Can Patentees File a Terminal Disclaimer in a Soon-to-Expire Patent Involved in an IPR Proceeding to Change the Claim Construction Standard Applied by the Board?

One advantage of the AIA’s new post-grant proceedings over litigating patent validity in federal district court is that the USPTO currently gives claims in unexpired patents their broadest reasonable interpretation (BRI) in light of the specification, which frequently means that more potentially invalidating prior art may be used. The Office justifies the use of BRI for unexpired patents because, consistent with examination, the patent owner has an ability to amend claims. Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,764 (Aug. 14, 2012).

When a patent has expired, however, the PTO has acknowledged that use of BRI is no longer appropriate and the patent should be examined under the claim construction espoused in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc), which is the standard applied by district courts. According to Phillips, the terms of a claim should generally be given their “ordinary and customary meaning” which is the “meaning that a term would have to one of ordinary skill in the art in question at the time of the invention.” Id.at 1312.

Should patent owners be allowed to take actions in the middle of an IPR proceeding that would change the standard applied by the Board?  In Amkor Technology, Inc. v. Tessera, Inc., IPR201-00242, pending since April 9, 2013, the matters were fully briefed, discovery had concluded, and the Oral argument was scheduled for May 21, 2014 (Paper 91). On April 11, 2014, Tessera filed a terminal disclaimer disclaiming the remainder of the patent term and, on April 14, 2014, asked the Board to apply the Phillips standard, instead of BRI (See Paper 119). According to the Patent Owner, when the claims are given their “ordinary and customary meaning,” Amkor has not presented a prima facie case of unpatentability and the IPR should be terminated.  Tessera argued that the filing of the terminal disclaimer immediately terminated its ability to amend it claims and therefore changed the standard under which the claims should be examined.

In response, Petitioner Amkor disagreed, noting that the terminal disclaimer does not take effect until the Office issues an IPR certificate. Moreover, Tessera itself applied BRI in its responses to Amkor’s unpatentability arguments and the Board should not allow the standard to shift at this point to discourage other patent owners from engaging is such a tactic.

On May 22, 2014, the Board issued its decision, concluding that the terminal disclaimer should be held in abeyance until the IPR terminates or a final written decision is issued, and that the claims should continue to be given their broadest reasonable interpretation. (Paper 129, p. 2). The Board exercised its exclusive jurisdiction pursuant to 37 C.F.R. § 42.7(b) to “vacate or hold in abeyance any non-Board action directed to a proceeding while a[] … patent is under the jurisdiction of the Board unless the action was authorized by the Board.” Id., p. 6. The Board agreed with Petitioner that allowing Patent Owner to change the standard at the last minute would “defeat the purpose of inter partes review to provide a timely, cost-effective determination on patentability” and would encourage gamesmanship. Id., p. 8. The Board noted that the Preliminary Response was Patent Owner’s opportunity to argue how the claims were to be interpreted and that any arguments not raised and fully briefed by Patent Owner were waived. Id., p. 9.

In view of this decision, Patent Owners responding to an IPR petition should determine if any involved patent will expire during the course of or shortly after projected conclusion of the IPR. If so, the Patent Owner should consider whether filing a terminal disclaimer would improve its probability of success against the petitioner’s claims of unpatentability and outweigh any effects the shortened term may have on the litigation strategy. If so, the terminal disclaimer should be filed before or with the Patent Owner’s Preliminary Response.