Federal Circuit Dismisses Appeals Challenging PTAB’s Decision To Terminate IPRs On Remand
On August 29, 2019, the Court of Appeals for the Federal Circuit (CAFC) issued an opinion dismissing three related appeals, each challenging the decision of the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) to terminate an inter partes review (IPR). Biodelivery Scis. Int’l v. Aquestive Therapeutics, Inc., __ F.3d __ (Fed. Cir. Aug. 29, 2019). The CAFC found that 35 U.S.C. § 314(d) bars it from reviewing the PTAB’s decision, even though the PTAB had previously issued a final written decision of patentability in each IPR.
The patent challenger had filed three petitions for inter partes review of U.S. Patent No. 8,765,167. The petitions contained, in total, seventeen grounds. The PTAB instituted IPR on a single ground for each of the three petitions. In each of the three IPRs, the PTAB issued final written decisions sustaining the patentability of all claims.
The patent challenger appealed the patentability decisions. However, after oral argument on the appeals, the United States Supreme Court issued its decision in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). SAS held that, when the PTAB institutes an IPR, it must decide the patentability of all claims challenged in the petition, a ruling that the CAFC and the PTAB have interpreted to require consideration of either all or none of the grounds presented in a petition. The patent challenger moved the CAFC to remand the appeals to the PTAB for further consideration pursuant to the SAS decision. The CAFC granted the motion, vacating the PTAB’s final written decisions and remanding to the PTAB with a direction to “implement” SAS.
On remand, the PTAB did not issue a final written considering all of the grounds proposed in the petitions. Instead, the PTAB simply terminated all three proceedings. The patent challenger appealed, again.
In the CAFC, the patent owner moved to dismiss the second set of appeals, arguing that, pursuant to 35 U.S.C. § 314(d), PTAB institution or non-institution decisions are unappealable. The CAFC granted the motion, finding that, because the appeals “merely challenge the [PTAB’s] determination not to institute review,” they are barred by 35 U.S.C. § 314(d). The CAFC noted that its 2018 remand order directing the PTAB to “implement SAS” did not divest the PTAB of is discretion not to institute review at all. The CAFC also agreed with the PTAB that there is no requirement that instituted IPRs must proceed through a final written decision, and that instituting IPRs on all of Biodelivery’s asserted grounds (most of which the PTAB had rejected before) would not have served the interests of “efficiency” and “speedy, inexpensive resolution of the proceeding.”
CAFC Judge Newman dissented, arguing that the PTAB’s decision “departs from principles of appellate review, and negates the agency’s obligations under the America Invents Act,” and is inconsistent with “the letter or the spirit” of the CAFC’s mandate. She reasoned that the Supreme Court held in in SAS “that SAS is entitled to a final written decision addressing all of the claims it has challenged,” and that, because the PTAB had already instituted the IPRs (and in fact issued final written decisions in favor of patentability), the PTAB lacked discretion to refuse to (re)institute them, and the CAFC’s mandate to the PTAB to “implement SAS” required the PTAB to issue new final written decisions addressing all of the proposed grounds.
The decision is another reminder to practitioners that post-SAS, patent challengers must be selective in the grounds they select to present to the PTAB; too many arguments, or inclusion of relatively weaker arguments, can result in a failure to institute regardless of the strength of the main grounds.