Patent Trial And Appeal Board Exercises Discretion To Deny Institution Of An IPR Based On Insufficient Use Of Resources Where Petitioner Had Shown A Reasonable Likelihood Of Prevailing On Only A Small Fraction Of Challenged Claims And Grounds
02/05/2019On Thursday, January 24, 2019, the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO) issued a decision exercising its statutorily authorized discretion to deny institution of a petition for inter partes review (IPR). Deeper, UAB v. Vexilar, Inc., IPR Case No. 2018-01310 (PTAB Jan. 24, 2019). The PTAB determined that instituting IPR would be an inefficient use of the PTAB’s finite resources because the petitioner had shown a reasonable likelihood of prevailing on its invalidity challenges with respect to only two of the twenty-three challenged claims as to one of the four grounds.
35 U.S.C. § 314(a) provides that an IPR may not be instituted unless the petition “shows there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” This provision has been interpreted to provide the PTAB with complete discretion to deny institution. See, e.g., Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (finding that the PTAB’s “decision to deny a petition is a matter committed to the Patent Office’s discretion,” and noting there is “no mandate to institute review” under Section 314(a)).
This provision has also taken on an increased significance after the Supreme Court’s SAS decision and the Federal Circuit’s interpretation thereof. As we discussed in our prior posts, see Shearman & Sterling LLP, US Supreme Court Approves IPRs, But Requires Decision On All Challenged Claims, Need-to-Know Litigation Weekly, May 1, 2018 and Shearman & Sterling LLP, Federal Circuit Expands The Supreme Court’s SAS Holding To Require Institution On All Grounds Argued In An IPR Petition, July 10, 2018, SAS requires that the PTAB institute IPR, if at all, on all challenged claims and all grounds included in the petition. The post-SAS mandate contrasts with the PTAB’s pre-SAS approach, in which the PTAB would pick and choose the grounds and claims upon which to institute—instituting on some claims and grounds and denying on others.
In the instant IPR, petitioner Deeper, UAB filed a petition challenging twenty-three patent claims on a total of four obviousness grounds. The PTAB analyzed, in its Decision on Denying Institution of Inter Partes Review, each of the claims and grounds, and found that the Petitioner had shown a reasonable likelihood of prevailing on only one ground for two of the twenty-three challenged claims. Following the USPTO’s Guidance issued in the wake of SAS, the PTAB evaluated the number of claims and grounds that it found met the reasonable-likelihood-of-prevailing standard versus the number of claims and grounds that it found do not. According to the PTAB, “instituting a trial with respect to all twenty-three claims on all four grounds based on the evidence and arguments directed to only two claims and one ground would not be an efficient use of the Board’s time and resources,” and therefore, the PTAB denied institution under Section 314(a).
This decision is the latest in a line of decisions in which the PTAB has continued to more heavily rely on its unfettered statutory authority to deny IPR institution. As a result of this and other recent decisions, petitioners should continue to carefully evaluate the merits of invalidity assertions and tailor any petitions accordingly. One strategy petitioners may consider is to separate grounds and claims into multiple petitions, such that the PTAB can institute on one petition and deny on others—creating a situation similar to the PTAB’s pre-SAS “partial” institution approach.