United States: Federal Circuit Panel Splits In Important Decision Regarding Its Jurisdiction Over Institution Of IPRs

Last Updated: October 10 2016
Article by Allen M. Sokal

In Husky Injection Molding Systems Ltd. v. Athena Automation Ltd., Appeal Nos. 2015-1726, 1727 (Sept. 23, 2016), the panel majority, consisting of Judges Lourie (the opinion's author) and Stoll, differed sharply with dissenting Judge Plager over the court's jurisdiction to review the PTAB's institution of an inter partes review. This decision could have broad implications. In his dissent, Judge Plager listed three categories of issues in addition to the issue before the court "that this court is obligated to consider" despite 35 U.S.C. § 314(d). Dissenting op. at 8.1

Husky, the patent owner, appealed from the board's decision that assignor estoppel did not preclude institution of the IPR. A co-inventor of the challenged patent assigned the patent to Husky and subsequently left Husky and formed Athena, the petitioner. The board rejected Husky's argument that assignor estoppel barred Athena from filing its petition. The board relied on 35 U.S.C. § 311's broad statutory mandate that "a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent." After the board issued its final decision that the prior art anticipated some of the challenged claims, Husky raised the same estoppel issue in its appeal to the Federal Circuit. The panel majority held that it lacked jurisdiction to consider that issue because of the prohibition under § 314(d) that "[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable."

Both the panel majority and Judge Plager recognized that the Supreme Court left open the possibility of exceptions to § 314(d) in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016). But they interpreted those exceptions differently.

Since the panel majority and the dissent construed Cuozzo somewhat differently, quoting what the Supreme Court actually said may be useful:

[O]ur interpretation [of § 314(d)] applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office's decision to initiate inter partes review. . . . This means that we need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond "this section [i.e. § 314]." . . . Thus, contrary to the dissent's suggestion, we do not categorically preclude review of a final decision where a petition fails to give "sufficient notice" such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, cancelling a patent claim for "indefiniteness under § 112" in inter partes review. . . . Such "shenanigans" may be properly reviewable in the context of § 319 and under the Administrative Procedure Act, which enables reviewing courts to "set aside agency action" that is "contrary to constitutional right," "in excess of statutory jurisdiction," or "arbitrary [and] capricious."

136 S. Ct. at 2141-42.

Based on that discussion, the panel majority concluded that a two-part inquiry determines whether the court has jurisdiction to review a challenge to the board's decision whether to institute:

First, we must determine whether the challenge at issue is "closely tied to the application and interpretation of statutes related to the Patent Office's decision to initiate inter partes review," or if it instead "implicate[s] constitutional questions," "depend[s] on other less closely related statutes," or "present[s] other questions of interpretation that reach, in terms of scope and impact," "well beyond 'this section.'" . . . If the latter, our authority to review the decision to institute appears unfettered. But if the former, § 314(d) forbids our review. One further exception remains, however. At the second step of the inquiry, we must ask if, despite the challenge being grounded in a "statute closely related to that decision to institute," . . . it is nevertheless directed to the Board's ultimate invalidation authority with respect to a specific patent . . . . If so, we may review the challenge.

Slip op. at 14 (citations omitted).

The panel majority's "further exception"–challenges directed to the board's ultimate invalidation authority with respect to a specific patent–appears to be narrower than the Supreme Court's permitting review of agency action "outside its statutory limits." The panel majority derived that exception from the Federal Circuit's own case law that preceded the Supreme Court's decision in Cuozzo. As will be shown below, that explains part of the disagreement between the panel majority and the dissent.

More specifically, the panel majority relied on (1) Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015), cert. denied, No. 15-1145, 2016 WL 1029054 (U.S. June 27, 2016), which held that the court had jurisdiction to determine whether a challenged patent satisfies the criteria for a covered business method review, since otherwise the board would be exceeding its statutory authority to evaluate and invalidate the patent in a CBM review, and (2) Achates Reference Publ'g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), which held that the court lacked jurisdiction to review the board's decision regarding whether the petitioner complied with the time bar of 35 U.S.C. § 315(b), because that raised the question of "who could petition for review rather than whether the Board could ultimately invalidate the patent." Slip op. at 11-14.

Based on that analysis, the panel majority's conclusion that it lacked authority to review the board's determination that assignor estoppel does not apply at the PTO followed. Applying the first prong of its two-part inquiry, the panel majority reasoned that determining whether assignor estoppel applies at the PTO in an IPR requires interpreting 35 U.S.C. § 311(a): "a person who is not the owner of the patent may file with the Office a petition to institute an inter partes review of the patent." The panel majority further reasoned that interpreting "a person who is not the owner of a patent may file" to either include or foreclose assignor estoppel "is very 'closely related' to any decision to initiate inter partes review." Slip op. at 16.

Turning to the second prong, the panel majority further concluded that whether assignor estoppel applies at the PTO does not fall within any of the exceptions to § 314(d). It raises no constitutional concern. Because it is a creature of the common law, it does not "depend on other less closely related statutes." And, according to the panel majority, it does not involve an "interpretation of an issue that reaches, in terms of scope and impact, well beyond § 314," which requires the Director to determine whether the petitioner has a reasonable likelihood of prevailing regarding patentability, because if assignor estoppel applies, an assignor "may not challenge the patentability of the patent earlier assigned, and any petition filed by an assignor or his or her privies falls far short of the 'reasonable likelihood' standard guarding against improper institution." Slip op. at 15-17.

Finally, the panel majority concluded that the question raised by the petition did not relate to the board's ultimate invalidation authority. As noted above, the panel majority narrowed that exception to § 314(d) to questions addressing not who can petition for review of a patent, but rather whether the board can ultimately invalidate the patent. Since assignor estoppel operates only to prevent the assignor of a patent from challenging that patent, it does not prevent a tribunal from evaluating the validity of the patent when parties other than the assignor challenge it. The panel majority therefore held that it had no jurisdiction to review the board's determination that assignor estoppel does not preclude an assignor from petitioning for inter partes review.

Judge Plager, in dissent, took strong issue with the panel majority's reasoning. He disagreed that the applicability of assignor estoppel depends on interpretation of § 311(a) and further reasoned that § 311 reasonably can be considered a "less closely related statute" than § 314(a)-(c), which govern the decision to institute an IPR. Moreover, he argued that the question of whether assignor estoppel applies to the decision to institute an IPR "could be considered to be one that 'present[s] other questions of interpretation that reach, in terms of scope and impact, well beyond'" § 314. Dissenting op. at 7. Observing that because the Supreme Court left open whether several categories are exceptions to § 314(d), the dissent stressed that "this court must undertake that determination in future cases. . . . [T]here is a range of reviewable issues that this court is obligated to consider. Examples may include, among others, filing deadlines and joinder and estoppel issues. . . . Whether the Board properly ruled on the application of assignor estoppel to this case is clearly subject to this court's judicial power of review. Accordingly, I find the majority's analysis of this case, its unnecessary commentary approving prior cases that may no longer be good law in light of Cuozzo, and its discussion of why the question of the application of assignor estoppel to this case does not relate to "the Board's ultimate invalidation authority," unhelpful. Dissenting op. at 8.

Though dissenting, Judge Plager seems to have the better argument. For example, given the Supreme Court's exceptions to § 314 for issues "that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond" § 314, those categories would seem to call for an assignor estoppel exception a fortiori. In other words, a common law doctrine, not being a creature of statute, is further removed from closely related statutes than are less closely related statutes and presents questions reaching far beyond § 314. As Judge Plager noted, "[a]ssignor estoppel is an equitable doctrine that is recognized in the common law. Given the long tradition of judicial review of administrative decision-making, and the Supreme Court's specific reference in Cuozzo to the APA's provisions mandating review of agency action, it would seem anomalous to say that the application of such a rule to proceedings before the Board, a unit of an administrative agency, is exclusively for the agency to decide." Dissenting op. at 6-7. In any event, the broad implications of this issue suggest that ultimately at least the en banc court will have to resolve it.


1 The court also unanimously reversed the board's decision that a patent application that the petitioner relied on as an anticipation did not incorporate by reference a patent that the petitioner relied upon to complete the anticipation. That ruling, however, did not break any new ground.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.