Supreme Court: PTAB Institution Decisions Cannot Be Appealed, Even on the Basis of Time-Bar Challenges

By Eileen McDermott
April 20, 2020

“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

https://depositphotos.com/52674523/stock-photo-united-states-supreme-court-with.htmlIn 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.

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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.

The Dissent

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 QuinnGene 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.

Image Source: Deposit Photos
Image ID: 52674523
Copyright: etienjones 

The Author

Eileen McDermott

Eileen McDermott is the Editor-in-Chief of IPWatchdog.com. Eileen is a veteran IP and legal journalist, and no stranger to the intellectual property world, having held editorial and managerial positions at several publications and industry organizations. She has acted as editorial consultant for the International Trademark Association (INTA), chiefly overseeing the editorial process for the Association’s twice-monthly newsletter, the INTA Bulletin. Eileen has also served as a freelance editor for the World Intellectual Property Organization (WIPO); as senior consulting editor for the Intellectual Property Owners Association (IPO) from 2015 to 2017; as Managing Editor and Editor-in-Chief at INTA from 2013 to 2016; and was Americas Editor for Managing Intellectual Property magazine from 2007 to 2013.

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 and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 12 Comments comments. Join the discussion.

  1. Anon April 20, 2020 1:35 pm

    The anti-Marbury case of all time…?

  2. M. D. Hoyle April 20, 2020 5:19 pm

    If you EVER had any illusions of Iancu being a friend of the Inventor, that false assumption was now just killed.

  3. Josh Malone April 20, 2020 5:51 pm

    The Supreme Court majority seems aggravated that inventors persist in believing in fairy tales about rule of law and property rights and the Constitution. Silly fables. They have been very clear that patents are privileges reserved for the wealthy elite. We should just shut up and go back to to our day jobs a big corp.

  4. Wayne Helge April 20, 2020 9:26 pm

    Footnote 5 of the Court’s Opinion should be enough to give pause to anyone on either side of the debate: “The second look Congress put in place is assigned to the very same bureaucracy that granted the patent in the first place. Why should that bureaucracy be trusted to give an honest count on first view, but a jaundiced one on second look?” The entire purpose of the second look is that the bureaucracy’s first view is flawed. Turning the Court’s question on its head, if the bureaucracy’s first view is flawed, why should the second look (or even the unreviewable decision to take the second look) be trusted?

    Whether one agrees more with the majority or the dissent, there is an unfortunate result for both sides. The Board benefited from the CAFC’s decisions and guidance on how to apply 35 USC 315(b) in Applications in Internet Time v. RPX (RPI), WesternGeco v. Ion (privy), and Worlds v. Bungie (burden of proof/production on RPI naming), all of which issued after Wi-Fi One confirmed the appealability of 315(b) issues, and before today’s SCOTUS decision. It appears the Board is on its own from here.

  5. Ternary April 20, 2020 11:33 pm

    Gorsuch in dissent:

    “Some seek to dismiss this concern by noting that the bureaucracy the AIA empowers to revoke patents is the same one that grants them. But what comfort is that when the Constitution promises an independent judge in any case involving the deprivation of life, liberty, or property? Would it make things any better if we assigned the Department of the Interior the task of canceling land patents because that agency initially allocated many of them?

    The relevant constitutional fact is not which agency granted a property right, but that a property right was granted”

  6. Lost In Norway April 21, 2020 6:20 am

    I know that I shouldn’t be, but I am shocked. How does one agency manage to be immune from the constitution?

  7. TFCFM April 21, 2020 9:24 am

    Lo and behold! Congress gets to make the laws! What an utterly predictable decision. When Congress writes the law to specify ‘no appeals,’ it means … NO APPEALS!!!!

    Don’t like that law? Get Congress to change it. The Supreme Court has again recognized that courts don’t get to change Congress’ laws, just because some folks don’t like them.

  8. Anon April 21, 2020 10:47 am

    LiN,

    The Supreme Court – blinded by their own agendas – desecrates the very thing that they are charged to protect.

    To all:

    The scoreboard is broken. Our number one task is to understand exactly what that means, to accept this, and to put forth solutions that include the fact that the scoreboard is broken. Any measure that does not include this (and I do mean ANY) is necessarily doomed to failure.

  9. Anon April 21, 2020 10:52 am

    TFCFM,

    Your post appeared in passing (after I posted my thoughts).

    I would point out merely that yet again you display an ignorance of legal principles.

    Congress does NOT have unfettered ability to pass laws, and just because Congress HAS passed a law, does not mean that THAT law is immune from Constitutional protections.

    I think that you are only too happy in the immediate instance that THIS situation is an anti-patent situation, and that you fail to grasp the larger legal impact at play here.

    In other words, I am not surprised in the least to your reaction. By this time, I have some rather low expectations for you and your views.

  10. Curious April 21, 2020 12:04 pm

    Don’t like that law? Get Congress to change it. The Supreme Court has again recognized that courts don’t get to change Congress’ laws, just because some folks don’t like them.
    LOL … Like 35 USC 101? You know, the law that the Supreme Court has decided to add exceptions to?

    How about 35 USC 282, which describes as a defense “on any ground specified in part II as a condition for patentability.” However, 35 USC 101 is not listed as a condition for patentability.

    I guess SCOTUS doesn’t get to interfere with the law when it is to the benefit of infringers for them not to do so.

  11. Pro Say April 21, 2020 2:09 pm

    Curious @ 10: Big +1.

    Supreme judicial hypocrisy indeed.

  12. Daniel Hanson April 22, 2020 8:38 am

    If we step away from patent law, and look at general law related to statutes of limitation (and statutes of repose), we might see a modest solution to the problem. If the statute in question is deemed a statute of limitation that extinguishes the remedy rather than the right, then look to the statute to see what remedy is extinguished.

    The statutory remedy is non-institution: “An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 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.”

    Can the solution be a modest, non-controversial amendment to the statute, such as “An inter partes review may not be instituted, and no relief under an inter partes review shall be granted, if the petition requesting the proceeding is filed more than 1 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.”

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