The ability to appeal the determination on institution of an IPR is expressly limited by statute. 35 U.S.C. § 314(d) states: “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” An identically-phrased limitation is also applicable to PGR institution decisions at 35 U.S.C. § 324(e), and by extension, to CBMR institution decisions. On its face, this part of the post-grant proceedings schema seems clear and simple: PTAB institution decisions are not to be appealable. As post-grant proceedings have percolated through the courts since institution of the AIA, case law over the last eighteen months has been developing that mostly confirms this as a hard-and-fast rule. However, recent decisions and a petition for certiorari to the U.S. Supreme Court suggest that the rule may not be so clear cut as it might at first appear. This post highlights cases that outline the boundaries relative to §§ 314(d) and 324(e) as they have developed to date.
Most recently, in MCM Portfolio LLC v. Hewlett-Packard Co., No. 2015-1091 (Fed. Cir. Dec. 2, 2015) and Achates Reference Publ’g, Inc. v Apple Inc., No. 2014-1767 (Fed. Cir. Sept. 30, 2015) CAFC panels held that “35 U.S.C. § 314(d) 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, Slip Op., at 13; accord MCM, Slip Op. at 7. Achates had appealed to the CAFC from an adverse IPR final decision, arguing that the PTAB’s decision to institute the IPR was time-barred under 35 U.S.C. § 315(b) because of an alleged privity relationship with earlier defendants, and consequently, that the entire IPR proceeding was improper and that the PTAB’s institution decision should be reversed. The CAFC panel disagreed, stating: “Because the Board’s determinations to institute IPRs in this case are final and nonappealable under 35 U.S.C. § 314(d), this court lacks jurisdiction and dismisses the appeals.” Achates, Slip Op., at 3. In MCM, the panel further stated that “[r]eview of whether the PTO properly instituted inter partes review is forbidden by § 314(d). MCM, Slip Op. at 7.
The Achates and MCM decisions join a growing number of Federal Circuit decisions addressing whether the PTAB’s decision to institute or not institute a given IPR, PGR, or CBMR is reviewable on appeal. A reading of the Achates and MCM opinions would make it seem as if it is now a fairly settled issue (with a narrow exception for mandamus petitions) that the CAFC does not have subject matter jurisdiction over any aspect relative to the PTAB’s decision to institute IPR, PGR, or CBMR proceedings. However, a more in-depth look at additional cases suggests that there may not be as settled as Achates and MCM might suggest.
In addition to Achates and MCM, at least four decisions by the CAFC relative to variations on the theme of 35 U.S.C. § 314(d) provide valuable background. In St. Jude Medical Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014), St. Jude filed an appeal of a PTAB decision not to institute an IPR based on the § 315(b) one-year time bar. The Federal Circuit held that, based on the structure of the IPR statutory provisions, the language of section 314(d), and the jurisdictional statute read in light of those provisions, the CAFC could not hear St. Jude’s appeal. In particular, the court concluded that § 314(d) “certainly bars an appeal of the non-institution decision here.” St. Jude, at 1376.
In In re Dominion Dealer Solutions, LLC, 749 F.3d 1379 (Fed. Cir. 2014), Dominion filed a petition for a writ of mandamus in the CAFC to challenge a PTAB decision not to institute IPRs on five patents. The court, however, denied Dominion’s petition because Dominion did not satisfy the three conditions necessary to obtain a writ of mandamus. Particularly, based on the decision in St. Jude (which was decided on the same day), the court determined that “Dominion has no ‘clear and indisputable’ right to challenge a non-institution decision directly in this court, including by way of mandamus.” In re Dominion, at 1381.
In In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268 (Fed. Cir. July 8, 2015), Cuozzo appealed the PTAB’s decision to institute an IPR based at least partly on prior art that was not identified in the petition, contrary to 35 U.S.C. § 312(a)(3). Unlike St. Jude, Cuozzo’s appeal was brought after a final decision and also appealed the decision on the merits. Relative to the decision to institute, however, the CAFC panel concluded that “§ 314(d) prohibits review of the decision to institute IPR even after a final decision.” In re Cuozzo, at 1273. Thus, the panel held that it lacked jurisdiction to review the PTO’s decision to institute IPR. Id. at 1271. Judge Newman, however, dissented from this holding, arguing that “[t]he statute does not preclude judicial review of whether the statute was applied in accordance with its legislated scope.” Id. at 1291 (Newman, J., dissenting).
One day after the Cuozzo decision, a different CAFC panel in Versata Development Group, Inc. v. SAP America, Inc., 793 F. 3d 1306 (Fed. Cir. July 9, 2015) addressed an appeal from a final decision in a CBMR. The panel, after determining that it was expressly precluded by 35 U.S.C. § 324(e) from reviewing the determination by the PTAB whether to institute the CBM review, nevertheless held that the CAFC had authority to review whether the patent at issue was within the PTAB’s authority for CBM review after a final decision by the PTAB. Id. at 1323. Thereafter, the panel determined that the patent at issue was indeed properly considered a CBM patent, and not within the exception for technological inventions. Id., at 1323-27. As reported earlier in this blog, however, Judge Hughes dissented in-part from this decision, arguing that the Federal Circuit lacks jurisdiction to review the Board’s decision to institute a CBM review, including the Board’s determination that the challenged patent claims a covered business method, in line with previous cases.
The takeaway from all this seems to be that, contrary to the apparent clarity of the wording of 35 U.S.C. §§ 314(d) and 324(e) and of some of the CAFC panel decisions over the last eighteen months, the question of what can be reviewed on appeal relative to the PTAB’s decisions on institution is not yet completely closed
In the wake of these decisions, a petition for writ of certiorari has been filed with the Supreme Court in the In re Cuozzo case. In its petition, Cuozzo asks the Supreme Court to overrule the line of cases that deny jurisdiction to review whether an IPR institution decision was properly decided. (The petition also asks the Supreme Court to eliminate the broadest reasonable interpretation standard for IPRs, but that is not the subject of this post.) Cuozzo points to the Versata decision as being “directly conflicting” with the Cuozzo decision on the question of reviewability (Petition at 20-21), and warns that this issue has “divided that court’s judges” (Petition at 23). Regardless of whether the petitioner’s characterization of deep division is wholly accurate or more argumentative, there does seem to be some tension between different CAFC panels regarding the questions of where the boundaries of review of the PTAB’s institution decisions may lie. The takeaway from all this seems to be that, contrary to the apparent clarity of the wording of 35 U.S.C. §§ 314(d) and 324(e) and of some of the CAFC panel decisions over the last eighteen months, the question of what can be reviewed on appeal relative to the PTAB’s decisions on institution is not yet completely closed.