Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-15-01347/USCOURTS-ca13-15-01347-0/pdf.json

Parties Involved:
Complementsoft, LLC.
Cross-Appellant
SAS Institute, Inc.
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

SAS INSTITUTE, INC.,

Appellant

v.

COMPLEMENTSOFT, LLC.,

Cross-Appellant

______________________ 

2015-1346, 2015-1347

______________________ 

Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. 

IPR2013-00226.

______________________ 

Decided: June 10, 2016

______________________ 

JOHN MARLOTT, Jones Day, Chicago, IL, argued for 

appellant. Also represented by GREGORY A. CASTANIAS, 

Washington, DC; DAVID B. COCHRAN, Cleveland, OH; 

MATTHEW JOHNSON, Pittsburgh, PA.

MATTHEW TOPIC, Loevy & Loevy Attorney at Law, 

Chicago, IL, argued for cross-appellant.

JOSEPH GERARD PICCOLO, Office of the Solicitor, United States Patent and Trademark Office, Alexandria, VA, 

argued for intervenor. Also represented by THOMAS W.

KRAUSE, SCOTT WEIDENFELLER, STACY BETH MARGOLIES. 

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2 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

______________________ 

Before NEWMAN, CHEN, and STOLL, Circuit Judges.

Opinion for the court filed by Circuit Judge STOLL. 

Opinion concurring-in-part and dissenting-in-part filed by 

Circuit Judge NEWMAN.

STOLL, Circuit Judge. 

SAS Institute, Inc. filed an inter partes review (“IPR”) 

petition with the Patent Trial and Appeal Board (“Board”) 

to review the patentability of ComplementSoft’s U.S. 

Patent No. 7,110,936. The Board instituted an IPR 

proceeding on some, but not all, of the ’936 patent claims 

challenged in SAS’s petition. The Board ultimately found

all of the instituted claims, except for claim 4, unpatentable in view of the prior art. SAS argues on appeal that 

the Board misconstrued a claim term and that the Board 

erred by not addressing in the final written decision 

claims SAS petitioned against, but that the Board did not 

institute as part of the proceeding. ComplementSoft 

cross-appeals two of the Board’s claim constructions. For 

the reasons below, we agree with the Board on all of the 

challenged constructions and determine that the Board 

did not need to address in its final written decision claims 

it did not institute. We also vacate the Board’s determination that claim 4 is patentable and remand so that the 

parties may address a new construction that the Board 

adopted in its final written decision after interpreting the 

claim differently before. 

BACKGROUND

I.

ComplementSoft is the assignee of the ’936 patent, issued September 19, 2006, and directed to an “Integrated 

Development Environment for generating and maintaining source code . . . in particular, programmed in data 

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manipulation languages.” ’936 patent col. 2 ll. 8–11. The 

patent characterizes a development environment as 

comprising a set of software tools allowing users to develop, edit, and debug software for a particular programming 

language or set of programming languages. Id. col. 1 

ll. 32–48. The development environment contemplated by 

the ’936 patent utilizes a graphical user interface and is 

particularly designed for data manipulation languages, 

including SAS®, which is developed by the appellant. Id.

col. 1 l. 64 – col 2 l. 3, col. 2 l. 11. The specification describes that the development environment of the 

’936 patent serves three primary functions: (1) it allows 

users to locally edit code stored on a central server; (2) it 

detects a user’s programming language and parses code 

accordingly; and (3) it generates representative visualization of such code, which can be directly edited to effect a 

change to the underlying code. Id. col. 2 l. 8 – col. 3 l. 20.

The specification describes that four major components of the ’936 patent design environment are a document manager, an editor, a parser layer, and a visualizer. 

The document manager is a program that performs enhanced file management functions. Id. col. 6 ll. 22–42. 

The editor allows a user to edit and debug source code 

using standard text-editing functions. Id. col. 7 l. 3 – 

col. 8 l. 7. The parser layer examines source code, detects 

which programming language is being used in the code, 

and applies rules and logic corresponding to that programming language. Id. col. 9 ll. 38–53, col. 17 ll. 30–45. 

Finally, the visualizer works in conjunction with the 

parser layer to parse the code and display it graphically 

using icons connected with arrows. Id. col. 8 ll. 8–12.

The ’936 patent discloses two types of visualizations,

those for program flows and those for data flows. Program flow diagrams contain programming block icons, 

which represent sections of source code, linked with 

arrows that depict the overall flow of the program. Id. 

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col. 2 ll. 38–40, col. 15 ll. 56–59. Figure 9 of the 

’936 patent depicts a program flow.

Data flow diagrams, the other visualization disclosed by 

the ’936 patent, “are comprised of icons depicting data 

processing steps and arrows to depict the flow of the data 

through the program.” Id. col. 2 ll. 40–42. Figure 17 of 

the ’936 patent depicts a data flow.

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During prosecution, the patentee added the “data manipulation languages” limitation to the claims in response 

to a prior art rejection based on U.S. Patent No. 6,851,107 

to Coad (“the Coad patent”). The Coad patent generally 

describes a design environment for purely object-oriented 

programming languages, such as Java and C++. In 

response to the patentee’s amendment, the examiner 

allowed the claims to issue, stating that the Coad patent 

does not disclose “that the detected language is a data 

manipulation language.” J.A. 528.1

 

1 Citations to “J.A. ___” refer to the Joint Appendix 

filed by the parties.

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The claims at issue in this appeal are independent 

claim 1 and dependent claim 4. They recite:

1. An integrated development environment, 

comprising: 

a document manager for retrieving source 

code programmed using one of a plurality of types 

of data manipulation languages; 

an editor for displaying the retrieved source 

code and providing a means for a user to edit the 

retrieved source code;

a parser layer which detects the one of the 

plurality of types of data manipulation languages

in which the retrieved source code is programmed 

and which activates rules and logic applicable to 

the detected one of the plurality of types of data 

manipulation languages; and

a visualizer dynamically linked to the editor 

for displaying graphical representations of flows

within the retrieved source code using the rules 

and logic applicable to the detected one of the plurality of types of data manipulation languages

and activated by the parser, wherein the editor, 

parser layer and visualizer cooperate such that 

edits made to the source code using the editor are 

automatically reflected in the graphical representations of flows displayed by the visualizer and edits made to the graphical representations of flows

in the visualizer are automatically reflected in the 

source code displayed by the editor.

4. The integrated development environment as 

recited in claim 1, wherein the graphical representations of data flows are expandable and collapsible. 

Id. col. 18 ll. 19–43, 50–52 (emphases added). 

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II.

SAS petitioned for IPR of the ’936 patent, alleging 

that all sixteen of the patent’s claims were unpatentable 

as anticipated under 35 U.S.C. § 102 or as obvious under 

35 U.S.C. § 103.2 The Board instituted IPR for claims 1

and 3–10 on obviousness grounds, but did not institute 

IPR for claims 2 and 11–16. Relevant to this appeal, the 

Board’s institution decision construed “data manipulation 

language” as “a programming language used to access

data in a database, such as to retrieve, insert, delete, or 

modify data in the database,” and “graphical representations of flows within the retrieved source code” as “a 

diagram that depicts a map of the progression (or path) 

through the source code.” SAS Inst., Inc. v. ComplementSoft, LLC, IPR2013-00226, 2013 WL 8595939, at *4–6 

(PTAB Aug. 12, 2013) (Institution Decision). The institution decision also interpreted “graphical representations 

of data flows” to mean “a depiction of a map of the path of 

data through the executing source code.” Id. at *12.

The Board’s final written decision concluded that 

claims 1, 3, and 5–10 of the ’936 patent were unpatentable as obvious in view of the prior art. At the same time, 

the Board found claim 4 patentable over the prior art. 

Particularly, the Board found that the prior art did not 

satisfy the “graphical representations of data flows” 

limitation in claim 4, which it newly construed to mean “a 

graphical representation comprised of icons depicting 

data processing steps and arrows to depict the movement 

 

2 The versions of 35 U.S.C. §§ 102 and 103 that apply here are those in force preceding the changes made by 

the America Invents Act, given the effective filing dates of 

the claims of the ’936 patent. See Leahy–Smith America

Invents Act, Pub. L. No. 112-29, 125 Stat. 284, 293 (2011). 

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of data through source code.”3 The Board’s construction of 

this purportedly unmet claim limitation differed from the 

interpretation the Board gave in its institution decision:

“a depiction of a map of the path of data through the 

executing source code.” Institution Decision, 2013 

WL 8595939, at *12. The final written decision did not 

review patentability of claims 2 and 11–16 for which the 

Board did not institute IPR. See SAS Inst., Inc. v. ComplementSoft, LLC, IPR2013-00226, 2014 WL 3885937, at 

*24 & n.3 (PTAB Aug. 6, 2014) (Final Written Decision) 

(“Claims 2 and 11–16 are not at issue in this trial.”).

SAS sought rehearing before the Board, which the 

Board denied. SAS then timely appealed to this court, 

and ComplementSoft timely cross-appealed. We have 

jurisdiction under 28 U.S.C. § 1295(a)(4)(A) and 

35 U.S.C. § 141(c) to review the Board’s final written 

decision. 

DISCUSSION

On appeal, SAS argues that the Board erred by construing “graphical representations of data flows” in claim 

4 as “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code.” SAS also argues that 

it was improper for the Board to change its interpretation 

of this claim term in the final written decision without 

 

3 The final written decision actually construed the 

shorter term “data flows.” The Board, however, in its 

denial of SAS’s request for rehearing, clarified that the 

construction applies equally to the longer claim term 

“graphical representations of data flows,” else the construction would repeat the “graphical representations” 

language found in the claim. SAS Inst., Inc. v. ComplementSoft, LLC, IPR2013-00226, Paper No. 40, at *3–4 

(PTAB Nov. 10, 2014) (Rehearing Denial).

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affording the parties an opportunity to respond. SAS 

lastly argues that the Board’s final written decision is 

deficient for failing to address the patentability of all 

claims SAS included in its IPR petition, including those 

for which the Board did not institute IPR. ComplementSoft cross-appeals, arguing that the Board erred in 

construing two terms in claim 1: “data manipulation 

language” as “a programming language used to access 

data in a database, such as to retrieve, insert, delete, or 

modify data in the database”; and “graphical representations of flows within the retrieved source code” as “a 

diagram that depicts a map of the progression (or path) 

through the source code.” We first address the parties’ 

claim construction arguments and then move to SAS’s 

remaining arguments.

I.

“The ultimate construction of the claim is a legal 

question and, therefore, is reviewed de novo.” Info-Hold, 

Inc. v. Applied Media Techs. Corp., 783 F.3d 1262, 1265 

(Fed. Cir. 2015). Further, claim construction based solely 

upon intrinsic evidence—meaning the patent claims, the 

patent specification, and the prosecution history—is a 

matter of law reviewed de novo. Teva Pharms. USA, Inc. 

v. Sandoz, Inc., 135 S. Ct. 831, 841 (2015). On the other 

hand, when extrinsic evidence is relied upon, we review 

the Board’s “underlying factual determinations involving 

extrinsic evidence for substantial evidence.” Microsoft 

Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1297 (Fed. Cir. 

2015) (citing Teva, 135 S. Ct. at 841–42).

Claim construction seeks to ascribe the meaning to 

claim terms as a person of ordinary skill in the art at the 

time of invention would have understood them. Phillips 

v. AWH Corp., 415 F.3d 1303, 1312–14 (Fed. Cir. 2005) 

(en banc) (citing Vitronics Corp. v. Conceptronic, Inc., 90 

F.3d 1576, 1582 (Fed. Cir. 1996)). In an IPR proceeding, 

claims are given their broadest reasonable interpretation

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in light of the specification. In re Cuozzo Speed Techs., 

LLC, 793 F.3d 1268, 1279 (Fed. Cir. 2015), cert. granted

sub nom. Cuozzo Speed Techs., LLC v. Lee, No. 15-446, 

2016 WL 205946 (U.S. Jan. 15, 2015). In construing 

terms, “the person of ordinary skill in the art is deemed to 

read the claim term not only in the context of the particular claim in which the disputed term appears, but in the 

context of the entire patent, including the specification.” 

Phillips, 415 F.3d at 1313. Indeed, the specification is 

“the single best guide to the meaning of a disputed term” 

and “[u]sually, it is dispositive.” Id. Thus, “claims ‘must 

be read in view of the specification, of which they are a 

part.’” Id. at 1315 (quoting Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en 

banc), aff’d, 517 U.S. 370 (1996)). 

A.

The Board ultimately construed “graphical representations of data flows” as “a graphical representation 

comprised of icons depicting data processing steps and 

arrows to depict the movement of data through source 

code.” Final Written Decision, 2014 WL 3885937, at *10. 

In construing this term, the Board recognized that the 

specification did not use the claim term at all. The Board 

also recognized, however, that the specification spoke 

extensively about “data flow diagrams” and, in fact, 

defined them as comprising “icons depicting data processing steps and arrows to depict the movement of data 

through source code.” ’936 patent col. 2 ll. 40–42. After 

determining that there was no reason to conclude that the

patentee meant something different between the terms 

“graphical representations of data flows” and “data flow 

diagrams,” the Board used the specification’s definition of 

data flow diagrams to construe graphical representations 

of data flows.

We agree with the Board’s construction. SAS argues 

that because the Board’s construction is narrow, it cannot 

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be the broadest reasonable interpretation of the claim 

term. This is not so. While we have endorsed the Board’s 

use of the broadest reasonable interpretation standard in 

IPR proceedings, we also take care to not read “reasonable” out of the standard. This is to say that “[e]ven under 

the broadest reasonable interpretation, the Board’s construction cannot be divorced from the specification and 

the record evidence, and must be consistent with the one 

that those skilled in the art would reach.” Proxyconn, 789 

F.3d at 1298 (internal quotation marks omitted) (first 

quoting In re NTP, Inc., 654 F.3d 1279, 1288 (Fed. Cir.

2011); and then quoting In re Cortright, 165 F.3d 1353, 

1358 (Fed. Cir. 1999)). The broadest reasonable interpretation here is that the claimed “graphical representation 

of a data flow” is commensurate with the “data flow 

diagram” described in the specification. The Board noted 

this, concluding that the specification suggests that the 

terms “data flow diagram” and “graphical representation 

of data flow” are interchangeable. Final Written Decision, 

2014 WL 3885937, at *10; Rehearing Denial, IPR2013-

00226, Paper No. 40, at *4. The only difference between 

these two phrases is the word “diagram” in the first 

phrase and the word “graphical representation” in the 

other. And a diagram is, in fact, a graphical representation. Because the specification explicitly defines data flow 

diagram, one of skill in the art having read the specification would apply this definition to graphical representations of data flows as well.

What the specification also makes clear is that program flows differ from data flows. The Board correctly 

noted that the specification consistently distinguishes 

these flows. See Rehearing Denial, IPR2013-00226, Paper 

No. 40, at *5 (citing ’936 patent col. 2 ll. 38–42, col. 8 ll. 8–

14, col. 16 ll. 6–30); see also ’936 patent abstract, col. 2 

ll. 33–38, col. 3 ll. 3–5. The specification crystallizes this 

distinction when it describes a user having to “toggle 

between the program flow and the data flow display” in 

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the visualizer. ’936 patent col. 15 ll. 50–56. The figures 

also show that program flows differ from data flows. 

Compare id. Fig. 9, with id. Fig. 17. To the extent that 

SAS argues that the specification describes a representation of a program flow as depicting the flow of data, we 

disagree that one of skill in the art would equate this with 

a graphical representation of a data flow, given the specification’s consistent disjunction of the two flows. Thus, it 

is not in error for the Board’s construction of “graphical 

representation of data flow” in claim 4 to exclude program 

flows.

The structure of the claims also lends support to the 

Board’s construction. See Phillips, 415 F.3d at 1314 

(“Other claims of the patent in question, both asserted 

and unasserted, can also be valuable sources of enlightenment as to the meaning of a claim term.”). Independent 

claim 1 recites broadly “graphical representations of 

flows,” and dependent claims 2 and 3 recite more specifically that the flows are “data flows” or “program flows,” 

respectively. ’936 patent col. 18 ll. 19–49. This structure 

is consistent with the specification, which first discloses 

visualizations generally and then immediately defines 

program flow diagrams and data flow diagrams as distinct things. See id. col. 2 ll. 33–42. We therefore reject 

SAS’s argument that the Board construed the term 

“graphical representations of data flows” too narrowly.

B.

On cross-appeal, ComplementSoft first challenges the 

Board’s construction of “data manipulation language” as 

“a programming language used to access data in a database, such as to retrieve, insert, delete, or modify data in 

the database.” ComplementSoft argues that this construction should limit the claim term to program languages that are solely purposed for creating datacentric 

programs and which provide direct access to a database. 

Particularly, ComplementSoft would have us exclude 

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object-oriented languages altogether—even when implemented with embedded data manipulation code using 

Structured Query Language (“SQL”)—because the prior 

art Coad patent the patentee distinguished during prosecution discussed object-oriented languages. ComplementSoft makes this argument under a theory of prosecution 

history disclaimer.

The prosecution history of a patent, though “less useful for claim construction purposes” than the claim language and written description, plays various roles in 

resolving uncertainties about claim scope. Phillips, 415 

F.3d at 1317. “[F]or prosecution disclaimer to attach, our 

precedent requires that the alleged disavowing actions or 

statements made during prosecution be both clear and 

unmistakable.” Omega Eng’g, Inc., v. Raytek Corp., 334 

F.3d 1314, 1325–26 (Fed. Cir. 2003). “Where the alleged 

disavowal is ambiguous, or even ‘amenable to multiple 

reasonable interpretations,’ Cordis Corp. v. Medtronic 

AVE, Inc., 339 F.3d 1352, 1359 (Fed. Cir. 2003), we have 

declined to find prosecution disclaimer.” Avid Tech., Inc. 

v. Harmonic, Inc., 812 F.3d 1040, 1045 (Fed. Cir. 2016)

(citing Omega Eng’g, 334 F.3d at 1325 (“[W]e have thus 

consistently rejected prosecution statements too vague or 

ambiguous to qualify as a disavowal of claim scope.”); 

Rheox, Inc. v. Entact, Inc., 276 F.3d 1319, 1327 (Fed. Cir. 

2002)). 

Prosecution history disclaimer does not apply in this 

case, at least not as ComplementSoft would have it. 

There is simply nothing in the prosecution history to 

suggest that SQL, which the ’936 patent specification 

specifically identifies as a data manipulation language, 

embedded within another programming language does 

not satisfy the “data manipulation language” limitation. 

It is true that ComplementSoft added the “data manipulation language” limitation to avoid the Coad patent, but 

the Coad patent never discloses or suggests embedded 

data manipulation coding. At most, the patentee disCase: 15-1347 Document: 9-2 Page: 13 Filed: 06/10/2016
14 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

claimed object-oriented programming languages without 

any data manipulation components. There is no clear and 

unmistakable evidence that the patentee disclaimed 

anything more. 

The Board also examined the specification and found 

that it did not limit data manipulation languages to those 

providing direct access to a database. In other words, the 

Board found that the specification does not exclude embedding database access within object-oriented language

code. We agree. And because the specification and prosecution history did not conclusively resolve construction,

we also agree that it was appropriate for the Board to rely 

on dictionaries and expert testimony to aid its construction. Those sources lend support to the Board’s construction. 

ComplementSoft lastly argues that “access” to data in 

a database is not enough to make a programming language a “data manipulation language.” As the Board 

noted, ComplementSoft’s own expert and a named inventor on the ’936 patent provided testimony that contradicts 

this argument. Thus, we agree with the Board that this 

argument is not compelling. For these reasons, we agree 

with the Board’s construction of “data manipulation 

languages.” 

ComplementSoft’s second construction challenge relates somewhat to its first. ComplementSoft argues that 

when the Board construed “graphical representations of 

flows within the retrieved source code” to mean “a diagram that depicts a map of the progression (or path) 

through the source code,” it failed to limit the graphical 

representations to only depicting segments of source code 

that manipulate data.

Because we have already determined that a “data 

manipulation language” is not limited to languages that 

only perform data manipulation, we likewise do not inject 

a similar limitation into claim 1. Doing so would run 

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counter to the disclosure in the specification. Figures 9, 

19, and 20, for instance, are graphical representations of 

flows. Included within these representations is an icon 

for a “Print” operation, which is not a data manipulation 

step. Thus, we agree with the Board’s construction and 

do not insert an additional limitation that all depicted

steps must relate to data manipulation.

II.

As noted above, we agree with the Board’s ultimate 

construction of the “graphical representations of data 

flows” claim term. The Board’s procedure for arriving at 

this construction, however, gives us pause. 

In its institution decision, the Board’s claim construction section indicated that “data flow diagram” means “a 

map of the path of data through the executing source 

code.” Institution Decision, 2013 WL 8595939, at *5. The 

Board equated this interpretation of “data flow diagram” 

with the claim limitation “graphical representations of 

data flows” when it denied institution of a prior art 

ground. Particularly, the Board concluded that SAS had 

not demonstrated that the prior art ground disclosed “a 

depiction of a map of the path of data through the executing source code” and thus had not shown that the ground 

“discloses a graphical representation of a data flow.” Id. 

at *11–12 (internal quotation marks omitted). 

ComplementSoft filed its patent owner’s response and 

identified “a diagram that depicts a map of the path of 

data through the executing source code” as the Board’s 

construction for the term “graphical representations of 

data flows.” While it argued that the Board misconstrued 

the “data manipulation language” term, it did not similarly argue that the Board misconstrued graphical representations of data flows. SAS’s reply took issue with the 

construction’s inclusion of the term “executing,” but 

suggested no modifications other than to remove this term

from the construction. The parties did not ask for a 

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revised construction of “graphical representations of data 

flows” at the oral hearing.

The Board’s final written decision acknowledged that 

“the parties directly disagree regarding only the construction of the term ‘data manipulation language.’” Final 

Written Decision, 2014 WL 3885937, at *3. Nonetheless, 

the Board newly construed “graphical representations of 

data flows” as “a graphical representation comprised of 

icons depicting data processing steps and arrows to depict 

the movement of data through source code,” id. at *10, 

which varies significantly from its initial interpretation of 

the term as “a map of the path of data through the executing source code.” Institution Decision, 2013 WL 8595939, 

at *12. In denying SAS’s request for rehearing, the Board 

concluded that the new construction did not prejudice 

SAS because SAS could have made construction arguments for the term in its IPR petition. Rehearing Denial, 

Paper No. 40, at *3–4 n.1.

We disagree with the Board’s approach. As we have 

noted, IPR proceedings are formal administrative adjudications subject to the procedural requirements of the 

Administrative Procedure Act (“APA”). See Dell Inc. v. 

Acceleron, LLC, 818 F.3d 1293, 1298 (Fed. Cir. 2016); 

Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1080 

(Fed. Cir. 2015); see also Dickinson v. Zurko, 527 U.S. 150, 

154 (1999). One such APA provision is that “[p]ersons 

entitled to notice of an agency hearing shall be timely 

informed of . . . the matters of fact and law asserted.” 

5 U.S.C. § 554(b)(3); see Dell, 818 F.3d at 1298. SAS, as 

the petitioner, is entitled to this procedural protection in 

this instance. Although in the past we have discussed 

§ 554(b)(3) with respect to the protection it provides to the 

patent owner, the provision is not so limited in an instituted IPR proceeding. First, the APA provides that this 

protection applies to “[p]ersons entitled to notice of an 

agency hearing.” 5 U.S.C. § 554(b)(3). In an IPR proceeding, this class of persons includes the petitioner. See 35 

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U.S.C § 316(a)(10) (directing the PTO to promulgate 

regulations “providing either party”—i.e., petitioner or 

patent owner—“with the right to an oral hearing as part 

of the proceeding”); 37 C.F.R. § 42.70 (providing that “[a]

party may request oral argument” before the Board). 

Moreover, affording petitioners with the benefit of 

§ 554(b)(3) is appropriate because petitioners are not 

disinterested parties in an IPR proceeding. Rather, 

petitioners stand to lose significant rights in an instituted 

IPR proceeding because of the estoppel effects that trigger 

against them if the Board issues a final written decision. 

See 35 U.S.C. § 315(e).

We have interpreted § 554(b)(3) in the context of IPR 

proceedings to mean that “‘an agency may not change 

theories in midstream without giving respondents reasonable notice of the change’ and ‘the opportunity to 

present argument under the new theory.’” Belden, 805 

F.3d at 1080 (quoting Rodale Press, Inc. v. FTC, 407 F.2d 

1252, 1256–57 (D.C. Cir. 1968)); see also Dell, 818 F.3d 

at 1300–01 (holding that the Board, in relying on factual 

assertions the petitioner introduced for the first time at 

the oral hearing, violated § 554(b)(3) because the patent 

owner did not have a meaningful opportunity to respond). 

That maxim applies in this fact-specific circumstance. 

What concerns us is not that the Board adopted a construction in its final written decision, as the Board is free 

to do, but that the Board “change[d] theories in midstream.” Belden, 805 F.3d at 1080. SAS focused its 

argument on the Board’s institution decision claim interpretation, a reasonable approach considering ComplementSoft agreed with this interpretation in its patent owner’s 

response and never suggested that the Board adopt the 

construction that eventually materialized in the final 

written decision. It is difficult to imagine either party 

anticipating that already-interpreted terms were actually 

moving targets, and it is thus unreasonable to expect that 

they would have briefed or argued, in the alternative, 

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hypothetical constructions not asserted by their opponent. 

This is especially true for SAS, considering the strict 

fifteen page limit for its reply to the patent owner’s response. See 37 C.F.R. § 42.24(c)(1) (2012).4

Finally, to be clear, it is uncertain whether SAS will 

ultimately be able to show unpatentability of the 

’936 patent claim 4 even under the construction of “graphical representations of data flows” that the Board adopted 

and that we agree with. That is not for us to decide today, 

but for the Board to examine in the first instance after 

hearing from the parties on the new construction. See 

Dell, 818 F.3d at 1301 (remanding to the Board for further proceedings upon finding § 554(b)(3) not satisfied).

III.

SAS also argues that the Board erred by not addressing in the final written decision every ’936 patent claim 

SAS challenged in its IPR petition. The Board’s final 

written decision, rather, addresses patentability of only 

those claims for which the Board instituted an IPR proceeding. SAS’s argument, however, is foreclosed by our 

recent decision in Synopsys, Inc. v. Mentor Graphics 

Corp., 814 F.3d 1309 (Fed. Cir. 2016).

Synopsys presented the same question that SAS raises here: Must a final written decision by the Board ad-

 

4 37 C.F.R. § 42.24(c)(1) has been amended to provide 5,600 words for petitioner replies to patent owner 

responses. See Amendments to the Rules of Practice for 

Trials Before the Patent Trial and Appeal Board, 81 Fed. 

Reg. 18750, 18765 (April 1, 2016). When SAS filed its 

petitioner reply on February 12, 2014, however, the old 

regulation limiting the reply to fifteen pages was in effect. 

See Rules of Practice for Trials Before the Patent Trial 

and Appeal Board, 77 Fed. Reg. 48669, 48673 (August 14, 

2012). 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 19

dress every patent claim challenged in an IPR petition?5 

The petitioner argued, as does SAS, that the text of the 

final written decision statutory subsection, 35 U.S.C. 

§ 318(a), compels the Board to address every petitionchallenged claim. We found, however, “no statutory 

requirement that the Board’s final decision address every 

claim raised in a petition for inter partes review. Section 318(a) only requires the Board to address claims as to 

which review was granted.” Id. at 1316–17. We found it 

significant that § 318(a) describes “claims challenged by 

the petitioner,” whereas the institution decision statutory 

subsection, 35 U.S.C. § 314, describes “claims challenged 

in the petition.” We reasoned that the differing language 

implies a distinction between the two subsections such 

that § 318(a) does not foreclose the claim-by-claim approach the Board adopted there and in this case. Further, 

we upheld the validity of a PTO-promulgated regulation 

authorizing the claim-by-claim approach. Id. at 1316 

(validating 37 C.F.R. § 42.108, which “authorize[s] the 

review to proceed on all or some of the challenged 

claims”).

Accordingly, we reject SAS’s argument that the Board 

must address all claims challenged in an IPR petition in 

its final written decision.

CONCLUSION

For the foregoing reasons, we agree with the Board 

regarding the challenged constructions and conclude that

 

5 Indeed, not only did SAS’s briefing identify Synopsys as a related case, but SAS also submitted a brief as 

amicus curiae in Synopsys urging us to reach the same 

result that it now argues for in this appeal. See Brief of 

Amicus Curiae SAS Institute, Inc. in Support of Appellant 

Synopsys, Inc., Synopsys, 814 F.3d 1309 (Nos. 14-1516, 

14-1530). 

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20 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

SAS’s argument that the Board must address all claims 

from the IPR petition in the final written decision is 

foreclosed by Synopsys. We vacate the Board’s patentability determination of claim 4 and remand so that the 

parties may address the Board’s construction of “graphical representations of data flows.”

AFFIRMED-IN-PART, VACATED-IN-PART, AND 

REMANDED

Case: 15-1347 Document: 9-2 Page: 20 Filed: 06/10/2016
United States Court of Appeals 

for the Federal Circuit ______________________ 

SAS INSTITUTE, INC.,

Appellant

v.

COMPLEMENTSOFT, LLC.,

Cross-Appellant

______________________ 

2015-1346, 2015-1347

______________________ 

Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. 

IPR2013-00226.

______________________ 

NEWMAN, Circuit Judge, concurring in part, dissenting in 

part. 

I concur in Parts I and II of the majority opinion, for I 

agree that principles of due process, as well as the strictures of the Administrative Procedure Act as applied to 

the America Invents Act (AIA) and the Patent and 

Trademark Office (PTO), require that the parties have the 

opportunity to adjust their arguments and evidence to the

Patent Trial and Appeal Board’s (PTAB’s) change in claim 

construction.

I write separately because the PTAB’s practice of deciding the validity of only some of the patent claims 

challenged in the petition does not conform to the America 

Invents Act. I stated these concerns in Synopsys, Inc., v. 

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2 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

Mentor Graphics Corp., 814 F.3d 1309, 1324, 117 

U.S.P.Q.2d 1753, 1765 (Fed. Cir. 2016) (Newman, J., 

dissenting). The facts and rulings in the present case 

further illuminate the error in the PTO’s adoption of rules 

that depart from the legislative plan. The exclusion of

some of the challenged claims from the statutory procedures and estoppels of the AIA, accomplished by accepting 

some of the claims for which review is sought while ignoring others, in the PTO’s absolute discretion, serves no 

purpose other than to negate the intended legislative

purpose of the AIA.

The PTO practice replaces the benefits of the America 

Invents Act with new disadvantages, for, after the extensive (and expensive) proceedings of inter partes review, 

the parties are left with unaddressed claims to the same 

patented invention, claims that can be litigated as if no 

post-grant proceeding had occurred. This departure from 

the legislative purpose is illustrated in this case more 

strongly than in Synopsys, for here the PTAB issued a 

split final decision, invalidating eight petitioned claims

while validating one of the petitioned claims, simultaneously ignoring seven other petitioned claims that were 

properly presented for review. The split decision, following a partial institution, adds to the uncertainty of the 

claims that the PTAB chose not to review. The legislative 

plan contains no hint of such intentional irregularity.

As experience is gathered on diverse factual situations and the PTO’s erratic implementation, concerns 

have arisen within the communities that collaborated in 

the evolution of the America Invents Act. It is incumbent 

on the courts to assure the correct statutory interpretation by administrative agencies charged with statutory

administration. Thus I respectfully dissent from Part III 

of the majority opinion, and the majority’s ratification of 

the PTO practice of addressing only some of the challenged claims in a fully compliant IPR petition.

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 3

DISCUSSION

The America Invents Act created a new expert tribunal, charged to act with expedition and economy. Its 

purpose is to facilitate both the validation of properly 

issued patents and the elimination of invalid patents,

both in service to the compelling national interest in 

invention and innovation. The PTO’s position that it need 

not review some of the claims challenged in a petition for 

review via a post-grant proceeding is inconsistent with 

the Act. The PTO is authorized to refuse to institute 

review entirely—but a partial review cannot be inferred

from the statute or accommodated to its purpose.

The statutory provisions and the legislative purpose 

of substituting an agency tribunal for district court proceedings on aspects of patent validity are defeated by the 

PTO’s position that it can leave some challenged claims 

untouched. The America Invents Act presents a new 

system of reviewing issued patents, providing for stays of 

district court proceedings, and estoppels in all tribunals, 

based on the PTO decision. Final determination of the 

validity of a challenged patent is not achieved when the 

PTO selects, at its sole and unreviewable choice, which 

claims it will review and which it will not touch.

The post-grant procedures of the America Invents Act

are of great power and promise. However, as implemented by the PTO, these procedures have produced a startlingly destabilizing effect. As an amicus curiae stated in 

an AIA case before the Supreme Court on a different 

aspect of the statute, “IPR was meant to open an alternative pathway to the accurate resolution of patent disputes, 

not a gaping loophole that undermines the integrity of 

both administrative and federal court patent adjudications.” Brief for Intellectual Ventures as Amicus Curiae 

Supporting Petitioner, Cuozzo Speed Techs., LLC v. Lee 

(No. 15-446), 2016 WL 825549.

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4 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

The AIA provisions are designed to act in harmony, 

like a well-oiled engine. Incorrect implementation by the 

agency distorts the framework, providing the nowobserved result of protracted litigation grinding against 

administrative obstinacy. The victim is the Nation’s 

innovation economy.

Statutory compliance is the judicial obligation. I focus 

on specific statutory provisions that relate to, and are 

violated by, the PTO’s practice of partial decision of IPR 

petitions, viz., 35 U.S.C. §§ 311, 312, 314, 315, and 318, 

and AIA Section 18(a)(D).

35 U.S.C § 311. Inter Partes Review

Section 311 states the scope of inter partes review, 

and limits such review to challenges that “could be raised 

under section 102 and 103 and only on the basis of prior 

art consisting of patents or printed publications.” 35 

U.S.C. § 311(b). The AIA proceeding is structured as a 

complete alternative to litigation of these issues. In 

providing a meaningful alternative to district court litigation of these primary issues of patent validity, Congress 

designed the AIA to achieve expeditious and economical 

final resolution. See, e.g., Patent Reform Act of 2009: 

Hearing Before the House Comm. on the Judiciary, 111th 

Cong. 153 (2009) (statement of Rep. Manzullo) (“It is 

clearly appropriate to have an administrative process for 

challenging patent validity, but it should exist within a 

structure that guarantees a quick—and final—

determination.”). 

The legislative record is uniform and compelling. See, 

e.g., Patent Reform: The Future of American Innovation: 

Hearing Before the Senate Comm. on the Judiciary, 110th 

Cong. 13 (2007) (statement of Jon Dudas, Director, 

USPTO) (“[T]he estoppel needs to be quite strong that 

says on the second window any issue that you raised or 

could have raised you can bring up no place else. That 

second window, from the administration’s position, is 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 5

intended to allow nothing—a complete alternative to 

litigation.”).

At enactment of the AIA in 2011, Senator Grassley 

summarized that

if an inter partes review is instituted while litigation is pending, that review will completely substitute for at least the patents-and-printedpublications portion of the civil litigation.

157 Cong. Rec. S1360-94 (daily ed. March 8, 2011) (statement of Sen. Grassley). 

The intended complete alternative and complete substitution is impossible if the PTAB chooses incomplete 

review. That is my concern with Part III of the majority 

opinion. 

35 U.S.C. § 312. Petitions for review

Section 312 sets the requirements for petitions for 

post-grant review. Among others, the petition must 

identify: 

[I]n writing and with 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, 

including— 

(A) copies of patents and printed publications that 

the petitioner relies upon to support the petition, 

and

(B) affidavits or declarations of supporting evidence and opinions, if the petitioner relies on expert opinions;

35 U.S.C. § 312(a)(3). The purpose of these detailed filing 

requirements is: “to force a petitioner to present all of his 

best evidence against a patent up front. His petition itself 

must present a full affirmative case. It thus reinforces 

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6 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

the front loaded nature of an oppositional system, which 

is critical to the efficient resolution of proceedings by the 

PTO.” 154 Cong. Rec. S9982-93 (daily ed. Sept. 25, 2008)

(statement of Senator Kyl on S. 3600). 

In the case at bar, SAS presented complete evidence 

as to all of the claims that it challenged in the petition, 

and ComplementSoft provided a full response. Nonetheless, the PTO refused to consider all of the claims that 

had been placed at issue, leaving seven claims undecided.

The petition for review sets the boundaries of the IPR 

proceeding, as summarized by Senator Grassley on enactment of S. 23, that “by requiring petitioners to tie their 

challenges to particular validity arguments against 

particular claims, the new threshold will prevent challenges from ‘mushrooming’ after the review is instituted 

into additional arguments employing other prior art or 

attacking other claims.” 157 Cong. Rec. S1360-94 (daily 

ed. March 8, 2011). It is not disputed that these requirements were met in the petition presented in this case. 

Section 312, like the rest of the AIA, provides no support for the PTO’s practice of accepting consideration of 

some of the patent claims in the petition while ignoring 

others, when all challenged claims are fully documented 

and briefed in compliance with the statute. The PTO’s 

selective practice is especially deleterious to the statutory 

purpose when the patent is in validity litigation in the 

district court. 

35 U.S.C. § 314. Institution of Inter Partes Review

Section 314(a) establishes the threshold required for 

the Director to institute proceedings adjudicating validity: 

The Director may not authorize an inter partes 

review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed 

under section 313 shows that there is a reasonable 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 7

likelihood that the petitioner would prevail with 

respect to at least 1 of the claims challenged in 

the petition.

35 U.S.C. § 314(a). The statute does not provide the PTO 

with discretion to pick and choose which of the challenged 

claims will be included in the post-grant review when at 

least one claim is found to have crossed the threshold of 

likely invalidity. The Director can still refuse to institute 

review entirely, but the Director cannot choose to consider 

some of the challenged claims and to ignore others. The 

PTO departed from the statute in adopting regulations

that authorize review of only some of the challenged 

claims and grounds, as in 37 C.F.R. 42.108(a): 

(a) When instituting inter partes review, the 

Board may authorize the review to proceed on all 

or some of the challenged claims and on all or 

some of the grounds of unpatentability asserted 

for each claim.

I am not here concerned with the statutory authorization 

for complete denial of a petition to institute, for then the 

petitioner may proceed promptly with litigation. My 

concern is with the unauthorized partial institution after 

a PTO finding that at least one of the patent claims faces 

a likelihood of invalidity. This defeats the legislative 

purpose of creating a “substitute for court litigation” that 

is a “quick and cost effective alternative[]” where challengers must “front load their case,” and the decision 

imposes estoppel to “eliminate the need to press any 

claims in other fora.” Patent Reform: The Future of American Innovation: Hearing Before the Senate Comm. On the 

Judiciary, 110th Cong. 7 (2007) (written responses of Jon 

Dudas, Director, USPTO); H.R. Rep. No. 112-98, pt. 1 at 

48 (2011); 157 Cong. Rec. S1360-94 (daily ed. March 8, 

2011) (Sen. Grassley during Senate consideration, 

amendment, and passage of S. 23); 154 Cong. Rec. S9982-

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8 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

93 (daily ed. Sept. 25, 2008) (statement of Sen. Kyl on S. 

3600 (Patent Reform)).

Authorization to refuse to institute a petition was included in response to the concerns of then Director Dudas 

about whether the PTO could handle the increased workload within the statutory time frame; this accommodation 

did not also authorize the PTO to choose to decide part of 

a petition and leave the other part undecided. Partial 

institution is not a reasonable statutory interpretation—it 

imposes additional delay, uncertainty, and cost; all contrary to the purposes of the AIA. It particularly affects 

§ 315, discussed post, which imposes estoppel against the 

petitioner on all grounds that were “raised or reasonably 

could have [been] raised” in the IPR petition.

The AIA provides for two determinations by the Director when a petition for post-grant review has been 

filed: (1) whether the petitioner has presented grounds 

reasonably likely to invalidate at least one of the challenged claims, and (2) whether to institute post-grant 

review. Senator Kyl explained that the grant of discretion 

to the Director to refuse to institute review even when the 

invalidity threshold is met “reflects a legislative judgment 

that it is better that the Office turn away some petitions 

that otherwise satisfy the threshold for instituting an 

inter partes or post-grant review than it is to allow the 

Office to develop a backlog of instituted reviews that 

precludes the Office from timely completing proceedings.” 

157 Cong. Rec. S1377 (daily ed. Mar. 8, 2011) (statement 

of Sen. Kyl). 

35 U.S.C § 315. Estoppel

Section 315 establishes how these post-grant procedures interact with other aspects of patent litigation. 

Among the consequences of the PTO’s curious and unforeseen practice, partial review does not estop unreviewed 

claims as to either validity or invalidity, thereby adding to 

the litigants’ burden rather than lightening it. The 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 9

estoppel provisions were the subject of extensive legislative discussion.

Section 315(e) provides that when a petition for review is granted and the matter proceeds to trial and 

decision in the PTAB in accordance with § 318(a), estoppel arises with respect to “any ground that the petitioner 

raised or reasonably could have raised during that inter 

partes review.” This estoppel applies in the PTO, in the 

district courts, and in the International Trade Commission. 

35 U.S.C. § 315(e) Estoppel.— 

(1) Proceedings before the office.–The petitioner in 

an inter partes review of a claim in a patent under 

this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request 

or maintain a proceeding before the Office with 

respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

(2) Civil actions and other proceedings.–The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final 

written decision under section 318(a), or the real 

party in interest or privy of the petitioner, may 

not assert either in a civil action arising in whole 

or in part under section 1338 of title 28 or in a 

proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 

that the claim is invalid on any ground that the 

petitioner raised or reasonably could have raised 

during that inter partes review.

The America Invents Act was designed—after a decade of hearings and revisions—to reduce the cost of patent 

litigation, to resolve major validity issues in an expert 

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10 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

tribunal, and to put an end to repetitive challenges. The 

estoppel provision was a controversial aspect of the enactment.

An interim Senate Report states that contributors

were concerned about the fairness of the “could have 

raised” estoppel provision, given the extremely limited 

discovery available to petitioners. See S. Rep. No. 111-18, 

at 17, to accompany S. 515 (Patent Reform Act of 2009) 

(“Many businesses also have described could-have-raised 

estoppel as a powerful brake on their use of inter partes 

reexamination. They find this standard vague and uncertain, and fear that if they challenge a patent in an inter 

partes reexamination, they will lose the ability to raise 

later-discovered prior art against the patent if they are 

subsequently sued for infringement.”).

Congress initially considered a lesser estoppel. See S. 

Rep. No. 110-259, at 22, to accompany S. 1145 (“Moreover, 

once a petitioner has challenged the validity of a patent 

through a PGR, that party may not challenge validity in a 

court proceeding based on any ground it raised during the 

PGR”). But, by the time of enactment of the AIA in 2011, 

stronger estoppel provisions appear to have achieved 

consensus. See 157 Cong. Rec. S952 (Feb. 28, 2011)

(statement of Sen. Grassley on final consideration of S. 

23): 

In addition, the bill would improve the current inter partes administrative process for challenging 

the validity of a patent. It would establish an adversarial inter partes review, with a higher 

threshold for initiating a proceeding and procedural safeguards to prevent a challenger from using the process to harass patent owners. It also 

would include a strengthened estoppel standard to 

prevent petitioners from raising in a subsequent 

challenge the same patent issues that were raised 

or reasonably could have been raised in a prior 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 11

challenge. The bill would significantly reduce the 

ability to use post-grant procedures for abusive 

serial challenges to patents. These new procedures would also provide faster, less costly, alternatives to civil litigation.

Director Dudas had urged that because the PTO procedures are intended to substitute for district court litigation, litigation-type estoppel should attach to PTAB 

rulings:

We would favor providing for a second-window review to have a different estoppel effect than a 

first-window review . . . . A second-window review, however, will serve as a substitute for court 

litigation and, as such, should bind not only the 

patentee but also the challenger as a decision on 

the merits in litigation would.

Patent Reform: The Future of American Innovation: 

Hearing Before the Senate Comm. on the Judiciary, 110th 

Cong. 136–137 (2007) (statement of Jon Dudas, Director, 

USPTO).

Senator Grassley further summarized, at enactment, 

that the purpose of the estoppel is to “completely substitute” for the same issues in litigation. 

Ideally extending could-have-raised estoppel to 

privies will help ensure that if an inter partes review is instituted while litigation is pending, that 

review will completely substitute for at least the 

patents-and-printed-publications portion of the 

civil litigation.

157 Cong. Rec. S1360-94 (daily ed. March 8, 2011) (statement of Sen. Grassley). When PTO Director Kappos took 

office as the legislation neared finality, he stated at a 

closing hearing on the America Invents Act: 

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12 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

If I can say that in my own words also, that I believe there are significant advantages for patentees who successfully go through the post-grant 

system—in this case inter partes review—because 

of those estoppel provisions. Those estoppel provisions mean that your patent is largely unchallengeable by the same party.

America Invents Act: Hearing on H.R. 1249 Before the 

House Comm. on the Judiciary, 112th Cong. 52–53 (2011) 

(statement of David Kappos, Director, USPTO).

The “complete substitution” for section 102 and 103 

issues cannot occur unless all of the claims challenged in 

the petition are included when post-grant review is accepted. Challengers may choose between the IPR proceeding and district court litigation of the same issues, 

but Congress restricted the repetitive validity proceedings 

of the past. A witness testified that:

With respect to your question on alternatives to 

litigation...38% of all inter partes reexaminations 

brought between 2001 and 2005 were filed after 

patent litigation had already begun, showing that 

this proceeding, to a very significant part, is not 

used instead of litigation, but on top of litigation, 

and sometime even after litigation in attempts at 

undoing adverse district court judgments.

Patent Reform: The Future of American Innovation Before 

the Senate Comm. on the Judiciary, 110th Cong. 94 (written testimony for Alkermes plc) (emphasis original).

Senator Schumer stated at enactment of S. 23: 

Too many district courts have been content to allow litigation to grind on while a reexamination is 

being conducted, forcing the parties to fight in two 

fora at the same time. This is unacceptable, and 

would be contrary to the fundamental purpose 

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SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 13

of . . . provid[ing] a cost efficient alternative to litigation.

157 Cong. Rec. S1360-94 (March 8, 2011) (statement of 

Sen. Schumer).

These universally emphasized AIA purposes fall flat 

when the PTO chooses to review some but not all of the

challenged claims in the petition, leaving the other claims 

presumably alive and well. The legislation does not 

contemplate such a procedure. The legislation provides 

only for a PTO proceeding that subjects “any patent 

claim challenged by the petitioner and any new claim 

added” during the proceeding to be fully and finally 

decided through the PTO proceeding and its subsequent 

appeal, bringing “more certainty in litigation.” 157 Cong. 

Rec. S948 (Feb. 28, 2011) (statement of Sen. Leahy on 

Senate consideration of S. 23) (emphasis added).

This finality is achieved by the estoppel provisions as 

applied to the decision on every claim challenged by the 

petitioner as to every issue raised or that could have been 

raised. America Invents Act: Hearing on H.R. 1249 Before 

the House Comm. on the Judiciary, 112th Cong. 12 (2011) 

(statement of David Kappos, Director, USPTO) (“Those 

estoppel provisions mean that your patent is largely 

unchallengeable by the same party.”). However, when 

review is declined as to some claims that may be of litigation interest, the partial institution practice cannot be a 

“complete[] substitute for . . . [a] portion of civil litigation.” 

This contravenes a primary purpose of the AIA. 

During oral argument of this appeal, the court questioned PTO counsel on the relationship between the 

conduct of reexamination proceedings, the conduct of inter 

partes review proceedings, and the legislative purpose of 

the AIA’s post-grant procedures. Oral Argument at 

25:28–37:20. In a letter, the PTO provided MPEP sections 2243 and 2246, stating that reexamination under 

past PTO practice authorized by Section 302 may be 

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14 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

conducted on “fewer than all claims in the subject patent 

or in the reexamination request.” The PTO stated that 

this supports the partial institution practice for AIA 

proceedings. PTO Letter, January 11, 2016, ECF No. 61. 

The PTO urged that Chevron deference should be applied.

However, the legislative history is clear that the AIA 

inter partes review proceedings were designed to correct 

inadequacies plaguing the former procedure. The former 

PTO reexamination differs from AIA review in that (1) 

reexamination under § 302 is conducted by an examiner 

on the written record, not by the PTAB with discovery, 

witnesses, and trial; (2) § 302 reexamination entitles 

amendment as of right, and examination of the amended 

claims is of right, contrary to the PTO’s implementation of 

the AIA statute; (3) no estoppel attaches to § 302 reexamination, unlike the AIA rulings; and (4) § 302 reexamination requires “a substantial new question of patentability” 

and reexamination is mandatory when such a question is 

found, unlike the standard for “institution.”

The new AIA system was designed to improve upon 

the § 302 reexamination procedure. See 157 Cong. Rec. 

S952 (Feb. 28, 2011) (statement of Sen. Grassley on 

Senate consideration of S.23) (“In addition, the bill would 

improve the current inter partes administrative process 

for challenging the validity of a patent.”); 157 Cong. Rec.

S5370-77 (Sept. 7, 2011) (statement of Sen. Whitehouse 

on Senate consideration of H.R. 1249) (“Administrative 

processes that should serve as an alternative to litigation 

[] have broken down, resulting in further delay, cost, and 

confusion.”).

35 U.S.C § 316. Conduct of inter partes review

In promulgating regulations authorizing partial institution, the PTO invoked the authority of Section 6(c) of 

the AIA, requiring the PTO to “issue regulations to carry 

out chapter 31 of title 35, United States Code, as amended 

by subsection (a) of this section.” See § 316(a) (“The 

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Director shall prescribe regulations . . . (2) setting forth

the standards for the showing of sufficient grounds to 

institute a review under section 314(a); . . . (4) establishing and governing inter partes review under this chapter 

and the relationship of such review to other proceedings 

under this title”). 77 Fed. Reg. 7058.

This authority does not include authorization to depart from the statute. See Ernst & Ernst v. Hochfelder, 

425 U.S. 185, 213–14 (1976) (“The rulemaking power 

granted to an administrative agency charged with the 

administration of a federal statute is not the power to 

make law. Rather, it is the power to adopt regulations to 

carry into effect the will of Congress as expressed by the 

statute.”); see also H.R. REP. NO. 110-314, at 45 (2007) 

(“Where Congress has seen fit to provide specific limitations or conditions in statute, the USPTO may not surpass or take away these limitations or conditions by 

promulgated rule.”). 

The PTO improperly adopted a system of partial institution and partial final written decision, contravening the 

statute and the intent of Congress. The PTO has exceeded its statutory authority. It befalls this court to “add 

force and life to the cure and remedy, according to the 

true intent of the makers of the act.” Heydon’s Case, 76 

Eng. Rep. 637, 638 (1584).

35 U.S.C § 318. Decision of the PTAB 

Section 318 requires the Board to address all of the 

challenged claims and to issue a final written decision. 

The statute provides:

§ 318(a). If an inter partes review is instituted 

and not dismissed under this chapter, the Patent 

Trial and Appeal Board shall issue a final written 

decision with respect to the patentability of any 

patent claim challenged by the petitioner and any 

new claim added under section 316(d).

Case: 15-1347 Document: 9-2 Page: 35 Filed: 06/10/2016
16 SAS INSTITUTE, INC. v. COMPLEMENTSOFT, LLC. 

The statute is clear: the Board’s final written decision 

must include “the patentability of any patent claim challenged by the petitioner and any new claim added under 

section 316(d).” Id. And when a petition is instituted, all 

of the challenged claims must be included in the final 

written decision. Id.

The totality of provisions and history of the America 

Invents Act demonstrates that the PTO has erroneously 

adopted a system of partial review and partial decision 

that was not contemplated, not intended, not discussed, 

and indeed not suspected by Congress and the communities concerned with patent legislation.

CONCLUSION

The panel majority reinforces the erroneous PTO regulations and practices that contravene the statute. I 

respectfully dissent from Part III of the court’s opinion. 

Case: 15-1347 Document: 9-2 Page: 36 Filed: 06/10/2016