October 31, 2014
By Erika Harmon Arner; Jason L. Romrell; J. Derek McCorquindale; Daniel C. Cooley
Authored by Erika H. Arner, Daniel C. Cooley, J. Derek McCorquindale, and Jason L. Romrell
The Leahy-Smith America Invents Act (AIA)—the largest overhaul of the U.S. patent system since 1952—was signed by President Obama and enacted into law on Sept. 16, 2011.1 One year later, post-grant trials before the Patent Trial and Appeal Board (PTAB) took effect.2 Now, more than two years after their arrival, PTAB trials have become an important part of the patent-litigation landscape. As of Oct. 16 of this year, parties have filed 1,908 inter partes review (IPR) petitions, 241 covered business method review (CBM) petitions and 2 post-grant review (PGR) petitions.3
Congress has tasked the U.S. Court of Appeals for the Federal Circuit with exclusive appellate jurisdiction over the impending avalanche of PTAB final written determinations.4 Indeed, on Nov. 3, 2014, the Federal Circuit will hear oral arguments for In re Cuozzo Speed Technologies LLC, the first IPR final written decision to reach the court on appeal.5 But this will not be the first time that the Federal Circuit has been asked to consider a PTAB decision in the post-grant proceeding context. This article considers several recent Federal Circuit decisions addressing the scope of Federal Circuit review of post-grant proceedings, and what those decisions can tell us about the many more to come.
The AIA created a statutory framework for PTAB appeals to the Federal Circuit. In particular, 35 U.S.C. § 319 provides dissatisfied parties a right to appeal the PTAB's final written decisions in IPRs:
A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144. Any party to the inter partes review shall have the right to be a party to the appeal.
Similarly, 35 U.S.C. § 329 provides a right to appeal final written decisions in PGRs and CBMs.6 And referenced in both Sections 319 and 329, 35 U.S.C. § 141 vests the Federal Circuit with exclusive jurisdiction over these appeals:
(c) Post-Grant and Inter Partes Reviews.—A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal the Board's decision only to the United States Court of Appeals for the Federal Circuit.7
Additionally, 28 U.S.C. § 1295 generally provides that "the Federal Circuit shall have exclusive jurisdiction . . . of an appeal from a decision of . . . the Patent Trial and Appeal Board of the United States Patent and Trademark office with respect to a . . . post-grant review, or inter partes review under title 35."8
The statutory framework also establishes when the right to appeal does not exist. For example, 35 U.S.C. § 314(d) provides:
(d) No Appeal.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.
Section 324(e) provides the same for PGRs and CBMs. Although Sections 314(d) and 324(e) are captioned "No Appeal" in the statutes, many parties dissatisfied with the Director's institution decisions have pursued appellate review. These early appeals to the Federal Circuit have begun to bring some clarity to the scope of 35 U.S.C. §§ 314(d) and 324(e).
The first in a string of noninstitution decisions, St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., arrived at the Federal Circuit on a direct appeal from the PTAB.9 In 2010, St. Jude sued Volcano for patent infringement.10 That same year, Volcano counterclaimed and asserted its own patent against St. Jude, but the parties eventually entered a stipulation and the district court dismissed all claims relating to Volcano's patent.11 Six months after the dismissal, St. Jude filed an IPR petition targeting the Volcano patent.12 But the PTAB rejected St. Jude's petition under 35 U.S.C. § 315(b), which bars institution of an IPR where "the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest or privy of the petitioner is served with a complaint alleging infringement of the patent."13
St. Jude appealed the PTAB's denial of institution to the Federal Circuit, arguing that jurisdiction was proper under 28 U.S.C. § 1295.14 In a precedential order, the Federal Circuit granted a motion by Volcano to dismiss the appeal. The Federal Circuit stated that the statutory framework creates a "two-step procedure" for an IPR: first, the Director decides whether to institute a proceeding; and second, if instituted, the PTAB "conducts" the proceeding and renders a patentability decision.15 The Federal Circuit held that only the final written decision of the PTAB (the result of the second step) could be appealed because Section 314(d)'s "broadly worded bar on appeal . . . certainly bars an appeal of the noninstitution decision here."16 While suggesting that Section 314(d) "may well preclude all review [of a noninstitution decision] by any route," the Federal Circuit held that it "need not decide" that issue here.17 Finally, the Federal Circuit held that 28 U.S.C. § 1295 did not vest the jurisdiction that Section 314(d) specifically barred, concluding instead that § 1295 "is most naturally read to refer precisely to the Board's decision under section 318(a) . . . after it 'conducts' the proceeding that the Director has 'instituted.' " 18
On the same day as its decision in St. Jude Medical, the Federal Circuit also issued a precedential order in In re Dominion Dealer Solutions, LLC.19 This challenge arrived through a petition to the Federal Circuit for mandamus relief under 28 U.S.C. § 1651.20 Dominion had petitioned the Director to institute IPRs of five patents that another party had asserted against it.21 The PTAB refused to institute any of the IPRs because Dominion had failed to show that it would likely prevail on at least one of the claims challenged per 35 U.S.C. § 314(a).22 Dominion sought a writ of mandamus challenging the Director's decision not to institute an IPR, which the Federal Circuit denied.23 After noting that "[t]he remedy of mandamus is a drastic one, to be invoked only in extraordinary situations," the Federal Circuit held that "Dominion has no 'clear and indisputable right' to challenge a non-institution decision directly in this court, including by way of mandamus."24
The Federal Circuit again rejected an attempt to directly appeal a noninstitution decision in ZOLL Lifecor Corp. v. Philips Electronics North America Corp.25 In September 2012, Philips filed a complaint against ZOLL Lifecor asserting infringement of multiple patents.26 ZOLL Lifecor subsequently filed IPRs challenging the validity of those patents just before the one-year deadline of 35 U.S.C. § 315(b), but did not name its parent company—ZOLL Medical Corp.—as a real party in interest pursuant to 35 U.S.C. § 312(a).27 The PTAB rejected ZOLL Lifecor's IPR petitions, holding that even if the PTAB gave ZOLL Lifecor an opportunity to correct the deficiency, the corrected petitions would then fall outside the one-year period under Section 315(b). 28
ZOLL Lifecor appealed the PTAB's noninstitution decision to the Federal Circuit, and Philips moved to dismiss.29 Relying heavily on its analysis in St. Jude Medical and rejecting ZOLL Lifecor's attempts to distinguish the case, the Federal Circuit dismissed the appeal and again held that a petitioner cannot appeal from a decision to deny institution based on Section 315(b).30
To date, the Federal Circuit has applied the same jurisdictional analysis to the review of institution decisions as it has applied to noninstitution decisions. For example, in In re MCM Portfolio, LLC, the Federal Circuit rejected MCM's petition for mandamus relief from the Director's decision instituting an IPR against MCM's patent.31 According to MCM, the Director should have been barred from instituting an IPR under Section 315(b)'s one-year deadline because the petitioner—Hewlett-Packard Co.—was in privity with a manufacturer that MCM had sued years earlier.32 While the Federal Circuit held that MCM had not carried its "heavy burden" to obtain mandamus relief, it denied the petition of mandamus "without prejudice to MCM attempting to raise its section 315(b) arguments on appeal after final decision by the Board."33
In re Procter & Gamble Co. also arrived at the Federal Circuit as a petition for mandamus relief from the Director's institution of an IPR.34 The Procter & Gamble Co. had argued against institution below because the IPR petitioner, Clio USA Inc, had filed a declaratory judgment action against P&G, which P&G argued barred Clio under 35 U.S.C. § 315(a) from filing an IPR.35 Because Clio's declaratory judgment action had been dismissed without prejudice, the PTAB rejected P&G's argument and instituted the requested IPR.36
In a precedential order issuing the same day as—and relying heavily on—St. Jude Medical and In re Dominion Dealer, the Federal Circuit denied P&G's petition for mandamus relief.37 So too here, the Federal Circuit held that there is no "clear and indisputable right" to the Federal Circuit's immediate review of a decision to institute an IPR.38 The Federal Circuit did note, however, that "[i]t is a separate question whether section 314(d) means that the decision to institute the review is unchallengeable later—if the Board reaches a decision under 318(a) and an appeal is taken under section 319."39 Noting that Section 314(d) might preclude review of a decision to institute even in an appeal from a final written decision, the Federal Circuit left that question for another day.40 But even with that question looming, the Federal Circuit has continued to deny mandamus review of the Director's decisions to institute.41
The Federal Circuit has thus far applied a strict interpretation of Section 314(d)'s "final and nonappealable" language to reject every request to directly review the PTAB's institution and noninstitution decisions, including by extraordinary writ. Yet the Federal Circuit has declined to categorically rule out the possibility of reviewing institution decisions by other means—for example, as part of the review of a final written decision under Section 318(a).42 The Federal Circuit may address this issue as final written decisions begin to arrive on appeal.43
Endnotes
1 Leahy-Smith America Invents Act (AIA), Pub. L. No. 112-29, 125 Stat. 284 (2011).
2 Id. § 6(c)(2)(A), 125 Stat. 304 ("The amendments made by subsection (a) [enacting 35 U.S.C. § 319 and amending 35 U.S.C. §§ 312-318] shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act [Sept. 16, 2011] and shall apply to any patent issued before, on, or after that effective date.").
3 See http://www.uspto.gov/ip/boards/bpai/stats/aia_statistics_101614.pdf.
4 35 U.S.C. § 141(c).
5 In re Cuozzo Speed Techs. LLC, No. 2014-1301. This is an appeal from the first IPR final written decision in Garmin International, Inc. v. Cuozzo Speed Technologies LLC, IPR2012-00001, Final Written Decision, Paper 59, 108 U.S.P.Q.2d 1852 (P.T.A.B. Nov. 13, 2013) (87 PTCJ 112, 11/15/13).
6 AIA, Pub. L. No. 112-29, § 18(a)(1), 125 Stat. 329 ("The transitional proceeding [for CBM patents] implemented pursuant to this subsection shall be regarded as, and shall employ the standards and procedures of, a post-grant review under chapter 32 of title 35, United States Code, subject to the following . . . .").
7 35 U.S.C. § 141(c).
8 28 U.S.C. § 1295(a)(4)(A).
9 749 F.3d 1373, 110 U.S.P.Q.2d 1777 (Fed. Cir. 2014) (88 PTCJ 18, 5/2/14).
10 Id. at 1375.
11 Id.
12 Id.
13 Id.; 35 U.S.C. § 315(b).
14 St. Jude Med., 749 F.3d at 1375.
15 Id. at 1375-76.
16 Id. at 1376.
17 Id.
18 Id.
19 749 F.3d 1379, 110 U.S.P.Q.2d 1780 (Fed. Cir. 2014) (88 PTCJ 18, 5/2/14).
20 Id. at 1380-81.
21 Id. at 1380.
22 Id.
23 Id. at 1381.
24 Id. (quoting Kerr v. U.S. Dist. Court for N. Dist. of Cal., 426 U.S. 394, 402 (1976)).
25 Nos. 2014-1588, -1589, -1590, -1591, -1592, -1593, -1594,-1595 (Fed. Cir. Aug. 25, 2014) (88 PTCJ 1111, 8/29/14).
26 Id., slip op. at 2.
27 See, e.g., ZOLL Lifecor Corp. v. Philips Elecs. N. Am.Corp., IPR2013-00606, Decision Denying Institution of Inter Partes Review, Paper 13 at 11 (PTAB Mar. 20, 2014).
28 Id. at 12.
29 ZOLL Lifecor, No. 2014-1588, slip op. at 2.
30 Id. at 3-4.
31 Misc. No. 2014-104 (Fed. Cir. Feb. 18, 2014).
32 Id., slip op. at 2.
33 Id. at 2-3.
34 749 F.3d 1376, 110 U.S.P.Q.2d 1782 (Fed. Cir. 2014) (88 PTCJ 18, 5/2/14).
35 Id. at 1378 & n.1 ("An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent." (quoting 35 U.S.C. § 315(a)(1))).
36 Id. at 1378.
37 Id. at 1378-79.
38 Id.
39 Id. at 1379.
40 Id.
41 In re Bd. of Trs. of the Univ. of Ill., Misc. No. 2014-122 (Fed. Cir. May 5, 2014) (denying mandamus relief from IPR institution decisions); In re Versata Dev. Grp., Inc., Misc. No. 2014-131 (Fed. Cir. May 5, 2014) (denying mandamus from CBM institution decisions) (88 PTCJ 104, 5/9/14).
42 See In re Procter & Gamble Co., 749 F.3d at 1376, 1379 (Fed. Cir. 2014) ("Perhaps section 314(d)'s broad language precludes all judicial review of the institution decision, even in an eventual section 319 appeal. We need not decide that question, which can be addressed in a section 319 appeal."); In re MCM Portfolio, LLC, Misc. No. 2014-104, slip op. at 2-3 (Fed.Cir. Feb. 18, 2014) (denying mandamus "without prejudice to MCM attempting to raise its section 315(b) arguments on appeal after final decision by the Board").
43 See Opening Brief of Appellant at 1, In re Cuozzo Speed Techs., LLC, No. 2014-1301 (Fed. Cir. Apr. 22, 2014) (identifying as an issue for appeal "[w]hether the PTAB lacked authority to institute IPR for claims 10 and 14 on grounds of unpatentability not identified in the Petition").
Reproduced with permission from BNA's Patent, Trademark & Copyright Journal, Vol. 88, No. 1702, 10/31/2014. Copyright © 2014 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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