En banc Fed Circuit: PTAB decisions on timeliness can be appealed

Parties can file court challenges against determinations by the Patent Trial and Appeal Board (PTAB) on whether an inter partes review (IPR) petition is timely, the US Court of Appeals for the Federal Circuit ruled yesterday.

In a 9-4 decision, the court recognised the “strong presumption in favour of judicial review of agency actions”, finding that the time-bar determinations under section 315(b) are appealable.

Under 35 USC, section 315(b), an IPR can’t be instituted if the petition is filed more than one year after the date on which the petitioner is served with a patent infringement complaint.

The court agreed to a rehearing en banc in the case, Wi-Fi One v Broadcom Corporation, in January last year.

The patents, which are now owned by Wi-Fi One, were originally owned by Ericsson.

Ericsson had sued a number of defendants for infringement of the three patents in 2010 at the US District Court for the Eastern District of Texas. Broadcom was not one of the defendants.

Broadcom petitioned for IPRs of US patent numbers 6,772,215; 6,466,568; and 6,424,625 in 2013.

Before the institution decision, Wi-Fi One argued that Broadcom was barred from seeking review of the patent and filed a supporting motion seeking discovery.

Wi-Fi One claimed that Broadcom was in privity (a legal relationship) with the defendants in the Eastern District of Texas litigation, meaning that the director of the US Patent and Trademark Office (USPTO) was prohibited from instituting review.

But the PTAB denied Wi-Fi One’s motion and, in a final written decision, found that Broadcom was not related to the defendants.

Broadcom appealed to the Federal Circuit, arguing that the court should reverse or vacate the board’s time-bar determinations.

Wi-Fi One claimed that Achates Reference Publishing v Apple, a case that prevents judicial review by the courts in instances concerning IPR timeliness, was implicitly overruled by the US Supreme Court decision Cuozzo Speed Technologies v Lee.

The Federal Circuit disagreed with Wi-Fi One’s interpretation in September 2016, holding that it sees “nothing in the Cuozzo decision that suggests Achates has been implicitly overruled”.

Wi-Fi One then filed a petition for rehearing and rehearing en banc in three appeals.

The Federal Circuit said that a poll was requested and taken, and the court decided that the appeal warrants en banc consideration.

Yesterday, January 8, Circuit Judge Jimmie Reyna handed down the decision of the court.

He explained that to overcome the presumption that agency actions should be reviewed, Congress must “clearly and convincingly indicate its intent to prohibit judicial review”.

The Federal Circuit found no such indication and held that the time-bar determinations are appealable, overruling Achates’s contrary conclusion and remanding the cases to the panel for further proceedings.

“We find no clear and convincing indication in the specific statutory language in the America Invents Act (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 section 315(b) time-bar determinations,” he noted.

Circuit Judge Todd Hughes, who was joined by Circuit Judges Lourie, Bryson and Dyk, voiced the opinion of the dissenting judges.

He said that Congress barred judicial review of the USPTO director’s decision to institute IPR in section 314(d).

Hughes added that the majority opinion limits this prohibition to the director’s assessment of the criteria for instituting review covered in section 314, not to other preliminary determinations, such as whether the petition was filed in time.

“I do not agree with such a narrow reading of the statute, which not only contradicts the statutory language, but is also contrary to the Supreme Court’s construction of that language in Cuozzo,” he said.

Douglas Cawley, principal in the Dallas office of McKool Smith and Wi-Fi One’s representative, said that this was the first time the Federal Circuit has reined in the PTAB’s decision-making about instituting reviews.

“Without this decision, the PTAB would be free to ignore the statutory time-bar completely,” he said.

Cawley added that there are currently several cases on appeal that question the PTAB’s authority to revoke patent rights and that this decision demonstrates that the courts have become “more willing to scrutinise the authority of the PTAB”.

Raghav Bajaj, an associate at Haynes and Boone, expects the number of appeals to increase slightly, although not significantly, because appeals of issues under section 315(b) generally accompany an appeal of the PTAB’s substantive patentability findings.

“Because parties can only appeal a final written decision, a patent owner who receives an adverse final written decision from the board, but wins at the Federal Circuit on a section 315(b) issue, may only have a pyrrhic victory, as the claims of its patent were still held to be anticipated or obvious by the board,” cautioned Bajaj.

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