In a non-precedential decision late last year, the Federal Circuit dismissed a patent owner’s appeal of a Patent and Trial Appeal Board decision that refused to apply a statutory time-bar to deny institution of an inter partes review proceeding. Click-to-Call Technologies, LP v. Oracle Corp., 622 Fed. Appx. 907 (Fed. Cir. 2015) (per curiam). The court relied on the “No Appeal” provision in 35 USC § 314(d), which states that the “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Last week, the Supreme Court stated, in Cuozzo Speed Technologies, LLC v. Lee, that it need not decide the precise effect of that provision on appeals that may raise issues of the Board acting outside its statutory limits: “Such ‘shenanigans’ may be properly reviewable in the context of [35 USC] § 319 and under the Administrative Procedures Act.” The Court concluded that the facts of Cuozzo Speed did not implicate such shenanigans. But, on June 27, 2016, when faced with the potential that the Board acted outside of its statutory limits in Click-to-Call, the Court vacated the Federal Circuit’s dismissal of the appeal, and remanded for proceedings consistent with the Court’s Cuozzo Speed decision. The Federal Circuit will now have to reinterpret the No Appeal provision, which it has used—wrongly, according to many—to confine the scope of its own jurisdiction.
The AIA statute sets a time period outside of which a party may not petition for inter partes review: “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.” 35 USC § 315(b). Last year, the Federal Circuit repeatedly held that the No Appeal provision “prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the Board’s final written decision.” Achates Reference Publ’g, Inc. v Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015), cert. dismissed, 136 S. Ct. 998 (2016), accord MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1288 (Fed. Cir. 2015). Click-to-Call raises the same issue.
In Click-to-Call, the Board instituted inter partes review over the patent owner’s protestations that the petition was time-barred under § 315(b). The basis for the § 315(b) dispute was that the Patent Owner had filed an infringement complaint against a predecessor-in-interest to the petitioner several years before the petition, but that complaint was later dismissed without prejudice pursuant to the parties’ stipulation. Looking beyond the plain language of the statute and to earlier Federal Circuit decisions interpreting the effect of such dismissals, the Board concluded that the dismissal here left those parties as though the infringement suit had never been brought. Oracle Corp. v. Click-to-Call Techs, LP, Case IPR2013-00312, Paper No. 26 (PTAB 2013) (precedential as to Section III.A). As a consequence, the Board concluded that the previous service of the complaint did not bar the current petitioner from seeking inter partes review. Ultimately, the Board canceled the challenged claims and restated its position regarding § 315(b) as part of its final written decision.
Click-to-Call appealed the Board’s final written decision to the Federal Circuit, arguing that § 315(b) should have barred the Board’s review. The Federal Circuit dismissed the appeal for lack of appellate jurisdiction in view of that court’s earlier decision in Achates and in view of its characterization that Click-to-Call was challenging the Board’s institution decision. The court acknowledged that there is an implicit and narrow exception to statutory provisions that bar judicial review for allegations that the agency exceeded its delegated authority or violated a clear statutory mandate. But, the court reaffirmed its view that disputes over the interpretation of § 315(b) fall outside of that exception to the No Appeal provision. Click-to-Call, 622 Fed. Appx. at 908.
Dissatisfied, of course, Click-to-Call next petitioned the Supreme Court to consider whether the Board’s assessment of § 315(b) is reviewable on appeal after the Board issues its final written decision. The Patent Office defended the Federal Circuit’s dismissal, stating simply that Click-to-Call offers no sound reason to believe that this issue warrants the Court’s review. The Court disagreed with the Patent Office, and handed Click-to-Call at least a temporary victory when it granted Click-to-Call’s petition, vacated the Federal Circuit’s decision, and remanded the matter for further review.
On remand, the Federal Circuit may hear arguments that its earlier decision was correct because, as the Supreme Court posited, Congress could not have thought that the Patent Office’s final written decision “could be unwound under some minor statutory technicality related to its preliminary decision to institute inter partes review.” The Federal Circuit also may hear a number of arguments that the time-bar in § 315(b) is not a minor statutory technicality and that its earlier decision to dismiss was wrong:
- Whether the time-bar in § 315(b) applies is a fact-intensive inquiry that may occur during the inter partes review trial (post-institution). It makes little sense, therefore, to conclude that the Board finally decides whether the time-bar applies at the pre-discovery, institution stage. Further, Congress probably did not intend to prevent appeals of such decisions by somehow tying 315(b) to the No Appeal provision in § 314.
- The No Appeal provision’s reference to “under this section” limits the provision to the Threshold provision of § 314(a)—i.e., that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition—and, thus, does not apply to the Board’s assessment of the time-bar in a different section, § 315(b). (In contrast, the Timing provision in § 315(b) recites the more expansive phrase “under this chapter.”)
- Even if issues addressed only in an institution decision are final, in this case the time-bar issue was reconsidered and restated in the Board’s later, final written decision and, thus, that aspect of the final written decision should be reviewable under § 319(a), which expressly permits appeals from final written decisions.
- Justice Alito stated in his separate opinion in Cuozzo Speed: “Judicial review enforces the limits that Congress has imposed on the agency’s power” and “thus serves to buttress, not ‘undercut,’ Congress’s objectives.” Congress enacted the time-bar in § 315(b) to safeguard patent owners from belated AIA trials. Preventing judicial review of the Board’s consideration of that time-bar would, therefore, frustrate Congress’s objectives.
If the Federal Circuit is persuaded by these types of arguments and if it also concludes on the appeal record that the time-bar of § 315(b) applies—and there is no legal certainty that it would apply—then Click-to-Call’s temporary victory from the Supreme Court might ultimately lead to a more permanent victory. Nevertheless, Click-to-Call has suffered a permanent injury: the next challenger that is not time-barred has a clear roadmap to convincing the Patent Office to again cancel the claims on the same prior art grounds.