Source: http://www.lawjournalnewsletters.com/sites/lawjournalnewsletters/2018/02/01/federal-circuit-holds-that-ptabs-determination-on-whether-the-one-year-time-bar-is-triggered-in-inter-partes-review-is-reviewable-on-appeal/
Timestamp: 2018-02-24 10:17:27
Document Index: 669989373

Matched Legal Cases: ['§315', '§294', '§315', '§315', '§314', '§315', '§315', '§315', '§315', '§314', '§315', '§315', '§315', '§315', '§315', '§314', '§315', '§315', '§315', '§315', '§315']

The inter partes review (IPR) process for challenging patent validity before the Patent Office’s Patent Trial and Appeal Board (PTAB) has been around for over five years. During that time, the process has become a widely utilized and popular venue that allows defendants to strike back against patentees when they are sued for infringement. Section 315(b) imposes an important limit on the IPR process. It requires that all IPR petitions be filed within one year of the petitioner being served with a “complaint alleging infringement of the patent.” In other words, those sued for infringement must petition the PTAB for IPR within one year of being sued. Any petitions filed after one year are statutorily barred. Importantly, the time-bar of §315(b) extends beyond the named petitioner to a “real party in interest, or privy of the petitioner.”
Many patent owners have challenged the PTAB’s decision to conduct IPR on grounds that the petitioner was time-barred, or in privity with a time-barred party, or that a real party in interest was time-barred. Still others have challenged whether “complaints” in other types of actions, such as arbitrations under 35 U.S.C. §294 or International Trade Commission investigations, could trigger §315(b)’s one-year bar. Prior to the Federal Circuit’s recent en banc decision in Wi-Fi One, however, the PTAB’s determinations on §315(b) were unreviewable on appeal under a case entitled Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015). Achates held that another provision of the statute — 35 U.S.C. §314(d) — precluded review of the PTAB’s §315(b) determinations because decisions to institute IPR are non-appealable.
The patentee in Wi-Fi One challenged the correctness of the Achates decision, arguing that the time-bar of §315(b) was a hard limit on the PTAB’s authority to conduct IPR and, as such, its determinations with respect to that provision should be judicially reviewable on appeal. The Federal Circuit sitting en banc agreed with Wi-Fi One and overruled Achates. The impact of Wi-Fi One is that patent owners who properly challenge the PTAB’s decision to institute IPR can appeal an adverse decision with respect to §315(b) to the Federal Circuit. This means that the Federal Circuit now has jurisdiction to consider whether the PTAB has properly interpreted the scope and applicability of §315(b), as well as whether the PTAB’s assessments on privity and real party in interest status are legally correct and supported by substantial evidence.
While the majority of the Federal Circuit took this view, four judges dissented. In its analysis of the issue, the majority first considered a 2016 Supreme Court’s decision that interpreted the no-appeal provision of §314(d), Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016). In light of the Supreme Court’s reasoning in Cuozzo, the majority evaluated how the §315(b) time-bar differs from more discretionary aspects of the PTAB’s decision making on the merits at the institution stage. The majority held that the PTAB’s assessment of §315(b) is not discretionary, like its consideration of the merits, and is therefore “not akin to either the non-initiation or preliminary-only merits determinations for which unreviewability is common in the law, in the latter case because the closely related final merits determination is reviewable.” Wi-Fi One, 2018 WL 313065 at 6.
The majority opinion reasoned that there is a strong presumption in the law that agency decisions are judicially reviewable: “We find no clear and convincing indication in the specific statutory language in the AIA, the specific legislative history of the AIA, or the statutory scheme as a whole that demonstrates Congress’s intent to bar judicial review of §315(b) time-bar determinations ….” Id. at 5. And since the time-bar of §315(b) was a statutory “condition precedent to the Director’s authority to act” and “[e]nforcing statutory limits on an agency’s authority to act is precisely the type of issue that courts have historically reviewed,” the majority opinion held that “time-bar determinations under §315(b) are reviewable by this court.” Id. at 7. The dissenting opinion disagreed on grounds that §314(d) should be construed more broadly than the majority held and is “absolute,” thus precluding review on appeal. Id. at 12.
While the majority opinion expressly limits the scope of its holding to the PTAB’s time-bar determinations under §315(b), the reasoning in Wi-Fi One could have broader implications. Specifically, the majority’s reasoning indicates that questions touching on the PTAB’s authority are fundamentally different from questions that go to the merits or are committed, by statute, to the agency’s discretion. Consequently, this development in the law creates more opportunities to argue that the PTAB exceeded its statutory authority by instituting a review than were previously thought to be viable under Cuozzo. At a high level, Wi-Fi One suggests that the Federal Circuit is inclined to review the PTAB’s interpretation of the statutory limits on its own authority.
While the en banc holding in Wi-Fi One does not mean that all time-bar challenges under §315(b) will be successful — or even that the PTAB erred in its §315(b) determination in Wi-Fi One — it does mean that patent owners who have properly raised and preserved a challenge under §315(b) will have their day in court if the PTAB decides to institute IPR. There are likely to be informative developments on the merits of Wi-Fi One’s §315(b) challenge following its remand to the original Federal Circuit panel, as well as in the future as more parties seek judicial review.
Jon E. Wright is a Co-Chair of the Appellate and Patent and Trademark Office practices at Sterne, Kessler, Goldstein & Fox PLLC. He focuses primarily on contested proceedings before the PTAB, and on appeals of those cases to the United States Court of Appeals for the Federal Circuit. Pauline M. Pelletier is an Associate in the Litigation Group at Sterne, Kessler, Goldstein & Fox PLLC. She focuses her practice on patent litigation before the courts and on contested proceedings before the PTAB, as well as on appeals to the United States Court of Appeals for the Federal Circuit.