Cuozzo Speed Technologies, LLC v. Lee

This case arose when Cuozzo Speed Technologies, LLC owned a patent on a speed limit indicator. Garmin International petitioned for inter partes review (IPR) at the U.S. Patent and Trademark Office's Patent Trial and Appeal Board (PTAB). The PTAB applied the broadest reasonable interpretation standard to the patent claims, found them obvious, and cancelled them. Cuozzo appealed to the Federal Circuit, which affirmed, and subsequently to the Supreme Court. Cuozzo argued that the PTAB improperly instituted the IPR beyond the grounds specified in the petition and that the PTAB should have used the same claim construction standard used in district court litigation. The Supreme Court granted certiorari to resolve whether PTAB institution decisions are judicially reviewable and what claim construction standard applies in IPR proceedings.

The Supreme Court affirmed the Federal Circuit in a 6-2 decision. Justice Breyer wrote for the majority, holding that the PTAB's decision to institute an IPR is not judicially reviewable because §314(d) expressly bars appeals of institution determinations. The Court also held that the USPTO's regulation requiring the broadest reasonable interpretation standard for claim construction in IPRs was a reasonable exercise of the agency's rulemaking authority, as IPRs are administrative proceedings distinct from district court litigation. Justices Thomas and Alito filed concurring opinions, while Justice Sotomayor dissented in part.

1. Whether the PTAB's decision to institute an IPR proceeding is judicially reviewable under 35 U.S.C. §314(d). 2. Whether the PTAB may apply the broadest reasonable interpretation standard rather than the Phillips standard used by district courts when construing patent claims in IPR proceedings.

The decision significantly strengthened the IPR system created by the America Invents Act. By insulating institution decisions from judicial review and permitting the broadest reasonable interpretation standard, the ruling made it easier for the PTAB to initiate reviews and cancel patent claims. This was praised by technology companies seeking to challenge broad or vague patents, particularly in the software and electronics sectors. However, the ruling was criticized by patent holders, pharmaceutical companies, and investors who argued it devalued patents and created uncertainty. The decision contributed to ongoing debates about patent quality, administrative overreach, and the balance between incentivizing innovation and preventing patent abuse. Congress later considered legislative reforms addressing some of these concerns.