The AIA does not restrict judicial review of a final written decision

supreme-court-scotus-pillarsOn February 25, 2016, the New York Intellectual Property Law Association (NYIPLA) filed an amicus brief on the merits in Cuozzo Speed Technologies, LLC v. Lee, No. 15-446. Dorothy Auth, President of the NYIPLA, as well as Eugene Gelernter, Irena Royzman, Jason Vitullo, Charles R. Macedo and David Goldberg were authors on the brief. Charles R. Macedo and Irena Royzman are Co-Chairs of NYIPLA’s Amicus Briefs Committee and Robert Isackson is the NYIPLA Board Liaison.

Because of the widespread use of inter partes review (IPR), and the importance of such proceedings to patent owners and validity challengers alike, the NYIPLA members and their clients have a strong interest in the issues presented in Cuozzo, which the Supreme Court has agreed to decide, with oral arguments scheduled for April 25, 2016. As with many cases of great importance to our membership, the NYIPLA elected[1] to file an amicus brief in support of the petitioner on the second question presented, and in support of neither party on the first question presented.

What follows is an executive summary that is based on the brief filed.


Should Institution Decisions Be Reviewable on Appeal from a Final Written Decision?

The second question accepted by the Supreme Court is as follows:

Whether the court of appeals erred in holding that, even if the Board exceeds its statutory authority in instituting an IPR proceeding, the Board’s decision whether to institute an IPR proceeding is judicially unreviewable.

The America Invents Act (“AIA”), Pub. L. No. 112-29, 125 Stat. 284 (2011), imposes strict limits on the PTO’s authority in IPRs. It states that the PTO “may not” institute an IPR “unless” the “information in the petitiondemonstrates that there is a reasonable likelihood that the petitioner will prevail in establishing that at least one challenged claim is unpatentable. 35 U.S.C. § 314(a) (emphasis added). The petition, in turn, must set forth “with particularity … the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for [that] challenge ….” 35 U.S.C. § 312(a)(3). If a petition fails to meet these requirements, it may not “be considered” by the PTO. 35 U.S.C. § 312(a).

These provisions set clear limits on the PTO’s authority. They ensure that the PTO will consider patentability in IPRs only on grounds raised in the petition and will not hold claims unpatentable on other grounds that the petition did not raise. If the PTO violates these statutory limits on its authority, its ultra vires conduct should (and must) be subject to judicial review, not immune from it.

In its 2-1 decision in this case, the Federal Circuit held that ultra vires action by the PTO, in instituting and deciding an IPR on grounds not raised in the petition, is not subject to judicial review on appeal from a final decision in an IPR. That conclusion is at odds with a long line of decisions by this Court. It turns the statutory limits on the PTO’s authority into a toothless nullity and effectively gives the PTO a blank check to expand its authority beyond clear statutory limits without judicial constraint.

Administrative agencies are obligated to act within the statutory limits on their authority. If an agency violates those limits, its conduct is subject to judicial review absent clear and convincing evidence that Congress intended otherwise. The PTO is no exception. The AIA and its legislative history do not provide clear and convincing evidence that Congress intended ultra vires agency action by the PTO in holding claims unpatentable to be exempt from judicial review on appeal from a final written decision in an IPR. The Supreme Court should make clear that if the PTO holds claims unpatentable on grounds not set forth in the petition, then that ultra vires conduct is subject to judicial review, not exempt from it.

Section 314(d) of the AIA, which the Federal Circuit majority relied upon, does not restrict judicial review of a final written decision. That provision is part of a section entitled “Institution of inter partes review.” It states that “[t]he determination by the Director whether to institute an inter partes review … shall be final and nonappealable.” 35 U.S.C. § 314(d). By its express terms, § 314(d) applies to decisions on whether to institute inter partes review—not to appeals from a final written decision, which are governed by § 319. Nothing in § 319 or any other provision bars review of whether the PTO violated the statutory limits on its authority by holding claims unpatentable on grounds not set forth in the petition.


Is BRI the Proper Standard?

The first question accepted by the Supreme Court is as follows:

Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.

On the other Question Presented, the NYIPLA does not take a position on whether the standard for claim construction in IPRs should be the “broadest reasonable interpretation (BRI)” standard that the PTO applies in patent examination, the standard set forth in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) that courts apply in patent infringement litigation, or some other standard. The NYIPLA submits that the decision on that issue should be informed by consideration of the extent to which amendments to claims are available in IPRs.

Applying the BRI standard can result in a claim construction that is broader than the construction yielded by applying the Phillips standard, and a broader construction may in turn make some claims more vulnerable to an invalidity challenge. Applying the BRI standard nonetheless is appropriate in patent examination proceedings because those proceedings involve a back-and-forth between the applicant and the patent examiner, and applicants are freely able to amend their claims in examination to address validity issues that the examiner may raise. In contrast, there is no opportunity to amend claims in patent infringement litigation, and the application of the Phillips standard is appropriate in that context.

IPRs do not match either paradigm. In IPRs, patentees may not freely amend claims, but do have a very limited ability to move for claim amendments. Such motions are almost always denied. The appropriate standard for claim construction should be informed by the limited extent to which such amendments are available in IPRs.



[1] The arguments made in this brief were approved by an absolute majority of NYIPLA’s officers and members of its Board of Directors, but do not necessarily reflect the views of a majority of the members of the Association, or of the law or corporate firms with which those members are associated. After reasonable investigation, the NYIPLA believes that no officer or director or member of the Amicus Briefs Committee who voted in favor of filing this brief, nor any attorney associated with any such officer, director or committee member in any law or corporate firm, represents a party to this litigation. Some officers, directors, committee members or associated attorneys may represent entities, including other amici curiae, which have an interest in other matters that may be affected by the outcome of this litigation.

The Author

Eugene Gelernter

Eugene Gelernter is a partner with Patterson Belknapp. His practice concentrates in patent infringement litigation and other complex litigation matters. He has represented patentees and alleged infringers in numerous trials and arbitration hearings in high-stakes patent cases. In five of his cases, he has won judgments or arbitration awards ranging from $150 million to $700 million for his clients. He also represented the plaintiff in a series of cases where the client received settlements totaling $3.2 billion. He has successfully briefed and/or argued numerous appeals in the Federal Circuit and other appellate courts. For more information or to contact Mr. Gelernter please visit his firm bio page.

Eugene Gelernter

Irena Royzman is a Partner with Kramer Levin, where she represents pharmaceutical, biotech and medical device companies in patent litigation, advising both plaintiffs and defendants in every stage of the litigation process from pre-suit investigation through trials and appeals. She litigates a wide range of subject matters including small molecule drugs, antibodies, manufacturing processes, point-of-care diagnostics, gene-editing technology, gene therapies, and drug-eluting coatings. She has a particular depth of experience in litigation under the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act (BPCIA). In addition, she represents clients in inter partes reviews and high-stakes license disputes. Irena also provides strategic counseling in the area of biologics and pharmaceuticals and advises clients on contractual and licensing issues.

To read more about Ms. Royzman or to contact her, please visit her firm profile page.

Eugene Gelernter

Charles R. Macedo is a Partner at Amster, Rothstein & Ebenstein LLP, where he advises and litigates in all areas of intellectual property law, including patent, trademark and copyright law, with a special emphasis in complex litigation. He also assists clients in obtaining, maintaining and enforcing patent and trademark portfolios. He has successfully recovered domain names registered to others using clients’ trademarks.
Mr. Macedo is also the author of the book, The Corporate Insider’s Guide to U.S. Patent Practice, originally published by Oxford University Press.

For more information or to contact Mr. Macedo, please visit his Firm Profile Page.

Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of Read more.

Discuss this

There are currently 9 Comments comments.

  1. David March 10, 2016 2:35 pm

    The various amici have struggled with the underlying constitutional law.

    Per the CAFC, the validity of an issued patent is a matter of “public rights.” Per that designation, the claim is properly administrative. Where properly administrative, the administrative agency handles the claim as set forth in administrative statute.

    Where the administrative statute states that a particular decision governing the administrative claim is “unreviewable,” that designation controls. The Article III SCOTUS does not re-write administrative regulations governing legislative or executive tribunals as they resolve administrative claims.

    Virtually all of the Cuozzo amici have applied “private right” rule to the Article I – Article III interaction.

  2. Edward Heller March 10, 2016 5:54 pm

    “Nothing in § 319 or any other provision bars review of whether the PTO violated the statutory limits on its authority by holding claims unpatentable on grounds not set forth in the petition.”

    A simple, and eloquently stated, point. But let us be clear that the grounds of which we speak are the prior art (and supporting evidence regarding skill in the art, etc.), the legal basis, and the argument for invalidity.

    In this case, the claims at issue were invalidated over art and argument not presented in the petition. Would this extend, to arguments not presented? To supported evidence not presented, such as, skill in the art, that would be required to support an obviousness argument that was made? Where is the dividing line, if any.

    Still the statute

  3. Edward Heller March 10, 2016 6:01 pm

    David, assuming for argument’s sake that a patent is a not the property of the inventor or his assigns, but government privilege known as a public right that can be revoked by the government without court authorization in order that the public may freely use the invention without restriction, does the patent owner still have due process rights such that government must follow the statutes and its own rules?

  4. Edward Heller March 10, 2016 6:13 pm

    One more point, if the PTAB can invalidate patents on grounds not presented in the petition, the assumption is that the PTAB can invalidate a patent on grounds of its own choosing and become the protagonist, not the judge. It doesn’t even need a petitioner. Just kick them out of the case, making it Board vs. Patent Owner, with the Board being prosecutor, judge and jury.

  5. David March 10, 2016 6:27 pm

    Ned – two thoughts:

    (1) As a general concept, yes, due process should operate at the administrative level to prevent deprivation of basic fairness, etc. This is a core idea, and likely does not apply beyond fundamental prejudicial or unequal treatment.

    (2) Does the congressional “unreviewable” limitation in the IPR statute constitute, e.g, a prejudicial deprivation of procedural due process at the administrative level? Seems unlikely.

    Either way, you just flushed out the correct constitutional form the amici briefs should have taken:

    (1) the discussion of patent validity as a public right, and the associated ramifications;

    (2) the identification any legitimate ambiguity in the administrative statute requiring the court’s interpretation; and

    (3) a review of how procedural due process applies to “public rights,” and any arguments as to how there might be deprivation in the instant case.

    Unfortunately, the amici more or less missed the mark – and largely devolved into standard fare policy arguments (perhaps aimed at Congress?)

  6. Anon March 10, 2016 7:06 pm

    The title and the first sentence of hte last paragraph (“Section 314(d) of the AIA, which the Federal Circuit majority relied upon, does not restrict judicial review of a final written decision“) are misleading to the extent that the issue here front and center is NOT the matter of judicial review of any final decision, but rather – and perhaps critically – it is the non-review of the initiation decision.

    This is because it is at that point – regardless of any further decision on the merits – that the property that is the grant of a patent suffers a taking without review or recompense.

  7. Edward Heller March 10, 2016 7:10 pm

    Anon, I believe allowing the PTAB to ignore the statutes and hold a patent invalid on grounds of its own choosing lacks a lot of due process given that the PTAB becomes prosecutor, judge and jury.

  8. Anon March 11, 2016 9:52 am

    Mr. Heller,

    Whether or not the final decision reaches the point that you seem to want to discuss at 7 is just not material to the breach of Constitutional protections that occur at the point of initiation.

    Please focus on that point before inserting a different point.

  9. Bemused March 11, 2016 10:12 am

    “Just kick them out of the case, making it Board vs. Patent Owner, with the Board being prosecutor, judge and jury.”

    And executioner.