Source: https://www.iplawalert.com/2018/04/25/while-the-pto-director-has-discretion-to-institute-an-ipr-the-board-must-review-all-petitioned-claims-upon-institution/
Timestamp: 2019-02-21 00:12:33
Document Index: 653919711

Matched Legal Cases: ['§318', '§318', '§318', '§312', '§314', '§314', '§314', '§318']

While the PTO Director has Discretion to Institute an IPR, the Board Must Review All Petitioned Claims Upon Institution | IP Law Alert
The U.S. Supreme Court in SAS Institute v. Iancu held that when the Patent Trial and Appeal Board (PTAB or “the Board”) institutes an inter partes review (IPR), it must decide the patentability of all claims challenged in the original petition. Here, in a case with wide-reaching implications, the questions centered on the United States Patent and Trademark Office (USPTO) Director’s discretion and subsequent control of an IPR. In the underlying case, SAS filed a petition for IPR alleging that all 16 claims of a particular patent were unpatentable. The Board instituted review on nine of the challenged claims and denied review on the rest, eventually finding eight of the instituted claims unpatentable in a final written decision. The Federal Circuit rejected SAS’s argument on appeal that 35 U. S. C. §318(a) required that the Board decide the patentability of all 16 claims challenged in the petition. The Supreme Court, in a 5-4 opinion authored by Justice Gorsuch, reversed the Federal Circuit, striking down partial IPR decisions.
The Supreme Court held that the plain text of §318(a) conclusively answers the question presented. The section 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.” (emphasis added). The word “shall,” according to the majority, imposes a “nondiscretionary duty.” And the word “any” carries an “expansive meaning,” implying “every member of the class or group.” Thus, 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.” Because SAS challenged all 16 claims of the particular patent, the Board in its final decision had to address the patentability of all 16 claims.
The majority held that nothing in the statutory scheme gives the Board the power of “partial institution.” Rather, Congress envisioned a system in which the petitioner will seek an inter partes review guided by a petition describing “each claim challenged” and “the grounds on which the challenge to each claim is based.” §312(a)(3). According to the Court, it is the petitioner, not the Board, who gets to define the contours of the proceeding. Moreover, §314(b) says the Board must decide “whether to institute an inter partes review . . . pursuant to a petition.” The section “indicates a binary choice—either institute review or don’t.” Under §314(a), once the Board decides that the petitioner is likely to succeed on “at least 1 of the claims challenged in the petition,” it does not matter whether the petitioner is likely to prevail on any additional claims; the Director need not even consider any other claim before instituting review. Per the majority, the statute anticipates “a regime where a reasonable prospect of success on a single claim justifies review of all.” And while it is true that “§314(a) invests the [Board] with discretion on the question whether to institute review,” it does not follow that the statute affords the Board discretion regarding what claims that review will encompass.
The majority rejected the Government’s policy arguments 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.” Such policy determinations, according to the majority, should be made by Congress. Justice Breyer, joined by three others, dissented. The dissent argued that, under the Chevron doctrine, §318(a) left a gap that Congress implicitly delegated authority to the USPTO to fill, and the USPTO’s interpretation of the statutory phrase “any patent claim challenged by the petitioner” was reasonable.
SAS Institute will implicate all avenues of patent litigation. The decision gives Director Andrei Iancu an opportunity to implement his vision for the USPTO. As Gibbons reported last week, Director Iancu has vowed to increase the predictability of IPRs and other post-grant proceedings. Under his leadership, the USPTO will have broad discretion in applying SAS Institute to the rules and procedures for instituting and conducting post-grant proceedings. At the district court level, various courts have held that, when the PTAB does not institute IPR of a claim, an accused infringer is not prevented from making similar invalidity arguments in court. Estoppel, however, attaches to final decisions. SAS Institute will change this analysis, potentially broadening the applicability of IPR estoppel. At the appellate level, challengers are generally not able to appeal institution decisions that go against them but are, in most circumstances, able to appeal final decisions from the Board. Litigants will thus have to consider SAS Institute in crafting their overall strategy at the PTAB and trial court and on appeal.
Gibbons will continue to monitor the impact of the SAS decision, including any legislative action, and provide periodic updates when applicable.