On January 8, 2018, the Court of Appeals for the Federal Circuit, sitting en banc, issued a majority opinion holding that a determination made by the PTO concerning whether a petition for inter partes review (IPR) is time-barred under 35 U.S.C. § 315(b) is subject to judicial review. Specifically, the Federal Circuit majority held that the limit on judicial review in 35 U.S.C. § 314(d), pertaining to institution decisions, does not apply to time-bar determinations under 35 U.S.C. § 315(b).
A decision by the Patent Trial and Appeals Board (PTAB) on whether or not to institute an IPR is generally not appealable. Institution of an IPR is governed by 35 U.S.C. § 314. Section 314(a) establishes the threshold for instituting IPRs (“a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged”), and § 314(d) provides that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Id.
In addition, under § 315(b), an IPR cannot be instituted if the petition “is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” This is referred to as the time-bar. A Federal Circuit panel decision had previously held that a time-bar determination by the PTAB was not appealable under § 314(d). Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015). Achates was decided before the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).
In the present case, Petitioner Broadcom filed three IPR petitions against three different patents. Prior to institution, Patent Owner Wi-Fi One sought discovery as to whether privity existed between Broadcom and defendants from an earlier litigation involving those patents, in order to establish that the petitions were time-barred under § 315(b). The PTAB denied discovery and instituted the IPRs. At the conclusion of review, the PTAB issued final written decisions finding the challenged claims unpatentable. In the final written decisions, the PTAB stated that Wi-Fi One had not established privity between Broadcom and the defendants in the earlier litigation.
The Court’s Opinions
The Federal Circuit majority decision, written by Judge Reyna, and joined by Judges Prost, Newman, Moore, O’Malley, Wallach, Taranto, Chen and Stoll, overturned the decision in Achates. Doing so required addressing the Supreme Court’s intervening decision in Cuozzo. Cuozzo precluded appellate review of institution decisions under § 314(a), as well as matters “‘closely related’ to the § 314(a) determination.” However, as the Federal Circuit majority noted, Cuozzo acknowledged the “strong presumption” favoring judicial review of administrative decisions, such that judicial review should be available unless Congress provides a “clear and convincing” indication that it intends to prohibit such review. The Federal Circuit majority also noted that, while § 314(d) prevents judicial review of institution determinations, its express language states that judicial review is prohibited on the Director’s determination “under this section.” The majority concluded that “under this section” means the Director’s threshold determination to institute the IPR under § 314(a). The majority stated that “subsection (a) does only two things: it identifies a threshold requirement for institution, and…it grants the Director discretion not to institute even when the threshold is met.”
The Federal Circuit majority then proceeded to hold that the time‑bar provision in § 315(b) is not closely related to the Director’s determination on institution, and that that the Supreme Court’s ruling in Cuozzo “strongly points toward unreviewability being limited to the Director’s determinations closely related to the preliminary patentability determination or the exercise of discretion not to institute.” The majority concluded that § 315(b) is a statutory limit on an agency’s authority, which is a type of issue that courts have historically reviewed.
The Federal Circuit majority limited its decision as to the appealability of § 315(b) time-bar determinations, stating that it “does not decide today whether all disputes arising from §§ 311–14 are final and nonappealable.” The Federal Circuit majority also did not reach the merits of the time-bar determination, instead remanding the matter to the PTAB for further consideration.
Judge O’Malley filed a concurring opinion, reasoning that the reviewability of a § 315(b) time-bar determination “turns on the distinction between the Director’s authority to exercise discretion when reviewing the adequacy of a petition to institute an [IPR] and authority to undertake such a review in the first instance. If the [PTO] exceeds its statutory authority by instituting an IPR proceeding under circumstances contrary to the language of § 315(b), our court, sitting in its proper role as an appellate court, should review those determinations.”
Judge Hughes filed a dissenting opinion, which was joined by Judges Lourie, Bryson and Dyk. According to Judge Hughes, “the petition’s timeliness under § 315(b) is part of the Board’s institution decision, and is therefore barred from judicial review…. The question of timeliness does not go to the merits of the petition, nor does it become part of the PTO’s final determination. Instead, the PTO evaluates timeliness within the context of the PTO’s preliminary determination of whether to institute IPR at all. Accordingly, timeliness under § 315(b) is plainly a question ‘closely tied’ to the Director’s decision to institute.”
Of note, this dispute reached the Federal Circuit through an appeal of a “final written decision” on the merits, after institution. Section 319 provides that a party dissatisfied with a “final written decision” may appeal. The statute, however, does not provide an explicit path for appealing a decision denying institution. Thus, a question remains as to what happens when the PTAB finds a time-bar exists and denies institution, such that no final written decision ever issues.