On January 8, 2018, the Federal Circuit issued a divided en banc opinion in Wi-Fi One, LLC v. Broadcom Corp., No. 2015-1944, holding that the parties to an inter partes review (“IPR”) proceeding may appeal determinations from the Patent Trial and Appeal Board (the “Board”) on whether the IPR petition was timely filed under 35 U.S.C. § 315(b). The en banc decision narrowly interprets the issues that are “nonappealable” under 35 U.S.C. § 314(d). The court’s decision thus opens the door to more extensive appellate review of the Board’s institution decisions and, in the long term, will likely increase the costs associated with IPR proceedings.
Wi-Fi One involved two provisions governing IPR proceedings: § 314(d) and § 315(b). Under § 315(b), “an inter partes review may not be instituted if the petition requesting the proceeding is filed more than one 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.” Under § 314(d), “[t]he determination…whether to institute an inter partes review under this section shall be final and nonappealable.”
In Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), the Federal Circuit held that the Board’s determination that a petition was timely under § 315(b) was part of the institution decision and therefore nonappealable. The Achates court noted that this remained true “even if such assessment [was] reconsidered during the merits phase of the proceedings and restated as part of the Board’s final written decision.”
Following Achates, the Supreme Court issued its decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016). In Cuozzo, the Court held that § 314(d) precluded Federal Circuit review of institution decisions where “the grounds for attacking the decision to institute inter partes review consist[ed] of questions that [were] closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Id. at 2141. The Supreme Court, however, noted that the Federal Circuit may still be able to review institution decisions that were “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.” Id. at 2142.
In Wi-Fi One, Broadcom had filed a petition seeking inter partes review in 2013. The patent owner, Wi-Fi One, opposed institution, arguing the petition was untimely under § 315(b). In particular, Wi-Fi One argued that Broadcom was in “privity” with third parties sued under the patent more than one year before the petition was filed. The Board disagreed, instituted inter partes review, and ultimately found all challenged claims of Wi-Fi One’s patent invalid.
On appeal, Wi-Fi One again argued that Broadcom’s petition was time-barred. Wi-Fi One asserted that following Cuozzo the only nonappealable issues under § 314(d) were those dealing with the Board’s “substantive patentability determinations.” Wi-Fi One argued that the Board’s timeliness decision did not concern a substantive patentability determination, but rather was a jurisdictional issue that could be reviewed to determine whether the Board acted in excess of its statutory jurisdiction. As such, Wi-Fi One argued that the timeliness determination was precisely the type of issue that was appealable under the exceptions outlined in Cuozzo.
A three-judge panel of the Federal Circuit disagreed, finding that the Supreme Court had not limited application of § 314(d) to substantive patentability determinations. The panel also disagreed with Wi-Fi One’s characterization of the Board’s timeliness determination. The panel explained that finding such a holding to be within the “narrow” Cuozzo exception to § 314(d) would make routine procedural orders reviewable “contrary to the entire thrust of the Cuozzo decision.” After the panel’s decision, Wi-Fi One filed a petition for rehearing en banc, which was granted on January 4, 2017.
The en banc court issued its 9-4 decision on January 8, 2017. The majority opinion, written by Judge Reyna, and joined by Chief Judge Prost and Judges Newman, Moore, O’Malley, Wallach, Taranto, Chen, and Stoll, agreed with Wi-Fi One, finding that it was not Congress’s intent to bar judicial review of § 315(b) time-bar determinations. The majority differentiated between “non-initiation” or “preliminary-only merits determinations” that were commonly unreviewable, and § 315(b) time-bar determinations which “control[led] the Director’s authority to institute IPR” and was “unrelated to the Director’s preliminary patentability assessment or the Director’s discretion not to institute IPR….” The court also rejected Broadcom’s argument that the time-bar issue was a “minor statutory technicality” of the type precluded from review by Cuozzo because timely filing was “a condition precedent to the Director’s authority to act.” The court concluded that the statutory scheme as a whole had demonstrated that the § 315(b) determination was not “closely related” to merits-based institution decisions in § 314(a) such that it was subject to § 314(d)’s bar on judicial review.
The dissent, written by Judge Hughes and joined by Judges Lourie, Bryson, and Dyk, argued that that the time-bar issue was unappealable under both Cuozzo and the plain meaning of § 314(d). The dissent determined that the time-bar issue was “closely tied” to the Director’s decision to institute, and thus was not subject to review. The dissent was concerned that the majority’s reading would effectively transform § 314(d) into a prohibition on interlocutory appeal, since parties may now have grounds to appeal institution issues by arguing that they are “merged” into the final written decision. The dissent noted that this reading of § 314(d) had been expressly rejected in Cuozzo. The dissent also expressed policy concerns that allowing review on threshold questions such as timeliness would “squander time and resources spent adjudicating the actual merits of the petition,” which was “counter to the AIA’s purpose of ‘providing quick and cost-effective alternatives to litigation.’”
The court remanded the case to the merits panel to consider Wi-Fi One’s initial time-bar appeal. The court also attempted to limit its holding by stating that it did not “decide today whether all disputes arising from §§ 311–14 [were] final and appealable,” and that its decision “applie[d] only to the appealability of § 315(b) time-bar determinations.” We expect to see further litigation on the scope of § 314(d) and, very likely, a petition for certiorari in the Wi-Fi One case.