United States: Supreme Court To PTAB: All Or Nothing At All

In a 5–4 decision, the Supreme Court of the United States reversed a decision by the US Court of Appeals for the Federal Circuit, holding that once the Patent Trial and Appeal Board (PTAB) institutes an inter partes review (IPR) proceeding, it must review every claim challenged in the petition. SAS Institute Inc. v. Iancu, Director of the USPTO, Case No. 16-969 (Supr. Ct., Apr. 27, 2018) (Gorsuch, Justice, joined by Roberts, Chief Justice, and Kennedy, Thomas and Alito, Justices) (Ginsburg, Justice, dissenting, joined by Breyer, Sotomayor and Kagan, Justices) (Breyer, Justice, dissenting, joined by Ginsburg, Sotomayor and Kagan, Justices). Going forward, the PTAB will no longer be permitted to engage in the practice of "partial institution," i.e., institution of only some of the claims challenged in the petition.

This dispute arose when SAS filed a petition for IPR challenging all 16 claims of a patent owned by ComplementSoft. The PTAB determined that SAS demonstrated a reasonable likelihood of success on only nine of the challenged claims, and therefore declined to institute an IPR on the remaining seven claims. In doing so, the PTAB relied on a regulation that states that the US Patent and Trademark Office (PTO) director "may authorize the review to proceed on all or some of the challenged claims and on all or some of the grounds of unpatentability asserted for each claim." 37 CFR § 42.108(a). In its final written decision, the PTAB found all but one of the instituted claims unpatentable and was predictably silent with regard to the seven claims on which it did not institute. SAS appealed to the Federal Circuit, which (over a "vigorous" dissent by Judge Newman) upheld the regulation (IP Update, Vol. 19, No. 12).

In reversing the Federal Circuit, the Supreme Court found that the America Invents Act (AIA) supplied a clear answer to the question at hand: § 318(a) states that the PTAB "shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." The Court found this directive both mandatory and comprehensive, analogizing it to civil litigation where a plaintiff would expect to have a decision on all the claims in the complaint and not just "those the decision maker might wish to address." The Supreme Court also dismissed the director's argument for partial institution because such power simply does not appear in the AIA, and the text that Congress chose to utilize strongly counsels against permitting partial institution.

The Supreme Court next addressed the comprehensive AIA framework for IPR proceedings to show that Congress was clear when requiring institution of all claims. Justice Gorsuch cited § 312(a)(3), explaining that the petition, not the institution decision, defines the contours of the proceeding. Next, citing § 314(b), Gorsuch stated that the director's decision to institute "pursuant to [the] petition" is simply a yes or no choice—not a piecemeal determination.

Additionally, citing § 314(a), the Supreme Court explained that the statute requires institution when a reasonable likelihood of success is shown for "at least one of the claims challenged in the petition." As the majority explained, this requirement combined with the need to use the petition itself as the procedural contour of the proceeding suggests, if anything, a regime where reasonable likelihood of success on one claim is both necessary and sufficient to justify review of all the challenged claims.

AIA § 316(a)(8) was also informative for the Court, since it discusses the patent owner's response "to the petition" and not its response to the instituted claims. Lastly, the Supreme Court noted that § 318(a) mandates that the PTAB issue a final decision for "any patent claim challenged by the petitioner."

In contradistinction to AIA proceedings, the Supreme Court looked to the provision covering a related proceeding, ex parte re-examination, where the director is explicitly granted discretion to determine, on a claim-by-claim basis, whether to review for patentability. 35 USC § 303(a).

In attempting to reconcile the statutory sections of the AIA, the director argued justification for the PTAB to exercise discretion in the language of §§ 314 and 318. According to the director, since § 314 is directed to claims in the petition, while § 318 is directed to claims challenged by the petitioner, there is enough linguistic discrepancy to find the number of claims in the petition to be fewer than those eventually challenged by the petitioner in the actual IPR proceeding. Justice Gorsuch stated, however, that "[w]e just don't see it," and noted that whatever differences there may be are insufficient to authorize the PTO's regulation. If anything, this discrepancy could be a result of the patent owner's ability to cancel, settle or amend various claims (powers specifically within the statute's text), thereby making the claims in the petition fewer than those eventually challenged.

The Supreme Court also dismissed the director's final two arguments. The Court rejected a policy argument that investing the PTAB with discretion for partial institution promotes efficiency at the PTAB, thus expediting the streamlined nature of the IPR system. The Court simply noted that such policymaking was a job for Congress. The Court also rejected the director's argument that reviewing a decision not to institute on some challenged claims was violative of the Supreme Court's Cuozzo decision (IP Update, Vol. 19, No. 7). The Court noted that the case at hand did not involve a challenge to the determination of a likelihood of success, but rather was an appeal over whether the director exceeded its statutory authority in declining to institute all claims despite finding the requisite likelihood of success for at least one challenged claim.

One dissent, authored by Justice Ginsburg, was short but strongly worded. Ginsburg noted that viewing the combination of the majority's interpretation of § 318(a) and the absence of a mandate to institute IPRs at all under Cuozzo, the PTAB could simply decline to institute on petitions having some challenged claims where no reasonable likelihood of success is demonstrated while simultaneously noting that other claim challenges warrant ex parte re-examination. Such a procedure would permit petitioners to file multiple petitions in order to determine which claims are most likely to be instituted and then file amended petitions that would receive institution. Justice Ginsburg found it difficult to believe that Congress would implicitly authorize this practice while clearly precluding the more rational way of weeding out insubstantial challenges through the PTAB's process of partial institution.

Another dissent by Justice Breyer noted many linguistic gaps in the statutory framework that the majority found so clear. For example, Breyer explained that the phrase "any patent claim challenged by the petitioner" is not clear as to whether such claim is from the "original petition." Under the majority view, if 16 claims are challenged and 15 of the challenges are found to be frivolous, the PTAB is nevertheless required to issue appealable decisions on each claim, as opposed to the PTAB's regulatory framework, where only a decision on the one non-frivolous claim would be appealable and the decision not to institute IPR on the remaining 15 claims would not be appealable.

Breyer's dissent also focused on the need to effectuate the statute's purpose and avoid a "rigid" reading of the statute (such as the majority's reading). The dissent pointed to the director's ability to institute as an authorization of discretion because some challenges are allowed and others are not. The dissent wondered why a hard line to stop at all claims or no claims would be preferred over the more efficient claim-by-claim alternative.

The dissent also found the majority's reading of the statute at odds with Cuozzo, noting that it was difficult to understand why Congress would make decisions not to institute non-appealable and wholly within the director's discretion, while simultaneously requiring institution of all challenged claims even if a likelihood of unpatentability was demonstrated for only one. In Breyer's view, that paradigm creates appellate review of final decisions upholding the patentability of claims in cases where a petitioner, in its petition, failed to raise a reasonable likelihood that a claim was invalid. The dissent argued that this additional work for the PTAB and the Federal Circuit could not have been Congress' intent when creating a more streamlined and inexpensive procedure for patentability review.

Practice Note: Going forward, institution decisions will be based on whether the petitioner has established a reasonable likelihood that at least one challenged claim is unpatentable. In two cases currently on appeal where the PTAB instituted on fewer than all of the challenged claims (PGS Geophysical AS v. Iancu and BASF Corporation v. Iancu), the Federal Circuit ordered supplemental briefing on whether the cases can be heard or must sent back to the PTAB. There is likely to be considerable litigation around the SAS decision on issues such as whether all claims may be waived by petitioner (to limit the scope of estoppel).

On April 26, 2018, the PTO issued a memo explaining how SAS will affect pending and future IPRs. For future IPRs, the PTAB will either institute as to all the petition's challenges or decline to institute an IPR altogether. For pending trials where the petition was only partially instituted, the panel may issue an order supplementing the institution decision to include all challenges from the petition. After this order issues, the parties "shall" meet and confer to discuss the need for additional briefing and/or other adjustments to the schedule. While the PTAB has discretion to sua sponte grant adjustments to the briefing and/or procedural schedule, parties are encouraged to contact the PTAB following any meet and confer to explain their decision whether to seek adjustments, since doing so guarantees that the parties' intentions are reflected in the IPR moving forward. Lastly, the memo explains that going forward, the PTAB "shall" address all pending and unresolved claims in its final written decision, including all remaining challenges from the petition and any new claims added during the IPR via amendment.

Supreme Court To PTAB: All Or Nothing At All

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.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions