In Nautilus, Inc. v. Biosig Instruments, Inc., the Supreme Court rejected the Federal Circuit's "insolubly ambiguous" phraseology for evaluating indefiniteness and announced a new standard—whether the claims "fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention." 1 The Nautilus case arose from a validity challenge in district court to an issued patent.
But while Nautilus was still pending before the Supreme Court, the Federal Circuit in In re Packard distinguished the post-issuance, litigation indefiniteness standard from the U.S. Patent and Trademark Office's (PTO) pre-issuance, examination indefiniteness standard. 2 While the Federal Circuit declined to expressly address the PTO's indefiniteness standard in examination, the court affirmed the PTO's burden-shifting approach. 3
Examination, however, is not the only context where the PTO evaluates indefiniteness. Under the Leahy-Smith America Invents Act (AIA), 4 parties can raise indefiniteness challenges to issued patents in covered business method review (CBM) petitions 5 and post-grant review (PGR) petitions. 6 And upon institution of review, the Patent Trial and Appeal Board (PTAB) will consider whether the petitioner has shown, by a preponderance of the evidence, that the challenged claims are invalid under the instituted grounds, which may include indefiniteness under 35 U.S.C. §112(b).
As the first PTAB Final Written Decisions considering indefiniteness arrive on appeal, the Federal Circuit will likely be asked to consider which indefiniteness standard applies—the Supreme Court's "reasonable certainty" standard, or the "lower threshold" standard 7 applied to pending patent applications. This article considers both standards, and which standard might apply to CBMs and PGRs.
After the Supreme Court granted certiorari in Nautilus but before the Supreme Court issued its opinion, the Federal Circuit considered "what standard for indefiniteness should the [PTO] apply to pre-issuance claims" in In re Packard. 8 The examiner had rejected Mr. Packard's applied-for patent claims as indefinite, and therefore not in compliance with the statutory drafting requirements of 35 U.S.C. §112(b). 9 In the course of affirming the examiner's rejection, the PTAB applied the review standard set forth in the Manual of Patent Examining Procedure (MPEP) §2173.05(e), namely, "[a] claim is indefinite when it contains words or phrases whose meaning is unclear." 10
Mr. Packard appealed to the Federal Circuit, arguing that the PTAB misapplied the standard of indefiniteness. 11 Specifically, Packard argued that the PTO is bound to apply the Federal Circuit's "insolubly ambiguous" standard, such that "a claim is not indefinite if a court can give any meaning to the disputed term in the context of the claim." 12 In a per curiam opinion, the Federal Circuit declined to specially address "the broad issues raised by Mr. Packard," but nevertheless affirmed the PTAB's rejection, holding that
when the USPTO has initially issued a well-grounded rejection that identifies ways in which language in a claim is ambiguous, vague, incoherent, opaque, or otherwise unclear in describing and defining the claimed intention, and thereafter the applicant fails to provide a satisfactory response, the USPTO can properly reject the claim as failing to meet the statutory requirements of §112(b). 13
The Federal Circuit recognized that in Nautilus, the Supreme Court was considering the post-issuance standard for indefiniteness. 14 But according to the court, "indefiniteness rejections by the PTO arise in a different posture from that of indefiniteness challenges to an issued patent," and so the court did not need to reach the standard under consideration in Nautilus. 15 After discussing §112(b)'s requirements of "particular[ity]" and "distinct[ness]," the court noted that in examining an application, the PTO "is obliged to test the claims for reasonable precision according to these principles." 16 Ultimately, however, the court affirmed the PTAB's reliance on Mr. Packard's failure to adequately respond to the examiner's prima facie showing of indefiniteness without expressly deciding which indefiniteness standard the PTO should apply in evaluating pending claims. 17
While "fully support[ing]" the per curiam opinion, the concurring opinion went further, specifically addressing "the arguments pressed by Mr. Packard" on appeal. 18 After extensively discussing the history and rationale behind the PTO's concern for clarity in pending claims, the concurrence reasoned that the PTAB was justified in applying a "lower threshold for ambiguity" 19 than a district court. 20 Specifically, the concurrence noted that
as a legal matter the USPTO does not have to deal with the presumption of validity the statutes grant to post-issuance patents—sometimes said to hinder such an interpretation by courts. Furthermore, unlike courts which have a full prosecution record to consider, the prosecution record before the USPTO is in development and not fixed during examination, and the USPTO does not rely on it for interpreting claims. 21
Given the PTO's "unique and central role in the patenting process," the concurrence found "no legal obstacles to the PTO's proposed interpretation" of §112(b) in examining patents. 22
Less than a month after the Federal Circuit's decision in In re Packard, the Supreme Court decided Nautilus. 23 Patentee Biosig had asserted U.S. Patent No. 5,337,753 (the '753 patent) against Nautilus in district court. 24 Nautilus moved for summary judgment, arguing that the term "spaced relationship" was indefinite. 25 The district court granted Nautilus's motion, concluding that the term "'did not tell [the court] or anyone what precisely the space should be,' or even supply 'any parameters' for determining the appropriate spacing." 26
The Federal Circuit reversed and remanded, stating that a claim is indefinite "only when it is 'not amenable to construction' or 'insolubly ambiguous.'" 27 Applying that "insolubly ambiguous" standard, the Federal Circuit held that the '753 patent was not indefinite because the "intrinsic evidence" demonstrated "certain inherent parameters of the claimed apparatus, which to a skilled artisan may be sufficient to understand the metes and bounds of 'spaced relationship.'" 28
The Supreme Court vacated and remanded the Federal Circuit's decision. Cognizant of the "delicate balance" between "the inherent limitations of language" and the requirement that "a patent must be precise enough to afford clear notice of what is claimed," the Supreme Court found the Federal Circuit's "insolubly ambiguous" standard "more amorphous than the statutory definiteness requirement allows." 29 Instead, the Supreme Court read §112, ¶ 2 "to require that a patent's claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty." 30
To be sure, the Supreme Court acknowledged that the actual analysis performed by the Federal Circuit was closer to tracking the statute's requirements than the "insolubly ambiguous" and "amenable to construction" terminology suggested. 31 Nevertheless, the Supreme Court was concerned that such loose terminology could leave the patent bar "at sea without a reliable compass." 32 The Supreme Court also noted that, "[a]s the parties appear to agree, . . . [the] presumption of validity does not alter the degree of clarity that §112, ¶ 2 demands from patent applicants." 33
On remand and applying the Supreme Court's "reasonable certainty" standard, the Federal Circuit again held that the challenged claims of the '753 patent were not indefinite. 34
Indefiniteness in CBM and PGR proceedings does not squarely fit into either the pre-issuance or post-issuance scenarios discussed in In re Packard. On one hand, once a CBM or PGR is instituted, the presumption of validity no longer applies. 35 And unlike district court litigation, a patentee can—at least in theory—amend the challenged claims. 36 But on the other hand, as one Federal Circuit judge recently noted, post-grant proceedings do not offer an "unfettered opportunity to amend" like examination and reexamination. 37 Moreover, in Nautilus, the Supreme Court explained that the presumption of validity does not alter the degree of clarity that §112 demands from patent applicants. 38
The PTAB has already cited and applied the Supreme Court's "reasonable certainty" standard in a CBM proceeding, finding a challenged claim indefinite. 39 The Federal Circuit, however, has not yet addressed which indefiniteness standard—pre-issuance or post-issuance—is appropriate in CBM and PGR proceedings. More importantly, the Federal Circuit has not yet addressed whether the "reasonable certainty" standard announced in Nautilus is materially different from the "lower threshold" indefiniteness standard that the PTO applies during examination (i.e., whether the scope of the claim would be "reasonably ascertainable by those skilled in the art"). 40
But even if there is only one indefiniteness standard post-Nautilus, the Federal Circuit may still allow the PTAB more leeway in evaluating indefiniteness in CBM and PGR proceedings because of the possibility—even if remote—of claim amendments and, as discussed in In re Packard, the PTO's unique role in assuring claim clarity. Additionally, "[i]n the face of an allegation of indefiniteness," the Federal Circuit still applies "general principles of claim construction." 41 After the Supreme Court's decision in Teva Pharmaceuticals U.S.A., Inc. v. Sandoz, Inc., the Federal Circuit reviews the PTAB's ultimate claim construction de novo, but reviews underlying factual determinations concerning extrinsic evidence for substantial evidence. 42 Thus, the Federal Circuit will likely afford deference to the PTAB's underlying factual determinations concerning indefiniteness.
The Supreme Court's "reasonable certainty" test undoubtedly governs indefiniteness challenges at district courts. The Federal Circuit, however, has distinguished the pre-issuance indefiniteness standard from the post-issuance indefiniteness standard. Which standard applies to CBM and PGR proceedings after Nautilus—and whether the distinction is still meaningful—remains to be seen.
Endnotes
1 Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2124, 110 U.S.P.Q.2d 1688, 1690 (2014) (88 PTCJ 373, 6/6/14).
2 In re Packard, 751 F.3d 1307, 1312-13, 110 U.S.P.Q.2d 1785, 1788 (Fed. Cir. 2014) (per curiam) (88 PTCJ 99, 5/9/14).
4 Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, 125 Stat. 284 (2011).
5 Id. §18(a)(1), 125 Stat. 329 ("The transitional proceeding [for CBM patents] implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post-grant review under chapter 32 of title 35, United States Code, subject to the following . . .").
7 In re Packard, 751 F.3d at 1322-23.
9 Id. at 1309-11. The Federal Circuit also noted that the application at issue in this case was filed prior to the Sept. 16, 2012, effective date of the AIA, "which replaces paragraph 2 of 35 U.S.C. §112 with newly designated §112(b)." Id. at 1309 n.1. But "[f]or the benefit of current readers, [the court] . . . adopted the current designation as the text in relevant part is unchanged." Id.
10 Id. at 1310 (alteration in original) (quoting MPEP §2173.05(e)). See also MPEP §§2173.02 ("A decision on whether a claim is indefinite under 35 U.S.C. §112(b) or pre-AIA 35 U.S.C. §112, second paragraph requires a determination of whether those skilled in the art would understand what is claimed when the claim is read in light of the specification."), 2173.05(e) ("If the scope of a claim would be reasonably ascertainable by those skilled in the art, then the claim is not indefinite.").
11 In re Packard, 751 F.3d at 1309.
16 Id. at 1313 (alterations in original).
18 Id. at 1314-15 (Plager, J., concurring).
19 See MPEP §2173.02(I) ("In deciding whether a pending claim particularly points out and distinctly claims the subject matter, a lower threshold of ambiguity is applied during prosecution.").
20 In re Packard, 751 F.3d at 1322-24.
23 Nautilus, 134 S. Ct. 2120.
26 Id. (alteration in original) (citation omitted).
27 Id. (citation omitted).
28 Id. (citation omitted).
29 Id. at 2128-29, 2131.
33 Id. at 2130 n.10.
34 Biosig Instruments, Inc. v. Nautilus, Inc., 783 F.3d 1374, 114 U.S.P.Q.2d 1651 (Fed. Cir. 2015) (90 PTCJ 1843, 5/1/15).
37 In re Cuozzo Speed Techs., LLC, 778 F.3d 1271, 1287, 113 U.S.P.Q.2d 1613, 1624 (Fed. Cir. 2015) (Newman, J., dissenting) (89 PTCJ 877, 2/6/15).
38 Nautilus, 134 S. Ct. at 2130 n.10.
39 See SAP Am., Inc. v. Lakshmi Arunachalam, CBM2013-00013, Final Written Decision, Paper 61 at 11, 18-19 (P.T.A.B. Sept. 18, 2014).
40 See, e.g., MPEP §2173.05(e) ("If the scope of a claim would be reasonably ascertainable by those skilled in the art, then the claim is not indefinite.").
41 Nautilus, 783 F.3d at 1377-78 (quoting Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332, 94 U.S.P.Q.2d 1321, 1326 (Fed. Cir. 2010) (79 PTCJ 670, 4/2/10)).
42 In re Cuozzo, 778 F.3d at 1282-83 (citing Teva Pharm. U.S.A., Inc. v. Sandoz, Inc., 135 S. Ct. 831, 841, 113 U.S.P.Q.2d 1269 (2015) (89 PTCJ 737, 1/23/15)).