THE "BROADEST REASONABLE INTERPRETATION" AND APPLYING ISSUE PRECLUSION TO ADMINISTRATIVE PATENT CLAIM CONSTRUCTION.

• Author: Tietz, Jonathan I.
• Position: NOTE

Inventions are tangible. Yet patents comprise words, and words are imprecise. Thus, disputes over patents involve a process known as "claim construction," which formally clarifies the meaning of a patent claim's words and, therefore, the scope of the underlying property right. Adversarial claim construction commonly occurs in various Article III and Article I settings, such as district courts or the Patent Trial and Appeal Board (PTAB). When these proceedings ignore each other's claim constructions, a patent's scope can become inconsistent and unpredictable. The doctrine of issue preclusion could help with this problem. The Supreme Court recently reemphasized in B & B Hardware v. Hargis Industries that administrative decisions can have issue preclusive effect. But district courts and the PTAB use formally different legal standards in claim construction, where the district court takes a narrower view of a patent's scope. This Note contends that a claim construction determination made by the PTAB under the "broadest reasonable interpretation" standard should, indeed, be the broadest reasonable interpretation of a claim. To facilitate uniformity and public notice, issue preclusion should be applied such that the PTAB's "broadest reasonable interpretation" is an outer interpretive bound of a patent's scope in subsequent district court litigation.

TABLE OF CONTENTS INTRODUCTION I. SCHRODINGER'S PATENT: HOW CAN A PATENT'S MEANING CHANGE? A. The Role of Claim Construction in Patent Law B. Policy Considerations Underlying Claim Construction C. The Changing Meaning of a Single Patent in Various Settings II. ADMINISTRATIVE ISSUE PRECLUSION: THE B & B HARDWARE TWO-STEP A. Administrative Issue Preclusion and the B & B Two-Step B. The Court's Reasoning Underlying the B & B Two-Step C. The Court's Application of the Two-Step in B & B Hardware III. APPLYING THE B & 5TWO-STEP TO CLAIM CONSTRUCTION IN INTER PARTES REVIEW A. B & B Step One: No Statutory Purpose to the Contrary B. B & B Step Two: Ordinary Elements Could Be Satisfied 1. General Application of the "Ordinary Elements" Test 2. Differences in Procedure Do Not Warrant a Categorical Exception to Preclusion 3. Identity of the Issues: A Stumbling Block? IV. THE "BROADEST REASONABLE INTERPRETATION" AS A PRECLUSIVE OUTER BOUND ON DISTRICT COURT CLAIM CONSTRUCTION A. Wholesale Issue Preclusion as to Claim Construction Is Inappropriate B. An Outer-Bounds Preclusion Theory: Embracing the Differences Between the BRI and Phillips Standards CONCLUSION INTRODUCTION

The archetypical invention is a specific, tangible thing: an antibacterial chemical compound, a wine opener, a self-driving robot, a steam engine. (1) But the patents that protect inventions are intangible and abstract (2)--reducing a physical thing to words creates uncertainty. The law endeavors to make the scope of patents reasonably certain, but this is difficult because language is unavoidably imprecise. Even with an established evidentiary hierarchy, a settled interpretive procedure, and a body of case law governing interpretive principles, there is room to disagree. At nearly every patent-related proceeding, an adjudicating body must determine what exactly the patent in question means.

Yet patent infringement is a strict-liability offense: it is more or less irrelevant whether an infringer knows ex ante the precise scope of a patent's protectable subject matter. (3) This scope is fuzzy, and it can vary across time, space, legal doctrine, and branch of the government. Ultimately, liability can turn on what seem like minutiae.

To add to the confusion, a patent might be held invalid in one setting and valid in another--for instance, the Patent Trial and Appeal Board (PTAB) might find a patent invalid in one action while the International Trade Commission (ITC), in a second action, simultaneously finds it not only valid but infringed. (4) Paul Gugliuzza calls these "Schrodinger ['s] patents," (5) evoking the famous quantum-mechanics thought experiment involving a simultaneously alive-and-dead cat. (6) But there are other troubling opportunities for inconsistency beyond this extreme. For instance, a patent owner might ask a court to construe the scope of a patent narrowly when the validity of the patent is in question, so as to discourage the court from finding impermissible (unpatentable) overlap with inventions already in the public domain. (7) The same patent owner might then argue for a broad construction when suing for infringement, hoping to expand the scope of protection. (8) This might make strategic sense for a patent owner, (9) but it is worrisome when considering that a patent is meant to involve a fair trade of limited exclusivity (for the patentee) for disclosure of something useful (for society). (10) That bargain is frustrated when the actual scope of a patent varies by the day and by the courtroom.

But the law has a general solution for such inconsistencies: issue preclusion (also known as collateral estoppel). Under this doctrine, a litigant generally has one--and only one--opportunity to try a given issue in court, and that issue is treated as already decided if raised later. (11) Issue preclusion is especially appropriate in the context of property right delineation, including patent litigation. (12) For instance, a patent owner is estopped from asserting a patent previously held invalid, even where the parties in the two actions are not mutual. (13) Similarly, preclusion can apply to subsidiary issues, such as determinations of patent meaning. (14)

Patents, however, play a key role in contentious administrative determinations, and this presents a complication. Some judges, while comfortable with issue preclusion between courts, have been hesitant to recognize the principle in an administrative context, often articulating separation-ofpowers concerns. (15) This is perhaps intuitive when an administrative body is acting outside its core institutional competence. (16) But it is less so when an administrative body is charged with subject-matter expertise. The Supreme Court recently emphasized in B&B Hardware, Inc. v. Hargis Industries, Inc. (17) that administrative determinations can, when appropriate, have preclusive effects in later judicial proceedings if a two-step test is met. (18) The impact of B & B Hardware on patent law has not been resolved, but in general, courts have been reluctant to apply it. (19) Yet B 6- B Hardware presents an opportunity to apply issue preclusion law to the administrative patent context. In doing so, courts can encourage consistency in interpretation of patent scope and vindicate the exclusivity-disclosure bargain that a patent is meant to strike.

This Note argues that claim construction by the PTAB--that is, administrative determinations of the scope of a given patent (20)--should give rise to issue preclusion, forming a preclusive outer bound of a patent's scope. Part I explains how adjudication within various Article I and Article III proceedings has created inconsistency in the scope of patent rights and notes the reluctance of district courts and ITC administrative judges to afford an issue preclusive effect to PTAB decisions. Part II explores the Supreme Court's reasoning in B & B Hardware, in which the Court emphasized a functionalist, two-step approach to applying issue preclusion to the decisions of administrative bodies acting in an adjudicatory capacity. Part III applies this "B & B Two-Step" inquiry to the inter partes review (IPR) proceeding created by the America Invents Act (AIA) and concludes that such preclusion is consistent with the AIA. Part IV proposes an outer-bounds preclusion theory consistent with the policy goals underlying claim construction and faithful to the differences underlying judicial and administrative determinations of claim scope.

1. SCHRODINGER'S PATENT: HOW CAN A PATENT'S MEANING CHANGE?

   This Part describes the legal and structural causes of the "Schrodinger's patent" problem. Section I.A explores the role of claim construction in patent law. Section I.B highlights the policy considerations that underlie claim construction and also notes the public reliance interest on patent scope determinations. Section I.C demonstrates how a patent may take on different meanings in different legal settings, due in part to inconsistencies in the weight district courts afford administrative claim construction decisions.

   1. The Role of Claim Construction in Patent Law

      In principle, a patent is a single document describing a single invention with clarity, staking out the inventor's claimed property rights. (21) This is a trade: an inventor makes public a clear and enabling disclosure of a new and useful invention, and in exchange, the government grants a temporary right to exclude others from practicing that invention. (22) Clarity is a virtue here. Because patent infringement is a strict-liability offense, (23) it is sound policy for the public to know ex ante whether a particular patent will be infringed by a given technology. (24)

      In practice, clarity is difficult to achieve. (25) Language is fuzzy, even when objective technical terms are employed. (26) Indeed, the inherent complexity of technology, (27) the ambiguity of language, (28) the changing meanings of technical terms over time, (29) and various idiosyncrasies of patent law (30) all play a synergistic role in this uncertainty. Thus, despite efforts by Congress and the courts to improve clarity by legislation and judicial doctrine, ambiguity and uncertainty persist. (31)

      Resolving the scope of a patent is essential to determining both infringement and validity. (32) Doing so determines which possible inventions are or are not included within the language of a patent's claims. (33) A claim is overbroad when it comprises subject matter previously available to the public (34)--that is, where the public does not receive its end of the disclosure bargain: a new and useful...