2018 in review – Inter Partes Review Developments, Part 1 of 2
Oil States and PTAB’s Authority
In one of the most heavily anticipated, and in some ways controversial, decision of the year, the Supreme Court ruled in Oil States Energy Services v. Green’s Energy Group to uphold the Patent Trial and Appeal Board’s (PTAB) authority to invalidate patents by inter partes review.
Inter partes review was established in 2011 by the Leahy-Smith America Invents Act (AIA) as an additional avenue for third party challenges to patent validity. Previously, the primary vehicle for challenging a patent was litigation. Whether inter partes review has helped or hindered innovation has been the subject of much debate in the intervening years.
In Oil States, a District Court had found Oil States’ patent valid while a parallel PTAB proceeding found it invalid. Oil States appealed to the Federal Court, arguing that PTAB’s authority was unconstitutional. The Federal Court affirmed the PTAB’s decision, which led to the Supreme Court petition in the October 2017 term. Nearly 60 amicus briefs were filed.
In a 7-2 decision, the Supreme Court invoked the public-rights doctrine to determine PTAB’s authority as constitutional, and even reached back as far as 18th-century English law doctrine regarding the practice of Privy Council to vacate patents, which the Court found similar to inter partes review.
SAS Institute and Partial Inter Partes Review
In SAS Institute v. Ianco, the Court considered whether the PTAB may partially institute inter partes review (i.e. whether it can rule on only some of the claims challenged in a petition). Though it received less attention than Oil States, the decision has further reaching implications, as it not only effects the PTAB’s procedural practices, but also raises a host of strategic questions for petitioners.
SAS had filed an inter partes review petition of a ComplementSoft software patent that included one independent claim and 15 dependent claims. The PTAB instituted partial review for only nine of the claims. SAS appealed this outcome to the Federal Circuit, which subsequently denied SAS’s statutory challenge and their request for en banc. SAS then sought Supreme Court review and had its petition for certiorari granted in May 2017.
In a 5-4 decision, the Court, using a textual analysis, ruled that the PTAB is required to address every claim challenged in a petition. The Court also rejected a policy argument regarding the impact of this decision on efficiency, stating that “Congress’s prescribed policy here is clear: the petitioner in an inter partes review is entitled to a decision on all the claims it has challenged.
In the aftermath of SAS, there were many questions as to how the Federal Circuit and the PTAB would address proceedings already subject to partial review and how the decision would impact the operations of the PTAB.
The PTAB swiftly took action and issued a set of guidelines confirming that, going forward, as required by the SAS decision, it would institute as to all claims included in a petition or none. It also went one step beyond the express holding of SAS, confirming that it would also institute proceedings as to all grounds included in the petition. The PTAB further outlined a set of procedures for addressing pending proceedings subject to partial institution depending on the stage of the proceeding.
The Federal Circuit also had a number of pending appeals involving partial institution that had to be addressed. In a series of decisions, the Federal Circuit drew a distinction between appeals where at least one party requested remand following SAS versus those where neither party requested remand. If a party requested remand to address non-instituted claims or grounds, the Federal Circuit would remand but declined to do so sua sponte. (Compare Polaris Indust. Inc. v. Arctic Cat, Inc. with PGS Geophysical v. Iancu.)
While the Federal Circuit and the PTAB have dealt with some of the initial procedural questions that the SAS decision raised, the strategic implications for petitions and patent owners will continue to play out as we enter 2019.
You can read our more detailed analyses of these cases and their impact on the PTAB and inter partes review here. Our next post will discuss the impacts of the Click-to-Call Technologies case and the Saint Regis Mohawk Tribe case on inter partes review.