Digest of MCM Portfolio LLC v. Hewlett-Packard Co.., No. 2015-1091 (Fed. Cir. Dec. 2, 2015) (precedential). On appeal from the P.T.A.B. Before Prost, Dyk, and Hughes.

Procedural Posture: Patentee appealed the Board’s decision to institute inter partes review and its final written decision holding the challenged claims obvious. The Federal Circuit concluded that it lacked jurisdiction to review the Board’s decision to institute the IPR, rejected the patentee’s challenges to the Board’s final written decision on constitutional grounds, and affirmed the Board’s final decision on the merits.

  • Jurisdiction—Appellate Jurisdiction: The Federal Circuit lacks jurisdiction to review the Board’s determination that the challenger was not in privity with another defendant and thus that the IPR petition was not time-barred under 35 U.S.C. § 315(b). Under 35 U.S.C. § 314(d), the Board’s decision whether to institute an IPR is not appealable.
  • Constitutional Issues—Administrative Law: The Board correctly rejected the patentee’s argument that an IPR proceeding violates its right to have the validity of its patent determined by an Article III court. Supreme Court and Federal Circuit precedent demonstrate that the IPR provisions of the patent statute do not violate Article III. Patent rights are public rights derived from an extensive federal regulatory scheme, and Congress has the power to delegate disputes over public rights to agencies or courts other than Article III courts under the “public rights exception” to the rule that legal matters affecting private interests under federal law shall be decided by Article III courts.
  • Constitutional Issues—Seventh Amendment: The Board correctly rejected the patentee’s argument that an IPR proceeding violates its Seventh Amendment right to a trial by jury. The Seventh Amendment is not applicable to administrative proceedings. “Because patent rights are public rights, and their validity susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury.”
  • Obviousness: The patentee raised two new arguments on appeal about the prior art references and their combination. The Federal Circuit concluded the arguments had been waived because they were not made below. The Board’s factual findings regarding the combination of two references were supported by substantial evidence. Therefore, the Board did not err in finding that the claimed invention would have been obvious to a person of ordinary skill in the art.