Posts Tagged: "SAS Inst. v. ComplementSoft"

This article reviews recent Federal Circuit and Supreme Court decisions addressing the scope of appellate review of institution of inter partes review (IPR) by the Patent Trial and Appeal Board. The America Invents Act, 35 U.S.C. § 314(d), provides that: “[t]he determination… whether to institute an inter partes review under this section shall be final and nonappealable.” Federal courts initially interpreted Section 314(d) to bar appellate review of institution decisions entirely. However, recent decisions have narrowed Section 314(d) and expanded the scope of appellate review of matters decided by the Board at institution. This article will review decisions interpreting Section 314(d) to date, and explain how recent precedents have created new opportunities for appellate review of the Board’s decisionmaking in IPR proceedings.

The Federal Circuit denied appellant SAS’s petition for rehearing en banc from a decision by the Patent Trial and Appeal Board, without an explanatory opinion. Judge Newman dissented. Without discussing the facts of the case, she undertook to review the statutory provisions for inter partes review (“IPR”) proceedings under the America Invents Act (“AIA”). According to Newman, the Court should have granted the petition, in order to correct the Patent Office position that “the final order of the [Patent Trial and Appeal] Board need not address every claim raised in the petition for review.” According to Judge Newman, a review of the statutory provisions of the AIA makes it clear that, if the PTAB decides to institute review, it should do so for all of the challenged claims, not just some of the challenged claims.

The Federal Circuit held that the Board’s changed claim construction of “data flow,” violated the Administrative Procedure Act (APA), even if it was correct. In particular, it deprived the petitioner of the procedural protections of the APA, which prohibits an agency from changing legal theories during a proceeding without giving respondents notice of the change and the opportunity respond to the new theory. Because the Board changed its construction of the term “data flow” absent any suggestion from the parties, and without any notice, there was no meaningful opportunity to respond to the unanticipated change. Therefore, the Court vacated the decision of the Board to afford the parties an opportunity to present arguments on the Board’s newly-adopted construction of “data flow.”