Source: http://ipr-pgr.com/federal-circuit-weighs-in-on-3-aspects-of-ipr-proceedings-in-synopsis-v-mentor-graphics/
Timestamp: 2018-04-22 06:19:43
Document Index: 32237983

Matched Legal Cases: ['§ 318', '§ 314', '§ 318', '§ 316', '§ 316', '§ 316']

Federal Circuit Weighs in on 3 Aspects of IPR Proceedings in Synopsis v. Mentor Graphics | Welcome to IPR-PGR.com
Federal Circuit Weighs in on 3 Aspects of IPR Proceedings in Synopsis v. Mentor Graphics
Today in Synopsys Inc. v. Mentor Graphics, the Federal Circuit answered several new questions about the PTAB’s duties and the Federal Circuit’s powers of review during and after an inter partes review.
The first—and perhaps most significant—issue in this appeal was whether the PTAB must give a decision regarding all claims that the petitioner challenges. In this case, Synopsys had challenged 19 of Mentor Graphics claims in US 6,240,376, but the PTAB only instituted review on 12 of those claims, and only found 3 of those to be unpatentable in the final written decision. Synopsys appealed, arguing not only that the nine surviving should be held unpatentable, but also that the PTAB was statutorily obliged to address the seven claims on which IPR had not even been instituted. The logic of Synopsis’ argument is that 35 U.S.C. § 318(a) provides that the PTAB “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner… .” Synopsys reasoned that because it had challenged 19 claims, the PTAB was obliged to rule on 19 claims, even if the PTAB had only granted review on 12 claims. The majority opinion—authored by Judge Dyk—dismissed this argument because even Synopsys admitted that it would make little sense to have the PTAB pass on claims about which a full record had not been developed. The majority opinion also noted that § 314(a) speaks of “claims challenged in the petition,” while § 318(a) speaks of a “claim challenged by the petitioner.” The majority cited Bailey v. United States, 516 U.S. 137, 146 (1995) for the proposition that when Congress uses two different phrases, this suggests that the two are to be given different meanings (likening “challenged by the petitioner” and “challenged in the petition” to “used” and “intended to be used” in Bailey).
In other words, the majority held that both the plain text of the statute and common-sense considerations regarding statutory purpose favor the PTAB being only obliged to pass on claims for which IPR was instituted. The majority also noted that even if the statutory text had been ambiguous, Congress had committed the implementation of the America Invents Act (AIA) trial procedures to the USPTO’s expertise, so the USPTO’s implementing regulations are entitled to Chevron deference. The USPTO interprets its regulations as not requiring final decisions regarding claims on which IPR was never instituted, and this is further reason why Synopsys’ appeal fails. This is yet another case showing the Federal Circuit’s great deference to the USPTO’s decisions about how IPR trials are supposed to work. See, In re Cuozzo Speed Tech., 793 F.3d 1268, 1279 (Fed. Cir. 2015); Ethicon Endo-Surgery v. Covidien LP, 2016 U.S. App. LEXIS 473 at *23 (Fed. Cir. Jan. 13, 2016).
Another Synopsys argument for why all challenged claims need to be addressed in one IPR is that IPRs are supposed to resolve invalidity contests concerning documentary prior art (i.e., patents and printed publications) quickly and efficiently. If the PTAB may address some challenged claims but not others, this frustrates the Congressional intention to bring an expedited resolution to novelty/obviousness issues. The majority held that there is “no inconsistency” between the intended efficiency and the piecemeal nature of the PTAB’s review here, because the statute plainly contemplates the possibility of novelty/obviousness contests in both an IPR and a corresponding district court trial (e.g., where some invalidity contentions are based on documentary prior art, and others are based on prior public use). This drew a vigorous dissent from Judge Newman, who made it clear that she thinks that an IPR is supposed to be something that one does instead of—not in addition to—litigating novelty/obviousness in court.
A second interesting question at stake in this case was whether Mentor Graphics should have been allowed to enter a substitute claim set. Just as in the overwhelming majority of AIA trials in which the patent owner seeks to amend, the PTAB refused the proposed amendments. The Federal Circuit has twice affirmed the USPTO’s regulations regarding amendments in IPRs. Microsoft Corp. v. Proxyconn Inc., 789 F.3d 1292, 1303 (Fed. Cir. 2015); and Prolitec Inc. v. ScentAir Techs., 807 F.3d 1353, 1363 (Fed. Cir. 2015). Mentor Graphics attempted to distinguish these cases on the logic that neither had squarely addressed the issue of whether the USPTO’s approach to IPR amendments is consistent with the statutory provision (35 U.S.C. § 316(e)) that “the petitioner shall have the burden of proving a proposition of unpatentability,” (emphasis added). The majority was not impressed with this argument, and noted that § 316(e) begins with the introductory phrase “[i]n an inter partes review instituted under this chapter… .” The majority considered that “instituted under this chapter” means that the only claims for which the petitioner must prove unpatentability are the claims on which review was initially granted. Because Mentor Graphics’ substitute claims were not in the case at the time of institution, the burden allocation in § 316(e) does not apply to Mentor Graphics’ substitute claims. Once again, Judge Newman dissented from this part of the opinion, just as she had done in Prolitec, 807 F.3d at 1365.
Finally, the last interesting question at stake in this case was whether district court review of an IPR decision is available under the Administrative Procedures Act (APA). As this blog recently noted, this question has not been definitively answered, but what little evidence we have suggests that APA review is not available. Synopsys had filed parallel proceedings—challenging the PTAB’s decision not to review all 19 challenged claims—before both the Federal Circuit and the U.S. district court for the Eastern District of Virginia. The district court dismissed this challenge because it concluded that the AIA strips courts of jurisdiction to hear APA challenges to IPR decisions. The Federal Circuit held that because its own ruling here disposed of all the same issues that were at stake in the APA challenge before the district court, that the APA appeal was moot. Therefore, the Federal Circuit dismissed the APA appeal and vacated the district court’s ruling on the subject. Judge Newman also dissented from this holding. Judge Newman considered that the district court was correct—i.e., that the AIA really does strip courts of the authority to hear APA challenges to IPR decisions—and that the district court’s ruling should be affirmed, not vacated. In other words, while the subject of APA review remains technically an open question, this case stands as further evidence that APA review is not available from IPR decisions.
Author Matt CutlerPosted on February 10, 2016 February 11, 2016 Categories Appeal, Federal Circuit Decisions, Final Written Decision, Motion to AmendTags appellate review, Final Written Decision, Motion to Amend
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