Federal Circuit Affirms Board’s Authority to Assess IPR Petition in View of APA Challenge

In Fanduel, Inc., v. Interactive Games LLC, No. 2019-1393 (Fed. Cir. July 29, 2020), the Federal Circuit affirmed the Board’s duty to independently assess the merits of an inter partes review petition and held that a petitioner is not entitled to additional notice under the Administrative Procedure Act (APA) solely because the Board’s assessment of patentability exceeds the scope of patent owner’s response.

In its final written decision, the Board upheld one of Interactive Games’s claims as non-obvious, despite originally determining that Fanduel was reasonably likely to succeed on the petition. Fanduel argued the Board violated the APA by relying on its own rationale for non-obviousness when the patent owner’s only argument rested solely on whether one of the cited references was prior art. Fanduel further argued that the Board’s decision improperly contradicted both its previous determination that the petition was reasonably likely to succeed and petitioner’s unchallenged expert testimony.

On appeal, the Federal Circuit affirmed the Board, reasoning that the scope of the Board’s analysis is not limited by patent owner’s response, since such a limitation would effectively shift the burden of proof to patent owner. Furthermore, Fanduel knew from the time it filed the petition that the Board would assess the full veracity of its obviousness challenge and no additional notice was required under the APA. The Court further held that because the standard of proof at institution is lower than the standard at trial, that the final written decision was not inherently inconsistent with its decision to institute the IPR. Last, the Court held that the Board was not obligated to defer to an expert’s opinion—whether the patent owner rebutted it was inconsequential.