Can Congress Bar Review of PTAB Decisions to Institute Inter Partes Review?

The simplest questions often have the most complex implications.  In its order granting a rehearing en banc in Wi-Fi One, LLC v. Broadcom Corporation, the Court of Appeals for the Federal Circuit asked just such a question:

“Should this court overrule Achates Reference Publishing Inc. v. Apple Inc. … and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?”

As a result, Wi-Fi One stands among the latest—and potentially the most important—in a series of cases that have called into question both the degree to which Congress intended to restrict the authority of federal courts to review certain decisions made by the Patent Trial and Appeal Board (PTAB) and the limits on Congress’s power to actually do so.  While it remains to be seen how the en banc Federal Circuit will ultimately rule, the answer to its question will inevitably have a broad and deep impact on future inter partes review and other post-grant proceedings, Patent Office procedures, and beyond.

Inter Partes Review Proceedings Are Subject to Important Procedural and Substantive Limits

Since their inception as part of the changes ushered in by the America Invents Act (AIA), inter partes review (IPR) proceedings have proven to be a powerful tool for allowing petitioners to challenge patents, including those that are the subject of co-pending litigation.  Designed to be a time-compressed and cost-effective alternative to traditional litigation, IPR proceedings have been widely adopted across industries and have become an important consideration in patent litigation strategy.  IPR proceedings are, however, not without limits.  For example, a petition requesting an IPR proceeding must be filed within “[one] 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, and the petition must also substantively demonstrate a reasonable likelihood of success.  See 35 U.S.C. § 315(b); 35 U.S.C. § 314(a).

In addition to imposing limitations on the timing and content of a petition seeking to institute IPR proceedings, Congress included a provision in the AIA that attempts to limit the appealability of the decision whether or not to institute IPR proceedings.  Specifically, under 35 U.S.C. § 314(d), “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The 20 words in § 314(d) appear simple enough on their face, but their meaning, scope, and applicability have generated significant controversy and debate regarding whether, when, and under what circumstances a decision to institute IPR proceedings can be subjected to appellate review.

Recent Decisions Have Raised Questions About the Reviewability of IPR Institution Decisions

The dispute between the parties in Wi-Fi One underscores the tension between the Federal Circuit’s holding in Achates Reference Publishing, Inc. v. Apple Inc., No. 2014-1788 (Fed. Cir. Sept. 30, 2015) and the statements made in the U.S. Supreme Court’s opinion in Cuozzo Speed Techs., LLC v. Lee, No. 15-446 (June 20, 2016).  In Achates, a Federal Circuit panel took an expansive view of the scope of the nonappealability provision, holding that § 314(d) prohibits the Federal Circuit from reviewing the board’s determination to initiate IPR proceedings based on the PTAB’s assessment of the time-bar of § 315(b).  Under Achates, the board’s determination that the one-year bar has not been violated by a petitioner is effectively the final word on whether or not the requirements of § 315(b) have been satisfied.

The following summer, the Supreme Court weighed the nonappealability language in § 314(d) in a somewhat different context, ultimately holding that the nonappealability provision overcame the “strong presumption” in favor of judicial review and barred Cuozzo’s challenge to the PTAB’s decision to review two claims that were not explicitly addressed in the underlying  IPR petition.  However, while the Cuozzo decision confirmed the efficacy of the nonappealability provision within the context of the specific facts of that case, the opinion’s focus on the “under this section” phrase in § 314(d) and its explicit denial that it was precluding all judicial review of all aspects of a PTAB institution decision highlighted the tension between the expansive reading of § 314(d) in Achates and more restrictive readings of the nonappealability provision.

In Wi-Fi One, Broadcom petitioned the PTAB to institute IPR proceedings against a patent that Wi-Fi One had asserted, in parallel federal district court litigation, against a number of other entities.  See Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d 1329, 1332 (Fed. Cir. 2016).  In arguing against institution, Wi-Fi One asserted that Broadcom was in privity with the district court defendants, and because the one-year limit had elapsed for those defendants, Broadcom’s petition was time barred under 35 U.S.C. § 315(b).  Id.  Wi-Fi’s motion seeking supporting discovery was denied by the Board, as was its petition for a rehearing before the Board.  Id.  Wi-Fi One’s related petition for a writ of mandamus submitted to the Federal Circuit was also denied.  Id.  IPR proceeding were instituted against Wi-Fi One’s patent, and the challenged claims were determined to be unpatentable.  Id. at 1332-33.

On appeal to the Federal Circuit, Wi-Fi One again asserted that Broadcom’s petition was untimely because Broadcom was in privity with a time-barred district court litigant.  Id. at 1333.  As part of its argument, Wi-Fi One argued that Cuozzo implicitly overruled Achates, and therefore Wi-Fi One was free to appeal the PTAB’s determination on the timeliness of Broadcom’s petition.  Id.  Two of the judges on the panel flatly rejected this view, stating that there was “nothing in the Cuozzo decision that suggests Achates has been implicitly overruled.”  Id. at 1334.  Judge Reyna’s concurrence adopted a different view, asserted that Achates rendered § 315(b) “toothless,” and explicitly called for the reconsideration of Achates en banc:

Our opinion in Achates…holds that a time bar decision is not reviewable – a holding that I believe should be reconsidered by the en banc court.  Id. at 1340.

Taking its cue from Judge Reyna, Wi-Fi One subsequently requested a rehearing en banc.  Based on the supplemental briefing request contained in the order granting that request, the Federal Circuit appears willing to attempt to resolve the tension between Achates and Cuozzo, and determine whether appeals of the PTAB’s decisions regarding the one-year bar under § 315 are truly shielded from appellate review.  Regardless of how the en banc Federal Circuit addresses this tension, the disputes over the availability of appellate review in Achates, Cuozzo, and Wi-Fi One reveal divergent and potentially irreconcilable opinions about Congress’s precise intent as to the reviewability of IPR institution decisions and—perhaps more importantly—the ability of Congress to actually establish limits on judicial review of IPR institution decisions.

Does Congress Have the Ability to Establish Whether a Court has Jurisdiction to Review the PTAB’s Determination of Compliance with the One-Year Bar?

The Federal Circuit’s decision to rehear Wi-Fi One en banc raises a non-trivial possibility that the court’s decision will result in an incongruity between Congress’s intent and the actual language used in § 314(d).  Putting aside the question of whether the current Congress would subsequently attempt to amend the AIA, it remains essential to ask:  Could Congress amend the AIA to conclusively establish whether or not the PTAB’s determination of compliance with the one-year bar is subject to appellate review?  In evaluating this question, two scenarios warrant consideration

Scenario 1 – Congress Actually Intended for Determinations Regarding Compliance with the One-Year Bar to be Appealable.

It is certainly possible to read and interpret the relevant sections of the AIA in a manner that suggests Congress intended to cabin off the non-appealability provision in § 314 to only those topics covered in § 314—the substantive assessment of the prior art references cited in an IPR petition and their likelihood of rendering at least one challenged claim unpatentable—and leave decisions made under any other portion of the IPR-related statutory sections a subject to appellate review.  While such an approach would require the actual or effective overruling of Achates, is not necessarily inconsistent with the result in Unwired Planet, LLC v. Google, Inc., No. 2015-1812 (Fed. Cir. Nov. 21, 2016), where the court vacated and remanded a final decision in a Covered Business Method review based on the PTAB’s application of an incorrect definition of “covered business method” when evaluating the patent.  It also puts Congress in the relatively easy position of expanding appellate review of the IPR institution decision-making process, rather than attempting to restrict such review.  As such, there are a number of approaches Congress could take to amending the AIA and clearly declaring its intent.  For example, Congress could simply amend § 315 to explicitly note the availability of review for determinations with respect to the one-year bar.  Alternatively, revising § 314(d) to explicitly not apply to the aspects of IPR institution decisions regarding compliance with § 315 would achieve a similar result, as would any of a number of other revisions to § 314 that would tend to make clear that the “this section” language contained in § 314(d) is meant the refer only to the specific substantive determinations laid out in § 314.  In view of the strong presumption in favor of judicial review, it is unlikely that a provision explicitly conferring appellate jurisdiction would encounter much resistance from the federal courts, though it may be helpful in such a situation for Congress to further clarify whether or not it meant for appeals regarding the one-year bar to be eligible for interlocutory review, or whether such challenges should be brought only after the conclusion of the IPR proceedings.

Scenario 2 – Congress Intended to Forbid Appellate Review of the PTAB’s Determinations of the Satisfaction of the One-Year Bar.

Of course, it is also possible to view the nonappealability provision in § 314(d) as reflecting an intent to remove from appellate scrutiny all aspects of an IPR institution decision, including assessments of a petitioner’s compliance with the one-year bar contained in § 315.  Whether an explicit amendment rendering such assessments immune from appellate review would withstand scrutiny is a closer call.  On the one hand, the majority opinion in Cuozzo suggests that the high court may indeed be deferential to an explicit statement that a particular section of a statute is not reviewable.  Such an amendment may also be viewed as simply codifying the status quo set in Achates.

On the other hand, Cuozzo is fairly limited in its assessment of the scope of the nonappealability provision of § 314(d) and does not specifically address whether the one-year bar in § 315 is included within that scope.  A fair reading of Cuozzo leaves room for a distinction between the nonappealability of certain agency determinations that are within the particular expertise and/or authority of the agency, and the potentially appealable aspects of such determinations that raise constitutional questions, have due process implications, or are based on (to quote the Court) “shenanigans.”  See slip op. at 11-12.  As such, there is a reasonable argument to be made that the determination of whether a petition is timely (and the attendant determinations of the relationships between a petitioner and other relevant parties) are the sorts of decisions that raise precisely the sorts of concerns voiced in the majority’s opinion in Cuozzo.  Particularly when viewed in light of the well-recognized presumption in favor of review and the points raised in Justice Alito’s dissent in Cuozzo, it is possible that even a carefully drafted amendment seeking to exclude the PTAB’s determination that a petition is timely would fail to pass muster.

Conclusion

So long as inter partes review proceedings and other post-grant procedures remain powerful tools in the hands of industry leaders and other stakeholders who seek to resolve significant patent disputes, parties will continue to test the limits of every aspect of the governing statutes.  As the courts continue to construe the AIA, it will remain important to see whether, and how, Congress responds.

The Author

Christopher Douglas

Christopher Douglas is a partner on Alston & Bird’s Patent Prosecution, Counseling & Review Group and a coauthor of the USPTO Post-Grant Trials Handbook. Chris represents both petitioners and patent owners in post-grant proceedings and is recognized as one of the more active post-grant practitioners nationwide. Chris remains one of the few practitioners to tout confirmation of all claims in an inter partes review in a final written decision on behalf of a patent owner. In addition, he maintains a robust pre-grant patent prosecution practice. His familiarity with both pre-grant and post-grant proceedings informs his ability to counsel and secure foreign and domestic patent rights for his clients.

Christopher Douglas

Benjamin Huber is an associate on Alston & Bird’s Patent Prosecution, Counseling & Review Group. Ben focuses his practice on helping clients obtain, protect and enforce their intellectual property rights. In addition to preparing and prosecuting patent applications directed to electrical, e-commerce, mechanical and software inventions, Ben provides strategic counseling to achieve the client’s business and intellectual property goals.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com 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 IPWatchdog.com. Read more.

Discuss this

There are currently 7 Comments comments.

  1. Caesar Salazar February 27, 2017 8:28 am

    The first two links in this article are the exact same link (they are both Wi-Fi links). In fact even a Cuozzo link later in the article is the same link, which is kind of funny. Furthermore, there is a mention of the Unwired case in italics but no link.

    Where is the link to the actual question to be considered en banc? I understand that Judge Reyna advocated for an en banc rehearing in his concurring opinion, but that is NOT the same thing as the actual order.

    Where does the following come from:

    “Should this court overrule Achates Reference Publishing Inc. v. Apple Inc. … and hold that judicial review is available for a patent owner to challenge the PTO’s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?”

    There is absolutely no link to this statement, so it is unsourced. All the other sources are duplicate links to the panel Wi-Fi decision.

    Gene, this article needs to be heavily edited for lack of citations and duplicate citations.

  2. Caesar Salazar February 27, 2017 8:37 am

    From the article:

    “On the one hand, the majority opinion in Cuozzo suggests that the high court may indeed be deferential to an explicit statement that a particular section of a statute is not reviewable. Such an amendment may also be viewed as simply codifying the status quo set in Achates.”

    This statement seems to be on the money here. As harmonization is always kept in mind when trying to interpret laws, I would venture to say that this is how the court will rule.

  3. Gene Quinn February 27, 2017 10:37 am

    Caesar @1-

    Just because you don’t like what the article says doesn’t make it wrong or back. The author clearly indicates that the question you don’t understand where it comes from is the question that the Federal Circuit will decide. That is the question they agreed to answer en banc. See:

    http://www.cafc.uscourts.gov/sites/default/files/sWi-Fi_One_15-1944_Rehearing_Order.pdf

    Caesar @2-

    You say: “harmonization is always kept in mind when trying to interpret laws…”

    That is simply an incorrect statement of law. Despite what Justice Ginsburg says to the contrary, when interpreting U.S. law it is inappropriate to keep in mind the laws of other countries when trying to determine what a Statute means or the U.S. Constitution allows. That is why Ginsburg’s statements about the primacy and importance of international law have never been adopted. She, and you, are incorrect.

  4. David Boundy February 27, 2017 12:14 pm

    Chris and Ben —

    There’s really no question that the Congress *can* strip jurisdiction as a matter of exercise of Article III section 2, “under such Regulations as the Congress shall make”

    I agree with you, that Justice Alito’s dissent in Cuozzo is the correct analysis of the law. However, Cuozzo’s briefs didn’t raise these issues, and the Cuozzo majority had its hands tied to decide only the questions as presented. Cuozzo’s briefs were incredibly lousy (and Wi-Fi One’s are not a gem of relevance either).

    There’s a nice article in the current issue of ABA Landslide, Jan-Feb 2017 (electronic edition). An excerpt and a link to the full article is at

    http://patentlyo.com/patent/2017/02/administrative-following-technologies.html

  5. David Boundy February 27, 2017 12:18 pm

    Gene @ 3, you responded to something other than what Mr. Salazar was saying. He was commenting on “harmonization” among agencies for application of U.S. administrative law, not international. There, there’s no question that courts look broadly to make sure that U.S. law is an internally-consistent, seamless web.

    A little less heat would generate more light?

  6. Edward Heller February 27, 2017 1:02 pm

    An agency cannot finally decide whether it has authority to proceed. See, e.g., Crowell v. Benson.

    Moreover, Congress cannot relegate the courts to irrelevancy using its authority to “regulate.” When constitutionally protected rights are at stake, the courts always have the ultimate authority.

    Also, 315(b) is plainly worded in terms of authority.

  7. Caesar Salazar February 27, 2017 1:50 pm

    Gene,

    First, thanks for providing the link. That’s all I wanted. It’s not that I didn’t like the article, on the contrary I thought it was pretty good, but the references proved to be lacking (with many of the links being duplicate while looking like they were for different cases).

    Second, my view was in line with David Bounty @5. I don’t mean harmonization with international law. I mean harmonization and internal consistency with US law.

    “Statutory construction … is a holistic endeavor. A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme—because the same terminology is used elsewhere in a context that makes its meaning clear, or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” United Savings Ass’n v. Timbers of Inwood Forest Associates, 484 U.S. 365, 371 (1988) (citations omitted).

    The quote above is what I meant by harmonization. Gene, I thank you for the link but please read what others have written and respond respectfully.