On March 23, 2016, the Federal Circuit held it lacks jurisdiction to review a decision from the Patent Trial and Appeal Board (“Board”) denying institution of inter partes review (“IPR”) on grounds the Board deems redundant.  It further held that 35 U.S.C. § 315(e) does not prevent a petitioner from later raising such denied grounds before the Patent & Trademark Office (“PTO”) or a district court.

Background

Shaw Industries Group (“Shaw”) filed two petitions for IPR of Automated Creel Systems’ U.S. Patent No. 7,806,360, proposing fifteen grounds of rejection in one petition and six grounds in the other.  The Board instituted both IPRs on some, but not all, of the proposed grounds.  In particular, the Board denied one of Shaw’s petitions on a ground alleging anticipation by a patent issued to Payne, deeming the Payne-based ground redundant.  After the Board issued a consolidated final written decision, Shaw appealed the Board’s decision not to institute on the Payne-based ground, and also petitioned for a writ of mandamus instructing the Board to reevaluate its redundancy decision.

Federal Circuit Opinion 

The Federal Circuit held it had no authority to review the Board’s decision to institute on some but not all grounds.  Citing 35 U.S.C. § 314(d) and St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014), the Court stated it lacks jurisdiction to review the Board’s decisions instituting or denying IPR, regardless of whether the Board has issued a final written decision.  In this case, the Court interpreted the Board’s redundancy denial to be a decision denying institution for efficiency purposes, and not a substantive decision on patentability over the Payne reference.  The Court stated that, pursuant to Congress’s authorization, the Patent & Trademark Office (“PTO”) had promulgated 37 C.F.R. § 42.108, which allows the Board to institute IPR on only some of the challenged claims and, for any given claim, based on only some of the proposed grounds.  The Court commented that it saw a benefit in the PTO having this ability, particularly given the Board’s statutory obligation to complete proceedings in a timely and efficient manner.

The Federal Circuit also denied Shaw’s petition for a writ of mandamus, which was predicated on Shaw’s concern that 35 U.S.C. § 315(e) would estop Shaw from raising the Payne-based ground in future proceedings.  The Court agreed with the PTO that § 315(e) creates estoppel only for arguments “that the petitioner raised or reasonably could have raised” during an IPR.  As the Board denied institution on the Payne-based ground, it was not raised, nor could it have been raised, “during” the IPR, and thus § 315(e) would not apply.