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Timestamp: 2019-04-20 18:36:45+00:00

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FindACase | Arthrex, Inc. v. Smith & Nephew, Inc.
Arthrex, Inc. v. Smith & Nephew, Inc.
Appeal from the United States Patent and Trademark Office, Patent Trial and Appeal Board in No. IPR2016-00917.
Anthony P. Cho, Carlson, Gaskey & Olds, P.C., Birmingham, MI, argued for appellant. Also represented by David J. Gaskey.
Nathan R. Speed, Wolf, Greenfield & Sacks, PC, Boston, MA, argued for appellees. Also represented by Richard Giunta, Michael N. Rader.
In a pending inter partes review proceeding ("IPR") before the Patent Trial and Appeal Board ("the Board"), Arthrex, Inc. disclaimed all claims that were the subject of the petition. The disclaimer occurred before the Board issued an institution decision. The Board then entered an adverse judgment pursuant to 37 C.F.R. § 42.73(b). Ar-threx appeals. Because we conclude that the Board acted within the scope of the regulation, we affirm.
(4) Abandonment of the contest.
37 C.F.R. § 42.73(b) (emphasis added). In order to avoid the entering of an adverse judgment pursuant to 37 C.F.R. § 42.73(b), the Preliminary Response stated that "[b]y filing the statutory disclaimer, Arthrex, Inc. is not requesting an adverse judgment." J.A. 17.
After further briefing, the Board entered an adverse judgment against Arthrex pursuant to 37 C.F.R. § 42.73(b), concluding that "our rules permit the Board to construe a statutory disclaimer of all challenged claims as a request for adverse judgment, even when the disclaimer occurs before the Board has entered a decision on institution." Smith & Nephew, Inc. v. Arthrex, Inc., No. IPR2016-001917, slip op. at 6 (P.T.A.B. Sept. 21, 2016).
When the Board entered an adverse judgment, an estoppel effect attached, as 37 C.F.R. § 42.73(d)(3)(i) precludes a patent owner "from taking action inconsistent with the adverse judgment, including obtaining in any patent . . . [a] claim that is not patentably distinct from a finally refused or canceled claim." At the time of the adverse judgment, Arthrex had two pending continuation patent applications that this estoppel provision would impact. Those two applications have since issued as patents. Arthrex recently filed another continuation application, which remains in prosecution and therefore is affected by the adverse judgment.
Arthrex timely appealed. Smith & Nephew and Ar-throCare Corp., the petitioners in the IPR proceeding, moved to dismiss the appeal for lack of subject-matter jurisdiction, arguing that 35 U.S.C. § 319 (providing for appeal from a "final written decision") created the exclusive means of appeal and that the Board did not issue a "final written decision" as required by that section. This court denied the motion, directing the parties "to address in their briefs whether the order on appeal is reviewable as a final decision." Arthrex, Inc. v. Smith & Nephew Corp., No. 17-1239, Dkt. No. 18 (Fed. Cir. Jan. 31, 2017).
The first issue is whether the adverse final judgment is appealable. There is no contention that the statutory appeal-bar provision applies here. See 35 U.S.C. § 314(d) (stating that institution decisions "shall be final and nonappealable"); see also Cuozzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131, 2139-42 (2016). Rather, the question is whether a statute provides a right to appeal.
We approach this question in light of the general rule that judicial review is presumed to be available with respect to final agency action. The Supreme Court has recognized "the strong presumption that Congress intends judicial review of administrative action." Mach Mining, LLC v. EEOC, 135 S.Ct. 1645, 1651 (2015); see also Cuozzo, 136 S.Ct. at 2140; Administrative Procedure Act § 10, 5 U.S.C. §§ 701, 704 (providing judicial review for final agency actions unless precluded by statute).
Here, the language of 28 U.S.C. § 1295 appears to provide for appeal. Section 1295(a)(4)(A) provides the Federal Circuit with jurisdiction over "an appeal from a decision of-the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to . . . inter partes review under title 35." The adverse judgment in this case is a decision of the Board, and the decision is "with respect to" an inter partes review pro- ceeding. The judgment is also final, as the judgment terminated the IPR proceeding. See In re Arunachalam, 824 F.3d 987, 988 (Fed. Cir. 2016) (holding that § 1295(a)(4)(A) incorporates a finality requirement); Copelands' Enters., Inc. v. CNV, Inc., 887 F.2d 1065, 1067-68 (Fed. Cir. 1989) (en banc) (same).
Smith & Nephew argues, however, that the more specific reference to appeal rights in § 319 should govern; that § 319 only provides for review from a final written decision; and that there has been no final written decision here. Section 319 provides, "A party dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) may appeal the decision pursuant to sections 141 through 144." 35 U.S.C. § 319.
On its face, § 319 does not cabin the appeal rights conferred by § 1295. However, Smith & Nephew points to language in our previous decision, St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014). St. Jude stated that § 1295(a)(4)(A) "is most naturally read to refer precisely to the Board's decision under section 318(a) on the merits of the inter partes review, after it 'conducts' the proceeding that the Director has 'instituted.'" Id. at 1376. It also stated "[t]he final written decision is the only decision that the statute authorizes a dissatisfied party to appeal." Id. at 1374. However, St. Jude did not involve a similar situation, and the availability of appeal of final adverse judgment decisions was not directly addressed in that case.

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