United States: En Banc Federal Circuit Majority Rules Time-Bar Determinations By PTAB Are Appealable

In yesterday's en banc decision in Wi-Fi One v. Broadcom Corp., Nos. 15-1944, -1945 & -1946 (Fed. Cir. Jan. 8, 2018), the en banc Federal Circuit addressed issues regarding judicial review of the PTAB's time-bar determinations in IPR proceedings.  Answering the specific question presented in Wi-Fi One, a nine-judge majority opinion overruled the panel decision in Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), and held that judicial review is available for a patent owner to challenge the PTO's determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of IPR petitions.

The thirteen-judge en banc panel included all twelve active Federal Circuit judges plus Senior Circuit Judge Bryson.  Nine judges (Reyna, Prost, Newman, Moore, O'Malley, Wallach, Taranto, Chen, and Stoll) joined the majority opinion.  While Judge O'Malley joined the nine-judge majority opinion, her separate opinion indicated that she viewed "the question presented for en banc rehearing in this case [a]s much simpler than the majority's analysis implies." Four judges (Hughes, Lourie, Bryson, and Dyk) dissented.

In the underlying IPRs, the patent owner had argued that § 315(b) barred the PTO Director from instituting the reviews because the petitioner was in privity with defendants who had been served with a complaint more than one year before the filing of the petitions. A divided three-judge panel of the Federal Circuit rejected the patent owner's arguments, citing the holding in Achates that the "No Appeal" provision in 35 U.S.C. § 314(d) prohibited judicial review of whether the PTAB's decision to institute was time-barred under § 315(b).

In the majority opinion authored by Judge Reyna (who had been the panel dissenter), the en banc court recognized and applied the "strong presumption" in favor of judicial review of agency actions, citing extensively to the Supreme Court's 2016 decision addressing judicial reviewability of PTAB determinations in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).  While the Supreme Court held that the presumption favoring judicial review was overcome in Cuozzo with respect to "mine-run" claims over whether a petition met the preliminary requirements of § 312(a)(3), the Federal Circuit majority reached the opposite conclusion regarding the § 315(b) time bar at issue in Wi-Fi One.  Unlike Cuozzo, the majority in Wi-Fi One found "no clear and convincing indication in the specific statutory language in the AIA, the specific legislative history of the AIA, or the statutory scheme as a whole that demonstrates Congress's intent to bar judicial review of § 315(b) time-bar determinations."  The majority's reading of Cuozzo "strongly points toward unreviewability being limited to the Director's determinations closely related to the preliminary patentability determination or the exercise of discretion not to institute," and the § 315(b) time-bar determinations challenged in Wi-Fi One "are fundamentally different from those evaluating the satisfaction of § 312(a)(3)'s requirements, at issue in Cuozzo."

The majority held that § 315(b) time-bar determinations are not exempt from appeal, overruled Achates's contrary conclusion, and remanded the underlying IPRs to the merits panel for further proceedings.  The majority was careful to cabin its holding, however, noting that it was not "decid[ing] today whether all disputes arising from §§ 311–14 are final and nonappealable," and stating that the "holding applies only to the appealability of § 315(b) time-bar determinations."

Judge O'Malley's concurrence agreed with "much of the majority's thoughtful reasoning" and with its "conclusion that time-bar determinations under [§ 315(b)] are not exempt from judicial review."  In Judge O'Malley's view, though, the question presented in Wi-Fi One is "much simpler than the majority's analysis implies."  According to Judge O'Malley, there is a basic distinction between the PTO Director's authority to exercise discretion when reviewing the adequacy of a petition to institute an IPR and the PTO's underlying authority to undertake such a review in the first instance.  The § 314(d) bar on appellate review is directed to the Director's assessment of the substantive adequacy of a timely filed petition; § 314(d) does not, by contrast, apply to § 315(b) because that time bar provision has nothing to do with the substantive adequacy of the petition and is directed, instead, to the Director's authority to act.  If the PTO exceeds its statutory authority by instituting an IPR proceeding under circumstances contrary to the language of § 315(b), Judge O'Malley's view is that the Federal Circuit, sitting in its proper role as an appellate court, should review those determinations:  "Allowing judicial review of erroneous determinations by the PTO as to whether the § 315(b) time bar applies would prevent the agency from 'act[ing] outside its statutory limits,' one of the categories of 'shenanigans' envisioned by the majority in Cuozzo."

In his dissenting opinion, Judge Hughes characterized the majority's conclusion as contrary to Cuozzo and the plain meaning of § 314(d)'s bar on judicial review, arguing that "Cuozzo confirms that § 314(d) is not limited to the merits of the petition, but also bars judicial review of closely related issues such as the petition's timeliness."  Because "[t]he PTO evaluates timeliness within the context of the PTO's preliminary determination of whether to institute IPR at all," according to Judge Hughes and the dissenters, "timeliness under § 315(b) is plainly a question 'closely tied' to the Director's decision to institute," and "[i]ndeed, it is a specific requirement for 'institution.'"  The dissent cautioned that "[v]acating the Board's invalidity decision on the basis of threshold questions like timeliness or real parties in interest"—as now made possible under the majority holding—"will squander the time and resources spent adjudicating the actual merits of the petition," which "is counter to the AIA's purpose of 'providing quick and cost effective alternatives to litigation.'"

We will continue monitoring future developments in the Wi-Fi One case, including the remand to the merits panel and the potential for Supreme Court review of the split Federal Circuit en banc decision.

Jones Day attorneys Gregory A. Castanias, David B. Cochran, John A. Marlott, and Sasha Maeyergoyz filed an amicus brief in Wi-Fi One on behalf of the Intellectual Property Owners Association (IPO) urging that Achates be overruled and that judicial review should be available for § 315(b) time bar determinations by the PTAB.  The en banc majority opinion embraces each of the arguments set forth by the IPO and the Jones Day team that represented IPO.

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