PTAB Braces for Remands as the Federal Circuit Denies Stay in Arthrex

On Monday, the Court of Appeals for the Federal Circuit (CAFC) denied the USPTO’s unopposed motion to stay issuance of the mandate in Arthrex v. Smith & Nephew for 90 days, or pending final disposition of any petition for a writ of certiorari that may be filed.  In denying the stay of the mandate, the CAFC concluded that a stay would prevent the Patent Trial and Appeal Board (the PTAB) from conducting remand proceedings, while a denial of the stay would, at least initially, leave the timing of remand proceedings in the Board’s hands.

USPTO’s Motion to Stay the Mandate

In its Motion, the USPTO noted that a stay would allow the PTAB to “remain free to defer conducting the limited remand proceedings in such cases required by the Arthrex decision.”  However, the CAFC found that this reasoning did not justify a stay of the mandate in Arthrex or similar cases. The CAFC noted that a delay could cause harm because all of the cases before the CAFC that are similar to Arthrex include patent claims determined to be unpatentable by the Board and a “stay has the potential to leave in force patents which were determined invalid by earlier panels of the Board.”

Remand of Arthrex and Similar Cases

The USPTO also asserted that, absent a stay in Arthrex and similar cases, remands under Arthrex could “unwind dozens of agency decisions reached after months of administrative proceedings” and impose substantial burdens on the USPTO and private-party appellees. The CAFC disagreed, noting that the remand proceedings required by the Arthrex decision, i.e. “no more than 81 cases”, did not seem to be “especially burdensome, given the resources of the Board, which has more than 250 members.”

One of such cases, as pointed out by Arthrex in its Response to the Motion to Stay, is Bedgear v. Fedman Brox. Furniture Company, Inc., wherein three PTAB decisions were vacated and remanded to the Board for proceedings consistent with the CAFC’s decision in Arthrex. In an 85 page decision, the PTAB decisions found several claims of U.S. Patent No. 8,887,332, which was directed to a pillow having an open cell construction, unpatentable. In a 72 page decision, the PTAB found all claims of U.S. Patent No. 9,015,883 unpatentable. Further, in a 62 page decision, the Board determined that all challenged claims of U.S. Patent No. 8,646,134 were unpatentable. In Bedgear, Circuit Judge Dyk noted in a concurring opinion that requiring a new hearing before a new panel in Bedgear and similar cases would impose “large and unnecessary burdens on the system of inter partes review, requiring potentially hundreds of new proceedings.” In another case noted by Arthrex in its Response, Uniloc v. Facebook, the CAFC similarly vacated and remanded a PTAB decision for proceedings consistent with the Arthrex decision.  After two years of proceedings, the PTAB found several claims of U.S. Patent No. 8,571,194, which was directed to a method for initiating a voice conference call, unpatentable as obvious on two alternate grounds.

Federal Circuit Says Remands Would Not Be Burdensome for Board

Both Bedgear and Uniloc illustrate the potential complexity of the cases on remand to the PTAB, but the CAFC’s order denying the motion to stay solidified its reasoning set forth in the recent decision denying rehearing.  There the CAFC asserted that the Arthrex decision will result in no more that 81 remands that are “narrow in scope and will not necessitate anything like a full-blown process.”   In the Motion to Stay, the USPTO noted that although the PTAB is not required to reopen the record or permit new briefing in cases on remand, it must exercise “sound discretion [regarding] whether it should allow additional briefing or reopen the record in any individual case.” As also pointed out in the Motion, the PTAB will likely face motions from dissatisfied parties seeking to reopen the record. Thus, despite the CAFC’s assertion that the remands will be “narrow in scope” and “not…burdensome”, the PTAB is left to resolve as many as 81 cases sooner rather than later.