“The Patent Office itself must follow the Board’s guidance until contradicted by the Federal Circuit. Beyond that, at the court level, the Precedential Opinion Panel’s opinions are little more than an indication of how their briefs will read.”
The Supreme Court in SAS (SAS Institute Inc. v. Iancu) was quite clear that the Patent Trial and Appeal Board (PTAB or Board) has to follow the statute when conducting Inter Partes Review (IPR). So, when Facebook sought to enter patent claims into their IPR against Windy City Innovations past the one-year deadline dictated by 35 USC § 315(b), the PTAB had conveniently written themselves an opinion that allowed Facebook to join Facebook to circumvent the deadline. The Board’s Precedential Opinion Panel (POP) used the language in USC § 315(c) and had written that the statutory use of the words “any person” allowed them to join a party to itself. See Proppant Express Invs., LLC v. Oren Techs., LLC, No. IPR2018-00914, Paper 21, at 4–6 (P.T.A.B. Nov. 8, 2018).
No Deference Owed
In Facebook, Inc. v. Windy City Innovations, LLC (Windy City), the CAFC stated that the Proppant Express opinion is contrary to the unambiguous language of the statute and vacated relevant parts of the Board’s decision that allowed Facebook to join itself as a party, as well as vacating the allowance of Facebook adding new claims in that joinder, which otherwise would have been past the one-year deadline.
The main opinion in Windy City looked into what deference the Court owed the POP:
We now turn to the question of what, if any, deference is owed to the PTO’s interpretation of § 315(c). Because we conclude that the clear and unambiguous language of § 315(c) does not authorize same-party joinder or joinder of new issues, we need not defer to the PTO’s interpretation of § 315(c). See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 842–43 (1984). [Pg. 23]
The reason the CAFC addressed Chevron is because Facebook and the PTAB argued in their brief that the POP opinion deserved deference in view of Chevron. As stated above, they found that argument non-applicable. This, even though the deference owed in Chevron is minimal:
“Even under Chevron, we owe an agency’s interpretation of the law no deference unless, after ‘employing traditional tools of statutory construction,’ we find ourselves unable to discern Congress’s meaning.” SAS, 138 S. Ct. at 1358 (quoting Chevron, 467 U.S. at 843 n.9). [Id.]
In other words, they look for plain meaning. If that is not clear, then they look to Congressional intent. Only after the attempt to divine Congressional intent has failed should the courts defer to an agency’s interpretation. Note that the main opinion did not say that the Chevron deference is owed to the Board, only that when looking at the steps in Chevron, its applicability to Windy City failed at the first step, so is moot.
Chief Judge Prost, as well as Judges Plager and O’Malley, were concerned enough about the nuances of that distinction that they went on to pen a concurring opinion. In that concurrence they detail why a POP opinion is not due any deference, even if the plain meaning of the statute is ambiguous. In short, they say the Director would have Chevron deference only if Congress were to expressly delegate the ability to adopt legal standards and procedures by prescribing regulations. What they determined was:
There is no indication in the statute that Congress either intended to delegate broad substantive rulemaking authority to the Director to interpret statutory provisions through POP opinions or intended him to engage in any rulemaking other than through the mechanism of prescribing regulations. [Concurrence, pg. 7.]
The result of this is any opinion of the POP on statute has no effect:
In light of the limited authority delegated by the AIA, we decline to defer to the POP opinion on this issue of statutory interpretation—a pure question of law that is not within the specific expertise of the agency. [pgs. 10-11.]
The Court also determined that the Skidmore deference, which is even less deferential than Chevron, does not apply either.
In sum, even if § 315(c) were ambiguous—which it is not—we would conclude in the alternative that on appeal the PTO’s interpretation set forth in the POP opinion in Proppant is not deserving either of Chevron or Skidmore deference. [pg 15]
Do Not Accept the Board’s Interpretation
Therefore, any POP statutory interpretation is irrelevant. Practitioners should not accept any conclusions made by the Board about a statute, and petitioners should be more assured that a reasoned argument will prevail. Originally, the Board tried to pick and choose what parts of the statute to use. (The practices of the PTAB were likely unconstitutional, though they were never challenged on the proper grounds). When that was stopped, they started making up their own interpretations, even when it clearly conflicted with the unambiguous meaning of the statute. This will hopefully put an end to that practice.
If the opinion in Windy City holds, then the obvious question is “what use is any POP opinion on statutory interpretation?” The Patent Office itself must follow the Board’s guidance until contradicted by the Federal Circuit. Beyond that, at the court level, the POP’s opinions are little more than an indication of how their briefs will read. Of course, the Court also noted–ironically enough—that the Board has often issued conflicting decisions on statutory interpretation.
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