Terminal Disclaimer does not Change Claim Construction Standard, at least not in the Final Stages of an Inter Partes Review

Scott Daniels | May 28, 2014

Patent Owners have criticized the new AIA post-issuance proceedings for a number of reasons.  The loudest criticism, however, has been directed at the APJs’ giving challenged patent claims their “broadest reasonable construction” – making them more vulnerable to attack from the prior art.  Only where the patent has expired (and the Patent owner may no longer amend its claims) do the APJs follow the practice of the District Courts in infringement actions, by construing claims more narrowly according to the Phillips v. AWH decision.

The Patent Owner in Amkor Technology v. Tessera (IPR2013-00242) thought that it had figured a way out of this problem.  Since its patent would expire at the end of December anyway, just two and a half months before the October deadline for completion of the inter partes review, the Patent Owner filed a terminal disclaimer in April.  It then asked the APJs either to terminate the review, or to complete the review but switch to the more favorable Phillips standard.

In a ruling Friday, the APJs refused to go along.  They complained that there had been numerous opportunities for the Patent Owner to challenge their application of the broadest reasonable interpretation standard, “but [it] waited until the last minute to raise the prospect of filing a terminal disclaimer.” The APJs explained that the

Patent Owner [had] filed a Preliminary Response arguing that the claims should be given their broadest reasonable interpretation … We applied the broadest reasonable interpretation standard in the Decision on Institution, and Patent Owner did not seek rehearing of that determination. Patent Owner filed a Response and two declarations, all of which applied the broadest reasonable interpretation standard … The Response was Patent Owner’s opportunity to explain how it believes the claims should be interpreted and why the challenged claims are patentable based on that interpretation … Rather than raising the terminal disclaimer issue at that time and arguing that the challenged claims should be interpreted under the district court standard, however, Patent Owner followed the broadest reasonable interpretation standard. Patent Owner then filed its terminal disclaimer after all substantive briefing had been completed in this proceeding.

Essentially, the APJs found that the terminal disclaimer had come too late.  Termination of the review, they said, “would encourage gamesmanship … and defeat the purpose of inter partes review to provide a timely, cost-effective determination on patentability.”  And switching to the Phillips standard would be impractical; it would “not [be] feasible, at this late stage of the proceeding, to change the standard by which the challenged claims will be interpreted, as all of the arguments and evidence we have before us have applied the broadest reasonable interpretation standard.”

The lesson for practitioners is that the APJs might be persuaded to adopt the Phillips standard, provided that the terminal disclaimer is filed early in the case.  Of course, in the great majority of cases, a terminal disclaimer will not make sense for the patentee – but there will be a handful of cases where it does, for instance, where the Patent Owner is anxious to protect an earlier judgment but does not anticipate future infringement litigation.

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