Last month, in January 2021, the United States Patent and Trademark Office (“USPTO”) published a memorandum (the “January 2021 Memorandum”) clarifying how it will analyze claims for indefiniteness in AIA post-grant proceedings before the Patent Trial and Appeal Board (“PTAB”), namely patented claims in PGRs and CBMs and proposed substitute claims in IPRs. Prior to the January 2021 Memorandum, the PTAB applied two different approaches: the Packard approach and the Nautilus approach. According to the January 2021 Memorandum, the USPTO will now exclusively use the Nautilus approach, as further explained below. This aligns the PTAB with the courts in civil actions.
To satisfy the definiteness requirement, a specification must have “one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.” 35 U.S.C. §112(b).
Under the Packard approach, a claim was indefinite if it contained “words or phrases whose meaning is unclear.” In re Packard, 751 F.3d 1307, 1310, 1314 (Fed. Cir. 2014) (per curiam). By contrast, the Nautilus approach requires an arguably higher threshold, finding a claim indefinite only if the claim fails to identify the inventive subject matter with “reasonable certainty.” Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120, 2130 (2014).
The USPTO has traditionally followed the Packard approach, while district courts apply the Nautilus approach. According to the Federal Circuit, the USPTO could properly apply the Packard approach, in the pre-issuance context, because “Congress assigned to the USPTO the responsibility to examine applications to ensure compliance with the statutory criteria” for patentability. More importantly, the applicant plays an “interactive” role pre-issuance and can therefore clarify any initially perceived problems. 751 F.3d at 1311-13. The Federal Circuit later declined to opine on whether the Packard threshold could additionally be applied to AIA post-grant proceedings. See Tinnus Enterprises, LLC v. Telebrands Corp., 733 F. App’x 1011, 1018 (Fed. Cir. 2018).
The question of indefiniteness has been considered “inextricably intertwined” with the claim construction analysis. Cox Commc’ns, Inc. v. Sprint Commc’n Co., 838 F.3d 1224, 1232 (Fed. Cir. 2016). Previously, the USPTO applied the “broadest reasonable interpretation” to the claim construction analysis, while the district courts applied the analysis set forth in Phillips. See Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). In 2018, the USPTO announced that starting November 2018, it would be applying the Phillips claim construction standard for interpreting claims in trial proceedings before the PTAB in order to be consistent with the district courts and to “promote fairness, balance, predictability, and certainty in the patent system.”
Even with the claim construction standard aligned with the district courts, the PTAB and parties were still unclear about whether the indefiniteness analysis should also follow the district courts. Parties began to argue—and the PTAB began to analyze—indefiniteness under both Packard and Nautilus, finding a claim either indefinite or not indefinite under both approaches. See, e.g., Shure Inc. v. ClearOne, Inc., PGR2020-00079, Paper 1 at 29 (PTAB July 28, 2020) (arguing indefiniteness under both Nautilus and Packard); Nippon Suisan Kaisha Ltd. v. Pronova Biopharma Norge AS, PGR2017-00033, Paper 37 at 12 (PTAB Jan. 16, 2019) (finding the claims indefinite under either the Nautilus approach or the Packard approach); Supercell Oy et al v. GREE, Inc., PGR2018-00039, Paper 42 at 42 (PTAB Sept. 6, 2019) (determining the claims are not indefinite under the Nautilus standard or the Packard standard).
In the January 2021 Memorandum, the USPTO clarified that the Nautilus approach is the proper approach for analyzing indefiniteness in AIA post-grant proceedings. The memorandum explained that because the claim construction standard in AIA post-grant proceedings now aligns with the standard used by district courts, and because indefiniteness questions are generally considered as part of the claim construction process, the PTAB’s approach to indefiniteness in AIA post-grant proceedings should similarly align with the analysis used by the district courts and therefore follow the Nautilus approach. As with the claim construction standard, aligning the indefiniteness approach in AIA post-grant proceedings with the courts will “promote consistency and efficient decision making among coordinate branches of government that decide similar issues in co-pending proceedings.”
After November 2018, when many decisions applied both the Packard approach and the Nautilus approach, the percentage of instances in which patented claims were found indefinite decreased compared to when Packard was viewed as the controlling standard. With the USPTO’s January 2021 Memorandum clarifying that the standard in Nautilus is the proper approach, we may see a continued decrease and fewer claims invalidated by the PTAB for indefiniteness.