Commenters Weigh in On Implications of High Court Ruling in Thryv v. Click-to-Call

By IPWatchdog
April 21, 2020

“With the Federal Circuit holding in Arthrex that PTAB judges are not constitutionally appointed, the Supreme Court is giving those same judges ultimate power to make final decisions about whether a petition is timely filed? We need more consistency and predictability from our courts handling patent matters.” – Bob Stoll

https://depositphotos.com/69798509/stock-photo-woman-holding-microphone.htmlYesterday’s Supreme Court decision in Thryv, Inc. v. Click-to-Call Technologies was in some ways unsurprising, but has generated buzz among the patent community all the same. Many pointed to Justice Gorsuch’s dissent as being particularly poignant, and perhaps indicative of what issues will be front and center in other pending petitions at the Court, such as Arthrex v. Smith & Nephew.

IPWatchdog Founder and CEO Gene Quinn said yesterday that, with the Thryv decision, “the Supreme Court sets hundreds of years of fundamental procedural law on its head…. No challenge is proper, and if the PTAB wants to institute outside the statutory time period there is nothing anyone can do.”

Adam Charnes

For his part, however, Adam Charnes of Kilpatrick Townsend & Stockton, who represented Thryv at the High Court, told IPWatchdog that the decision was correct and “compelled” by the America Invents Act. “We are gratified that the Court held that the PTAB’s time-bar decision was not appealable,” said Charnes. “As we argued, and the Court agreed, the plain language of the America Invents Act and Congress’s purpose in enacting it both compelled that conclusion.”

Here is what some other members of the patent bar had to say.

Clint Conner, Dorsey & Whitney

Yesterday, the Supreme Court lifted a cloud of uncertainty regarding the finality of certain PTAB (Patent Trial and Appeal Board) decisions. The timeliness of an inter partes review (IPR) petition is a contested threshold issue in many cases, particularly with respect to patents directed to multi-component products where real party in interest and privity issues are in play. The Federal Circuit’s decision, as well as its en banc decision in Wi-Fi One, LLC v. Broadcom Corp., 878 F. 3d 1364, 1367 (2018) allowed patent owners to appeal invalidating PTAB final written decisions on grounds that the PTAB should never have instituted IPR in the first place based on the 35 U.S.C. §315(b) “one-year bar.

In light of the Supreme Court’s decision recognizing that the PTAB has plenary authority for determining whether the ‘one-year bar’ applies, patent owners should put a priority on identifying grounds for challenging IPR petitions based on the one-year bar and presenting their best case to the PTAB on this issue in the first instance.

Q. Todd DickinsonTodd Dickinson, Polsinelli

On its face, the opinion yields a fairly modest result to a fairly simple question of statutory construction: i.e. that the AIA’s one-year time limit to file an IPR after the initiation of litigation under 35 U.S.C. §315(b) is subject to the non-appealability provision of 35 U.S.C. §314(d). In what’s pretty much a 50-50 “take-your-pick call”, the Court, following its decision in Cuozzo, held that the time limit was so closely related to the PTAB decision of whether to institute that it was governed by §314(d).

But what was otherwise interesting was how the Justices lined up on the opinions. Specifically, Justice Ginsburg only got the minimum five votes for her entire opinion. Justices Thomas and Alito did not join section III(C). While it is not revealed why they wouldn’t agree to that section, one possibility is that they couldn’t agree with Justice Ginsburg’s rather colloquial and discursive treatment of the patent policy and purpose, at least how it relates to post-grant proceedings. It begs the question to use terms such as “overpatenting”, “weed out ‘bad’ patents”, and “save ‘bad’ patent claims; what do those mean? Instead of ‘bad’ patents, surely, she could have written something more legally precise and intellectually rigorous, such as “patents having at least one claim which fail to comply with the statutory requirements under §§102 and 103”? And who can say what is “overpatenting”? Inventors file patent applications, not the PTO, and they are entitled to file any application they want and then allow the PTO to determine if they have met the statute. What standard should the PTO examiners apply to prevent “overpatenting”? Are five related patents that meet the statutory requirements okay, but 10 that meet them too many? Who’s to say?

Another interesting possibility may relate to the thrust of the Gorsuch/Sotomayor dissent: that there is apparently a continuing debate at the Court about whether patents really are “public franchises”, as they characterized them in Oil States, or the long-held belief that they were a type of property and, among other things, subject to the Takings provision of the 5th Amendment. While seemingly a bit pedantic, in fact it could resonate in bigger debates, such as those around ownership and patenting of coronavirus vaccines and therapies. Finally, it should also be noted that the Gorsuch dissent is especially clear and well-written, showing a better understanding of the language and nuance of the patent law. It may simply be a coincidence, but Gorsuch happens to be the only Justice who has a former patent law professor as a current clerk—likely a first.

Matthew DowdMatt Dowd, Dowd Scheffel

Yesterday’s decision continues the Supreme Court’s weakening of procedural safeguards Congress intended to be meaningful restrictions on when patents could be challenged through AIA proceedings. To those not steeped in the nuances of statutory interpretation, administrative law, and the presumption of judicial review, the issue here might appear straightforward. The PTO cannot institute an IPR “if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner . . . is served with a complaint alleging” patent infringement. Congress clearly intended that one-year deadline to be meaningful and to provide some sense of repose to patent owners.

Yesterday’s decision and the PTAB’s institution in this case completely undermine the statutory deadlines and likely other procedural requirements for AIA review. As Justice Gorsuch explained in dissent, the statute that “reads like an affirmative limit on the agency’s authority reduces to a mere suggestion.”

From a purely administrative-law perspective, there is nothing extraordinarily controversial about a statute that bars judicial review of certain agency decisions. Indeed, until Congress changed the controlling statutes, the Supreme Court long upheld the bar on judicial review of most challenges to veterans’ benefit decisions by the Veterans’ Administration.

What is surprising here, though, is that the Court’s majority decision cites nothing in the statute or legislative history suggesting that Congress expected the PTO to ignore or overlook clear statutory restrictions on the agency’s power to revoke granted patents. We now seem to be in the realm of “no harm, no foul” for limitations on an agency’s power.

No doubt, many will praise the Court’s decision, asserting that these procedural trifles should not obstruct the cancellation of so-called “bad patents.” But should we really be advocating for an “ends justify the means” approach to disputes about intellectual property?

Stephen Kunin, Maier & Maier

This Supreme Court decision clearly cuts against the trend toward uniform application of the Administrative Procedures Act previously expressed by the Court in other cases. The presumption of judicial review cases set forth in Abbot v. Gardner, Bowen v. Michigan Physicians, and Mach Mining argued in the briefs did not seem to impress the Court. Short of an improbable legislative fix, we are probably stuck with this ruling.

Bradley Olson, Barnes & Thornburg

Yesterday’s decision will have the effect of further restricting the arguments available to patentees seeking review of Patent Trial and Appeal Board decisions. However, despite the Supreme Court’s almost reflexive reversal of yet another Federal Circuit decision on a patent issue, the opinion in Thryv should be viewed as little more than an affirmance of the Supreme Court’s opinion in Cuozzo Speed Technologies, LLC v. Lee, 579 U. S. ___ holding that 35 U.S.C. § 314(d) “preclud[es] review of the Patent Office’s institution decisions.” (Id., at __. Slip op. pp. 6–7). See Predicting Cuozzo After Supreme Court Oral Arguments, IPWatchdog May 4, 2016.

What is perhaps most interesting in the Thryv opinion is the insight in the dissent penned by Justice Gorsuch, joined in part by Justice Sotomayor, that raised the issue left undecided in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U. S. ___ (2018), concerning the power of agency officials to withdraw already-issued patent claims with very limited judicial review. (Gorsuch, J. Dissent., Slip op. at 18). Note that the issue of agency power under the AIA specific to the non-appealable withdrawal of patent “property” rights raised in Oil States is also central to the pending petition for certiorari raised by Arthrex, Inc. (and an anticipated separate petition by Arthrex in a separate Federal Circuit decision) regarding the same agency powers and the extent of Article III court review. See Will the Supreme Court Keep Kicking the Can or Stop It by Addressing Arthrex. IPWatchdog, April 15, 2020. Once again, only time will tell, but that time may be soon.

Pauline M. Pelletier, Director at Sterne, Kessler, Goldstein & Fox

In Thryv, Inc. v. Click-to-Call Technologies, LP the Supreme Court held, 7-2, that patent owners cannot appeal determinations by the Patent Trial and Appeal Board (PTAB) declining to apply the time-bar of 35 U.S.C. § 315(b). This means that patent owners who are contesting PTAB decisions to institute inter partes review (IPR) on grounds that the petitioner is time-barred will not be able to seek review of that determination on appeal before the Federal Circuit. While the Supreme Court did not foreclose mandamus action as a mechanism for seeking judicial review, it did not indicate what types of situations would warrant mandamus relief. Thryv joins two prior Supreme Court decisions that address the breadth and applicability of the appeal bar of 35 U.S.C. 314(d), Cuozzo Speed Technologies, LLC v. Lee (2016) and SAS Institute Inc. v. Iancu (2018). In attempting to reconcile these prior rulings, Thryv crafts a fine distinction between challenges to “the manner in which the agency’s review ‘proceeds’ once instituted” and challenges to “whether the agency should have instituted review at all.” We expect this distinction to frame the battleground on similar questions that arise in the future. Ultimately, this decision shifts power back to the PTAB in terms of deciding what scenarios will trigger the § 315(b) time-bar.

Irena Royzman, Kramer Levin

As Justices Gorsuch and Sotomayor lamented in dissenting, the decision “carries us another step down the road of ceding core judicial powers to agency officials and leaving the disposition of private rights and liberties to bureaucratic mercy.” The ruling makes ultra vires PTO decisions that disregard or violate the statutory time-bar of Section 315(b) and institute IPR in violation of the PTO’s statutory authority immune from judicial review and oversight. IPR challenges to patents that should have never gone forward will proceed without any recourse to patent owners on appeal.

Karen Sebaski, Holwell Shuster & Goldberg LLP

The Supreme Court’s decision in Thryv Inc. v. Click-to-Call Technologies L.P. gives administrative patent judges unfettered authority to decide that a particular petition for inter partes review (IPR) is not time barred under 35 U.S.C. § 315(b), which proscribes the institution of IPR proceedings “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.” Relying heavily on the high court’s prior decision in Cuozzo Speed TechnologiesLLC v. Lee, the majority explained that § 315(b) easily qualifies as a matter “closely tied to the application and interpretation of statutes related to” the threshold decision to institute an IPR, the most popular form of proceeding under the America Invents Act. As expected, the potential impact of a contrary decision on the efficient and cost-effective nature of IPR proceedings also was front and center. Indeed, at oral argument, Justice Ginsburg, who wrote the majority opinion, commented that there was “something unseemly about nullifying the [PTAB’s] determination on the merits” based on the time bar of §315(b) when another challenger simply could file a new IPR petition “where the Board has already made the decision that the patent is no good.”

Russell SliferRuss Slifer, Schwegman Lundberg & Woessner

Notwithstanding the consequences of the Court’s decision for IPR petitioners and patent owners, the most important part of the decision, in my opinion, is the dissent by Justices Gorsuch and Sotomayor. It is hard to determine what truly motivated the strongly worded dissent. At first it appears they are very pro-inventor (a breath of fresh air), but then Gorsuch wanders through Executive branch over-reach, a mistrust of political appointees, the loss of judicial review, Constitutional takings, and statutory interpretation. Specifically, “the [majority] brushes past these warning signs and, in the process, carries us another step down the road of ceding core judicial powers to agency officials and leaving the disposition of private rights and liberties to bureaucratic mercy.” His disdain for bureaucracy is clear when he writes that “the [PTAB] Board can err; it can even act in defiance of plain congressional limits on its authority. But, in [the Court’s] view, a court can do nothing about it. Enforcement of §315(b)’s time bar falls only to the very Patent Office officials whose authority it seeks to restrain. Inventors like Mr. DuVal just have to hope that the bureaucracy revoking their property rights will take the extra trouble of doing so in accordance with law.”

The strongest reasoning set forth in the dissent is that the majority was wrong in its holding that building on the dicta in Cuozzo, is “expansive reading of §314(d) [that] takes us further down the road of handing over judicial powers involving the disposition of individual rights to executive agency officials.” Specifically, “[t]he historic presumption of judicial review has never before folded before a couple stray pieces of legislative history and naked policy appeals.”

Justice Gorsuch did not limit his dissent to this case but stated that the Court “started the wrong turn in Oil States Energy Services. There, a majority of this Court acquiesced to the AIA’s provisions allowing agency officials to withdraw already-issued patents subject to very limited judicial review.” Concluding that “now inventors hold nothing for long without executive grace. An issued patent becomes nothing more than a transfer slip from one agency window to another.”

For now, the USPTO’s determination of 315(b) is not appealable. That may not be what Congress intended when it drafted the statute, but I am sure that Congress will not propose any changes.

Bob Stoll

Bob Stoll, Faegre Drinker Biddle and Reath

Yesterday, the Supreme Court, in a holding that was not totally unexpected, found that the decision to institute a PTAB review at the USPTO was not appealable per 35 USC 314 (d). Petitioner was attempting to rely on 35 USC 315 (b) after a final written decision, which is a different section from the one that says that decisions under 314 are final. The Supreme Court basically maintained that 35 USC 315 (b) was all about time-barred institution and that it would not permit the “end-around” 35 USC 314 (d). Okay. Get it. But with the Federal Circuit holding in Arthrex that PTAB judges are not constitutionally appointed, the Supreme Court is giving those same judges ultimate power to make final decisions about whether a petition is timely filed? We need more consistency and predictability from our courts handling patent matters. Is it possible someone could find a way to take away Supreme Court review on some of the patent issues where they are causing significant confusion?

 

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IPWatchdog

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Discuss this

There are currently 2 Comments comments. Join the discussion.

  1. Pro Say April 21, 2020 8:39 pm

    “over patenting?”

    Pshaw.

    Over judging.

    See, e.g., Mayo, Alice, KSR, eBay . . .

  2. BP April 21, 2020 9:18 pm

    Justice Ginsburg’s opinion furthers efficient infringer control over officials in Washington (think the appointment of Director Lee) at the expense of the “property rights” of independent inventors, as acquired through considerable effort.

    The “bad” patent Golem continues its work, protecting efficient infringers from the evil independent inventors.

    What constitutes the “bad” patent Golem? Not inanimate mud or clay. It’s the anti-patent examiners, the Fed Cir, the paid-for academics, and time and again, a contingent at the Supreme Court that refuses to revisit 35 USC 101.

    Golem rule number 1: “Rather than securing incentives to invent, the regime creates incentives to curry favor with officials in Washington.”

    Golem rule number 2: “inventors hold nothing for long without executive grace.”

    Golem rule number 3: “An issued patent becomes nothing more than a transfer slip from one agency window to another.”

    Golem rule number 4: The USPTO is, under the AIA, “an administrative regime singularly focused on the efficient canceling of patents.”

    Golem rule number 5: Go “down the road of handing over judicial powers involving the disposition of individual rights to executive agency officials.”

    As stated by Justice Gorsuch:
    The abdication of our judicial duty comes with a price. The Director of the Patent and Trademark Office is a political appointee. The AIA vests him with unreviewable authority to institute (or not) inter partes review. Nothing would prevent him, it seems, from insulating his favorite firms and industries from this process entirely. Those who are not so fortunate proceed to an administrative “trial” before a panel of agency employees that the Director also has the means to control. The AIA gives the Director the power to select which employees, and how many of them, will hear any particular inter partes challenge. It also gives him the power to decide how much they are paid. And if a panel reaches a result he doesn’t like, the Director claims he may order rehearing before a new panel, of any size, and including even himself.

    We can see the problems with Arthrex, employees (APJs) of the agency (per Fed Cir) can be dismissed if the politically appointed Director does not like their “thinking”.

    Seems like Justice Gorsuch would say that the APJs must be Principal Officers and that the “fix” of the Fed Cir is an expedient.

    The drive to get rid of “bad” patents gets rid of patents. Seems like that’s what Justice Ginsburg wants.

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