Supreme Court Agrees to Hear Challenge to U.S. Patent Review Process

By Andrew Chung | January 20, 2016
 The U.S. Supreme Court will consider whether a federal agency’s procedures have made it too easy to successfully cancel patents after agreeing last Friday to decide a case involving a vehicle speedometer that alerts drivers if they are speeding.

The nine justices will hear an appeal filed by Cuozzo Speed Technologies LLC, whose speedometer patent was invalidated in a U.S. Patent and Trademark Office review procedure after being challenged by GPS device maker Garmin Ltd in 2012.

Companies that are frequent targets of patent suits, including Apple Inc. and Google Inc., have taken advantage of the patent office procedure, known as inter partes review (IPR), in unexpectedly high numbers since it was put in place in 2012.

These reviews allow anyone to challenge the validity of a patent far more cheaply and quickly than in a U.S. federal court.

The high court justices will now consider whether the patent office is improperly interpreting the patents that come before it in the reviews. Critics say this leads to a high rate of patent cancellations.

New Jersey-based Cuozzo told the Supreme Court the procedure was “surprisingly lethal,” noting that in nearly 85 percent of cases some or all of the patent claims challenged have been canceled.

If the patent office does not change course, it would allow hundreds or even thousands of additional patent claims to be “invalidated under the wrong standard,” Cuozzo said in court papers.

Jeffrey Wall, an attorney for Cuozzo, said he was pleased the high court will examine the case.

The agency had asked the court not to hear Cuozzo’s appeal, saying in court papers any changes to its procedures should be made by Congress.

A ruling is due by the end of June.

Cuozzo was supported by several industry groups and companies, which urged the justices to take the case.

One friend-of-the-court brief on behalf of 3M Co., Caterpillar Inc., Eli Lilly and Co. and Qualcomm Inc. said the patent office reviews and litigation in district court needed to be streamlined for the “proper functioning of the patent system as a whole.”

The cancellation of Cuozzo’s patent came in the first-ever petition for an IPR. Garmin’s action was in response to a lawsuit filed by Cuozzo in federal court in 2012. Garmin is no longer involved in the case.

A spokesman for the patent office declined to comment.

The case is In re Cuozzo Speed Technologies LLC v Michelle K. Lee, in the Supreme Court of the United States, No. 15-446.

(Reporting by Andrew Chung; Editing by Alexia Garamfalvi and Will Dunham)

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