Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca13-14-01530/USCOURTS-ca13-14-01530-0/pdf.json

Parties Involved:
Mentor Graphics Corporation
Cross-Appellant
Synopsys, Inc.
Appellant

Document Text:

United States Court of Appeals 

for the Federal Circuit ______________________ 

SYNOPSYS, INC.,

Appellant

v.

MENTOR GRAPHICS CORPORATION,

Cross-Appellant

v.

MICHELLE K. LEE, DIRECTOR, U.S. PATENT AND 

TRADEMARK OFFICE,

Intervenor

______________________ 

2014-1516, 2014-1530

______________________ 

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

IPR2012-00042.

______________________ 

Decided: February 10, 2016

______________________ 

ERIC SHUMSKY, Orrick, Herrington & Sutcliffe LLP, 

Washington, DC, argued for appellant. Also represented 

by JEREMY PETERMAN; INDRA NEEL CHATTERJEE, TRAVIS 

JENSEN, CAM THI PHAN, Menlo Park, CA; GEORGE LASZLO 

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2 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

KANABE, San Francisco, CA; ANDREW D. SILVERMAN, New 

York, NY; WILLIAM H. WRIGHT, Los Angeles, CA.

MARK E. MILLER, O’Melveny & Myers LLP, San Francisco, CA, argued for cross-appellant. Also represented by 

GEORGE ALFRED RILEY; CHRISTOPHER LEWIS MCKEE, 

MICHAEL STEVEN CUVIELLO, BRADLEY CHARLES WRIGHT,

Banner & Witcoff, Ltd., Washington, DC; KEVIN F. KING,

ROBERT ALLEN LONG, JR., Covington & Burling LLP, 

Washington, DC.

SCOTT WEIDENFELLER, Office of the Solicitor, United 

States Patent and Trademark Office, Alexandria, VA, 

argued for intervenor. Also represented by NATHAN K.

KELLEY, JAMIE LYNNE SIMPSON. 

JENNIFER LORAINE SWIZE, Jones Day, Washington, 

DC, for amicus curiae SAS Institute, Inc. Also represented by JOHN S. SIEMAN. 

______________________ 

Before NEWMAN, DYK, and WALLACH, Circuit Judges.

Opinion for the court filed by Circuit Judge DYK. 

Dissenting opinion filed by Circuit Judge NEWMAN. 

DYK, Circuit Judge. 

Synopsys, Inc. (“Synopsys”), the petitioner, appeals a 

final decision of the Patent Trial and Appeal Board 

(“Board”) in an inter partes review of claims of U.S. 

Patent No. 6,240,376 (“the ’376 patent”). Mentor 

Graphics Corporation (“Mentor”), the patent owner, cross 

appeals. The Board found that claims 5, 8, and 9 were

invalid as anticipated (which Mentor does not challenge

on appeal) but declined to find that claims 1 and 28 were 

anticipated (which Synopsys appeals). We conclude that 

the Board did not err in its ruling that claims 1 and 28 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 3

were not invalid. We also hold that (1) the final order of 

the Board need not address every claim raised in the 

petition for review, and (2) the Board did not err in denying Mentor’s motion to amend. Accordingly, we affirm.

BACKGROUND

The ’376 patent claims a method of tracing bugs, i.e.,

errors in coding, in the design of computer chips. An error 

in the design of a computer chip, even a minor one, can be 

extremely problematic and costly for the company that 

produces the chip. Thus, before a chip is manufactured, 

the design undergoes significant testing to make sure that 

the chip performs as intended. The ’376 patent relates to 

a method of testing involving a software or hardware 

simulation of the chip. The method allows a chip designer 

to trace errors discovered during testing back to the 

original source code that a designer uses to program the 

chip so that these errors can be corrected. 

To explain the specifics of this invention, some background information about chip design is necessary. Chip 

designers write source code to design the basic operation 

of the circuits that make up a computer chip. For example, a chip designer may indicate that a particular 

“gate”—or component of the circuit—is supposed to provide a particular output given a particular input. The 

source code indicates this using general logical statements, such as “if A=0, then B=0, else B=1.”1 See, e.g.,

’376 patent, fig.4. However, this source code must be 

“translated” into the actual design of the chip. Special1 In this admittedly simple example, if the input A 

is equal to 0, then the output B would be equal to 0. If the 

input A is not equal to zero, then the output B would be 1. 

Depending on the particular input, only one “branch” of 

this “if-then” statement is executed.

 

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ized software “synthesizes,” i.e., translates, the source 

code into a “gate-level netlist,” or a basic schematic of the 

chip. Id. at 1:26–36. But the design still may be incomplete, as it may contain redundant circuitry based on a 

direct translation from the source code. Yet another 

specialized piece of software is then used to optimize the 

design, which removes the superfluous components from 

the circuit and results in a simpler and more efficient 

circuit without losing any functionality. 2 

When the design process is complete, chip designers 

use specialized software or hardware to imitate the behavior of the final circuitry to test whether the chip does 

what it is supposed to do. For example, a designer can 

simulate the circuit from the original source code. During 

this test, if there is a problem, the designer can fix it by 

going back to the code and making modifications. However, it is often difficult to trace back errors to the right 

place in the source code because high level information in 

the source code is lost during translation and optimization. The loss of this information makes identifying and 

correcting errors much more costly and time consuming. 

The ’376 patent seeks to solve this problem. The invention uses “instrumented signals” to identify the place in 

the source code where the error resides, thus allowing the 

designer to go back to the specific part of the source code 

to correct the error. ’376 patent, col. 2 ll. 40–43.

On September 26, 2012, Synopsys filed a petition for 

inter partes review of claims 1–15 and claims 20–33 of the 

‘376 patent, alleging that these claims were anticipated or 

would have been obvious in light of various prior art 

references, including U.S. Patent No. 6,132,109 (“Grego2 For example, the statement “if A=0, then B=1, 

else B=1” is redundant and can be replaced with just 

“B=1.” The optimizer removes these redundancies. 

 

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ry”). In its preliminary patent owner response, Mentor 

contested Synopsys’s invalidity contentions and also 

argued that Synopsys’s petition was time-barred and 

moved for discovery relating to the time-bar. Specifically, 

after filing the petition for inter partes review, Synopsys 

had acquired an entity who had previously been sued by 

Mentor for infringement of the ’376 patent more than one 

year earlier. Mentor argued that the petition for inter 

partes review was time-barred under 35 U.S.C. § 315(b), 

which states that “[a]n inter partes review may not be 

instituted if the petition requesting the proceeding is filed 

more than 1 year after the date on which the petitioner, 

real party in interest, or privy of the petitioner is served 

with a complaint alleging infringement of the patent.” In 

the alternative, Mentor argued that the acquired entity, 

rather than Synopsys, was the appropriate real party in 

interest to the inter partes review and, in light of the 

earlier suit, the inter partes review was time barred. 

On February 22, 2013, the Board instituted review of 

claims 1–9, 11, and 28–29 based solely on anticipation by 

Gregory, finding that the petition “show[ed] that there is 

a reasonable likelihood that the petition would prevail” in 

demonstrating unpatentability. 35 U.S.C. § 314(a). The 

Board denied the petition with respect to claims 10, 12–

15, 20–27, and 30–33, finding that there was no reasonable likelihood of invalidity because Synopsys had not 

shown, for example, how any prior art disclosed “local 

variable assignment statement[s]” as required by claim 

20. J.A. 34–35. 

In the decision to institute, the Board also rejected 

Mentor’s argument that Synopsys’s petition was timebarred by section 315(b) of title 35. The Board found that 

the § 315(b) bar is measured as of the filing date of the 

petition, pursuant to its regulation interpreting this 

section, 37 C.F.R. § 42.101(b), which states that a petition 

is barred only if “[t]he petition requesting the proceeding 

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is filed more than one year after the date on which the 

petitioner . . . is served with a complaint alleging infringement of the patent.” According to the Board, Mentor had not “provide[d] persuasive evidence that Synopsis 

[sic] and [the newly acquired entity that had been sued by 

Mentor more than one year earlier] were in privity on the 

filing date of the petition.” J.A. 16. The Board also found 

that Synopsys was the appropriate real party in interest. 

Therefore, the Board found that the petition was not time 

barred. 

After institution, Mentor filed a motion to amend and 

substitute claims 34–43 for claims 1, 5, 28, 2, 3, 6, 8, 9, 11, 

and 29, respectively, which was opposed by Synopsys. 

After an oral hearing, the Board issued its final written decision on February 19, 2014. Synopsys Inc. v. 

Mentor Graphics Corp., IPR2012-00042, Paper 60 (PTAB 

February 19, 2014) (“Bd. Op.”). The Board found claims 5, 

8, and 9 anticipated by Gregory. However, the Board also 

found that claims 1–4, 6, 7, 11, 28, and 29 were not anticipated. In addition, the Board denied Mentor’s motion to 

substitute claims 35, 40, and 41 for claims 5, 8, and 9. 

According to the Board, Mentor failed to “demonstrate 

general patentability over prior art,” including Gregory. 

Id. at 47. “As the moving party,” Mentor bore “the burden 

to show entitlement to the relief requested,” namely the 

amendment of claims. Id.

Synopsys appeals, arguing that the Board erred in

finding claims 1 and 28 not anticipated and by issuing a 

final decision that did not address the validity of all 

claims raised in the petition. Mentor cross appeals, 

challenging the Board’s finding that the petition was not 

time barred and the Board’s denial of its motion to 

amend. The PTO has intervened as an interested party to 

defend its procedures. We have jurisdiction under 28 

U.S.C. § 1295(a)(4)(A). We review the Board’s factual 

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findings for substantial evidence and its legal conclusions 

de novo. In re Baxter Int’l, Inc., 678 F.3d 1357, 1361 (Fed.

Cir. 2012). 

DISCUSSION

I 

Synopsys first contends that the final decision of the 

Board erroneously failed to address every claim raised in 

the petition for inter partes review. As we have previously explained, inter partes review proceeds in two stages. 

See St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 

749 F.3d 1373, 1375 (Fed. Cir. 2014). In the first stage, 

the Board, acting on behalf of the Director, reviews the 

petition for inter partes review and any patent owner 

preliminary response to decide whether “there is a reasonable 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); 37 C.F.R. § 42.4(a). The PTO 

has adopted a regulation allowing the Board to initiate 

inter partes review “on all or some of the challenged 

claims.” 37 C.F.R. § 42.108(a). At the second stage, the 

Board conducts the inter partes review and then issues a 

final decision with respect to “any patent claim challenged 

by the petitioner.” 35 U.S.C. § 318(a).3 

The decision of the Board to institute inter partes review cannot be appealed. 35 U.S.C. § 314(d); In re Cuozzo 

Speed Techs., LLC, 793 F.3d 1268, 1273 (Fed. Cir. 2015), 

3 Section 318(a) reads as follows:

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 claimed challenged by the petitioner and any 

new claim added under section 316(d).

 

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cert. granted, No. 15-446, 2016 WL 205946, at *1.4 The 

PTO argues that the “logical import” of Synopsys’s challenge is a challenge to the decision to institute. Br. of 

PTO, at 15–16. However, Synopsys does not challenge 

the decision to institute but rather the scope of the final 

decision itself. Because Synopsys challenges the final 

decision, we can hear this appeal. The statute allows “[a] 

party dissatisfied with the final written decision of the 

Patent Trial and Appeal Board” to “appeal the decision.” 

35 U.S.C. § 319; Versata Dev. Grp., Inc. v. SAP Am., Inc., 

793 F.3d 1306, 1322 (Fed. Cir. 2015). 

On the merits, Synopsys argues that, because § 318(a)

directs the Board to issue a final written decision with 

respect to “any patent claim challenged by the petitioner,” 

the Board’s final decision must address every claim raised 

in the petition.5 However, the statute cannot be read to 

impose such a requirement. First, the text makes clear 

that the claims that the Board must address in the final 

decision are different than the claims raised in the petition. Congress explicitly chose to use a different phrase 

when describing claims raised in the petition for inter 

partes review in § 314(a) and claims on which inter partes 

4 We note that an issue relating to institution does 

not become appealable simply because the Board mentions that issue in its final decision. See Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 

2015) (appealability bar applies to institution decisions 

“even if such assessment is reconsidered during the 

merits phase of proceedings and restated as part of the 

Board’s final written decision”). 5 Presumably, Synopsys’s theory is that even if the 

Board, in a final decision, found the additional claims not 

invalid, Synopsys could on appeal challenge the finding of 

non-invalidity of those claims.

 

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review has been instituted in § 318(a). Section 314(a) 

specifies that Board may not institute inter partes review 

unless “the information presented in the petition . . . and 

any response filed . . . shows that there is a reasonable 

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) (emphasis added). However, in describing 

the final written decision, Congress stated that the Board 

must issue a final written decision with respect to any 

“claim challenged by the petitioner.” 35 U.S.C. § 318(a)

(emphasis added). When Congress chooses to use two 

different words or phrases, this typically suggests that the 

two were deemed to have two different meanings. See, 

e.g., Bailey v. United States, 516 U.S. 137, 146 (1995) 

(distinction between “used” and “intended to be used” 

creates implication that a related provision’s reliance on 

“use” alone refers to actual and not intended use”). 

In addition, the conditional phrase “[i]f an inter partes 

review is instituted” in § 318(a) also strongly suggests 

that the “challenged” claims referenced are the claims for 

which inter partes review was instituted, not every claim 

challenged in the petition. Thus, the text of § 318(a) 

demonstrates that the Board need only issue a final 

written decision with respect to claims on which inter 

partes review has been initiated and which are challenged 

by the petitioner after the institution stage. 

Second, the statute would make very little sense if it 

required the Board to issue final decisions addressing

patent claims for which inter partes review had not been 

initiated, as Synopsys admitted at oral argument. After 

inter partes review is initiated, the patent owner files a 

full response to the petition. See 35 U.S.C. § 316(a)(8); 37 

C.F.R. § 42.120. In addition, both parties may submit 

information to supplement the record by taking discovery, 

submitting affidavits, and by submitting expert declarations. See 37 C.F.R. §§ 42.123, 42.51, 42.65. Parties may 

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present their cases to the Board in an oral hearing. 37 

C.F.R. § 42.70. All of these various mechanisms allow the 

Board to issue a final decision based on a full record 

rather than just on the limited record in the initial petition and the patent owner’s preliminary response. See 35 

U.S.C. § 314(a) (specifying that the decision to institute is 

made on “information presented in the petition . . . and 

any [preliminary] response” filed by the patent owner). It 

would make no sense to interpret § 318 in a way that 

would require the Board to issue a final determination on 

validity of patent claims without the benefit of this additional argument and record. 

At the same time, the statute is quite clear that the 

PTO can choose whether to institute inter partes review 

on a claim-by-claim basis. In deciding when to institute 

IPR, the statute requires a claim-by-claim inquiry to 

determine whether “there is a reasonable 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) 

(emphasis added). Unless at least one of the claims 

satisfies this inquiry, the Board cannot institute. The 

statute strongly implies that the initiation decision be 

made on a claim-by-claim basis and that the Board can 

pick and choose among the claims in the decision to 

institute. In fact, nothing in § 314 requires institution of 

inter partes review under any circumstance.

Although we find that the language is clear, if there 

were any doubt about the Board’s authority and the 

statute were deemed ambiguous, the PTO has promulgated a regulation allowing the Board to institute as to some 

or all of the claims. The regulation “authorize[s] 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.” 37 C.F.R. § 42.108. Contrary to 

Synopsys’s argument that this regulation is invalid, the 

PTO has explicit authority to promulgate regulations 

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“setting forth the standards for the showing of sufficient 

grounds to institute” inter partes review. 35 U.S.C. 

§ 316(a)(2). This regulation is plainly an exercise of that 

authority. Under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), this 

regulation is a reasonable interpretation of the statutory 

provision governing the institution of inter partes review. 

See Cuozzo, 793 F.3d at 1278. As the PTO noted in adopting the regulation, the claim-by-claim approach “streamline[s] and converge[s] the issues for consideration” and 

“aids in the efficient operation of the Office and the ability 

of the Office to complete the [review] within the one-year 

timeframe.” Changes to Implement Inter Partes Review 

Proceedings, Post-Grant Review Proceedings, and Transitional Program for Covered Business Method Patents, 77 

Fed. Reg. 48703 (Aug. 14, 2012) (Response to Comment 

60). 

Synopsys also argues that the legislative history and 

the structure of the AIA support its construction. For this 

assertion, it points to a few floor statements suggesting 

that inter partes review “will completely substitute for at 

least the patents-and-printed publication portion of” 

infringement litigation. 157 Cong. Rec. S1376 (daily ed. 

Mar. 8, 2011 (statement of Sen. Kyl); see also 154 Cong. 

Rec. S9989 (daily ed. Sept. 27, 2008) (statement of Sen. 

Kyl); 153 Cong. Rec. H10280 (Sept. 7, 2007) (statement of 

Rep. Jackson-Lee). Floor statements by a few members of 

the legislative branch cannot supplant the text of the bill 

as enacted. In addition, Synopsys argues that the Board’s

practice of issuing final decisions only addressing some of 

the claims in the petition is inconsistent with the estoppel 

provisions of the AIA because final decisions that do not 

address all of the claims “will have limited estoppel effect” 

and thus do not “force a party to bring all of its claims in 

one forum.” Appellant’s Br. 74 (internal quotation marks 

omitted). The validity of claims for which the Board did 

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not institute inter partes review can still be litigated in 

district court. We see no inconsistency in this. Inter 

partes review cannot replace the district court in all 

instances, for example, when claims are challenged in 

district court as invalid based on the on-sale bar, for 

claiming patent-ineligible subject matter, or on grounds of 

indefiniteness. See 35 U.S.C. § 311(b) (limiting inter 

partes review to grounds “that could be raised under 

section 102 [anticipation] or 103 [obviousness] and only on 

the basis of prior art consisting of patents or printed 

publications”). 6

In summary, we find 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.

6 Both Synopsys and the PTO argue that the 

change from the prior reexamination statute supports 

their respective constructions. The statute stated that if 

“the Director finds that a substantial new question of 

patentability affecting a claim of a patent raised” the 

Director shall order “inter partes reexamination of the

patent for resolution of the question.” 35 U.S.C. § 313 

(2010). Synopsys argues that because the AIA does not 

specifically mention “resolution of the question,” institution under the AIA must be broader in scope. The PTO 

argues that because the previous version required institution and the AIA makes institution discretionary, the 

change supports its view of the AIA which makes discretionary claim-by-claim institution allowable. We find 

neither of these arguments persuasive.

 

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II

We now turn to the substance of the Board’s anticipation finding with respect to claims 1 and 28. Anticipation 

is a question of fact. See In re Graves, 69 F.3d 1147, 1151 

(Fed. Cir. 1995). This court reviews the Board’s decision 

for substantial evidence. Dickinson v. Zurko, 527 U.S. 

150, 152 (1999); In re Gartside, 203 F.3d 1305, 1313 (Fed. 

Cir. 2000).

Claims 1 and 28 read:

1. A method comprising the steps of:

a) identifying at least one statement within a register transfer level (RTL) synthesizable source code; and

b) synthesizing the source code into a 

gate-level netlist including at least one instrumentation signal, wherein the instrumentation signal is indicative of an 

execution status of the at least one statement.

28. A storage medium having stored therein processor executable instructions for generating a 

gate-level design from a register transfer level 

(RTL) synthesizable source code, wherein when 

executed the instructions enable the processor to 

synthesize the source code into a gate-level netlist 

including at least one instrumentation signal, 

wherein the instrumentation signal is indicative 

of an execution status of at least one synthesizable statement of the code.

’376 patent col. 15 ll. 1–8, col. 17 l. 62–col. 18 l. 7. The 

Board found that Gregory disclosed everything in these 

claims except for “instrumentation signals” that are 

“indicative of an execution status of the at least one 

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statement.” Bd. Op. at 30. The finding that the prior art 

disclosed all other aspects of the claims is not challenged 

on appeal by the patentee. The Board construed “instrumentation signal” to be “an output signal created during 

synthesis of [] source code by inserting additional code 

into a program that indicates whether the corresponding 

[] source code statement is active.” Id. at 26–27. The 

Board construed the term “execution status” to mean 

“information regarding whether a particular [source code] 

instruction has been performed.” Id. at 27. These constructions are not challenged on appeal by the petitioner. 

Rather, the petitioner asserts that Gregory discloses 

the “execution status” limitation. As discussed above, the 

’376 patent is directed to locating errors in the source 

code. Testing of chips is done by inputting “millions or 

billions of test vectors” into the chip and comparing the 

outputs the chip gives with expected results. ’376 patent 

col. 4 ll. 58–60. As a very simplified example, a designer 

may ask the chip to compute “1+1.” If the chip outputs 3 

instead of the expected result, the designer knows that 

there is an error in the source code somewhere leading to 

that inaccurate output. When one of the tests gives an 

incorrect output, the designer must go back to the source 

code to find the error that caused this. The difficulty lies 

in finding the particular statement in the source code that 

caused the error. 

During typical testing of code, programmers have access to a number of tools that help locate errors in source 

code. For example, programmers are able to set a “break 

point,” which is a signal that tells the debugging software 

to temporarily suspend execution of the code. ’376 patent, col. 1 l. 49. In other words, a programmer will 

artificially stop the execution of the code at a particular 

point and examine the results of the execution up to that 

point. Setting a breakpoint allows a programmer to 

examine only a small subset of the code and thus simplify

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the task of finding where in the source code errors arise

by narrowing the code tested to only a portion of the 

entire code. Another traditional debugging method is a 

visual trace where a programmer can examine exactly 

which lines of code have been executed during one of the

tests. However, “the designer typically cannot set a 

breakpoint from the source code during gate-level simulation” because the designs after translation “include[] none 

of the high-level information available in the . . . source 

code.” ’376 patent, col. 2 ll. 5–6; col. 4 l. 66–66. Thus,

traditional debugging tools “such as setting breakpoints 

or analyzing the source code coverage are not available” 

when doing “gate-level” testing of the designs of chips. Id.

at col. 4 l. 67–col. 5 l. 2. 

The invention of the ’376 patent uses instrumentation 

signals to “facilitate source code analysis, breakpoint 

debugging, and visual tracing of the source code execution 

path during gate-level simulation.” ’376 patent, col. 2 

ll. 52–55. These instrumentation signals are created in 

the source code as illustrated below: 

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will not execute. A designer can know this because the 

“trace” variables associated with the executed lines of 

code will have a value of 1 whereas the “trace” variables 

associated with the unexecuted lines of code will still have 

a value of 0. 

This instrumentation logic is preserved during translation, and becomes instrumentation signals in the schematic used for testing (a signal being output is the same 

as the variable being set to 1). Thus, chip designers can 

set a breakpoint by telling the testing software to stop 

when a particular instrumentation signal is output (i.e.

when a particular line of code is executed) and can visually trace the execution of the code in any given test by 

looking at a list of outputted instrumentation signals

associated with that test. 

Gregory also deals with tracing errors in chip design 

to source code, but uses a different method, as is uncontested. The designer, using the invention described in 

Gregory, can identify the “source code in the places that 

the designer wants to be able to debug,” and isolate those 

particular portions of the chip design for testing. Gregory, 

col. 8 l. 24. During synthesis of the source code into the 

schematic of the chip, “the translator . . . adds additional 

information or components to the initial circuit that 

indicate that certain components should not be replaced

during optimization.” Gregory, col. 8, ll. 27–31. The 

designer then can test only those portions of the chip and, 

after errors are discovered, only have a smaller subset of 

the code to search for errors. Further, because the code in 

those portions is unoptimized, it corresponds to the source 

code directly so if an erroneous answer is output, the 

designer can know exactly which lines of the original 

source code were executed and can narrow down even 

further the source of the error. 

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Synopsys argues that the Board erred in concluding 

that Gregory does not disclose instrumentation signals 

that are indicative of the execution status. 

First, Synopsys argues that the Board applied the 

wrong legal standard by requiring explicit disclosure in 

Gregory of the “execution status” element of claims 1 and 

28. According to Synopsys, Gregory implicitly or inherently discloses the “execution status.” 

Synopsys relies on one sentence out of the Board decision and takes it out of context. The Board stated: “Gregory does not state explicitly that ‘tempout,’ or any other 

element, indicates an ‘execution status’ of an HDL instruction.” Bd. Op. at 32. However, the Board then 

immediately went on to discuss how Gregory does not 

implicitly disclose the necessary limitation. See id. The 

Board relied on Mentor’s expert testimony that Gregory 

did not disclose instrumentation signals indicative of 

execution status. This expert testimony does not rely on 

explicit disclosures’ being missing from the Gregory 

reference—rather, it carefully explains how the Gregory 

reference does not inherently (or even implicitly) disclose 

the necessary claim limitation. The Board did not require 

explicit disclosure in Gregory. 

Second, Synopsys argues that the Board improperly 

required it to present expert testimony. For this proposition, it again points to a single sentence in the Board’s 

opinion where the Board stated, in weighing the quality of 

evidence presented by Synopsys, “Synopsys, however, 

does not point to any expert testimony to support these 

statements.” Bd. Op. at 31. Synopsys argues that because the Board is constituted to evaluate technical 

arguments about technical materials, expert testimony 

should not be required. 

We have previously found that, in the context of district court litigation, “expert testimony is not required 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 19

when the references and the invention are easily understandable.” Wyers v. Master Lock Co., 616 F.3d 1231, 

1242 (Fed. Cir. 2010). However, when the technology is 

complex and “beyond the comprehension of laypersons,” 

expert testimony is “sometimes essential.” Centricut, LLC 

v. Esab Grp., Inc., 390 F.3d 1361, 1369 (Fed. Cir. 2004). 

In the context of inter partes reviews, “Board members, 

because of expertise, may more often find it easier to 

understand and soundly explain the teachings and suggestions of prior art without expert assistance,” but 

“[w]hat the Board can find without an expert depends on 

the prior art involved in a particular case.” Belden Inc. v. 

Berk-Tek LLC, 805 F.3d 1064, 1079 (Fed. Cir. 2015). 

Certainly, “[n]o rule requires a Petition to be accompanied 

by any declaration, let alone one from an expert guiding 

the Board as to how it should read prior art.” Id. At the 

same time, the Board is not precluded from finding that 

the technology in a particular case is sufficiently complex 

that expert testimony is essential for a petitioner to meet 

his burden of proving unpatentability. In this particular 

case, the technology involved is highly complex. The 

invention of the ’376 patent deals with testing the design 

of microchips, a process that even Synopsys describes as 

an “extremely complicated task.” See Appellant’s Br. 6. 

But we need not decide whether the Board here correctly required expert testimony. The Board here did not, 

in fact, require expert testimony. The Board simply noted 

that Mentor provided expert testimony whereas Synopsys 

did not, which the Board gave “substantial weight.” Bd. 

Op. at 31. We see no error in this approach. 

Third, Synopsys argues that that the “tempout” signal 

of Figure 9 in Gregory is an “instrumentation signal” 

“indicative of an execution status.” Figure 9 “shows a 

circuit that a translator could produce” from source code 

modified as described in Gregory. Gregory, col. 12 ll. 62–

63. The figure contains an output termed “tempout” 

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20 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

which is created from a designer’s addition of lines of code 

in the source code for the purposes of testing, much like 

the “trace” variables of the ’376 patent. The Board found 

that “tempout” is an “instrumentation signal,” as it, like 

the instrumentation signals in the ’376 patent, is created 

by adding extra source code solely for testing purposes 

and unrelated to the underlying functions of the chip. See 

Bd. Op. at 30–32. However, the Board found that this 

signal was not indicative of an execution status. 

Synopsys argues that this finding of the 

Board is not supported by substantial evidence because a 

designer can “anaylz[e] the value of ‘tempout []’ [and can] 

determine a broad range of information” including whether particular line of source code has been executed. 

Appellant’s Br. 59. Though this “tempout” signal is 

typically used for a different kind of testing, see Gregory 

col. 13 ll. 16–29, Synopsys argues that a designer might 

be able to re-trace the logical steps that led to this particular output and thus can glean whether particular lines of 

code had been executed. 

The Board gave “significant weight to the testimony of 

Mentor Graphics’s expert,” Bd. Op at 28, who testified 

“the result of the ‘tempout’ signal is not indicative of the 

execution status,” id. at 31. Specifically, Mentor’s expert 

testified that, in several instances, knowing the temporary output “provides no information as to whether the 

statement is executed.” J.A. 1905. We see no error in the 

Board’s reliance on expert testimony to resolve this factual dispute.

Even if we were to accept Synopsys’s assertion that 

“tempout” “can indicate which statement was executed,” 

Appellant’s Br. at 59 (emphasis added), a signal that may, 

under some circumstances, indicate an execution status 

does not meet the limitation in this case. The point of the 

invention is to enable designers to more easily debug the 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 21

source code based on testing of the optimized circuits. 

Developers could not do this if the instrumentation signal 

were indicative of execution status only some of the time. 

Thus, accordingly, the Board construed “execution status” 

as “information regarding whether a particular [source 

code] instruction has been performed,” pointing specifically to a passage in the ’376 patent discussing determining 

“the execution status of every branch” of code. Bd. Op. at 

27. In the case of this invention, partially accurate information is tantamount to no information. “The mere fact 

that a certain thing may result from a given set of circumstances is not sufficient” to show anticipation where the 

claim, as here, requires more. See In re Oelrich, 666 F.2d 

578, 581 (C.C.P.A. 1981); see also MEHL/Biophile Int’l 

Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed. Cir. 1999) 

(noting that a “possibility” that under certain circumstances a laser designed for tattoo removal may be pointed at hair follicles “does not legally suffice to show 

anticipation” of a patent involving laser hair removal). 

The Board’s finding of non-anticipation in this respect is 

supported by substantial evidence.

Fourth, Synopsys argues that the output of logic gate 

232 in Figure 9 (see figure above) meets the “execution 

status” limitation. As previously discussed, a logic gate is 

a visual representation of a particular logical statement 

in the source code and performs an operation based on 

that logic. Logic gate 232 is an “AND” gate, which means 

that it outputs a signal only when it receives both inputs. 

Synopsys argues that if a designer knew the output of this

particular gate, the designer would be able to figure out 

whether the particular line of source code associated with 

that gate had been executed. The Board rejected the 

argument as waived because “the argument [was] presented for the first time in Synopsys’s reply and is not 

responsive to arguments made in Mentor Graphic’s response.” Bd. Op. at 33. 

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22 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

We see no error in the Board’s determination that this 

argument was not properly raised in the petition for inter 

partes review. See 37 C.F.R. § 42.23(b). In any case, the 

Board did not entirely ignore this argument, noting that 

“Synopsys does not point to any evidence or persuasive 

argument to explain how [the output of AND gate 232]

disclose[s] the claimed instrumentation signal.” Bd. Op. 

at 33. Substantial evidence supports the conclusion that 

the output of the “AND” gate is not an instrumented 

“output signal” as required by the undisputed claim 

construction of “instrumentation signal.” See Bd. Op. at 

26–27 (requiring that an instrumentation signal “at least 

includes an output signal created during synthesis of RTL 

source code by inserting additional code into a program 

that indicates whether the corresponding [] source code 

statement is active”) (emphases added).

Lastly, Synopsys argues that the “tempout” signals of 

Figures 16 and 18 of Gregory disclose instrumentation 

signals indicative of execution status, and that the Board 

improperly did not address this argument in its decision. 

In general, an agency issuing an order from a formal 

adjudication must “include a statement of findings and 

conclusions, and the reasons or basis therefor, on all the 

material issues of fact, law, or discretion presented on the 

record.” 5 U.S.C. § 557(c)(3)(A). This means that agencies must articulate “logical and rational” reasons for 

their decisions. See Allentown Mack Sales and Serv., Inc. 

v. NLRB, 522 U.S. 359, 374 (1998). However, this does 

not require an agency to address every argument raised 

by a party or explain every possible reason supporting its 

conclusion. See, e.g., Human Dev. Ass’n v. NLRB, 937 

F.2d 657, 669 (D.C. Cir. 1991) (“Although ‘the better 

practice’ . . . might have been to identify and . . . brush off 

the argument [that the appellant argued the agency 

should have addressed], the ruling under review leaves no 

room for doubt that the” agency decided the issue.); Am. 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 23

President Lines v. NLRB, 340 F.2d 490, 492 (9th Cir. 

1965) (finding that, despite not making “separate rulings 

on each” claim, “[t]he [agency] sufficiently informed 

petitioner of the disposition of all of its” claims). The 

agency’s decision must allow effective judicial review, 

which means that the agency is obligated to “provide an 

administrative record showing the evidence on which the 

findings are based, accompanied by the agency’s reasoning in reaching its conclusions.” In re Sang Su Lee, 277 

F.3d 1338, 1342 (Fed. Cir. 2002); see also SEC v. Chenery 

Corp., 318 U.S. 80, 94 (1943) (“[T]he orderly functioning of 

the process of review requires that the grounds upon 

which the administrative agency acted [are] clearly disclosed and adequately sustained) (emphasis added). 

In its final decision, the Board addressed why a “tempout” signal is not “indicative of an execution status.” Bd. 

Op. at 31–32. The Board need not specifically reference 

Figure 18 in its finding—it only need explain itself sufficiently to allow effective judicial review. And the Board 

did so here. It specifically stated that it relied on Mentor’s expert witness who gave testimony that the “tempout” signal of Figure 9 was not “indicative of execution 

status.” Id. The “tempout” signal of Figure 18 is the 

same type of signal as the “tempout” signal in Figure 9 

and the arguments for why it discloses (and does not 

disclose) are, in essence, the same. Compare Gregory col. 

13 ll. 1–6 with col. 14 ll. 27–29. Because the Board addressed whether the “tempout” signal, in general, was 

indicative of execution status, we find no error in the 

Board not having specifically referenced Figures 16 or 18 

in its decision.

III

We next address the issues raised by the cross appeal. 

Mentor does not challenge the substance of the Board’s 

anticipation finding. Rather, Mentor first argues that the 

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24 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

Board improperly instituted review because Synopsys’s 

petition was time barred under § 315(b). The theory is 

that Synopsys’s acquisition of an entity who had been 

sued by Mentor alleging infringement of this patent more 

than one year earlier should bar Synopsys from petitioning for inter partes review or, alternatively, that the 

acquired entity is the real party in interest, also barring 

the petition. See 35 U.S.C. § 315(b). At oral argument, 

Mentor conceded that our previous decision Achates, 803 

F.3d at 658, held that the PTO’s decisions concerning the

§ 315(b) time bar, including determinations of the real 

party in interest and rulings on discovery related to such 

determinations, are non-appealable. Mentor agrees that 

Achates precludes review of this issue here. This issue is 

not appealable pursuant to § 314(d).

Mentor also argues that the Board impermissibly 

placed the burden of proving patentability of the proposed 

claims on Mentor when it denied Mentor’s contingent 

motion to substitute claims 35, 40, and 41 for claims 5, 8, 

and 9. The Board denied the motion to substitute the 

claims on two grounds. First, the Board found that “Mentor Graphics has not met its burden to show that independent claim 35 or claims 40 and 41, which depend from 

claim 35, would not have been obvious to a person of 

ordinary skill in the art based on the disclosure of Gregory.” Bd. Op. at 47. The Board, alternatively, found that 

Mentor had not shown general patentability over the 

prior art.

We have previously held in Microsoft Corp. v. Proxyconn, Inc. that the Board may properly place the burden 

of proving patentability of substitute claims on the patentee for the prior art of record. 789 F.3d 1292, 1303–08 

(Fed. Cir. 2015); see also Prolitec, Inc. v. ScentAir Techs., 

Inc., 807 F.3d 1353, 1363 (Fed. Cir. 2015) (finding that 

“the PTO’s approach [requiring the patentee to prove 

patentability over the relevant prior art in the prosecuCase: 14-1530 Document: 4-2 Page: 24 Filed: 02/10/2016
SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 25

tion history] is a reasonable one at least in a case . . . in 

which the Board’s denial of the motion to amend rested on 

a merits assessment of the entire record developed on the 

motion, not just on the initial motion itself”). Mentor 

argues that Proxyconn does not control because the Proxyconn opinion did not address whether the patentee ought 

to bear the burden to distinguish all prior art known to 

the patent owner and whether this requirement is contrary to 35 U.S.C. § 316(e), which states that in an inter 

partes review, “the petitioner shall have the burden of 

proving a proposition of unpatentability.” 

In the present case, the Board found that Mentor 

“ha[d] not met its burden to show that independent claim 

35 or claims 40 and 41, which depend from claim 35, 

would not have been obvious to a person of ordinary skill 

in the art based on the disclosure of Gregory.” Bd. Op. at 

47. As in Proxyconn and Prolitec, we see no error in 

placing the burden of demonstrating patentability of 

substitute claims on the patentee over Gregory, which 

was the only piece of prior art for the inter partes review. 

While the Board also concluded that Mentor had not 

“demonstrate[d] general patentability over prior art,” id., 

we find that the Board’s narrower holding requiring 

Mentor to prove patentability over Gregory sufficient to 

sustain the decision.

Section 316(e) does not alter our analysis. That section reads: “In an inter partes review instituted under 

this chapter, the petitioner shall have the burden of 

proving a proposition of unpatentability by a preponderance of the evidence.” 35 U.S.C. § 316(e). The introductory phrase referring to an “inter partes review instituted 

under this chapter” makes clear that this provision specifically relates to claims for which inter partes review was 

initiated, i.e., the original claims of the patent that a 

party has challenged in a petition for review. Inter partes 

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26 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

review was not initiated for the claims put forward in the 

motion to amend. 

We find that Mentor’s arguments here are foreclosed 

by Proxyconn and Prolitec and affirm the Board’s denial of 

the motion to amend.7

AFFIRMED

COSTS

Costs to neither party.

7 Mentor also alleges that the Board placed unreasonable procedural constraints in connection with the 

motion to amend. Mentor’s motion was initially denied 

because the replacement claims were not listed as part of 

the motion, but were rather included in an appendix 

which the Board found to be contrary to 37 C.F.R. 

§ 42.121 (previous version) (requiring that a “motion to 

amend claims must include a claim listing”). The regulation governing motions to amend now allows the claim 

listing to “be contained in an appendix to the motion.” 37 

C.F.R. § 42.121 (effective May 19, 2015). The earlier 

regulation simply stated that a “motion to amend claims 

must include a claim listing.” 37 C.F.R. § 42.121 (effective

September 16, 2012 to May 18, 2015). The Board interpreted that regulation as barring placing the claims in an 

appendix, a permissible interpretation of the Board’s own 

regulation. When an agency interprets its own regulation 

it is entitled to near-absolute deference unless it “is 

plainly erroneous or inconsistent with the regulation.” 

Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 

(1945). See also Auer v. Robbins, 519 U.S. 452, 461–463 

(1997).

 

Case: 14-1530 Document: 4-2 Page: 26 Filed: 02/10/2016
United States Court of Appeals 

for the Federal Circuit ______________________ 

SYNOPSYS, INC.,

Appellant

v.

MENTOR GRAPHICS CORPORATION,

Cross-Appellant

v.

MICHELLE K. LEE, DIRECTOR, U.S. PATENT AND 

TRADEMARK OFFICE,

Intervenor

______________________ 

2014-1516, 2014-1530

______________________ 

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

IPR2012-00042.

______________________ 

NEWMAN, Circuit Judge, dissenting. 

The Leahy-Smith America Invents Act of 2011 changes the way patent validity disputes are resolved—a 

change at least as significant for this Nation’s patent 

system as the formation of the Federal Circuit in 1982. 

The purpose is as ambitious as it is necessary: to 

strengthen the incentive to industrial and technological 

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2 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

innovation by restructuring the system for reviewing and 

adjudicating patent validity.

Today’s economic reality is based on continuing advances in science and technology. The system of patents 

is integral to commercial development of new science and 

technology, and spurs innovators to create new products 

and methods of economic value. American industry and 

entrepreneurship use and rely on the patent system; and 

as patent activity has increased,1 so have disputes concerning patent rights.2

Congress and the public recognized that the traditional adjudicatory structure is imperfectly adapted to 

resolution of technologically complex patent validity 

issues, as advancing science, competitive forces, and high 

stakes meet in the courthouse. It came to be understood 

that the cost and delay of litigation is a disincentive to 

commercial activity. When the result is inventions not 

1 In 1982 (the year the Federal Circuit came into 

being), 117,987 patent applications were filed and 63,276

patents were granted; in FY 2015, 617,216 patent applications were filed and 322,448 patents were granted. 

USPTO, Performance and Accountability Report Fiscal 

Year 2015, 185–187 available at http://www.uspto.gov/

sites/default/files/documents/USPTOFY15PAR.pdf and 

U.S. Patent Statistics Chart Calendar Years 1962–2014 

available at http://www.uspto.gov/web/offices/ac/ido/oeip/

taf/us_stat.htm. 2 In FY 1982, 845 patent infringement suits were 

filed. Admin. Office of U.S. Courts, U.S. District Courts—

Civil Cases Commenced, by Nature of Suit, tbl.C-2A (Sept. 

1985). In FY 2015, 5,686 patent infringement suits were 

filed. Admin. Office of U.S. Courts, U.S. District Courts—

Civil Cases Commenced, by Nature of Suit, tbl.C-2A (Sept. 

2015).

 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 3

made and technology not developed, the losers are the 

public and the Nation’s economy.

The Leahy-Smith America Invents Act (AIA) is the 

product of extensive study by the concerned communities 

and the Congress. The AIA’s purpose is to reinvigorate 

the foundations of industrial innovation, by providing 

expeditious and reliable review of patents that had previously been examined and granted. The goal is stability of 

patent-based property rights, whereby valid patents 

would be reinforced and invalid patents eliminated, in an 

economical proceeding conducted by experts in technology 

and law.

To this end, the AIA established a new adjudicatory 

body in the Patent and Trademark Office, and vested it 

with many of the civil litigation powers of the district 

courts. This new tribunal, named the Patent Trial and 

Appeal Board (PTAB), would have administrative judges 

experienced in technology and knowledgeable in the 

relevant law and policy, and would provide stability, 

confidence, and reliability to the patent-based foundations 

of industrial innovation. 

The goal is to serve the Nation’s traditional innovative spirit and entrepreneurial energy, and thereby to 

enhance economic growth and industrial strength, while 

supporting discovery and invention for public benefit. 

This ambitious project consumed over a decade of evolution, starting with the May 10, 2001 hearing on “Patents: 

Improving Quality and Curing Defects” before the House

Committee on the Judiciary. 

The AIA, as enacted, contains balances and compromises, for many interests are affected. I write in dissent 

because the court’s rulings today depart from the text, 

purpose, and policy of the AIA, and abrogate the careful 

balance of this new adjudicatory system. The result is 

that patent validity adjudication is incompletely fulfilling 

the goals of the AIA. 

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4 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

I list my principal concerns:

1. The court today holds, contrary to the AIA, that the 

PTAB can “pick and choose” which of the challenged

patent claims and issues it will decide in these new proceedings. Maj. Op. at 10. The court endorses such partial 

decisions by the PTAB, and “see[s] no inconsistency” with 

leaving some of the challenged claims and issues undecided. Maj. Op. at 12. This absence of finality negates the 

AIA’s purpose of providing an alternative and efficient

forum for resolving patent validity issues. 

Instead, the present practice of partial decision by the 

PTAB leads to duplicative proceedings in the PTAB and 

the district courts. Since the AIA provides for a different 

standard of proof than in the district courts, this system 

of partial decision does not achieve the reliability and 

expedition for which the AIA was enacted, but instead can 

produce prolonged uncertainty and multiplied proceedings, at increased rather than reduced cost. In the case at 

bar, validity of all of the challenged claims was not decided by the PTAB, illustrating this concern. 

2. The court also misapplies the AIA provision that 

the decision whether to “institute” these post-grant proceedings is not appealable. The statute requires the PTO 

Director first to determine, at an initial “institution” 

phase, whether it is more-likely-than-not that at least one 

claim of the challenged patent is invalid. This threshold 

phase serves the tripartite purpose of screening out 

harassing and unfounded petitions, accommodating the 

PTO’s concern about the increased workload, and eliminating the delay and burden of interlocutory appeals.

The non-appealability of the institution determination 

should not mean that substantive rulings material to the 

final decision or to the propriety of the entire proceeding 

are immunized on review of the final decision, if such 

aspects arose at the institution phase. However, the court 

holds otherwise, and removes from judicial review any 

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 5

decision during the institution phase—here the question 

of whether certain prior patent litigation is a statutory or 

jurisdictional bar. These issues are raised on this appeal, 

for the court has converted the threshold phase into a 

source of unappealable substantive rulings, subverting 

the purpose of the adjudicatory design. 

3. The court also supports the PTO’s elimination of 

the statutory designation of different decision-makers for 

the institution phase and the trial phase. The AIA assigns the former role to the Director and the latter role to 

the PTAB. The record shows the concern of practitioners

that the institution phase would become a short-cut to 

final judgment. Whatever the convenience to the PTO, 

there is no authority to violate the statute. 

4. A critical aspect of the AIA—the aspect credited 

with the large influx3 of petitions for post-grant proceedings—is the easier standard of patent invalidation that is 

accorded to these PTAB proceedings. Although patents 

submitted for PTAB review have all been previously 

examined and granted and carry the statutory presumption of validity, the AIA assigns the standard of preponderance of the evidence for invalidation, whereas the 

district courts must apply the standard of clear and 

convincing evidence for invalidation. 

3 From the September 16, 2012 opening date to December 31, 2015, 3,953 petitions for inter partes review 

were filed. See online at http://www.uspto.gov/sites/

default/files/documents/2015-12-31%20PTAB.pdf. During 

the period between September 30, 2012, to September 30, 

2015, 17,747 patent infringement complaints were filed in 

the district courts. See Admin Office of U.S. Courts, note

2, supra. 

 

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The panel majority also supports the PTO’s stingy 

implementation of the statutory authorization for claim 

amendment. The opportunity to amend is an important 

part of the balance struck in the AIA. The easier standards and lighter burdens for invalidation in AIA proceedings, including the PTAB’s use of the broadest claim 

interpretation instead of the correct claim interpretation, 

up-end the delicate balance crafted by Congress. 

Amendment issues are present in this case.

The America Invents Act made dramatic changes in 

the way patent disputes are resolved, in the way complex 

technologies are integrated into the law, in the way a 

devoted and expert agency is burdened in service to the 

Nation. It is our judicial responsibility to assure that the 

agency and its new tribunal are in compliance with the 

statute. It is our responsibility to assure that the legislative plan is fulfilled.

DISCUSSION

The America Invents Act responds to concerns that 

the time and cost and uncertainty of resolving patent 

validity challenges are a disincentive to development and 

commercialization of new science and technology. As 

stated by Senator Leahy, an architect and principal 

sponsor of the legislation: 

This legislation is not an option but a necessity . . . . I also want to ensure the delicate balance 

we have struck in the post-grant review process 

and make certain that the procedure is both efficient and effective at thwarting some strategic 

behavior in patent litigation and at promoting a 

healthier body of existing patents.

Introduction of Patent Reform Act of 2006, 152 Cong. Rec. 

S8830 (Aug. 3, 2006) (statement of Sen. Patrick Leahy, 

Member, Subcomm. on Intellectual Prop. of the S. Comm. 

on the Judiciary).

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 7

Senator Leahy refers to the “delicate balance” that 

pervades this statute. The legislative record spans a 

decade4 of hearings, reports, bills, and debates, with 

submissions and testimony by the nation’s inventors, 

industries, bar associations, academics, the PTO and 

other government and public interests; and demonstrates 

the breadth of concerned attention throughout the development of this legislation.

Senator Grassley, a central figure in this effort, described the highlights of the achievement as the final bill 

neared enactment:

[T]he bill . . . 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 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.

157 Cong. Rec. S952 (daily ed. Feb. 28, 2011) (statement 

of Sen. Grassley on S.23). The House Report on the final 

4 Starting with a hearing on May 10, 2001, before 

the House Committee on the Judiciary (Patents: Improving Quality and Curing Defects). The first bill that would 

coalesce into the AIA was introduced on October 8, 2004. 

108 H.R. 5299 (Patent Quality Assistance Act of 2004).

 

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8 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

bill stated the necessity of assuring that serial and duplicative attacks did not result from the new procedures: 

The Committee recognizes the importance of quiet 

title to patent owners to ensure continued investment resources. While this amendment is intended to remove current disincentives to current 

administrative processes, the changes made by it 

are not to be used as tools for harassment or as a 

means to prevent market entry through repeated 

litigation and administrative attacks on the validity of a patent. Doing so would frustrate the purpose of the section as providing quick and cost 

effective alternatives to litigation. Further, such 

activity would divert resources from the research 

and development of inventions.

H.R. REP. NO. 112-98, pt. 1, at 48 (2011).

The AIA was signed into law on September 16, 2011, 

with an effective date of September 16, 2012. The new 

procedures were promptly invoked. The concerns I outline arose early in implementation of the statute, and 

continue to this day.

I 

PTAB Decision of Only Some of the Challenged Claims Is Contrary To the 

Statute

The America Invents Act vests the PTAB with authority to adjudicate post-grant validity under sections 102 

(anticipation) and 103 (obviousness), for these are the 

principal documentary grounds on which validity is

challenged in the courts. These grounds are well suited to 

resolution by the PTAB whose adjudicators are experienced in technology, for the determination is required to 

be made from the viewpoint of “a person having ordinary 

skill in the art to which said subject matter pertains,” the 

words of section 103.

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SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 9

The America Invents Act requires the PTAB to issue a 

final written decision on the patentability of the challenged claims:

35 U.S.C. § 318(a).—FINAL WRITTEN DECISION. 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).

The court today holds that, despite the statute, “the final 

order of the Board need not address every claim raised in 

the petition for review.” Maj. Op. at 3. However, the 

statute uses the word “shall.” “Shall” is a term of command. Merck & Co. v. Hi-Tech Pharmacal Co., 482 F.3d 

1317, 1322 (Fed. Cir. 2007) (“Use of the word ‘shall’ in a 

statute generally denotes the imperative.”).

A statutory requirement cannot be overridden by 

agency rule. See Norwegian Nitrogen Prods. Co. v. United 

States, 288 U.S. 294, 315 (1933) (“[A]dministrative practice does not avail to overcome a statute so plain in its 

commands as to leave nothing for construction.”). However, the PTO proposed an administrative Rule authorizing 

the PTAB to decide which of the challenged claims and 

issues it would “proceed on”: 

42.108(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.

Changes to Implement Inter Partes Review Proceedings of 

the Leahy-Smith America Invents Act, 77 Fed. Reg. 7041 

(proposed Feb. 10, 2012) (recorded at 37 C.F.R. 42.108(a)).

This proposed Rule was widely criticized, as commentators pointed out that the Rule violated the statute and 

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negated the AIA’s purpose of achieving finality of validity

review by the PTAB instead of the district court. The 

Minnesota Intellectual Property Law Association 

(MIPLA) explained the consequences of the proposed 

departure from the statute:

[I]n cases where IPR would be granted under the 

proposed rule for some requested claims and not 

others, the result is likely to be a serial or parallel 

process of IPR review of some claims and Federal 

district court review of the other claims. Congress, however, appears to have intended that IPR 

be an alternative system in which a litigant can 

choose to resolve disputed patent validity in either 

an IPR setting or through the Federal courts, but 

not both. Hence, the claim-by-claim approach of 

§ 42.108 would not seem to accomplish the result 

intended by Congress in this regard.

Comments on Changes to Implement Inter Partes Review 

Proceedings, MIPLA 2 at 4 (April 10, 2012) available at

http://www.uspto.gov/sites/default/files/aia_implementatio

n/comment-mipla2.pdf. The MIPLA complained that the 

proposed partial review raises “fairness and due process” 

concerns, and is unlikely “to fully achieve the intent of 

Congress in establishing these proceedings.” Id. at 3. 

The MIPLA urged the PTO to “revert to the language of 

35 U.S.C. § 314(a), which contemplates that review will be 

ordered as to all requested claims.” Id. at 5.

IBM’s chief patent counsel objected that the Rule is

contrary to the AIA, stressing the mandatory words of the 

statute:

Under provisions of 318(a) final written decisions 

are required for all reviews which are “instituted 

and not dismissed”. The statute makes no provisions for reviews which are “instituted-in-part” or 

“dismissed-in-part”. . . . The same provision further provides that the Board “shall issue a final 

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written decision with respect to the patentability 

of any patent claim challenged by the petitioner and any new claim . . .” Thus, any claim challenged in the initial petition in a review that was 

instituted must be decided upon in the final written decision; the statute does not appear to leave 

discretion to provide a final written decision not 

addressing any claim that was initially challenged 

by the petitioner on the basis that the Office determined it to be “not part of the trial”. We do not 

see how the Office squares its attempt to limit the 

scope of review with the referenced statutory requirements; in essence, the scoping decision 

amounts to a premature final decision. We believe the Office should, consistent with the statute, allow all challenged claims to be included in 

the inter partes review when it has found a reasonable likelihood of prevailing with respect to 

one challenged claim.

Comments on Changes to Implement Inter Partes Review 

Proceedings, IBM 5 at 3 (April 6, 2012) (emphases in 

original) (parentheticals omitted) available at

http://www.uspto.gov/sites/default/files/aia_implementatio

n/comment-ibm5.pdf. 

Expressions of concern were also presented by other

participants in the process that produced the legislation. 

See Comments on Changes to Implement Inter Partes

Review Proceedings of the Leahy-Smith America Invents 

Act, available at http://www.uspto.gov/patent/laws-andregulations/america-invents-act-aia/comments-changesimplement-inter-partes-review. 

As the panel majority recognizes, Maj. Op. at 11, the 

PTO stated that its departure from the statute allows it to 

“streamline and converge the issues for consideration,” to 

“aid[] in the efficient operation of the Office and the 

ability of the Office to complete the [review] within the 

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one-year timeframe.” Changes to Implement Inter Partes 

Review Proceedings, Post-Grant Review Proceedings, and 

Transitional Program for Covered Business Method Patents, 77 Fed. Reg. 48703 (Aug. 14, 2012) (Response to 

Comment 60). Criticism of the practice of partial resolution of the challenged claims continued, and the PTO on 

Aug. 20, 2015 published the following Comment and 

Response: 

Comment 12: Several commenters expressed 

concern about the Office’s practice of allowing institution based on some, but not all, of the 

grounds presented in a Petition. Commenters are 

concerned that because the decision on institution 

is not appealable, and any ground on a challenged 

claim that is not instituted is not reflected in the 

final, appealable decision, a petitioner has no redress for grounds on which the Office chooses not 

to institute . . . . 

Response: The Office appreciates the concern 

expressed by the comments, but must balance 

these concerns with the workload in AIA proceedings and the statutory time constraints under 

which AIA review proceedings must be decided. 

In order to ensure a fair and efficient process to 

resolve reviews in a timely fashion, the Office uses 

partial institution as one tool to manage effectively AIA reviews. The Office is cognizant of the 

ramifications of partial institution where the 

grounds are in different statutory classes, or when 

a reference may be overcome by swearing behind 

it, and strives to strike an appropriate balance between what can be accomplished during the finite 

time frame for a trial and fairness to the parties 

in fully vetting patentability issues on challenged 

claims. The Office will continue to assess whether 

such balance is appropriately struck.

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80 Fed. Reg. 50739 (Aug. 20, 2015).

Agency convenience is not grounds for negation of a 

statutory obligation. See Utility Air Regulatory Grp. v. 

Environmental Protection Agency, 134 S. Ct. 2427, 2446 

(2014) (“[A]n agency may not rewrite clear statutory 

terms to suit its own sense of how the statute should 

operate.”). Nonetheless, the PTO continues to adhere to 

Rule 42.108(a), although it is apparent that the Rule 

conflicts with the statute, and that “[n]othing in the 

language of the statute states or suggests that the word 

‘shall’ does not mean exactly what it says.” Gutierrez de 

Martinez v. Lamagno, 515 U.S. 417, 434 n. 9 (1995). 

The criticized Rule was here applied to the ’376 patent

of Mentor Graphics, presented for inter partes review by 

Synopsys’ petition challenging claims 1–15 and 20–33. 

Review was instituted on claims 1-9, 11, 28, and 29, the 

selection apparently made by the PTAB. The PTAB 

conducted a trial, and issued a decision on the selected

claims. The PTAB ruled that claims 5, 8, and 9 were 

unpatentable, and that claims 1–4, 6, 7, 11, 28, and 29 

were patentable. The PTAB did not decide the patentability of claims 10, 12-15, 20-27 and 30-33.

Responding to Synopsys’ objection to the incomplete

decision, the panel majority states that “the statute is 

quite clear that the PTO can choose whether to institute 

inter partes review on a claim-by-claim basis . . . and that 

the Board can pick and choose among the claims in the 

decision to institute.” Maj. Op. at 10. The statutory 

clarity is ephemeral, and authority to “pick and choose 

among the claims” does not exist. Neither the AIA nor 

anything in its voluminous history suggests a legislative 

plan whereby the Board could decide which of the challenged claims would be decided, leaving the other challenged claims untouched.

The design of the AIA is that the major documentary 

validity challenges, sections 102 and 103, will be subject 

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14 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

to decision by the PTO expert tribunal. As commentators 

pointed out, if only some of the challenged claims are 

decided, there is neither complete nor final disposition. 

Senator Schumer explained this foundation of the legislation:

What the bill does . . . is very simple. It says the 

Patent Office will make an administrative determination before the years of litigation as to 

whether this patent is a legitimate patent so as 

not to allow the kind of abuse we have seen.

157 Cong. Rec. S5437 (statement of Sen. Schumer during 

Senate consideration of H.R. 1249). 

When review is instituted, 35 U.S.C. § 318(a) requires 

the PTAB to issue a Final Written Decision on all of the 

claims challenged in the petition. The AIA authorizes the 

Director to decline to institute any requested review, 35 

U.S.C. § 314(d), but the AIA does not authorize or contemplate that the PTO would pick and choose which 

patent claims it will decide. “Administrative construction 

of a statute which conflicts with the express meaning of 

the statutory terms can be viewed as authoritative only if 

it appears that Congress has in fact accepted that construction, and the burden of proof necessarily is on the 

proponent of the administrative view.” Saxbe v. Bustos, 

419 U.S. 65, 84 (1974).

The legislative record emphasizes the purpose of this 

new PTO tribunal to resolve validity issues, a purpose 

that collapses if only some of the challenged claims are 

decided. A Senate Report explained:

[I]f [such] proceedings are to be permitted, they 

should generally serve as a complete substitute 

for at least some phase of the litigation.

S. REP. NO. 110-259, at 67 (Additional Views of Senator 

Specter Joined with Minority Views of Senators Kyl, 

Grassley, Coburn and Brownback) (2008). This statement 

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encapsulates the purpose of the legislation, and the record 

shows that the concerned communities welcomed this new 

adjudicatory role of the PTO, built on its reputation for 

excellence. 

Chevron Deference Does Not Apply

PTO Rule 42.108(a) is “not in accordance with law,” 

the words of the Administrative Procedure Act, 5 U.S.C. § 

706(2)(A). Agency rulemaking authority “does not include 

a power to revise clear statutory terms,” Utility Air Regulatory Group, 134 S. Ct. at 2446:

Under our system of government, Congress makes 

laws and the President, acting at times through 

agencies . . . “faithfully execute[s]” them. U.S. 

Const., Art. II, § 3 . . . . The power of executing 

the laws necessarily includes both authority and

responsibility to resolve some questions left open 

by Congress that arise during the law’s administration. But it does not include a power to revise 

clear statutory terms that turn out not to work in 

practice.

See also, e.g., 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 . . . . 

These concepts are the core of the administrative state. 

“Chevron deference” applies to statutory implementation 

in fidelity to the statute—not statutory departure from

the legislative plan. 

Nonetheless, the panel majority, invoking Chevron

deference, holds that the statute “only requires the Board 

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to address claims as to which review was granted.” Maj. 

Op. at 12. That is not what the statute says. 

“[R]easonable statutory interpretation must account for 

both ‘the specific context in which . . . language is used’ 

and ‘the broader context of the statute as a whole.’” Utility

Air Regulatory Group, 134 S. Ct. at 2442 (omission in 

original). Partial decision negates the purposes of the 

America Invents Act, and achieves neither expedition nor 

economy nor finality nor estoppel.

Senator Kyl explained a central purpose of the America Invents Act is “to force a party to bring all of [its] 

claims in one forum . . . and therefore to eliminate the 

need to press any claims in other fora.” 154 Cong. Rec. 

S9989. Senator Kyl stressed that this new system “ideally [will] completely substitute for at least the patents-andprinted-publication portion of the civil litigation.” 157 

Cong. Rec. S1376. This goal is thwarted when the PTAB

decides validity of some but not all of the claims challenged in the petition.

The justification offered for partial institution or partial decision of an AIA petition is the workload of the 

PTO. Maj. Op. at 11. See Patent Reform: The Future of 

American Innovation: Hearing Before the Senate Comm. 

on the Judiciary, 110th Cong. 7 (2007) (statement of 

Director Jon Dudas) (“[Q]uite frankly, without having the 

resources available now, we are not certain that we could 

handle the administration of that many cases.”). This 

concern received a sympathetic response, and the AIA 

authorizes the Director to refuse to institute any review 

petition in its entirety, without excuse and without appeal. Senator Kyl explained that this provision

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

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views that precludes the Office from timely completing proceedings.

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

of Sen. Kyl). 

The PTO can refuse to institute any post-grant challenge, as the statute provides, 35 U.S.C. § 314(d) (“The 

determination by the Director whether to institute an 

inter partes review under this section shall be final and 

nonappealable.”). However, when a petition is accepted, 

the PTAB “shall” decide the challenged claims, 35 U.S.C. 

§318(a). Decision of only some of the challenged claims 

leaves the undecided claims for district court resolution, 

as this court recognizes, Maj. Op. at 12. In such event, 

the AIA purpose of replacing the cost and delay of district 

court validity proceedings instead dissolves into potentially duplicative proceedings in the PTO and the district 

court, enlarging rather than reducing cost and delay. 

The panel majority states that if there is uncertainty 

as to this statutory obligation of the PTAB, Chevron

deference requires support of the PTO position. However, 

Chevron states that: “If the intent of Congress is clear, 

that is the end of the matter; for the court, as well as the 

agency, must give effect to the unambiguously expressed 

intent of Congress.” Chevron U.S.A., Inc. v. Natural 

Resources Defense Council, Inc., 467 U.S. 837, 842–43

(1984). “Chevron allows agencies to choose among competing reasonable interpretations of a statute; it does not 

license interpretive gerrymanders under which an agency

keeps parts of statutory context it likes while throwing 

away parts it does not.” Michigan v. Environmental 

Protection Agency, 135 S. Ct. 2699, 2708 (2015).

Here there are no “competing reasonable interpretations.” Id. The command of section 318(a) is clear; the 

intent of Congress is plain in the statute. There is no 

ambiguity, and no silence; Chevron provides no support 

for “pick and choose” authority. The theory that the 

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PTAB can select what it will decide cannot be found in the 

legislative record. To the contrary, partial post-grant 

review eviscerates the purpose of resolving major validity

issues in a PTO tribunal instead of in the district court.

The judicial obligation is to assure fidelity to the statute and to the legislative policy, lest we become complicit 

in frustrating the intent of Congress: 

[T]he courts are the final authorities on issues of 

statutory construction. They must reject administrative constructions of the statute, whether 

reached by adjudication or by rulemaking, that 

are inconsistent with the statutory mandate or 

that frustrate the policy that Congress sought to 

implement.

Federal Energy Comm’n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 32 (1981).

The Legislative Record Cannot Be Discarded

The panel majority disposes of the legislative record 

with the remark that “Floor statements by a few members 

of the legislative branch cannot supplant the text of the 

bill as enacted.” Maj. Op. at 11. That is not this legislative record. 

The record of the AIA starts with a House Judiciary 

hearing on “Patents: Improving Quality and Curing 

Defects,” on May 10, 2001, and shows the continuing 

involvement of both parties and both Houses, filling nine 

fat volumes in the Federal Circuit library. There are 

statements by Senators and Representatives, statements 

for government agencies including the PTO, the Department of Commerce, the International Trade Commission, 

the Department of Health and Human Services, and the 

Government Accountability Office. There are written 

submissions and recorded testimony from large and small 

industries, from labor unions, from inventors, and from 

virtually every patent bar association in the nation, as 

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well as from university scientists, law professors, and 

others. There is interaction, commentary, debate and 

compromise. The panel majority’s dismissal of this record 

as “a few floor statements” is not easy to fathom.

We have canvassed the entire record, 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). The record shows bipartisan unanimity on the foundational principle of this legislation; 

that is, that a tribunal within the PTO would be empowered to conduct post-grant review of major patent validity 

issues, with the intent to provide an expert adjudicatory 

alternative to litigation. The commentators’ views of 

details in achieving this goal were not unanimous, and 

balances, trade-offs, and compromises are embodied in the 

final statute. The court must give effect to this legislative 

accomplishment.

Statutes are administered to conform to “the design of 

the statute as a whole and to its object and policy.” Crandon v. United States, 494 U.S. 152, 158 (1990). The record 

shows the participation and collaboration among the 

legislators as well as the concerned communities. See 157 

Cong. Rec. S1044 (daily ed. Mar. 1, 2011) (statement of 

Sen. Leahy):

Mr. President, the Senator [Kyl] has been involved in this right from the beginning. We have 

worked at having a bill that would be in the best 

interests of the Senate under both Republicans 

and Democrats across the political spectrum. We 

have worked very closely together.

Many Senators and Representatives placed comments in 

the record. Senator Ted Kaufman, of the Senate Judiciary Committee, described PTO post-grant review as “a 

viable alternative to litigation:”

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The good news is that there are several aspects of 

the reform effort that are relatively uncontroversial. Just about everyone agrees that we need . . . 

to limit unnecessary litigation costs. So there is 

much on which we can agree, including . . . improving the Patent Office challenge process as a 

viable alternative to litigation.

Patent Reform in the 111th Congress: Legislation and 

Recent Court Decisions: Hearing Before the Senate Comm. 

on the Judiciary, 111th Cong. 205 (2009). 

Senator Schumer cited the benefits of this alternative 

forum for validity determination:

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 

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

157 Cong. Rec. S1360-94 (daily ed. Mar. 8, 2011).

Senator Sheldon Whitehouse referred to the cost and 

delay of litigation:

Similarly, the bill will improve administrative 

processes so that disputes over patents can be resolved quickly and cheaply without patents being 

tied up for years in expensive litigation.

157 Cong. Rec. S1052 (daily ed. Mar. 1, 2011). 

The intended benefits were also described by Representative Issa, a member of the House Judiciary Committee and its Subcommittee on Courts, the Internet, and 

Intellectual Property:

[The issue of overzealous litigation is] addressed 

in part in this bill. The creation of a post grant 

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review procedure at the Patent Office will help direct some conflicts away from court to an administrative remedy, hopefully saving vast resources in 

time and money.

153 Cong. Rec. 23927–66, (2007) (House consideration 

and passage of H.R. 1908). 

Representative Berman discussed the value of an 

agency procedure for assuring that issued patents are 

valid:

When functioning properly, the patent system encourages and enables inventors to push the 

boundaries of knowledge and possibility. I support strong, robust protection for quality patents. 

However, when the system functions improperly, 

such as allowing an overly broad or obvious patent, the patent system can stifle innovation and 

harm America’s competitiveness in the global 

economy . . . . This legislation favors no industry, 

no person, organization or interest group. It seeks 

to solve problems that we have identified and 

have been identified for us by outside experts and 

agencies. 

153 Cong. Rec. 23904–11, (2007) (House consideration of 

H.R. RES. 636 (rule for debate on Patent Reform Act of 

2007).

Senator Leahy, reporting the Administration’s support of the proposed legislation, again mentioned the 

“alternatives to costly and complex litigation” that would 

be achieved, along with other benefits of the legislation:

The Administration supports Senate passage of 

S. 23. As a whole, this bill represents a fair, balanced, and necessary effort to improve patent 

quality, enable greater work sharing between the 

United States Patent and Trademark Office 

(USPTO) and other countries, improve service to 

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patent applicants and the public at the USPTO, 

and offer productive alternatives to costly and 

complex litigation.

157 Cong. Rec. S1030 (daily ed. Mar. 1. 2011).

The legislators gave attention to assuring the efficiency and effectiveness of this “second window” of agency 

action. Senators Specter, Kyl, Grassley, Coburn, and 

Brownback stated in a Senate Report:

[O]pening up a second window for administrative 

challenges to a patent only makes sense if defending a patent in such proceedings is not unduly expensive, and if such proceedings substitute for a 

phase of district-court litigation. . . . The initiation of the proceedings is likely to lead to a stay in 

the litigation, which likely will remain in place 

through the appeal of the PTO’s second-window 

decision . . . . If second window proceedings are to 

be permitted, they should generally serve as a 

complete substitute for at least some phase of the 

litigation.

S. REP. NO. 110-259 at 66 (2008). The Senators stressed

that the second window should be a “complete substitute” 

for the major validity phase—not a partial disposition. 

These goals are forsaken if the PTO decides only some 

of the challenged claims, restoring the costly litigation

procedures and delay that the AIA is designed to replace. 

The intent and purpose of the legislators, embodied in the 

enacted legislation and replete in its history, cannot be 

ignored. Amid universal accolades for assignment to the 

PTO of post-grant review of major issues of validity, the 

legislators and collaborators never suggested that the 

PTO could “pick and choose” which of the challenged 

claims would be decided. This spurious outcome was not

contemplated.

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Representative Manzullo stressed the legislative purpose that these PTO proceedings would substitute for 

district court proceedings, not merely provide another 

forum for non-final validity debate: 

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. Congress must 

ensure that the administrative processes provided 

for in the bill do not become a vehicle for infringers to avoid justice.

Patent Reform Act of 2009: Hearing Before the House 

Comm. on the Judiciary, 111th Cong. 153 (2009).

The panel majority supports PTAB partial decision of 

some of the challenged claims by suggesting that maybe 

other validity issues would require district court resolution, beyond the section 102 and 103 issues assigned to 

the PTAB. Maj. Op. at 12. It is of course possible that 

claims held valid by the PTAB under sections 102 and 103 

would be vulnerable on other grounds. The legislators 

recognized that not all validity issues are assigned to the 

PTAB. Senator Kyl explained:

In this bill, however, the issues that can be raised 

in the second window are so sharply limited that 

the goal of flushing out all claims is unattainable. 

Only 102 and 103 arguments based on patents 

and printed publications can be raised in the second window . . . . 

154 Cong. Rec. S9982-93 (daily ed. Sept. 25, 2008) (statement by Sen. Kyl on S. 3600).

The legislators also recognized that sections 102 and 

103 are the major grounds of challenge to issued patents, 

as well as the most demanding of technologic or scientific 

expertise. The heavy and immediate recourse to the new 

AIA proceedings attests to the soundness of this principle. 

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The possibility that other grounds of invalidity might also 

be present does not justify dilution of the provisions 

directed to sections 102 and 103.

On this vast legislative record, it is surprising to read 

the panel majority’s dismissal of “floor statements by a 

few members of the legislative branch.” Maj. Op. at 11. 

To the contrary, the record confirms that throughout the 

gestation of the America Invents Act, legislators of the 

House and Senate sought strong and conclusive resolution 

of the most challenging issues of patent-supported innovation, by providing an effective alternative to district 

court litigation, whereby the expert agency would reliably 

and confidently review the validity of granted patents.

Ignoring this purpose, the panel majority holds that 

“the validity of claims for which the Board did not institute inter partes review can still be litigated in district 

court. We see no inconsistency in this.” Maj. Op. at 11–

12. To the contrary—it is inconsistent with the entirety of 

the America Invents Act.

II

The Stay and Estoppel Provisions Are Also 

Undermined by Partial Decision of 

Validity Challenges

An amicus curiae explained the stay and estoppel 

provisions of the AIA and their role in resolution of patent 

disputes: 

The experienced administrative judges at the 

PTAB evaluate the patentability of the claims 

identified by a petitioner. Claims that are cancelled for lack of patentability vanish from the litigation entirely. Claims that undergo review, and 

survive, will return to the district court with statutory estoppel, which prevents the accused infringer from making the same invalidity 

arguments before the district court that it made 

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before the PTA. Thus, whether or not the patent 

claims are cancelled or survive, the case is simplified for claims addressed in a PTAB trial. It is 

therefore no surprise that, as Congress envisioned, courts frequently stay litigation pending 

PTAB review. But when the PTAB decides to review only some of the challenged claims, but not 

others, it undermines the intended efficiency of 

these trials and saddles the district courts with 

larger and redundant workloads.

SAS Institute amicus Br. 6 (Oct 10, 2014).

The stay and estoppel provisions become irrelevant if

only some of the challenged claims are decided by the 

PTAB, leaving other claims unresolved. Yet the court 

today sees “no inconsistency” in leaving some claims 

undecided, because “the validity of claims for which the 

Board did not institute inter partes review can still be 

litigated in district court,” Maj. Op. at 11–12. This is an 

extreme distortion of the statutory purpose.

Senator Grassley discussed the scope of the litigation 

stay authorization, as the AIA reached enactment in the 

Senate: 

Lengthy and duplicative proceedings are one of

the worst evils of other systems of administrative 

review of patents. . . . Ideally extending couldhave-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-printedpublications portion of the civil litigation.

157 Cong. Rec. S1360–94 (daily ed. Mar. 8, 2011). 

On the foundational principle that the PTAB proceeding is designed as an alternative to district court litigation, there was extensive commentary from the 

innovation communities. An example is a letter from the 

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Consortium of Higher Education Institutions, supporting 

the proposed new system because it would– 

reduce patent litigation costs by establishing the 

new post-grant procedure noted above, and by 

significantly improving the current inter partes 

review procedure, which will provide a lower-cost 

alternative to civil litigation to challenge a patent 

throughout its lifetime, while significantly reducing the capacity to mount harassing serial challenges . . .

157 Cong. Rec. S1178 (daily ed. Mar. 3, 2011). The PTO

Director, testifying for the administration, also supported 

estoppel, stating that– 

the 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 intended to allow nothing–a complete 

alternative to litigation.

Patent Reform: The Future of American Innovation: 

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

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

The court’s ruling today inhibits the America Invents 

Act from achieving its purposes. It is reported that some

district courts are declining to stay parallel litigation. 

E.g. Invensys Sys. v. Emerson Elec. Co., No. 6:12-cv-00799, 

2014 U.S. Dist. LEXIS 128454, at *10 (E.D. Tex. July 25, 

2014) (district court denying stay where PTAB instituted 

partial review because “any simplification is likely to be 

minimal”); U.S. Nutraceuticals LLC v. Cyanotech Corp., 

No. 5:12-cv-366-Oc-10PRL, 2013 U.S. Dist. LEXIS 

163057, at *8 (M.D. Fla. Oct. 15, 2013) (recommending 

denial of stay pending inter partes review because “the 

USPTO may authorize the review to proceed on only 

‘some of the challenged claims’ or on only ‘some of the 

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grounds of unpatentability asserted for each claim.’ 37 

C.F.R. § 42.108(a). It is entirely possible, perhaps even 

likely, that this case will proceed on numerous claims 

regardless of the outcome of the USPTO proceeding”); 

Xilinx, Inc. v. Invention Inv. Fund I LP, Nos. 5:11-cv00671-EJD, 5:11-cv-04407-EJD, 2012 WL 6003311, at *4 

(N.D. Cal. Nov. 30, 2012) (“the court will have to resolve 

all claims in dispute as to [claims not currently undergoing inter partes reexamination]. That being the case, 

waiting for the outcome of reexamination does nothing for 

that portion of the litigation.”). 

Similarly for the estoppel provision, it too is undermined by partial decision, for estoppel is effective only 

when validity is resolved by the PTAB. This provision is 

important to the AIA structure, as explained by Representative Jackson-Lee, for the purpose of “prohibiting a 

party from reasserting claims in court that it raised in 

post-grant review.” 153 Cong. Rec. H10,280 (daily ed. 

Sept. 7, 2007). This view was urged by the PTO as important to the new proceeding: 

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 Director Jon Dudas). 

This position was reiterated by Director Kappos:

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 proCase: 14-1530 Document: 4-2 Page: 53 Filed: 02/10/2016
28 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

visions 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 Director David Kappos).

Instead of vigorously implementing the AIA as it was 

enacted, the panel majority’s rulings today waffle toward

the inefficiencies, conflicts, and uncertainties that the 

America Invents Act was designed to resolve.

III

Rulings at “Institution” Do Not Restrict 

All Appellate Review 

The “institution” phase of the AIA is a threshold proceeding whose primary purpose is to screen out unsupported attacks on validity. As Senator Grassley 

explained, there is a “higher threshold” for commencing a 

PTAB proceeding as compared with the filing of a complaint in district court, by requiring a showing that at 

least one patent claim is more likely than not invalid. 

This is a safeguard against harassment, tactical delay, 

and like abuses. This purpose pervades the legislative 

record, e.g., 157 Cong. Rec. S952 (statement of Sen. 

Grassley) (describing the AIA’s “procedural safeguards to 

prevent a challenger from using the process to harass 

patent owners.”).

The “institution” decision is, by statute, not appealable. However, information presented and rulings made at 

this threshold are not immunized from judicial review, 

when material to the final decision on validity. The court 

today holds otherwise, stating that “an issue relating to 

institution does not become appealable simply because 

the Board mentions that issue in its final decision.” Maj. 

Op. at 8 n.4. The court cites Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), for 

its statement that the “appealability bar applies to instiCase: 14-1530 Document: 4-2 Page: 54 Filed: 02/10/2016
SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION 29

tution decisions ‘even if such assessment is reconsidered 

during the merits phase of proceedings and restated as 

part of the Board’s final written decision’.” Maj. Op. at 8 

n.4 (quoting Achates, 803 F.3d at 658). 

Precedent does not require this extended application 

of Achates. In Versata Dev. Group, Inc. v. SAP Am., Inc., 

793 F.3d 1306 (Fed. Cir. 2015), the court held that when 

information at the threshold phase is material to the 

PTAB final decision, this court on appeal is not precluded 

from reviewing such information. The court stated:

Congress explained the anomalous nature of a bar 

to judicial review of final agency action: “Very 

rarely do statutes withhold judicial review. It has 

never been the policy of Congress to prevent the 

administration of its own statutes from being judicially confined to the scope of authority granted 

or to the objectives specified. Its policy could not 

be otherwise, for in such a case statutes would in 

effect be blank checks drawn to the credit of some 

administrative officer or board.”

Id. at 1319 (quoting S. Rep. No. 79-752, at 26 (1945)). As 

stated in Social Security Board v. Nierotko: 

Administrative determinations must have a basis 

in law and must be within the granted authority . . . . An agency may not finally decide the limits of its statutory power. That is a judicial 

function.

327 U.S. 358, 369 (1946). These principles are a foundation of the Administrative Procedure Act.

On this appeal, a ruling that the court insulates from 

review relates to the one-year bar. The America Invents 

Act requires that a petition must be filed within one year 

after the start of any district court litigation on the same 

patent: 

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30 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

35 U.S.C. §315(b) PATENT OWNER’S ACTION.—An 

inter partes review may not be instituted if the 

petition requesting the proceeding is filed more 

than 1 year after the date on which the petitioner, 

real party in interest, or privy of the petitioner is 

served with a complaint alleging infringement of 

the patent. . . .

Although this issue is presented on this appeal, the panel 

majority refuses to consider it because it was decided at 

the “institution” phase. The question is whether a predecessor to Synopsys, in litigation with Mentor Graphics 

more than a year earlier, raised the one-year bar. The 

PTAB held that there was no bar. PTAB Op. 14–17. The 

court today holds that “the PTO’s decisions concerning the 

§315(b) time bar, including determinations of the real 

party in interest and rulings on discovery related to such 

determinations, are non-appealable,” even after the 

PTAB’s final written decision. Maj. Op. at 24.

It is unlikely that such issues material to statutory 

compliance–issues of privity, standing, and jurisdiction–

were intended to be excluded from appellate review. Such 

a departure from the judicial obligation cannot be presumed. See Crowell v. Benson, 285 U.S. 22, 54-55 (1932):

A different question is presented where the determinations of fact are fundamental or ‘jurisdictional,’ in the sense that their existence is a 

condition precedent to the operation of the statutory scheme. These fundamental requirements 

are . . . indispensable to the application of 

the statute . . . because the Congress has so provided explicitly.

The Court in Crowell notes that: “In relation to administrative agencies, the question in a given case is whether it 

falls within the scope of the authority validly conferred.” 

Id. at 54 n.17.

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Whether or not the one-year bar here is deemed jurisdictional, it is an essential part of the AIA structure. The 

correctness of its treatment is subject to the traditional 

judicial review of agency determinations; the question is 

not insulated from appeal simply because it was decided

at the start of the post-grant proceeding. The Court 

guides in Bowen v. Michigan Academy of Family Physicians that preclusion of judicial review is viewed strictly: 

We begin with the strong presumption that Congress intends judicial review of administrative action. From the beginning “our cases [have 

established] that judicial review of a final agency 

action by an aggrieved person will not be cut off 

unless there is persuasive reason to believe that 

such was the purpose of Congress.” Abbott Laboratories v. Gardner, 387 U.S. 136, 140 (1967).

476 U.S. 667, 670 (1986) (alteration in original). The appellate court must ensure that an agency’s action is not “so 

extreme as to amount to an abdication of its statutory 

responsibilities.” Heckler v. Chaney, 470 U.S. 821, 833 n.4 

(1985). When an agency “exercise[s] its power in some 

manner. The action at least can be reviewed to determine 

whether the agency exceeded its statutory powers.” Id. at 

832.

In sum, “Congress rarely intends to prevent courts 

from enforcing its directives to federal agencies;” there is 

“a strong presumption favoring judicial review of administrative action.” Mach Mining, LLC v. EEOC, 135 S. Ct. 

1645, 1651 (2015) (quoting Bowen, 476 U.S. at 670). My 

colleagues’ position that no ruling during institution can 

receive appellate review, even when material to the final 

decision, cannot be correct.

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32 SYNOPSYS, INC. v. MENTOR GRAPHICS CORPORATION

IV 

The AIA Assigns the Decision to “Institute” 

to the Director, and Assigns the Trial and 

Final Decision to the PTAB

By statute, the “institution” decision is made by the 

Director, not by the judges of the Patent Trial and Appeal 

Board. The legislative record shows that these functions 

were deliberately separated. Senator Kyl explained the 

purpose of avoiding self-review: 

Obviously, subsection (a) alone would not be 

enough to test the view that PTO has reached an 

incorrect conclusion on an important legal question because subsection (a) requires the petitioner 

to persuade PTO that a claim appears to be unpatentable, and PTO is unlikely to be so persuaded if it has already decided the underlying legal 

question in favor of patentability.

154 Cong. Rec. S9982–93 (Sept. 27, 2008). The separation 

of these roles helps to ensure that the decision of the 

PTAB is not a rubber stamp of the institution decision, 

nor a shortcut on “an important legal question.” The 

PTO’s practice of assigning the institution decision to the 

PTAB is contrary to the statute, and commentators have 

objected, stating that:

Currently the same APJs consider an incomplete 

and preliminary record to decide that the claims 

being challenged in a petition are likely unpatentable. Those same APJs are then required to make 

the Final Written Decision—in essence, they are 

put in the position of defending their prior decision to institute the trial. This creates an actual 

or perceived bias against the patent owner.

AIPLA Comments on PTAB Trial Proceedings, at 20 (Oct. 

16, 2014), available at http://www.uspto.gov/ip/boards/

bpai/aipla_20141016.pdf. See also Ethicon Endo-Surgery, 

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Inc. v. Covidien LP, No. 2014-1771 (Fed. Cir. Jan. 13, 

2016) (Newman, J., dissenting).

This further contravention of the statute is not supportable. 

V 

The AIA Must Be Applied as a 

Balanced Whole

The record shows extensive policy balances in the AIA 

as eventually enacted. Today’s concerns focus primarily 

on procedures adopted after enactment of the statute, 

such as post-grant use of the “broadest” claim construction; a topic under review elsewhere.5 And I have previously pointed to issues arising from conflicting final 

decisions in the PTAB and the district court, see Fresenius USA, Inc. v. Baxter International, Inc., 721 F.3d 

1330, 1347 (Fed. Cir. 2013) (Newman, J., dissenting).

In addition, the statutory provision for amending 

claims for post-grant review has been misapplied. Although the AIA authorizes claim amendment, PTO statistics demonstrate the PTAB’s practice of denying almost 

all motions to amend, as referenced in Cuozzo, 793 F.3d at 

1288 n.1 (Newman, J., dissenting). Updated statistics 

show little change, see Daniel F. Klodowski and David 

Seastrunk, Claim and Case Disposition, AIA BLOG,

http://www.aiablog.com/claim-and-case-disposition/ (visited Feb. 5, 2016) (Reporting IPR Substitute Claim Disposition as of Jan. 1, 2016: 446 (94.49%) substitute claims 

denied, 26 (5.51%) substitute claims granted.)

It devolves upon the court to assure fulfillment of the 

policy embodied in the statute, with appreciation of the 

5 In re Cuozzo Speed Technologies, LLC, 778 F.3d 

1271 (Fed. Cir. 2015), cert. granted Jan. 15, 2016.

 

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statutory balance and the interrelation of provisions. The 

availability of amendment in IPR proceedings, as compared with district courts, balances the lighter standard 

of invalidation for IPR proceedings. A witness stated, in 

response to questions by Senators Grassley, Coburn, 

Specter and Kyl: 

[U]nnecessarily restricting the patentee’s ability 

to amend its claims (in contrast with the flexible

inter partes reexamination process) . . . encourage[s] outright invalidation of a patent that may 

simply require an adjustment in scope.

Patent Reform: the Future of American Innovation: Hearing Before Senate Comm. on the Judiciary, 110th Cong. 45 

(Responses of Bruce Bernstein, Chief Intellectual Property and Licensing Officer, InterDigital Communications 

Corp.).

The amendment opportunity was emphasized. See id. 

at 90 (Post-Hearing question of Sen. Kyl to Mary Doyle) 

(“24. Under the post-grant review procedure proposed in 

S. 1145, a patentee may amend its claims only once as a 

matter of right, and may further amend only for good 

cause shown.”). Thus the statute provides:

§ 316(d) AMENDMENT OF THE PATENT.— 

(1)In general.—During an inter partes review 

instituted under this chapter, the patent 

owner may file 1 motion to amend the patent in 1 or more of the following ways: 

(A) Cancel any challenged patent claim.

(B) For each challenged claim, propose a 

reasonable number of substitute claims.

(2)Additional motions.— 

Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially 

advance the settlement of a proceeding 

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under section 317, or as permitted by regulations prescribed by the Director.

(3)Scope of claims.— 

An amendment under this subsection may 

not enlarge the scope of the claims of the 

patent or introduce new matter.

(emphasis added). In the context of the statement of 

Senator Kyl that the legislation provides for one amendment “as a matter of right,” the reported implementation 

is indeed questionable.

The record demonstrates that the statute was well

understood as creating a fresh balance, whereby patents 

could be challenged in opposition-like proceedings, whether or not there was a “case or controversy” as required by 

Article III. Congress lowered the evidentiary standard of 

invalidity applied by the courts to granted patents, and 

authorized limited amendment, thereby allowing correction of flaws in the prior grant. This statute requires 

implementation in accordance with the legislative purpose. 

VI

This New Proceeding Is of 

Power and Promise

The power and promise of the America Invents Act, 

and the aspirations held by Congress and the Nation, 

recognize American innovation and the capability of 

invention to serve the public and the economy. For so 

large a change in national practice, adjustment is not 

surprising. The glitches I have pointed out are readily 

remediable, and appear to flow from construing isolated 

statutory provisions. See Davis v. Mich. Dep’t of Treasury, 

489 U.S. 803, 809 (1989) (“[S]tatutory language cannot be 

construed in a vacuum. It is a fundamental canon of 

statutory construction that the words of a statute must be 

read in their context with a view to their place in the 

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overall statutory scheme.”). Each provision contributes to 

the balance established in the statute, as Congressman 

Berman explained: 

Like all compromises, not everyone received everything they wanted, which is honestly just as it 

should be. This legislation favors no industry, no 

person, organization or interest group. It seeks to 

solve problems that we have identified and have 

been identified for us by outside experts and 

agencies. 

153 Cong. Rec. 23904–11 (2007) (Rule for debate on 

Patent Reform Act of 2007). Senator Leahy also commented on concerns that were balanced:

The array of voices heard in this debate represent 

virtually all sectors of our economy, all interests 

in the patent system. They have not been uniform, but they know the legislative process is one 

of compromise and accommodation where possible, and it has been that way during the 6 years 

we have been at work on this bill.

157 Cong. Rec. S1349 (daily ed. Mar. 8, 2011).

Congress aspired to revitalize the Nation’s patent system, in an era of innovation beyond imagination. I respectfully dissent from the departures from the legislative 

plan. 

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