In 2015, the Federal Circuit heard a number of appeals from the PTAB. This two-part series will provide a summary of what some identify as the most important or interesting decisions of 2015.
1.) Microsoft Corporation v. Proxyconn, Inc. (Jun. 16, 2015)
This is the first Patent Trial and Appeals Board (PTAB) decision to be remanded by the Federal Circuit to the PTAB, and provides a glimpse into how the PTAB will handle such cases. In considering the matter on appeal, the Federal Circuit found that the PTAB erred in construing two terms and, accordingly, reversed in-part, vacated in-part, and remanded the case to the Board for “proceedings consistent with” the court’s opinion. Procedurally, the PTAB directed the parties to simultaneously file 15-page briefs, within 7 days, on “the effect of the Federal Circuit’s decision on the Board’s Final Written Decision.” The second time around, the PTAB found the challenged claims unpatentable as obvious on grounds that were included in original petition, but which had not formed the basis for the institution in the first final written decision (FWD).
2.) GEA Process Eng’g Inc. v. Steuben Foods, Inc. (Jun. 23, 2015)
This decision is another case where the Federal Circuit declined to review an institution decision citing § 314(d). In GEA Process Engineering, the PTAB initially instituted five IPRs but later vacated its institution decisions after finding that the petitions filed to identify a real party-in-interest. Because correcting the petitions at that point would have required granting a new filing date, and the petitioners were then time-barred under 35 U.S.C. § 315(b), the PTAB terminated the proceedings. The Federal Circuit denied the Petitioner’s parallel appeal and mandamus petition seeking review of the PTAB’s vacation of its institution decisions. In dismissing the appeal, the Federal Circuit reaffirmed its previous decisions, that it only has jurisdiction to review “final written decision[s] with respect to patentability.” Federal Circuit also denied the writ petition because GEA Process could not meet the “clear and indisputable right to relief” standard for mandamus.
3.) In re Cuozzo Speed Technologies (Jul. 8, 2015)
The Supreme Court’s ruling in the appeal of the Federal Circuit’s decision in In re Cuozzo will mark the first time the high court reviews a decision originating with the PTAB. In this case, the patent owner appealed the PTAB’s institution of an IPR based on grounds not in the original Petition. The Federal Circuit declined to review the PTAB’s decision citing lack of jurisdiction in view of 35 U.S.C. § 314(d). The Federal Circuit ruled that § 314(d) prohibits any review of an institution decision, even if it was potentially wrong. The Federal Circuit reasoned that “[t]he failure to cite [those specific grounds] in the petition provides no ground for setting aside the final decision.” The Federal Circuit did, however, leave open the option of mandamus if the Board “clearly and indisputably exceeded its authority.” The Federal Circuit also affirmed the Board’s claim construction under the broadest reasonable interpretationstandard, and the Board’s denial of Cuozzo’s motion to amend. On review, the Supreme Court will address 1) whether the Federal Circuit erred in holding that, in IPR proceedings, the PTAB may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning, and 2) whether the Federal Circuit erred in holding that, even if the PTAB exceeds its statutory authority in instituting an IPR proceeding, the PTAB’s decision whether to institute an IPR proceeding is judicially unreviewable.
4.) Versata Development Group v. SAP America, Inc. (Jul. 9, 2015)
In Versata, the Federal Circuit considered whether it has authority to review the PTAB’s decision on whether or not a patent is a covered business method patent within the scope of AIA § 18, or whether such review is barred under 35 U.S.C. § 324(e), the statutory provision prohibiting appeal of institution decisions relating to covered business method patents. The Federal Circuit majority reasoned that § 324(e) does not apply to “limits on the authority to enter a ‘final written decision’ invalidating a patent” because “institution and invalidation are two distinct actions by the PTAB.” Slip Op. at 22. Citing the “long tradition of judicial review of government actions that alter the legal rights of an affected person,” and that “[a]n agency may not finally decide the limits of its statutory power,” the majority concluded that the Court can review the USPTO’s threshold determination under § 18 as to whether a patent is a covered business method in an appeal from a final written decision. Id.
5.) Progressive v. Liberty Mutual (Aug. 24, 2015)
In this case, the Federal Circuit affirmed the PTAB’s FWD that all claims were invalid, even though the PTAB had relied on prior art that was neither raised by the petitioner in the original petition nor the basis for institution. The Federal Circuit did not make a legal conclusion, but instead found that the outcome – invalidity – would not have been affected by any errors that could have been caused by the reliance on the prior art. The Federal Circuit also found that although the PTAB did not clearly state an obviousness rationale in its FWD, it was nevertheless supported by substantial evidence when the decision was viewed as a whole. The Federal Circuit also held that § 325(e)(1) does not estop the Board from entering a decision, as it only places limitations on a petitioner’s ability to request or maintain a proceeding.