Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01724/USCOURTS-ca13-14-01724-0/pdf.json

Parties Involved:
Chase Bank USA, National Association
Appellant
Chase Paymentech Solutions, LLC
Appellant
Intellectual Ventures II LLC
Appellee
JPMorgan Chase & Co.
Appellant
JPMorgan Chase Bank, National Association
Appellant
Paymentech LLC
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

INTELLECTUAL VENTURES II LLC,

Plaintiff-Appellee

v.

JPMORGAN CHASE & CO., JPMORGAN CHASE 

BANK, NATIONAL ASSOCIATION, CHASE BANK 

USA, NATIONAL ASSOCIATION, CHASE 

PAYMENTECH SOLUTIONS, LLC, 

PAYMENTECH LLC,

Defendants-Appellants

______________________ 

2014-1724

______________________ 

Appeal from the United States District Court for the 

Southern District of New York in No. 1:13-cv-03777-AKH, 

Judge Alvin K. Hellerstein.

______________________ 

Decided: April 1, 2015

______________________ 

ERIC F. CITRON, Goldstein & Russell, P.C., Bethesda, 

MD, argued for plaintiff-appellee. Also represented by 

THOMAS RICHARD BURNS, JR., Adduci, Mastriani & 

Schaumberg, LLP, Washington, DC; MARC BELLOLI, IAN 

NEVILLE FEINBERG, ELIZABETH DAY, NICKOLAS BOHL, 

Feinberg Day Alberti & Thompson LLP, Menlo Park, CA. 

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2 INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

MARK A. LEMLEY, Durie Tangri LLP, San Francisco, 

CA, argued for defendants-appellants. Also represented 

by CLEMENT ROBERTS; KENNETH R. ADAMO, Kirkland & 

Ellis LLP, New York, NY; BRENT P. RAY, EUGENE 

GORYUNOV, Chicago, IL; JOHN C. O'QUINN, WILLIAM H.

BURGESS, Washington, DC.

JAMES QUARLES, III, Wilmer Cutler Pickering Hale 

and Dorr LLP, Washington, DC, for amicus curiae 

Askeladden, L.L.C. Also represented by ROBERT ANTHONY 

ARCAMONA, GREGORY H. LANTIER; RICHARD WELLS 

O’NEILL, Boston, MA. 

______________________ 

Before O’MALLEY, BRYSON, and HUGHES, Circuit Judges. 

Opinion for the court filed by Circuit Judge O’MALLEY. 

Dissenting opinion filed by Circuit Judge HUGHES. 

O’MALLEY, Circuit Judge. 

Intellectual Ventures II LLC (“IV”) brought suit 

against JPMorgan Chase & Co.; JPMorgan Chase Bank, 

National Association; Chase Bank USA, National Association; Chase Paymentech Solutions, LLC; and Paymentech 

LLC (collectively, “JPMC”) in the United States District 

Court for the Southern District of New York, alleging 

infringement of five patents. JPMC moved to stay the 

action on grounds that it intended to file petitions seeking

covered business method reviews (“CBMR”) with respect 

to some of the patents in suit. After two CBMR petitions 

were filed by JPMC, but before the Patent Trial and 

Appeal Board (“PTAB”) acted on them, the district court 

denied JPMC’s motion to stay. JPMC then sought interlocutory review of that ruling. Because we do not have 

jurisdiction to review the district court’s denial of JPMC’s 

motion to stay, we dismiss. 

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INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 3

I. BACKGROUND

IV alleged infringement of five patents: U.S. Patent 

Nos. 6,715,084 (“the ’084 patent”); 6,314,409 (“the ’409 

patent”); 5,745,574 (“the ’574 patent”); 6,826,694 (“the 

’694 patent”); and 7,634,666 (“the ’666 patent”).1 Approximately one year later, on June 27, 2014, JPMC moved to 

stay the case pending the result of, inter alia, four CBMR 

petitions JPMC said it was planning to file.2 Joint Appendix (“J.A.”) 166 (“JPMC itself shortly will be filing 

requests asking the PTAB to institute a [CBMR] of four of 

the Patents-in-Suit.” (emphasis added)). Shortly after 

filing the motion to stay, JPMC did, in fact, file two 

CBMR petitions for the ’409 and ’574 patents—on July 11 

and 18, respectively. It has never filed the other two 

promised petitions.

On August 11, 2014, the district court denied JPMC’s 

motion to stay. The court applied the four-factor test set 

forth in § 18(b)(1) of the America Invents Act (“AIA”), Pub. 

L. No. 112-29, 125 Stat. 284, 329–31 (2011), expressly 

1 IV also asserted the same five patents against six 

other banking institutions in different district courts: 

First National Bank of Omaha, No. 8:13-cv-167 (D. Neb.)

(complaint filed 5/29/2013); BBVA Compass Bancshares, 

Inc., No. 2:13-cv-1106 (complaint filed 6/12/2013) (N.D. 

Ala.); Commerce Bancshares, Inc., No. 2:13-cv-4160 (W.D.

Mo.) (complaint filed 6/20/2013); SunTrust Banks, Inc., 

No. 1:13-cv-2454 (N.D. Ga.) (complaint filed 7/24/2013); 

U.S. Bancorp, No. 0:13-cv-2071 (D. Minn.) (complaint filed 

7/31/2013); Huntington Bancshares Inc., No. 2:13-cv-785 

(S.D. Ohio) (complaint filed 8/7/2013).

2 Although JPMC’s motion to stay was also based 

on the filing of 12 inter partes review petitions—all by 

third parties—JPMC does not argue that the stay ruling 

relating to those petitions gives us jurisdiction to hear 

this interlocutory appeal.

 

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stating that it was assuming without deciding that 

§ 18(b)(1) governed its consideration of the motion. The 

district court first noted that, because there are multiple 

patents and claims in suit, it would be inappropriate to 

stay the entire litigation while waiting to see if the PTAB 

would choose to initiate review of only two of the patents 

at issue. The district court also concluded that it expected 

the litigation to be resolved in less than a year. Since the 

PTAB is authorized to take twelve months to complete a 

CBMR, the PTAB could extend that time by another six 

months, and those time periods would not begin to run 

until a CBMR petition was actually granted, the court 

concluded that the litigation would likely be resolved 

more quickly than any extended CBM review. Ultimately, the district court concluded that JPMC’s argument 

that the PTAB’s resolutions of the CBMR petitions would 

reduce the court’s workload was largely speculative, and 

was offset by IV’s right to a speedy trial. 

JPMC filed a notice of appeal, arguing that the Federal Circuit has jurisdiction to hear an interlocutory 

appeal of a denial of a motion to stay relating to CBMR 

proceedings under § 18 of the AIA.3 As of the date of oral 

arguments, the PTAB had not acted on the CBMR petitions at issue.4

3 JPMC also filed a motion to stay the case pending 

the interlocutory appeal, which the district court denied. 4 We have been informed that the PTAB instituted 

a CBMR proceeding for all remaining claims in the ’409 

patent on January 14, 2015 but denied the petition for the

’574 patent on January 29, 2015. J.P. Morgan Chase & 

Co. v. Intellectual Ventures II LLC, No. CBM2014-160 

(Pat. Tr. & App. Bd. Jan. 29, 2015); J.P. Morgan Chase & 

Co. v. Intellectual Ventures II LLC, No. CBM2014-157 

(Pat. Tr. & App. Bd. Jan. 14, 2015). This court previously 

has taken judicial notice of post-appeal developments at 

 

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II. DISCUSSION

Consistent with the final judgment rule, this court

normally only has jurisdiction to review “a final decision

of the district court.” 28 U.S.C. § 1295(a)(1) (2012) (emthe PTAB when assessing the propriety of a trial court’s 

ruling on a motion to stay premised on the existence of a 

pending CBMR proceeding. See VirtualAgility Inc. v. 

Salesforce.com, Inc., 759 F.3d 1307, 1312–13 (Fed. Cir. 

2014). This court was cautious in doing so, however, 

“mindful that ‘an appellate court may consider only the 

record as it was made before the district court.’” Id. at 

1312–13 (quoting Ballard Med. Prods. v. Wright, 821 F.2d 

642, 643 (Fed. Cir. 1987)). We explained that we felt 

comfortable doing so, moreover, because the activities at 

the PTAB had been raised with the district court in a 

motion to reconsider the denial of the motion to stay, 

allowing the parties and the district court to fully vet the 

issue. And, notably, nothing about the facts noticed 

related to the propriety of this court’s jurisdiction.

Neither party has requested that we take judicial notice of the recent PTAB rulings in this case, and we decline to do so sua sponte. Because these new facts arose

not only post-appeal, but post-briefing and argument, 

these facts have never been presented to the district 

court, even though they could be, and those facts might 

well be relevant to the district court’s assessment of any 

renewed motion to stay, we decline to expand the record 

before us.

More importantly, we find these facts irrelevant to 

our ability to exercise jurisdiction over this appeal. The 

question we decide today is not whether a ruling on some 

future motion to stay, predicated on a different set of facts 

and procedural setting, would give rise to jurisdiction in 

this court; we ask only whether we have jurisdiction to 

consider the appeal from the order currently before us.

 

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phasis added). The Supreme Court has consistently 

reiterated the importance of the final judgment rule. E.g., 

Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368, 374 

(1981) (“[The final judgment rule] emphasizes the deference that appellate courts owe to the trial judge as the 

individual initially called upon to decide the many questions of law and fact that occur in the course of a trial. 

Permitting piecemeal appeals would undermine the 

independence of the district judge as well as the special 

role that individual plays in our judicial system.”); United 

States v. Nixon, 418 U.S. 683, 690 (1974) (“The finality 

requirement . . . embodies a strong congressional policy 

against piecemeal reviews, and against obstructing or 

impeding an ongoing judicial proceeding by interlocutory 

appeals.”). Exceptions to the final judgment rule, whether statutory or arising from common law, are to be narrowly construed. See Digital Equip. Corp. v. Desktop 

Direct, Inc., 511 U.S. 863, 867–68 (1994) (“[W]e have also 

repeatedly stressed that the ‘narrow’ exception should 

stay that way and never be allowed to swallow the general rule . . . that a party is entitled to a single appeal, to 

be deferred until final judgment has been entered.” (internal citation omitted)); Coopers & Lybrand v. Livesay, 

437 U.S. 463, 474 (1978) (stating that “Congress carefully 

confined” the availability of immediate review of non-final 

orders).

The parties agree that decisions on motions to stay 

ordinarily are not immediately appealable under the final 

judgment rule. See Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 277–78 (1988) (explaining 

that a denial of a motion to stay is not appealable because 

it is always subject to reconsideration and, thus, never 

truly final). And, more specifically, the parties agree that 

rulings on motions to stay premised on the institution of 

inter partes review proceedings are not appealable under 

this rule. See Appellant’s Br. 1–2. There is no doubt, 

accordingly, that the AIA’s authorization for immediate 

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appellate review of stay rulings relating to CBMR proceedings is a statutory grant of jurisdiction to this court 

which must be construed narrowly. See Digital Equip., 

511 U.S. at 867–68. 

Section 18 of the AIA states in relevant part:

(b) REQUEST FOR STAY.— 

(1) IN GENERAL.—If a party seeks a stay of a 

civil action alleging infringement of a patent under section 281 of title 35, United States Code, relating to a [CBMR]5 proceeding for that patent, the 

court shall decide whether to enter a stay . . . .

(2) REVIEW.—A party may take an immediate interlocutory appeal from a district court’s decision 

under paragraph (1). The United States Court of 

Appeals for the Federal Circuit shall review the 

district court’s decision to ensure consistent application of established precedent, and such review 

may be de novo.

AIA § 18(b) (emphases added). In other words, we have 

jurisdiction over an immediate interlocutory appeal from 

a district court’s decision on a motion to stay “relating to a 

[CBMR] proceeding for that patent.” Id. § 18(b)(1). 

Because the district court’s order on JPMC’s motion to 

stay considered two CBMR petitions pending before the 

PTAB, we must decide whether the proper interpretation 

of CBMR “proceeding” in § 18(b)(2) encompasses pending 

5 Section 18 of the AIA is entitled “Transitional 

Program for Covered Business Method Patents.” Based 

on this title, the AIA refers to CBMR proceedings as 

“transitional proceedings.” For consistency, we will 

replace “transitional” with “CBMR.”

 

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CBMR petitions on which the PTAB has not yet acted.6 

IV contends that a CBMR proceeding does not begin until 

the PTAB institutes a review in response to a CBMR 

petition. JPMC, on the other hand, argues that a CBMR 

proceeding begins as soon a party files a CBMR petition. 

In previous appeals where this court exercised jurisdiction 

over an interlocutory appeal under § 18(b)(2) of the AIA, 

the PTAB already had granted CBMR petitions and 

instituted CBM reviews. See, e.g., VirtualAgility, 759 

F.3d 1307. This is, therefore, an issue of first impression.

Our first step in construing the statute is to look to

the language of the AIA. Robinson v. Shell Oil Co., 519 

U.S. 337, 340 (1997) (“Our first step in interpreting a 

statute is to determine whether the language at issue has 

a plain and unambiguous meaning with regard to the 

particular dispute in the case.”). The AIA differentiates 

between a petition for a CBMR proceeding (which a party 

files) and the act of instituting such a proceeding (which 

the Director is authorized to do). For instance, AIA 

§ 18(a)(1)(B) refers to when a person may file a “petition 

for a [CBMR] proceeding,” which suggests that a petition 

is a request for a CBMR proceeding, not that the petition 

itself is part of the proceeding. Section 18(a)(3)(B) uses 

similar language—referring to “any petition for a [CBMR] 

proceeding”—again suggesting that the petition is a 

request that a proceeding be instituted, not that the 

petition itself institutes a proceeding. Comparing this 

6 While, as noted, no CBMR petitions were pending 

as of the filing of the motion to stay, it is permissible for 

the district court to consider the circumstances that exist 

as of the court’s ruling on the motion before it. See VirtualAgility, 759 F.3d at 1317 n.6. That is what the district 

court did here, and the developments between the time of 

the application for a stay and the court’s order denying 

the application are part of the record before us on review.

 

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language with that in § 18(a)(1)(E), which states that 

“[t]he Director may institute a [CBMR] proceeding only 

for a patent that is a covered business method patent,” is 

telling. Because the Director decides whether to “institute,” or begin, a CBMR proceeding, and necessarily bases 

that decision on the strength of the petition, the petition 

itself cannot substitute for the exercise of the Director’s 

discretion.

This interpretation is consistent with the use of “proceeding” in Chapter 32 of Title 35, which covers postgrant reviews generally and to which § 18(a) expressly 

refers. E.g., 35 U.S.C. § 325(d) (“In determining whether 

to institute or order a proceeding under this chapter, . . . 

the Director may take into account whether, and reject the 

petition or request because, the same or substantially the 

same prior art or arguments previously were presented to 

the Office.” (emphases added)); § 326 (setting forth guidelines for discovery and oral argument for proceedings); 

§ 327 (providing for termination of the proceeding if the 

parties settle, “unless the Office has decided the merits of 

the proceeding before the request for termination is 

filed”). The uses of proceeding in the post-grant review 

sections reinforce the distinction between a petition and a 

proceeding, and indicate that the Director decides whether to “institute or order” a proceeding based on a party’s 

“petition or request.” Id. § 325(d). The use of “proceeding” in 35 U.S.C. § 135 for derivation proceedings is 

likewise consistent with this interpretation. See, e.g., 35 

U.S.C. § 135(a)(1) (“An applicant for patent may file a 

petition with respect to an invention to institute a derivation proceeding in the Office.”).

The congressional record, while not terribly illuminating, supports a reading of § 18 which differentiates a 

petition from the CBMR proceeding itself. See, e.g., 157 

Cong. Rec. 3416–17 (2011) (statement of Sen. Schumer) 

(“[CBMR] proceedings will only be instituted upon a high 

up-front showing of likely invalidity. The proceeding is 

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limited to certain business method patents.” (emphasis 

added)). Like the language in the statute, the legislative 

history suggests that the CBMR proceedings will not 

begin until the PTAB institutes the proceedings and the 

PTAB will only institute a proceeding if a party’s petition 

presents a “high up-front showing of likely invalidity.” 

Id.7 Senator Schumer added that, “[s]ince the denial of a 

stay pending post-grant review under this amendment is 

an extraordinary and extremely rare circumstance, the 

filing of an interlocutory appeal should result in the stay 

of proceedings in the district court pending appeal.” Id. 

Because district courts would often deny a stay in the face 

of a mere petition for CBMR—waiting to see what the 

PTAB view of the merits of that petition are—that circumstance can hardly be the extraordinary and extremely 

rare circumstance that Senator Schumer contemplated. 

Indeed, in VirtualAgility, we said that “it [is] not error for 

the district court to wait until the PTAB made its decision 

7 Although the amici argues that the Senate codified the rationale in Broadcast Innovation, L.L.C. v. 

Charter Communication Inc., No. 03-cv-2223, 2006 WL 

1897165 (D. Colo. July 11, 2006)—which dealt with a stay 

that was granted before the petition for a reexamination 

was granted—the Senate only discussed the 4-part test 

for whether a stay was appropriate from that opinion, not 

when a motion for stay was eligible for interlocutory 

appeal. See 157 Cong. Rec. 3416 (2011) (statement of Sen. 

Schumer) (“Due to the low grant rates for stays in several 

jurisdictions, this amendment instructs courts to apply 

the four-factor test first announced in Broadcast Innovation, L.L.C. v. Charter Communications when evaluating 

motions to stay.”). The reference to the Broadcast Innovation case for a different proposition does not override the 

consistent use of the term “proceeding” in the statute and 

elsewhere in the congressional record.

 

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11

to institute CBM review before it ruled on the motion.”8 

759 F.3d at 1315. Similarly, when discussing the program for covered business method patents, the House 

Report on the bill that became the AIA anticipated that 

“[a]ny party may request a stay of a civil action if a related post-grant proceeding is granted.” H.R. Rep. No. 112-

98, at 54 (2011) (emphasis added).

This interpretation of the legislative history is consistent with the apparent purpose behind taking the 

unusual step of not only allowing interlocutory review of 

this narrow class of trial court stay rulings, but allowing 

for de novo review of the same. It was mainly for those 

rare circumstances where a stay is denied even after the 

PTAB has acted to institute a proceeding premised on a 

showing of likely invalidity that Congress crafted an 

exception to the final judgment rule and altered the 

permissible standard of review. See AIA § 18(b)(2) (“The 

United States Court of Appeals for the Federal Circuit 

shall review the district court’s decision to ensure consistent application of established precedent, and such 

review may be de novo.”).

Because the language of the statutory scheme consistently defines “proceeding” as beginning when the PTAB

institutes review, we adopt that interpretation. Robinson, 

519 U.S. at 340 (“Our inquiry must cease if the statutory 

language is unambiguous and the ‘statutory scheme is 

coherent and consistent.’” (quoting United States v. Ron 

Pair Enters., Inc., 489 U.S. 235, 240 (1989))). This narrow 

8 If the dissent were correct that the automatic stay 

provision applies to all petitions, an accused infringer 

could immediately bring a halt to a case, regardless of the 

merits of its challenge to the patent, by filing a CBMR 

petition as soon as the patentee brings suit. We decline to 

believe that is what either Senator Schumer or Congress 

had in mind. 

 

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reading of the statute, moreover, is consistent with Supreme Court precedent counseling us to interpret narrowly exceptions to the final judgment rule that expand the 

scope of our jurisdiction and warning against review of 

rulings that are never truly final. None of the nonstatutory arguments by JPMC and the amici persuade us 

to depart from the interpretation the statute itself dictates. 

One such non-statutory argument is that the U.S. Patent and Trademark Office (“PTO”) has defined “proceeding” more broadly in its regulations. See 37 C.F.R. § 42.2; 

77 Fed. Reg. 48756. The PTO’s interpretation, however,

is trumped by the clear language of the AIA. See 35 

U.S.C. § 2(b)(2) (“[The PTO] may establish regulations, 

not inconsistent with law . . . .” (emphasis added)). The 

PTO’s own regulations are inconsistent on this point, 

moreover. Compare 37 C.F.R. § 42.2 (“Preliminary Proceeding begins with the filing of a petition for instituting 

a trial and ends with a written decision as to whether a 

trial will be instituted. Proceeding means a trial or 

preliminary proceeding.”) with 37 C.F.R. § 42.101(b) (“The 

petition requesting the proceeding . . . .” (emphasis added)) 

and 77 Fed. Reg. 48756 at 48765 (“[T]he Director may 

institute a proceeding where a petitioner meets the 

threshold standards.” (emphasis added)) and id. (stating 

that “the Board may decline to institute a proceeding” 

under certain circumstances).9 Additionally, although we 

9 Indeed, the PTO’s compliance with the timelines 

dictated by the AIA is measured by reference to the date 

on which a petition is granted and proceedings are instituted. 35 U.S.C. § 326(a)(11). If a proceeding actually

began with the filing of the petition, the PTO’s regulations would seem to be in direct conflict with the congressional record. Compare 37 C.F.R. § 42.300(c) (“A covered 

business method patent review proceeding shall be ad-

 

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13

may give deference to the PTO with respect to procedural 

rules of conduct before the PTO itself, we see no reason to 

afford deference to an agency’s interpretation to the 

extent it purports to define the scope of an Article III 

court’s appellate jurisdiction. Cf. Cooper Techs. Co. v. 

Dudas, 536 F.3d 1330, 1335–36 (Fed. Cir. 2008) (explaining that the PTO is authorized to establish “procedural” 

rules, but cannot establish a “substantive” rule that 

“‘effects a change in existing law or policy’ which ‘affect[s] 

individual rights and obligations.’” (quoting Animal Legal 

Def. Fund v. Quigg, 932 F.2d 920, 927 (Fed. Cir. 1991))).

The fact that some district courts have relied on the 

PTO’s definition or used the same broad interpretation of 

proceeding, which appellant now urges, does not dictate 

our construction of a statute that expands our jurisdiction. Not only do these district court decisions not bind 

us, but § 18(b)(2) does not create jurisdiction for district 

courts; they already had the authority to consider motions 

to stay litigation before them under their broad equitable 

powers, regardless of the existence of a “proceeding” 

before the PTAB. District courts are therefore not subject 

to the same jurisdiction-expanding considerations as this 

court in interpreting § 18(b)(2). See Digital Equip., 511 

U.S. at 867–68. Importantly, moreover, our conclusion

that we do not have jurisdiction over an interlocutory

appeal before the PTAB grants a petition and institutes a 

CBMR proceeding does not affect the district court’s 

ability to exercise its discretion in deciding a motion to 

stay at any time; i.e., our holding does not prevent a 

district court from choosing to decide a motion before the 

ministered such that pendency before the Board after 

institution is normally no more than one year.” (emphasis 

added)) with 157 Cong. Rec. 3417 (2011) (statement of 

Sen. Schumer) (“And the proceeding will typically be 

completed within 1 year.”). 

 

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14 INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

PTAB acts on a CBMR petition. See VirtualAgility, 759 

F.3d at 1316 (“While a motion to stay could be granted 

even before the PTAB rules on a post-grant review petition, no doubt the case for a stay is stronger after postgrant review has been instituted.”).

Our construction of “proceeding,” moreover, does not 

create inconsistent rights of appeal for the patentee. 

Though a patentee cannot file an immediate appeal if a 

district court grants a motion to stay before the PTAB 

institutes a proceeding, as noted above, the patentee 

never had the right to an interlocutory appeal over such 

interim, discretionary rulings. The patentee can, if appropriate, seek a writ of mandamus from this court, as it 

always has been authorized to do. 

JPMC contends that—even if we accept the fact that a 

CBMR proceeding does not commence until the Director 

acts to institute such a proceeding—a petition for a proceeding, or even the anticipation of the filing of a petition,

is sufficiently related to a proceeding to give rise to jurisdiction under § 18(b)(2). This interpretation of “relating 

to,” however, is inconsistent with the language in the AIA. 

The AIA grants us jurisdiction over interlocutory appeals 

“from a district court’s decision” “[i]f a party seeks a stay 

of a civil action alleging infringement of a patent . . . 

relating to a [CBMR] proceeding for that patent.” 

§ 18(b)(1)–(2) (emphases added). Under the only fair 

reading of the AIA, this means that we only have jurisdiction under § 18(b)(2) if the party’s motion to stay is 

“relat[ed] to” a CMBR proceeding. Absent the existence of 

a proceeding, jurisdiction is not conferred upon us by 

§ 18(b)(2). 

JPMC asks us to read the statute as granting this 

court jurisdiction over any interlocutory appeal from a 

decision on a motion to stay where the motion is predicated on “anything that relates to” a CBMR proceeding, even 

a future intention to file a petition. Oral Argument at 

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INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

15

10:50, Intellectual Ventures II LLC v. JPMorgan Chase & 

Co., 2014-1724, available at http://oralarguments.cafc.

uscourts.gov/default.aspx?fl=2014-1724.mp3. This argument, however, is premised on a grammatically unsound 

reading of the AIA. As stated above, we only have jurisdiction over a decision on a motion to stay that is related 

to an actual CBMR proceeding, not a decision on a motion 

to stay that is related to anything that relates—however 

remotely—to a hoped-for CBMR proceeding.

III. CONCLUSION

For the foregoing reasons, we do not have jurisdiction 

under § 18(b)(2) of the AIA to consider an interlocutory 

appeal from a decision on a motion to stay until the PTAB 

institutes a CBMR proceeding. We, therefore, dismiss 

this appeal for lack of jurisdiction.

DISMISSED

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United States Court of Appeals 

for the Federal Circuit ______________________ 

INTELLECTUAL VENTURES II LLC,

Plaintiff-Appellee

v.

JPMORGAN CHASE & CO., JPMORGAN CHASE 

BANK, NATIONAL ASSOCIATION, CHASE BANK 

USA, NATIONAL ASSOCIATION, CHASE 

PAYMENTECH SOLUTIONS, LLC, 

PAYMENTECH LLC,

Defendants-Appellants

______________________ 

2014-1724

______________________ 

Appeal from the United States District Court for the 

Southern District of New York in No. 1:13-cv-03777-AKH, 

Judge Alvin K. Hellerstein.

______________________ 

HUGHES, Circuit Judge, dissenting. 

The America Invents Act (AIA), Pub. L. No. 112-29, 

125 Stat. 284 (2011), created a new transitional procedure 

to challenge the validity of covered business method 

(CBM) patents before the United States Patent and 

Trademark Office. The AIA also permits parties to seek 

stays of related district court litigation while CBM challenges are pending. See id. § 18. And to ensure uniformity in stay decisions, the AIA gave this court the authority 

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2 INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

to immediately review the district court’s grant or denial 

of a stay. The majority improperly limits our review 

authority to only stay decisions predicated on an already 

instituted CBM proceeding. Because the majority’s 

conclusion relies on an overly narrow textual analysis and 

is at odds with the overall purpose of the AIA and the 

specific purpose of the CBM procedure, I respectfully 

dissent. 

The AIA was “designed to establish a more efficient 

and streamlined patent system that will improve patent 

quality and limit unnecessary and counterproductive 

litigation costs.” H.R. Rep. No. 112-98, pt. 1, at 40 (2011). 

To these ends, Congress considered and enacted § 18, “one 

of the [AIA’s] most important reforms,” to “crackdown on 

low-quality business[-]method patents.” 157 Cong. Rec. 

9952 (2011) (remarks of Rep. Grimm). According to 

Congress, litigation over CBM patents placed a “substantial burden” on the courts and the economy. 157 Cong. 

Rec. 3416 (2011) (remarks of Sen. Schumer). Because 

Congress sought to curb this litigation and the associated 

costs, an explicit goal of the new program under § 18 was 

to provide a cheaper, faster administrative alternative for 

reviewing business method patents. Id. Indeed, Congress 

repeatedly indicated that the program should be used 

“instead of, rather than in addition to, civil litigation.” 

Id.; see also 157 Cong. Rec. 2710 (2011) (remarks of Sen. 

Hatch); 157 Cong. Rec. 3432–33 (2011) (remarks of Sen. 

Kyl); 157 Cong. Rec. S5436–37 (daily ed. Sept. 8, 2011) 

(remarks of Sen. Schumer).

To preserve the benefits of this alternative, § 18 authorizes a stay of related district court proceedings, and 

Congress intended stays to be granted in all but the 

rarest of circumstances. 157 Cong. Rec. 3417 (2011) 

(remarks of Sen. Schumer). It believed that “[t]oo many 

district courts [were] content to allow litigation to grind 

on while a reexamination [was] being conducted, forcing 

the parties to fight in two fora at the same time.” Id. at 

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3416. That state of affairs was “unacceptable, and . . . 

contrary to the fundamental purpose of [§ 18] to provide a 

cost efficient alternative to litigation.” Id. at 2417. To 

ensure consistent and rigorous application of the stay 

provisions, § 18 allows for parties, “as of right, to have the 

Federal Circuit closely review” a district court’s decision 

on a request for a stay of a civil action relating to a transitional proceeding. Id. Section 18 provides an “automatic 

right to an interlocutory appeal,” which the district court 

need not certify under 28 U.S.C. § 1292(b). Id. Congress 

made clear that “the Federal Circuit may not decline to 

hear an interlocutory appeal.” Id.

Section 18(b)(1) of the AIA limits the stay provisions 

in that section to infringement actions “relating to a 

transitional proceeding.” The majority reads the phrase, 

“relating to a transitional proceeding,” as confining the 

district court’s authority to stay a case under § 18 to 

instances where the Patent Office has already instituted a 

CBM review, and thus confines our review authority in 

§ 18(b)(2) to the same circumstances. The majority provides a reasonable textual analysis for its conclusion. But

given the overall purpose and legislative history of the 

AIA and § 18, I do not believe that Congress had any 

intent to so limit our jurisdiction by its choice of that 

specific statutory language. Rather, I read the stay 

provision in § 18(b)(1) as more broadly authorizing district courts to stay a case based on a CBM review at any 

stage in the CBM process, and consequently our review 

extends to stay decisions issued at any stage in the CBM 

process.

The majority’s purely textual analysis cannot be 

squared with the overall legislative purpose of the AIA 

and § 18. The meaning of statutory language “may vary 

to meet the purposes of the law, to be arrived at by a 

consideration of the language in which those purposes are 

expressed, and of the circumstances under which the 

language was employed.” Yates v. United States, 135 S. 

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4 INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

Ct. 1074, 1082 (2015) (quoting Atl. Cleaners & Dyers v. 

United States, 286 U.S. 427, 433 (1932)). Congress repeatedly stated its paramount goal of having § 18 serve as 

a cheaper, faster alternative to be used instead of—rather 

than in addition to—litigation in district court. If we

decline to review stay decisions before CBM review is 

instituted, parties inevitably will be forced to simultaneously litigate in district court and at the Patent Office. 

This is inconsistent with the purpose of § 18. Further, if 

the petition is ultimately granted, the expenses incurred 

at the district court from the time the petition was filed to

the time a subsequent stay request is granted become the 

kind of “unnecessary and counterproductive litigation 

costs” Congress sought to avoid. H.R. Rep. No. 112-98, pt. 

1, at 40 (2011). Given the clearly expressed purpose of 

§ 18 proceedings, Congress could not have intended to

create an exception for interlocutory orders, but then limit 

our jurisdiction by way of the majority’s distinction between instituted proceedings and those where a petition 

has been filed. 

The majority’s decision is also inconsistent with Congress’s desire for uniformity in stay decisions. As the 

majority recognizes, and as we have previously held, 

district courts may grant stays for CBM proceedings at 

any time and are not precluded from granting a stay 

based on the filing of a petition. See VirtualAgility Inc. v. 

Salesforce.com, Inc., 759 F.3d 1307, 1316 (Fed. Cir. 2014). 

Indeed, we have expressly noted the district court’s wide 

latitude in the timing of these stay decisions. Id. (“[A]

motion to stay could be granted even before the PTAB 

rules on a post-grant review petition . . . .”). If that is the 

case, then we are left with a situation where district 

courts could make stay decisions prior to institution that 

are unreviewable. And therefore we could not ensure the 

uniformity that Congress so clearly intended for such 

decisions. 

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Although it is true, as the majority notes, that the 

Supreme Court has stated that exceptions to the final 

judgment rule within 28 U.S.C. § 1291 are to be construed 

narrowly, I do not find that principle particularly relevant 

here. Congress expressly granted a right to interlocutory 

appeal in § 18(b)(2) that on its face is not limited. And to 

read § 18(b)(1) in such a way as to infer a limitation is not 

consistent with Congressional intent. Congress explicitly 

intended to allow litigants to circumvent the interlocutory 

appeal provisions of 28 U.S.C. § 1292(b) by invoking § 18. 

See 157 Cong. Rec. 3417 (2011) (remarks of Sen. Schumer)

(“[T]he district court does not need to certify the appeal in 

writing, as it would ordinarily need to do under 28 U.S.C. 

§ 1292(b). Also, unlike the discretion typically afforded an 

appellate court under 28 U.S.C. §1292(b), under this 

amendment the Federal Circuit may not decline to hear 

an interlocutory appeal.”). When read in the context of 

the surrounding legislative history, this strongly suggests 

that Congress sought to have district court litigation 

“disrupted by interlocutory review” and subject to the 

“premature demise” the Supreme Court has been concerned with when considering interlocutory appeals. 

Coopers & Lybrand v. Livesay, 437 U.S. 463, 474 (1978). 

The result of the majority’s interpretation is a curious 

parsing of the statute. It creates a needlessly complicated 

regime that divides CBM stay decisions and our review 

authority into two categories: § 18(b)(1) stays, which can 

only occur after a CBM proceeding has been instituted; 

and stays based on the district court’s inherent stay 

power for any stay requested between the filing of a 

petition for CBM review and the formal institution of a 

CBM proceeding. And apparently this is true even if the 

district court’s decision is expressly based on the filing of 

a petition and expressly weighs the § 18(b)(1) factors. 

Without something more explicit in the statute, I cannot believe Congress intended this result. The majority 

would seemingly require Congress to explicitly reference 

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6 INTELLECTUAL VENTURES II LLC v. JPMORGAN CHASE & CO. 

the petition stage of the CBM proceeding for it to be 

covered under § 18(b)(1) and thus for us to have jurisdiction under § 18(b)(2). I do not believe that is correct. 

Rather, the more natural reading of § 18(b) is a specific 

authorization of district courts to consider stay requests 

relating to CBM challenges based on the stay factors 

identified in § 18, regardless of whether the Patent Office 

has actually instituted a CBM proceeding. Indeed, the 

stay factors in § 18(b)(1) are drawn from a case in which a 

district court was considering a stay at the petition stage 

for a similar proceeding. See 157 Cong. Rec. 3416 (2011) 

(remarks of Sen. Schumer) (“this amendment instructs 

courts to apply the four-factor test first announced in 

[Broadcast Innovation, L.L.C. v. Charter Communications

Inc., No. 03-cv-2223, 2006 WL 1897165 (D. Col. July 11, 

2006)] when evaluating stay motions”). And that is 

exactly how most district courts have been applying § 18, 

which, perhaps not coincidentally, also furthers the 

uniformity of stay decisions in cases where CBM patents 

may be at issue. See, e.g., buySAFE, Inc. v. Google, Inc., 

No. 3:13CV781-HEH, 2014 WL 2714137, at *3 (E.D. Va. 

June 16, 2014); Market-Alerts Pty. Ltd. v. Bloomberg Fin. 

L.P., 922 F. Supp. 2d 486, 490 n.5 (D. Del. 2013). The 

majority’s more complicated, two-standard regime conflicts with the AIA’s overall purpose of establishing a 

more efficient and streamlined patent system. 

 Further, the majority’s distinction between pre- and 

post-CBM review institution decisions may create anomalous situations. If our jurisdiction is determined by 

whether the Patent Office has instituted CBM review, it 

is not clear how or even whether we should handle “hybrid” cases where a stay motion is predicated on one 

patent for which CBM review has been instituted and 

another patent for which a petition for CBM review is 

pending. Presumably we would possess jurisdiction 

because the stay decision is predicated on at least one 

instituted CBM proceeding, but that raises even further 

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questions about how our review should proceed. If the 

district court’s decision is based on not only the instituted 

proceeding, but also a pending petition or petitions, can 

we consider those pending petitions in reviewing the 

propriety of the stay decision? If the majority is correct 

that the district court’s authority to stay cases under

§ 18(b)(1) only extends to instituted proceedings and our 

jurisdiction is coextensive to that, then what would be the 

basis for our review of the decision at least so far as it 

extends to pre-institution proceedings? And the majority’s decision makes it less clear how or whether a party, 

the district court, or this court is to handle reconsideration of a stay which was granted before CBM review is 

instituted, after the Patent Office has instituted CBM 

review. To be sure, the majority’s decision will not further the establishment of a “more efficient and streamlined patent system.” 

Finally, it is inconsistent to hold that a party requesting a stay has the benefit of our review only after CBM 

review is instituted, while a party requesting a stay 

before that time does not, even though significant factors—e.g., expenditure of the court’s and the parties’ 

resources—favor a stay more so in the latter situation. 

Given these practical considerations and the difficulty in 

applying the majority’s rule, and without any convincing 

congressional intent to so limit our review authority, I 

conclude that we have jurisdiction over any stay decision 

related to a CBM proceeding, regardless of whether the 

stay request was filed at the petition stage or after institution. 

I would find that we possess jurisdiction to review the 

district court’s denial of the stay. And on the merits, I 

would affirm the district court’s decision. 

Accordingly, I respectfully dissent.

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