US Supreme Court SAS ruling: a ‘mess’ for IPRs
Limiting the discretion of the Patent Trial and Appeal Board (PTAB) in relation to inter partes reviews (IPRs) is a game-changing decision which creates a procedural “mess”, one lawyer has claimed.
The US Supreme Court’s 5-4 ruling in SAS Institute v Iancu was delivered yesterday, April 24.
In a much-awaited judgment, the court confirmed that the PTAB cannot choose to review only some challenged claims in an IPR—it must assess them all.
Also yesterday, the Supreme Court handed down its decision in Oil States Energy Services v Greene’s Energy Group, in which it confirmed that IPRs do not violate the Constitution and that the PTAB has the authority to invalidate patents.
Of the two, the SAS decision is the “game changer”, said Ronald Abramson, partner at Lewis Baach Kaufmann Middlemiss. He believes the decision “will likely go down as one of the more unfortunate IP decisions in Supreme Court history”.
Scott McBride, shareholder at McAndrews IP, noted that the decision leaves intact the PTAB’s discretion not to institute IPRs at all. He said the ruling is unsurprising based on the language of the America Invents Act (AIA) statute but “somewhat surprising” in the context of the practical workings of the PTAB.
Elaborating, Matt Cutler, principal at Harness, Dickey & Pierce, explained that the language of the statute had been “contradicted by the regulations implemented by the US Patent and Trademark Office, which give the board discretion to institute all or some of the challenged claims” in IPRs.
By narrowing the discretion of the PTAB the Supreme Court has delivered a decision which “impacts a frequent practice of the board”, added Celine Crowson, partner at Hogan Lovells.
Abramson said the SAS ruling “truly creates a mess” by potentially creating “a massive amount of needless work”, by changing the entire strategy and manner in which IPR proceedings are conducted by the PTAB.
He believes the decision could “multiply the proceedings in IPRs and up the ante for all involved”, which is the opposite of what Congress intended when it created the PTAB via the AIA.
For example, Abramson explained that the PTAB could turn down an entire IPR petition if one challenge appears to lack merit, or it could create more work for itself by ruling on each and every claim in every IPR, which makes “vastly more work for everyone in what was designed to be a streamlined proceeding.
Though there may be some “initial inefficiencies” in handling pending cases relating to partially-instituted IPR petitions, Brent Babcock, partner at Knobbe Martens, said he “wouldn’t equate that to inefficiency”. Rather, there will simply be “longer and perhaps more detailed filings and decisions”, he suggested.
McBride believes the decision now provides “even more incentive” for petitioners to be thorough in their petitions, to avoid any estoppel impact of a final written decision which turns out to be on the weakest grounds.
Babcock added that petitioners will need to consider whether to file an AIA challenge more carefully because the potential adverse consequences have been enhanced.
To date, IPR estoppel has only been available to claims which have gone through an IPR trial. However, as explained by Cutler, “this decision will ensure that all claims will go through the trial, thus ensuring that estoppel will (at least to some extent) apply to all challenged claims”.
“As a result, petitioners may have more of an incentive to file more petitions per patent” or even not to challenge certain claims at all by IPR, McBride added.
Whether the SAS ruling will have a retroactive effect on past decisions in PTAB proceedings is currently unknown, but it has the potential to cause a “massive upset to otherwise resolved cases”, Abramson noted.
Crowson said that “an open question remains as to how this decision impacts ongoing cases”, which is another concern for many petitioners and patent owners.
Ultimately, Babcock explained that the board must determine how to comply with the Supreme Court’s decision in SAS and the US Court of Appeals for the Federal Circuit must decide how to handle the “many pending appeals from PTAB cases that received only partial institution”.
“We expect to receive some guidance from the board on these issues in the coming weeks”, Babcock added, though he believes that there will be no recourse for cases which have already received a final judgment.
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