The Federal Circuit recently reversed course and expanded judicial review of PTAB institution decisions to include time-bar determinations, potentially clearing a path for petitioners and patent owners to appeal other threshold determinations.

The US Court of Appeals for the Federal Circuit sitting en banc recently revisited whether the bar on judicial review of institution decisions by the Patent Trial and Appeal Board (PTAB or the Board) applies to time-bar determinations. Overruling a prior panel decision answering in the affirmative, on January 8 the full Federal Circuit held that the PTAB’s time-bar determinations are in fact appealable. The ruling provides dissatisfied litigants with new ammunition for challenging institution decisions, and potentially opens the door to appeals on other threshold determinations that do not reach the merits of the inter partes review (IPR) petition.

Background

When Congress passed the Leahy-Smith America Invents Act (AIA) in 2011, it intended for post-grant proceedings, including IPR, to be quick and cost-effective alternatives to district court litigation for challenging the patentability of issued patent claims.^[1] To that end, Section 314 of Title 35 limits the judicial review of the Board’s institution decision by providing that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”^[2]The US Supreme Court made clear in Cuozzo that Section 314(d) bars judicial review of institution decisions concerning compliance with Section 312(a)(3)—i.e., whether the petition identified with sufficient particularity “each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim.”^[3] The Cuozzo court, however, expressly declined to “decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’”^[4]

The time-bar provision, Section 315(b) of the AIA, requires the Board to deny institution of an IPR even if the petition otherwise complies with Section 312(a)(3). The provision provides that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privity of the petitioner is served with a complaint alleging infringement of the patent.” This one-year time bar does not apply to requests for joinder under Section 315(c).

Prior to Cuozzo, a Federal Circuit panel determined for the first time whether Section 314(d) precludes judicial review of Section 315(b) time-bar determinations.^[5] There, the patent owner appealed a final written decision canceling certain patent claims through IPR, arguing that the Board overstepped its statutory authority by instituting IPR on a petition that was time-barred under Section 315(b).^[6] The Federal Circuit panel rejected this argument, holding that “35 U.S.C. § 314(d) prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on [the patent owner’s] 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 final written decision.”^[7] According to the panel, the Board’s misinterpretation of Section 315(b) does not constitute ultra vires agency action that might otherwise support judicial review.^[8] The panel concluded that it was barred from reviewing Section 315(b) decisions and dismissed the case for lack of personal jurisdiction.

The Decision

In 2013, Broadcom Corporation (Broadcom) filed three separate IPR petitions challenging three patents owned by Wi-Fi One, LLC (Wi-Fi), all of which had been asserted in 2010 in the Eastern District of Texas against multiple defendants, but never against Broadcom itself. In response to Broadcom’s petitions, Wi-Fi argued that the Board was prohibited from instituting review on any of the three petitions because Broadcom was in privity with the Eastern District of Texas defendants, and as such, the IPR petitions were time-barred under Section 315(b).

The Board disagreed and instituted IPR on the challenged claims, and issued final written decisions finding the challenged claims unpatentable. In those decisions, the Board determined that Wi-Fi had not shown that Broadcom was in privity with the defendants in the Eastern District of Texas litigation, and, therefore, the IPR petitions were not time-barred under Section 315(b).^[9]

Wi-Fi appealed the final written decisions, arguing, among other things, that the Board’s time-bar determinations should be reversed. After a panel of the Federal Circuit rejected Wi-Fi’s arguments, finding the Section 315(b) time-bar rulings nonappealable, Wi-Fi petitioned for rehearing en banc, and the Federal Circuit granted its petition.

The en banc panel began by finding no “specific legislative history that clearly and convincingly indicates congressional intent to bar judicial review of § 315(b) time-bar determinations.”^[10] Turning next to the statutory language, the Federal Circuit found that Section 315(b) controls the Board’s authority to institute IPR, and as such, is “unrelated” to the noninitiation and preliminary-only merits determinations because it “does not go to the merits of the petition.”^[11]

The time-bar decision is nowhere referred to in § 314(a). Additionally, the time bar is not focused on the particular claims, whereas § 314(a)’s threshold determination is; the time bar involves only the time of service of a complaint alleging infringement “of the patent.” Nothing in § 315(b) sets up a two-stage process for addressing the time bar: the time-bar determination may be decided fully and finally at the institution stage.^[12]

Simply put, the time-bar determination “has nothing to do with the patentability merits or discretion not to institute.”^[13] The Federal Circuit further distinguished Section 315 as “a condition precedent to the Director’s authority to act” that “sets limits on the Director’s statutory authority to institute,” which “is precisely the type of issue that courts have historically reviewed.”^[14]

For these reasons, the Federal Circuit held that “the statutory scheme as a whole demonstrates that § 315 is not ‘closely related’ to the institution decision addressed in § 314(a), and is therefore not subject to § 314(d)’s bar on judicial review.”^[15] The court remanded for the panel to consider in the first instance the merits of Wi-Fi’s time-bar appeal.

Future Implications

The Federal Circuit’s decision in Wi-Fi clears the way for more PTAB appeals, allowing patent owners and petitioners to immediately appeal time-bar determinations made by the PTAB at the institution stage. Although the en banc panel declined to decide “whether all disputes arising from §§ 311-314 are final and non-appealable,”^[16] the decision signals a raised scrutiny of the PTAB’s institution decisions.

By carving out an avenue for appealing an institution decision, which was strictly limited in the past, the Wi-Fi court’s ruling suggests that the court may in the future permit appeals on other threshold determinations that do not reach the merits of the IPR petition. Such determinations may include whether a petitioner has fulfilled the AIA’s requirement of naming all of the interested parties to a petition or is barred by estoppel from filing the petition.

[1] H.R. Rep. No. 112-98, pt. 1, at 48 (2001); 157 Cong. Rec. 2,710 (2011) (statement of Sen. Grassley).

[2] The director has delegated the authority to institute IPR to the PTAB. 37 C.F.R. §§ 42.4(a), 42.108.

[3] Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2139-42 (2016).

[4] Id. at 2141 (emphasis added).

[5] 803 F.3d 652, 658 (Fed. Cir. 2015).

[6] Id. at 653.

[7] Id. at 658.

[8] Id. at 658-59.

[9] Broadcom Corp. v. Wi-Fi One, LLC, No. IPR2013-00601, 2015 WL 1263008, at *4-5 (PTAB Mar. 6, 2015); Broadcom Corp. v. Wi-Fi One, LLC, No. IPR2013-00602, 2015 WL 1263009, at *4 (PTAB Mar. 6, 2015); Broadcom Corp. v. Wi-Fi One, LLC, No. IPR2013-00636, 2015 WL 1263010, at *4 (PTAB Mar. 6, 2015).

[10] Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944, slip op. at 15.

[11] Id. at 17.

[12] Id.

[13] Id.

[14] Id. at 20.

[15] Id.

[16] Id. at 21.