Posts Tagged: "nonappealable"

In a Per Curiam Order the Federal Circuit granted the petition for en banc rehearing and vacated the court’s three prior opinions in Wi-Fi One v. Broadcom Corp. The Federal Circuit will consider whether IPR institution decisions are reviewable in light of the Supreme Court’s decision in Cuozzo Speed Technologies v. Lee.

”It appears to me that en banc consideration [of Achates] is warranted,” Judge Taranto wrote. ”It is notable, to begin with, that the [Supreme] Court pointedly avoided embracing the simplest and most review-barring reading of § 314(d) – namely, that it prohibits judicial review of any determination to institute an IPR.”

In 2013, Cardiocom, LLC (“Cardiocom”), a subsidiary of Medtronic, Inc. (“Medtronic”), sought inter partes review of two patents owned by Robert Bosch Healthcare Systems, Inc. (“Bosch”). The Cardiocom petitions were denied in January 2014. Medtronic later sought another inter partes review of the same two patents, without naming Cardicom as an interested party… Section 314(d) bars review of questions regarding the application and interpretation of statutes “closely related” to the decision whether to institute an IPR, including reconsideration of the Board’s decision to institute.

The Federal Circuit dismissed Husky’s appeal, finding that it lacked jurisdiction to review the Board’s determination of whether assignor estoppel barred institution of an inter partes review for two reasons. First, Husky’s appeal did not fall into any of the three categories of challenges that were reviewable by the Federal Circuit: there were no constitutional concerns at issue, the question of assignor estoppel did not depend on other less closely related statutes, and there was no question of interpretation reaching beyond § 314(d). Second, Husky’s challenge only implicated the question of who may ask the Board to evaluate the validity of a patent, not the Board’s authority to invalidate a patent.

AIA trials have been sought over 5,000 times to challenge patents and are widely used to resolve patent disputes. Many patent owners complained that these proceedings were unfairly tilted in favor of those challenging patents. Cuozzo sought Supreme Court review of two such practices that it felt went too far and were inappropriate given the language and intent of the AIA. However, the Court sided with the PTAB on both issues, leaving the AIA trial process, as practitioners have come to know it over the last four years, intact.

“This is obviously a victory for some who challenge a patent’s validity in IPR proceedings since broadly construed claims are more vulnerable to attack than narrowly construed claims” remarked Scott Daniels, partner at Westerman Hattori Daniels & Adrian, LLP. “Still, the great majority of IPR decisions do not turn on claim construction and for those cases Cuozzo simply makes no difference.”… Levy, who was similarly dead on accurate with his predictions, raises an important point that so many in the patent community who were rooting for Cuozzo failed to keep in mind. Those challenging the action of an agency face a substantial uphill battle when they seek a judicial determination overriding agency rulemaking and statutory implementation.

In a unanimous decision delivered by Justice Breyer in Cuozzo Speed Technologies, LLC v. Lee, the United States Supreme Court upheld the United States Patent Office’s regulation requiring the Patent Trial and Appeal Board to apply the broadest reasonable interpretation (BRI) standard in Inter Partes Review (IPR) proceedings. The Supreme Court also held that the Patent Office’s decision to institute an IPR proceeding is not appealable to the Federal courts.

A good argument can be made that a given panel of PTAB judges will construe claims in the manner that makes most sense to them, regardless of the legal rubric they are assigned. Indeed, we can draw a direct analogy from the experience following the Supreme Court’s decision in Teva v. Sandoz on the degree of appellate deference to be accorded to a district court’s claim construction. Notwithstanding decades of anticipation surrounding that issue, there has been little practical effect on the outcomes of litigations or appeals as a result of Teva. District court judges and Federal Circuit panels still approach claim construction issues in essentially the same way they did before. It seems likely that the use of BRI versus plain and ordinary meaning in inter partes review proceedings will also turn out to be much ado about nothing.

It seems difficult to reconcile the Respondent’s principal argument that two standards should still apply: that is, that the PTAB should be permitted to continue applying its policy-derived broad BRI standard for construing patent claim scope in Congressionally mandated “adjudicative” IPR proceedings while still using the lower preponderance of the evidence standard provided under 35 U.S.C. § 316(e). The notion that the USPTO may “infer” such intent to also apply the BRI in the absence of any express guidance from Congress was weak, at best. Especially because having two such claim construction standards applied by Article III courts and the ITC on the one hand, and the USPTO’s unilateral application of an “examination” claim construction standard in an intended “adjudication” setting on the other hand, has already led to inequitable and presumably non-appealable results.

On Monday, April 25, 2016, the United States Supreme Court heard oral arguments in Cuozzo Speed Technologies v. Lee, the first case in which the Supreme Court will decide issues relating to inter partes review (IPR) proceedings conducted by the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO). With the oral arguments now behind us, I once again reached out to a panel of experts who are closely watching the case to ask for their reactions. Once again, I posed the question: What do you expect the Supreme Court to do in Cuozzo? This time, with the benefit of having listened to the oral arguments, the reactions and predictions of our panel of experts follows.

Perhaps the best question of the entire oral argument was asked by Chief Justice Roberts: “So why ­­should we be so wedded to the way they do business in the PTO with respect to the broadest possible construction when the ­­point is not to replicate PTO procedures? It’s supposed to take the place of district court procedures.” Gannon’s response pointed to the difference in the burden of proof between the district court (i.e., clear and convincing) and the PTAB (i.e., preponderance). Chief Justice Roberts responded, “it’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.” Gannon replied that there are “multiple reasons” why different results could be achieved, to which Roberts said: “there’s a problem here, and so we should accept another problem that’s presented where we don’t have to do it.”

The Supreme Court will hear oral arguments in the Cuozzo Speed Technologies, LLC v. Lee on April 25, 2016, with a decision expected sometime before the end of June… [S]ome of the Federal Circuit judges have shown signs that their position on these questions are not as rigid as previously thought. This is not unprecedented – for example, when the Supreme Court was on the verge of considering the patent fee-shifting statute of 35 U.S.C. § 285 in the Octane Fitness case, Judge Rader was seen criticizing the Federal Circuit’s established test in a concurrence to the Kilopass Tech. Inc. v. Sidense Corp. case. The current Federal Circuit may also be recognizing that the present understanding of PTAB jurisprudence may be soon changing.

ACS challenged the Board’s decision that Shaw was not barred from bringing the second IPR because the petition was filed more than one year after a complaint for infringement was served on Shaw. It argued that the decision of the Board not to apply the one-year bar was a matter of statutory interpretation reviewable by the Federal Circuit, and not a decision whether to institute an IPR. The court disagreed, and held that it had no authority to review the Board’s application of the one-year bar. In dicta, the Court suggested that while voluntary dismissal without prejudice may undo the effect of the lawsuit, it may not undo the effect of service of a complaint, which triggers the one-year time bar. But the issue was not properly before the court.

The Federal Circuit held, pursuant to 35 U.S.C. § 314(d), that it does not have jurisdiction to review an institution decision, because a “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The PTAB’s decision on the redundancy of Harmonic’s asserted grounds for review constituted a portion of the Institution Decision and was therefore unappealable, absent some other appealable question.