GTNX, Inc. v. INTTRA, Inc.

Clarifying the “final written decision” rule in covered business method (CBM) reviews, the U.S. Court of Appeals for the Federal Circuit explained that the Patent Trial and Appeal Board’s (PTAB or Board) decision to terminate a CBM proceeding was not appealable because the Board’s decision did not address the validity of the patents. GTNX, Inc. v. INTTRA, Inc., Case Nos. 15-1349; -1350; -1352 and -1353 (Fed. Cir., June 16, 2015) (Taranto, J.).

The patents-at-issue related to online methods for coordinating containerized shipping. In 2011, the appellant’s parent company filed suit in district court, seeking a declaratory judgment that the patents were invalid. While that case was pending, the appellant petitioned the U.S. Patent and Trademark Office (USPTO) for a CBM review of the asserted patents.

The Board instituted the CBM review proceedings. However, just two months after institution, the Board granted the appellee leave to file a motion to dismiss the proceedings under 35 U.S.C. § 325(a)(1), which states that “review may not be instituted . . . if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of the patent.” The appellant opposed the motion, arguing that the appellee had waived its § 325(a)(1) objection. The Board granted the motion to dismiss, noting that there was no dispute that the appellant’s declaratory judgment action fell within § 325(a)(1). The petitioner appealed.

The petitioner argued that the Board’s decision constituted a final written decision under § 328(a). But, the Federal Circuit rejected this claim, noting that § 329 authorizes appeals only with respect to a “final written decision of the [Board] under section § 328(a).” The Court explained that § 328(a) refers solely to a “final written decision with respect to the patentability of any patent claim challenged by the petitioner. . .” By contrast, the Board’s decision “was not reached after conduct of the review and did not make a determination with respect to patentability.” Thus, the decision fell outside of § 328(a). Since only a decision under § 328(a) constitutes an “appealable decision within the statutory regime,” the Court found that it did not have jurisdiction to hear the appeal.

The Federal Circuit went on to note that the Board “expressly stated that it was vacating [its] earlier decision to institute proceedings.” In so doing, the Board was, in effect, making a decision whether to institute proceedings. Under § 324(e), such decisions are “final and nonappealable,” further confirming the Court’s lack of jurisdiction.

Practice Note: Parties seeking institution of inter partes review must file such motions prior to (or on the same day of) seeking a declaratory judgment for invalidity. This bar cannot be waived, even where the patent owner fails to raise it as an issue.