In Intellectual Ventures II LLC v. JPMorgan Chase &
Co., a 2–1 decision issued on April 1, 2015, the Federal
Circuit held that it lacked jurisdiction to hear an appeal from a
denial of a motion to stay a district court action pending the
institution of covered business method reviews ("CBMRs")
before the United States Patent and Trademark Office's Patent
Trial and Appeal Board. Judge O'Malley, writing for the
majority and joined by Judge Bryson, began by noting that the court
"normally only has jurisdiction to review 'a final
decision of the district court.'" The majority noted that
"[e]xceptions to the final judgment rule, whether statutory or
arising from common law, are to be narrowly construed."
Section 18(b) of the America Invents Act ("AIA") allows
a party to seek a stay of a district court infringement action
"relating to a [CBMR] proceeding for that patent" and
allows a party to "take an immediate interlocutory
appeal" from such a stay decision. Placing heavy emphasis on
the term "proceeding" and invoking the principle that
statutory grants of jurisdiction "must be construed
narrowly," the majority reasoned that appellate review is
appropriate following institution of a CBMR "proceeding,"
but not for a decision issued before an institution decision is
made (and, thus, before a CBMR "proceeding" exists). The
majority canvassed the statutory framework of the AIA and reasoned
that "the language of the statutory scheme consistently
defines 'proceeding' as beginning when the PTAB institutes
review." Rejecting appellants' argument that a CBMR starts
when a petition is filed, the majority explained that the AIA's
statutory framework "differentiates between a petition for a
CBMR proceeding (which a party files) and the act of instituting
such a proceeding (which the Director is authorized to do)."
To that end, the majority determined that "[b]ecause the
Director decides whether to 'institute,' or begin, a CBMR
proceeding, and necessarily bases that decision on the strength of
the petition, the petition itself cannot substitute for the
exercise of the Director's discretion."
Accordingly, the majority concluded that the Federal Circuit
"only ha[s] jurisdiction over a decision on a motion to stay
that is related to an actual CBMR proceeding, not a decision on a
motion to stay that is related to anything that
relates—however remotely—to a hoped-for CBMR
proceeding."
Writing in dissent, Judge Hughes reasoned that the majority's
opinion frustrated the purpose and goal of the AIA in general and
the CBMR process specifically. Examining the legislative history,
Judge Hughes noted that "Congress intended stays to be granted
in all but the rarest of circumstances." Although admitting
that the "majority provides a reasonable textual analysis for
its conclusion," Judge Hughes placed little weight on the
principle of "narrow construction," instead concluding
that "the overall purpose and legislative history of the
AIA" did not show "any intent to so limit our
jurisdiction by its choice of that specific statutory language.
Rather, I read the stay provision in § 18(b)(1) as more
broadly authorizing district courts to stay a case based on a CBM
review at any stage in the CBM process, and consequently our review
extends to stay decisions issued at any stage in the CBM
process."
The Federal Circuit's decision does not impact a district court's discretion to manage docket as it sees fit, including staying litigation after a petition for CBMR but before the PTAB institutes a proceeding.
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