March 2018
CIPA Journal
Inter partes review (IPR) is a trial proceeding before the U.S. Patent and Trademark Office (USPTO) intended to be a cost-effective alternative to litigation for challenging the patentability of one or more claims of a patent on certain prior art bases. IPR was introduced by the America Invents Act (AIA), replacing the former inter partes reexamination, and applies to any patent regardless of when it issued. However, AIA prohibits the Director of the USPTO (Director) from instituting IPR if the petition requesting the review is filed more than one year aft er the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging patent infringement.1 The AIA also provides that decisions of the Director on whether to institute IPR proceedings are final and not subject to appeal.2
Early this year, in Wi-Fi One LLC v Broadcom Corp, the U.S. Court of Appeals for the Federal Circuit, sitting en banc, determined in a split decision that decisions by the Director to institute IPR validity challenges may be appealed to the Federal Circuit when such decisions relate to the timing of the petitions, rather than on the substantive merits.3
Broadcom filed petitions requesting inter partes review of patents owned by Wi-Fi One, LLC (“Wi-Fi”).4 Wi-Fi sought to avoid institution by arguing that the Director lacked authority to institute IPR by showing that Broadcom was in privity with defendants accused of infringement by the previous owner of the patents more than one year before Broadcom filed the petitions. Wi-Fi alleged the IPR petitions were therefore time-barred under §315(b).
The Patent Trial and Appeal Board (Board) instituted IPR and issued final written decisions finding the challenged claims unpatentable.5 The Board also determined that Wi-Fi had not shown that Broadcom, the IPR petitioner, was in privity with the defendants in the infringement action, and, therefore, the IPR petitions were not time-barred.6
Wi-Fi appealed the final written decisions, arguing that the Federal Circuit should reverse or vacate the Board’s time-bar ruling. A three-judge panel of the Federal Circuit rejected Wi- Fi’s arguments as settled by Achates Reference Publishing, Inc. v Apple, Inc.’s,7 which held that such rulings cannot be appealed, and dismissed Wi-Fi’s appeal for lack of jurisdiction.8 Wi-Fi petitioned for rehearing en banc.
In the en banc decision, Judge Reyna, writing for the majority and joined by Chief Judge Prost and Judges Newman, Moore, O’Malley, Wallach, Taranto, Chen, and Stoll, explained that there is a “strong presumption” favoring judicial review that will be abdicated only when “Congress provides a ‘clear and convincing’ indication that it intends to prohibit review.”9 Viewing the statutory language of the AIA, the legislative history, and the statutory scheme as a whole, the court found no clear and convincing indication to bar judicial review of time-bar determinations.10
Th e parties did not cite, nor was the court aware of, any specific legislative history that ‘clearly and convincingly’ indicates congressional intent to bar judicial review of the Director’s time-bar determination. In addition, the court found the natural reading of §314(d), which provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and non-appealable,” limits the reach of §314(d) to determination by the Director as set forth in §314.11 The only subsection under this section addressing the issues that are part of the Director’s determination is subsection (a), which identifies “a threshold requirement for institution” and as the Supreme Court recognized in Cuozzo,12 “grants the Director discretion not to institute even when the threshold is met.”13 Section 314(a) reads:
(a) Threshold. Th e Director may not authorize an inter partes review to be instituted unless the Director determines that the information present in the petition fi led under section 311 and any response fi led under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition.
In other words, the court explained, §314(d) is limited to“determinations that are focused on the patentability merits of particular claims.”14
In contrast, the court found that the §315(b) time bar is unrelated to the “Director’s preliminary patentability assessment or the Director’s discretion not to initiate an IPR.”15 Rather, the “time bar involves only the time of service of a complaint alleging infringement of the patent.”16 Section 315(b) reads:
(b) Patent Owner’s Action. An inter partes review may not be instituted if the petition requesting the proceeding is fi led more than one year aft er 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. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).
The majority further stated that this reading of the overall statutory scheme is consistent with the directive laid out in the Supreme Court’s Cuozzo decision, which stated that §314(d) bars judicial review when “a patent holder merely challenged the Patent Office’s determin[ation] that the information presented in the petition… shows that there is a reasonable likelihood of success with respect to at least one of the claims challenged” or when “a patent holder grounds its claim in a statute closely related to that decision to institute.”17 Thus, the Supreme Court’s statement “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.”18
The majority found that whether a petitioner complied with §315(b) is not such a determination “as it has nothing to do with the patentability merits or discretion not to institute.”19 Further, the court held that time-bar determinations under §315(b) are fundamentally different from the procedural requirements stated in §§311-313, which relate to the Director’s ability to make an informed preliminary patentability determination, and are not “closely related” to the institution decision addressed in §314(a).20 Instead, the time-bar determinations are a “condition precedent to the Director’s authority to act.”21 The court, therefore, held that time-bar determinations under §315(b) are reviewable on appeal, breaking from the court’s prior practice and overruling Achates’s contrary conclusion.22
Judge O’Malley filed a separate concurrence because in her view “the issue presented for en banc rehearing ‘is much simpler than the majority’s analysis implies’.”23 Section 315(b)’s time bar “has nothing to do with the substantive adequacy of the petition and is directed, instead, to the Director’s authority to act.”24 Specifically, it “places a limit on the USPTO’s authority to institute IPRs that is based on a comparison of two or more dates” and is an “important procedural right” provided to patent owners by Congress.25 Therefore, she states that “allowing judicial review of erroneous determinations by the [USPTO] as to whether the §315(b) time bar applies would prevent the agency from ‘acting outside its statutory limits,’” which falls within the “shenanigans” category envisioned by the majority in Cuozzo.26
In the dissent, Judge Hughes, joined by Judges Lourie, Bryson, and Dyk, disagreed with the majority’s narrow reading of the statute, arguing that it contradicts the statutory language and is contrary to the Supreme Court’s Cuozzo decision.27 Recognizing the “strong presumption” that Congress intends judicial review of administrative actions, the dissent explained that such a presumption is not insurmountable.28 The legislative history or the statutory scheme might indicate Congress’s intent to bar review or Congress can enact specific statutes to do so.29
The dissent argued that the language of §314(d) is “clear and unmistakable” – it “calls out a specific agency determination, and expressly prohibits courts from reviewing that decision” – and “absent persuasive indications to the contrary,” Congress “says what it means and means what it says.”30 Furthermore, the dissent explained that the difference in language between §314(d) and the bar on judicial review for reexaminations, as set forth in §303(c), supports a broad prohibition of review of IPR institution decisions.31 Unlike the bar in §314(d), §303(c) “does not bar review of the entire decision to initiate reexamination.”32 This difference, the dissent argued, should lead one to conclude that Congress intended to preclude judicial review of whether IPR petitions were timely filed.33
The dissent also disagreed with the majority opinion, which found that §314(d) “does not bar review of timeliness because the phrase ‘under this section’ limits the reach of §314(d) to the determination by the Director whether to institute IPR as set forth in §314,” stating that Cuozzo foreclosed this reading.34 Specifically, in Cuozzo, the Court held that “the bar on judicial review extends to the Director’s assessment of the requirements under §312, which is plainly different section than §314.”35
Further, because the petition’s timeliness under §315(b) is part of the Board’s decision to institute, the dissent argued that it “is plainly a question ‘closely tied’ to the Director’s decision to institute.”36 The dissent also disagreed with the majority’s view that §315 is less closely related to §314 than the criteria of §§311-312, arguing that payment of fees and identification of real parties in interest under §312 bear the same relation to the institution decision as the §315 inquiry.37
While the Wi-Fi One decision is confined to the reviewability of the time bar under §315(b), some believe that its rationale may extend to the reviewability of other issues. It remains to be seen how far the court will extend its reasoning, if at all.
1 35 U.S.C. §315(b).
2 Id. §314(d).
3 Slip op. at 21.
4 The patents were owned by Telefonaktiebolaget LM Ericsson when Broadcom filed the IPR petitions. During the pendency of the IPRs, Ericsson transferred ownership of the patents to Wi-Fi.
5 The Director has delegated the authority to institute IPR to the Board. 37 C.F.R. §2.4(a), 42.108. This delegation of authority has been held constitutionally and statutorily permissible. See Ethicon Endo-Surgery, Inc. v Covidien LP, 812 F.3d 1023, 1033 (Fed. Cir. 2016).
6 Broadcom Corp. v Wi-Fi One, LLC, No. IPR2013-00601, 2015 WL 1263008, at *4–5 (P.T.A.B. Mar. 6, 2015); Broadcom Corp. v Wi-Fi One, LLC, No. IPR2013-00602, 2015 WL 1263009, at *4 (P.T.A.B. Mar. 6, 2015); Broadcom Corp. v Wi-Fi One, LLC, No. IPR2013-00636, 2015 WL 1263010, at *4 (P.T.A.B. Mar. 6, 2015).
7 803 F.3d 652, 658 (Fed. Cir. 2015).
8 Id. at 659.
9 Slip op. at 15; see also Cuozzo Speed Technologies, LLC v Lee, 136 S. Ct. at 2140; see Lindahl v Office of Pers. Mgmt., 470 U.S. 768, 778 (1985); Block, 467 U.S. at 349–50; Return Mail, Inc. v U.S. Postal Serv., 868 F.3d 1350, 1357 (Fed. Cir. 2017)
10 Slip op. at 15.
11 Id. at 15-16.
12 S. Ct. 2131, 2140 (2016).
13 Slip op. at 16.
14 Id.
15 Id. at 17.
16 Id.
17 Id. at 18.
18 Id.
19 Id. at 19-20.
20 Id.
21 Id.
22 Id. at 21.
23 Slip op. at 3 (O’Malley, J., concurring)
24 Id.
25 Id. at 6.
26 Id. at 7.
27 Slip op. at 4 (Hughes, J., dissenting).
28 Id.
29 Id.
30 Id.
31 Id. at 8-9; see also 35 U.S.C. §303(c) (“[a] determination by the Director . . . that no substantial new question of patentability has been raised will be final and nonappealable.”).
32 Slip op. at 9.
33 Id. at 8.
34 Id.
35 Id.
36 Id. at 5.
37 Id. at 10.
Originally printed in CIPA Journal in March 2018. 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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