Some Decisions by the Patent Office to Institute IPR Validity Challenges May be Appealed to the...
Wednesday, January 31, 2018
Some Decisions for the Patent Office to the Institute IPR Validity Challenges May be Appealed to the Federal Circuit
By John Paul, Brian Kacedon, Robert MacKichan, and M. David Weingarten
Abstract: A split decision of the U.S. Court of Appeals for the Federal Circuit determined that decisions by the Patent Office to institute IPR validity challenges may be appealed to the Federal Circuit when such decisions relate to the timing of the petitions. This ruling reversed the decision of an earlier panel and distinguished statutory language that Patent Office decisions on whether to institute an inter partes review “shall be final and nonappealable.”
Inter partes review (“IPR”) is a trial proceeding before the Patent Trial and Appeal Board (“Board”) intended to be a cost-effective alternative to litigation for challenging patent validity. The IPR proceeding was introduced by the America Invents Act (“AIA”) and may be used to challenge the validity of any patent regardless of when it issued. However, if a complaint for patent infringement has been filed, the petition requesting the review must be filed within one year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with the complaint.
Decisions of the Board on whether to institute proceedings are typically final and not subject to appeal. However, in Wi-Fi One, LLC v. Broadcom Corp., the U.S. Court of Appeals for the Federal Circuit sitting en banc (i.e., the full court) determined that decisions by the Board to institute IPR validity challenges may be appealed when such decisions relate to the timing of the petitions, rather than on the substantive merits.
Broadcom filed petitions requesting that the Patent Office institute inter partes review of patents owned by Wi-Fi One, LLC. Wi-Fi argued that the Board lacked authority to institute IPR because the previous owner of the patents served a complaint on defendants in privity with Broadcom more than one year before Broadcom filed the IPR petitions.
The Board instituted IPR and issued Final Written Decisions finding the challenged patent claims unpatentable. The Board also determined that Wi-Fi had not shown that Broadcom, the IPR petitioner, was in privity with the defendants in the infringement action, and, therefore, the IPR petitions were not barred based on the time that had passed. Wi-Fi appealed the Final Written Decisions, arguing that the Federal Circuit should reverse or vacate the Board’s ruling.
A three-judge panel of the Federal Circuit rejected Wi-Fi’s arguments, concluding that the precedent of earlier cases provided that such rulings could not be appealed. Wi-Fi petitioned for rehearing by the full court.
The Wi-Fi One Decision
In reviewing the decision of the panel, the Federal Circuit, sitting en banc, considered whether Board decisions relating to the one-year time bar are unappealable based on the AIA statutory provision that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”
The majority opinion of the court explained that there is a “strong presumption” favoring judicial review that will be abdicated only when “Congress provides a ‘clear and convincing’ indication that it intends to prohibit review.” Viewing the statutory language of the AIA, the legislative history, and the statutory scheme as a whole, the court found no clear and convincing indication. In addition, the court found the natural reading of the statutory language, which provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable,” is limited to “determinations that are focused on the patentability merits of particular claims.” In contrast, the court found that time bar determinations are unrelated to the “Director’s preliminary patentability assessment or the Director’s discretion not to initiate an IPR.”
The majority further stated that this reading of the overall statutory scheme is consistent with the Supreme Court’s Cuozzo Speed Tech. decision, which held that judicial review is not available where “a patent holder merely challenged the Patent Office’s determin[ation] that the information presented in the petition . . . shows that there is a reasonable likelihood of success with respect to at least 1 of the claims challenged” or when “a patent holder grounds its claim in a statute closely related to that decision to institute.” The majority found that whether a petitioner complied with the statutory time bar requirements is not such a determination. The court, therefore, held that time-bar determinations are reviewable on appeal from the Board to the Federal Circuit.
A separate concurring opinion by members of the court stated that “the issue presented for en banc rehearing ‘is much simpler than the majority’s analysis implies.” The time bar “has nothing to do with the substantive adequacy of the petition and is directed, instead, to the Director’s authority to act.” Allowing judicial review of erroneous determinations by the patent office as to whether the time bar applies would prevent the agency from acting outside its statutory limits.
A separate dissenting opinion by members of the court disagreed with the majority’s narrow reading of the statute, arguing that the plain language of the statute bars judicial review of the Board’s decision to institute and, “absent persuasive indications to the contrary,” Congress “says what it means and means what it says.” The dissent also contended that the majority decision was contrary to Supreme Court precedent.
Strategy and Conclusion
While the Wi-Fi One decision focused on the appealability of time-bar issues, some commentators have expressed the view that petitioners in future cases may attempt to argue that the rationale of the Wi-Fi One decision should be extended so that Board decisions on other issues may be reviewed on appeal to the Federal Circuit.
The Wi-Fi One opinion can be found here.
This article is for informational purposes and does not constitute legal advice. The views expressed do not necessarily reflect the views of LES (U.S.A. and Canada) or Finnegan, Henderson, Farabow, Garrett & Dunner, LLP.