“Until today, it has been a fundamental principle of justice that one cannot bring a proceeding outside the statute of limitations when a proper challenge has been raised. Today, the Supreme Court says that no challenge is proper and if the PTAB wants to institute outside the statutory time period there is nothing anyone can do.” – Gene Quinn
In an opinion authored by Justice Ginsburg, the Supreme Court ruled today that Section 314 (d) of the U.S. Patent Act, which bars judicial review of Patent Trial and Appeal Board (PTAB) decisions to institute inter partes review (IPR), should preclude appeals of PTAB institution decisions, even where the appeal is based on Section 315(b)’s one-year time-bar for institution.
The decision stems from the PTAB’s determination in the underlying case that Section 315(b) did not bar IPR institution because “a complaint dismissed without prejudice does not trigger §315(b)’s one-year limit.” The case then proceeded through a convoluted series of appeals that began with the Federal Circuit’s November 2015 dismissal of Click-to-Call’s appeal of the PTAB’s institution decision, the appellate court citing Section 314(d)’s prohibition against appealing institution decisions consistent with its previous decision in Achates Reference Publishing, Inc. v. Apple Inc. (2015) Click-to-Call then filed a petition with the Supreme Court and in June 2016, the Court granted the petition, vacated the judgment and remanded for further proceedings consistent with Cuozzo Speed Technologies, LLC v. Lee. In November 2016, the Federal Circuit again dismissed Click-to-Call’s appeal, finding that Cuozzo didn’t overrule Achates, a holding that came from the Federal Circuit’s 2016 decision in Wi-Fi One, LLC v. Broadcom Corp. Click-to-Call then asked for the en banc rehearing by the Federal Circuit. Prior to the August 2018 decision in Click-to-Call, the Federal Circuit issued an en banc decision in Wi-Fi One in which a Federal Circuit majority expressly overruled Achates to find that time-bar determinations under Section 315(b) are appealable. In June 2019, the High Court granted Thryv’s (FKA Dex Media) January 2019 petition for certiorari.
Congress and Cuozzo Are Clear
“Congress designed inter partes review to weed out bad patent claims efficiently,” wrote the Court in today’s decision. “Allowing §315(b) appeals, however, would unwind agency proceedings determining patentability and leave bad patents enforceable.”
Despite Click-to-Call’s argument that the bar on appeals under Section 314(d) is limited to the agency’s threshold determination under §314(a) of the question whether the petitioner has a reasonable likelihood of prevailing, the Court explained that Cuozzo Speed Technologies, LLC v. Lee “is fatal to that interpretation.”
As noted in the linked article, in Cuozzo, the Court said that “the text of §314(d) expressly states that the Patent Office’s determinations whether to institute inter partes review ‘shall be final and nonappealable,’ and that “a ‘strong presumption’ favoring judicial review is overcome by ‘clear and convincing’ indications that Congress intended to bar review.”
While the Court in Cuozzo did “reserve judgment” on whether Section 314(d) would bar all appeals, such as those “that implicate constitutional questions,” for example, the instant issue does not meet that criterion, said the Court. “We need not venture beyond Cuozzo’s holding that §314(d) bars review at least of matters “closely tied to the application and interpretation of statutes related to” the institution decision, 579 U. S., at ___ (slip op., at 11), for a §315(b) challenge easily meets that measurement,” held the Court.
Section 315(b) “governs institution and nothing more,” and therefore is merely “a contention that the agency should have refused ‘to institute an inter partes review.’” Furthermore, said the Court:
The purpose of §315(b), all agree, is to minimize burdensome overlap between inter partes review and patent-infringement litigation. Judicial review after the agency proceedings cannot undo the burdens already occasioned. Nor are §315(b) appeals necessary to protect patent claims from wrongful invalidation, for patent owners remain free to appeal final decisions on the merits. [citations omitted]
The Court ultimately vacated the Federal Circuit’s decision in the case and remanded with instructions to dismiss for lack of appellate jurisdiction.
Justice Gorsuch dissented, and Justice Sotomayor joined as to Parts I-IV. Gorsuch said that the majority’s opinion “takes a flawed premise—that the Constitution permits a politically guided agency to revoke an inventor’s property right in an issued patent—and bends it further, allowing the agency’s decision to stand immune from judicial review.”
Gorsuch’s dissent also noted that the majority holding denies judicial review “even though the government now concedes that the patent owner is right and this entire exercise in property-taking-by-bureaucracy was forbidden by law.”
That’s because in May 2019 the Solicitor General submitted a brief for the federal respondent in opposition to the petition for writ of certiorari asking the Court not to consider the second question included in the petition. While the government agreed that the Federal Circuit didn’t have jurisdiction to hear Click-to-Call’s appeal of the institution decision, the USPTO Director had reconsidered the agency’s interpretation of the time-bar statutory language in Section 315(b) and had determined that the IPR leading to the appeal shouldn’t have been instituted. The Solicitor General had also argued that the case was a poor vehicle to decide the question on which the Supreme Court ultimately granted cert, in large part because of the Director’s reconsideration of Section 315(b) and the agency’s subsequent intention not to institute IPR proceedings in similar situations even when a complaint is dismissed voluntarily without prejudice.
Handing the PTAB Ultimate Authority
Gene Quinn, IPWatchdog Founder and CEO, said that the decision makes the PTAB “supreme” and gives the USPTO license to ignore statute:
The Supreme Court rules today that the Director of the Patent Office, and by designation the Patent Trial and Appeal Board, has ultimate authority to ignore the statutory restraints on initiating an inter partes review proceeding. In so doing, the Supreme Court sets hundreds of years of fundamental, procedural law on its head. Until today it has been a fundamental principle of justice that one cannot bring a proceeding outside the statute of limitations when a proper challenge has been raised. Today, the Supreme Court says that no challenge is proper and if the PTAB wants to institute outside the statutory time period there is nothing anyone can do. Today, the Supreme Court removes all pretense and affirms what opponents of the PTAB have been saying all along: The PTAB is supreme and cannot be checked, even by an Article III constitutional court–not even the Supreme Court.
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