Source: http://wa.findacase.com/research/wfrmDocViewer.aspx/xq/fac.20180424_0002694.SCT.htm/qx
Timestamp: 2019-04-18 14:26:52+00:00

Document:
Inter partes review allows private parties to challenge previously issued patent claims in an adversarial process before the Patent Office. At the outset, a party must file a petition to institute review, 35 U.S.C. §311(a), that identifies the challenged claims and the grounds for challenge with particularity, §312(a)(3). The patent owner, in turn, may file a response. §313. If the Director of the Patent Office determines "there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition, " §314(a), he decides "whether to institute . . . review . . . pursuant to [the] petition, " §314(b). "If . . . review is instituted and not dismissed, " at the end of the litigation 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." §318(a).
Petitioner SAS sought review of respondent Complement Soft's software patent, alleging that all 16 of the patent's claims were unpatentable. Relying on a Patent Office regulation recognizing a power of "partial institution, " 37 CFR §42.108(a), the Director instituted review on some of the claims and denied review on the rest. The Board's final decision addressed only the claims on which the Director had instituted review. On appeal, the Federal Circuit rejected SAS's argument that §318(a) required the Board to decide the patentability of every claim challenged in the petition.
When the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. The plain text of §318(a) resolves this case. Its directive is both mandatory and comprehensive. The word "shall" generally imposes a nondiscretionary duty, and the word "any" ordinarily implies every member of a group. Thus, §318(a) means that the Board must address every claim the petitioner has challenged. The Director's "partial institution" power appears nowhere in the statutory text. And both text and context strongly counsel against inferring such a power.
The statute envisions an inter partes review guided by the initial petition. See §312(a)(3). Congress structured the process such that the petitioner, not the Director, defines the proceeding's contours. The ex parte reexamination statute shows that Congress knew exactly how to authorize the Director to investigate patentability questions "[o]n his own initiative, and at any time, " §303(a). The inter partes review statute indicates that the Director's decision "whether" to institute review "pursuant to [the] petition" is a yes-or-no choice. §314(b).
Section 314(a)'s requirement that the Director find "a reasonable likelihood" that the petitioner will prevail on "at least 1 of the claims challenged in the petition" suggests, if anything, a regime where a reasonable prospect of success on a single claim justifies review of them all. Again, if Congress had wanted to adopt the Director's claim-by-claim approach, it knew how to do so. See §304. Nor does it follow that, because §314(a) invests the Director with discretion on the question whether to institute review, it also invests him with discretion regarding what claims that review will encompass. The rest of the statute confirms, too, that the petitioner's petition, not the Director's discretion, should guide the life of the litigation. See, e.g., §316(a)(8).
The Director suggests that a textual discrepancy between §314(a)- which addresses whether to institute review based on claims found "in the petition"-and §318(a)-which addresses the Board's final resolution of the claims challenged "by the petitioner"-means that the Director enjoys the power to institute a review covering fewer than all of the claims challenged in the petition. However, the statute's winnowing mechanism-which allows a patent owner to concede one part of a petitioner's challenge and "[c]ancel any challenged patent claim, " §316(d)(1)(A)-fully explains why Congress adopted the slightly different language.
The Director's policy argument-that partial institution is efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others-is properly addressed to Congress, not this Court. And the Director's asserted "partial institution" power, which is wholly unmentioned in the statute, is not entitled to deference under Chevron U.S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837. Finally, notwithstanding §314(d)-which makes the Director's determination whether to institute an inter partes review "final and nonappealable"-judicial review remains available consistent with the Administrative Procedure Act to ensure that the Patent Office does not exceed its statutory bounds. Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___, distinguished. Pp. 4-14.
825 F.3d 1341, reversed and remanded.
A few years ago Congress created "inter partes review." The new procedure allows private parties to challenge previously issued patent claims in an adversarial process before the Patent Office that mimics civil litigation. Recently, the Court upheld the inter partes review statute against a constitutional challenge. Oil States Energy Services, LLC v. Greene's Energy Group, LLC, ante, p.. Now we take up a question concerning the statute's operation. When the Patent Office initiates an inter partes review, must it resolve all of the claims in the case, or may it choose to limit its review to only some of them? The statute, we find, supplies a clear answer: the Patent Office must "issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." 35 U.S.C. §318(a) (emphasis added). In this context, as in so many others, "any" means "every." The agency cannot curate the claims at issue but must decide them all.
"To promote the Progress of Science and useful Arts, " Congress long ago created a patent system granting inventors rights over the manufacture, sale, and use of their inventions. U.S. Const., Art. I, §8, cl. 8; see 35 U.S.C. § 154(a)(1). To win a patent, an applicant must (among other things) file "claims" that describe the invention and establish to the satisfaction of the Patent Office the invention's novelty and nonobviousness. See §§102, 103, 112(b), 131; Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___.___-___ (2016) (slip op., at 2-3).
Sometimes, though, bad patents slip through. Maybe the invention wasn't novel, or maybe it was obvious all along, and the patent owner shouldn't enjoy the special privileges it has received. To remedy these sorts of problems, Congress has long permitted parties to challenge the validity of patent claims in federal court. See §§282(b)(2)-(3). More recently, Congress has supplemented litigation with various administrative remedies. The first of these was exparte reexamination. Anyone, including the Director of the Patent Office, can seek ex parte reexamination of a patent claim. §§302, 303(a). Once instituted, though, an exparte reexamination follows essentially the same inquisitorial process between patent owner and examiner as the initial Patent Office examination. §305. Later, Congress supplemented exparte reexamination with inter partes reexamination. Inter partes reexamination (since repealed) provided a slightly more adversarial process, allowing a third party challenger to submit comments throughout the proceeding. §314(b)(2) (2006 ed.) (repealed). But otherwise it too followed a more or less inquisitorial course led by the Patent Office. §314(a). Apparently unsatisfied with this approach, in 2011 Congress repealed inter partes reexamination and replaced it with inter partes review. See 35 U.S.C. §§311-319 (2012 ed.).
The new inter partes review regime looks a good deal more like civil litigation. At its outset, a party must file "a petition to institute an inter partes review of [a] patent." §311(a). The petition "may request to cancel as unpatentable 1 or more claims of [the] patent" on the ground that the claims are obvious or not novel. §311(b); see §§102 and 103. In doing so, the petition must identify "each claim challenged, " the grounds for the challenge, and the evidence supporting the challenge. §312(a)(3). The patent owner, in turn, may respond with "a preliminary response to the petition" explaining "why no inter partes review should be instituted." §313. With the parties' submissions before him, the Director then decides "whether to institute an inter partes review . . . pursuant to [the] petition." §314(b). (In practice, the agency's Patent Trial and Appeal Board exercises this authority on behalf of the Director, see 37 CFR §42.4(a) (2017).) Before instituting review, the Director must determine, based on the parties' papers, "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).
Once the Director institutes an inter partes review, the matter proceeds before the Board with many of the usual trappings of litigation. The parties conduct discovery and join issue in briefing and at an oral hearing. §§316(a)(5), (6), (8), (10), (13). During the course of the case, the patent owner may seek to amend its patent or to cancel one or more of its claims. §316(d). The parties may also settle their differences and seek to end the review. §317. But "[i]f an inter partes review is instituted and not dismissed, " at the end of the litigation the Board "shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." §318(a).
Our case arose when SAS sought an inter partes review of Complement Soft's software patent. In its petition, SAS alleged that all 16 of the patent's claims were unpatentable for various reasons. The Director (in truth the Board acting on the Director's behalf) concluded that SAS was likely to succeed with respect to at least one of the claims and that an inter partes review was therefore warranted. But instead of instituting review on all of the claims challenged in the petition, the Director instituted review on only some (claims 1 and 3-10) and denied review on the rest. The Director did all this on the strength of a Patent Office regulation that purported to recognize a power of "partial institution, " claiming that "[w]hen instituting inter partes review, the [Director] may authorize the review to proceed on all or some of the challenged claims and on all or some or the grounds of unpatentability asserted for each claim." 37 CFR §42.108(a). At the end of litigation, the Board issued a final written decision finding claims 1, 3, and 5-10 to be unpatentable while upholding claim 4. But the Board's decision did not address the remaining claims on which the Director had refused review.
That last fact led SAS to seek review in the Federal Circuit. There SAS argued that 35 U.S.C. §318(a) required the Board to decide the patentability of every claim SAS challenged in its petition, not just some. For its part, the Federal Circuit rejected SAS's argument over a vigorous dissent by Judge Newman. SAS Institute, Inc. v. Complement Soft, LLC, 825 F.3d 1341 (2016). We granted certiorari to decide the question ourselves. 581 U.S. (2017).
We find that the plain text of §318(a) supplies a ready answer. It directs that "[i]f an inter partes review is instituted and not dismissed under this chapter, the [Board] shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner . . . ." §318(a) (emphasis added). This directive is both mandatory and comprehensive. The word "shall" generally imposes a nondiscretionary duty. See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 (1998). And the word "any" naturally carries "an expansive meaning." United States v. Gonzales, 520 U.S. 1, 5 (1997). When used (as here) with a "singular noun in affirmative contexts, " the word "any" ordinarily "refer[s] to a member of a particular group or class without distinction or limitation" and in this way "impl[ies] every member of the class or group." Oxford English Dictionary (3d ed., Mar. 2016), www.oed.com/view/Entry/8973 (OED) (emphasis added) (all Internet materials as last visited Apr. 20, 2018). So when §318(a) says the Board's final written decision "shall" resolve the patentability of "any patent claim challenged by the petitioner, " it means the Board must address every claim the petitioner has challenged.
That would seem to make this an easy case. Where a statute's language carries a plain meaning, the duty of an administrative agency is to follow its commands as written, not to supplant those commands with others it may prefer. Social Security Bd. v. Nierotko, 327 U.S. 358, 369 (1946). Because SAS challenged all 16 claims of ComplementSoft's patent, the Board in its final written decision had to address the patentability of all 16 claims. Much as in the civil litigation system it mimics, in an inter partes review the petitioner is master of its complaint and normally entitled to judgment on all of the claims it raises, not just those the decisionmaker might wish to address.

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