PTAB Decisions Regarding Applicability of IPR Petition Time Bar Are Not Appealable
The U.S. Supreme Court decided in Thryv, Inc. v. Click-to-Call Techs., LP that decisions by the USPTO’s Patent Trial and Appeal Board (“PTAB”) regarding applicability of the America Invent Act’s 1-year time bar to filing a petition for Inter Partes Review are not appealable. While the patent owner in Thryv was thus held to be unable to challenge a PTAB institution decision that ultimately led to cancellation of its patent claims, the Court’s holding in Thryv equally precludes petitioners’ appeals of PTAB “no institution” decisions that are based on the 1-year time bar provision.
The America Invents Act of 2012 (“AIA”) established the post-grant patent challenge known as Inter Partes Review (“IPR”). The Director of the USPTO is authorized to “determine whether to institute an inter partes review” by the AIA, 35 U.S.C. § 314(b). Among several conditions that must be satisfied, the AIA states that petition for IPR may not be granted by the Director, and the IPR “trial” may not be “instituted,” if more than 1 year has passed since the petitioner, real party in interest, or privy of the petitioner was served with a complaint alleging infringement of the challenged patent. 35 U.S.C. § 315(b). Subsection (d) of Section 314 of the statute, titled “Institution of inter partes review,” states: “NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” The Director has delegated the authority to make IPR institution decisions to the USPTO’s Patent Trial and Appeal Board (“PTAB”).
In Thryv, Inc. v. Click-to-Call Techs., LP, No. 18-916, ___ S.Ct. ___, 2020 WL 1906544 (Apr. 20, 2020) the U.S. Supreme Court held that decisions by the PTAB regarding applicability of the AIA’s 1-year time bar against filing a petition for IPR are not appealable. While the patent owner in Thryv was thus held to be unable to challenge a PTAB institution decision that ultimately led to cancellation of its patent claims, the Court’s holding in Thryv equally precludes petitioners’ appeals of PTAB “no institution” decisions that are based on the 1-year time bar provision.
In 2013, Thryv filed a petition for IPR of a Click-to-Call patent on technology for randomizing phone calls. The patent owner argued the petition was time-barred because one of Thryv’s predecessor companies had been sued for infringing the patent in 2001. The complaint in that 2001 lawsuit had been voluntarily dismissed without prejudice. The PTAB initially decided that such a voluntarily dismissed infringement complaint did not start the 1-year time bar clock running, and thus the IPR was instituted and resulted in cancellation of many claims of Click-to-Call’s patent. Click-to-Call appealed the PTAB’s final written decision, arguing on appeal that Thryv’s IPR petition was untimely as filed some twelve years after Thryv’s predecessor had been served with a complaint for infringement. Thryv argued that the PTAB’s determination of timeliness of its petition under 35 U.S.C. § 315(b), as part of its IPR institution decision, was nonappealable according to 35 U.S.C. § 314(d). The Court of Appeals for the Federal Circuit (“CAFC”) disagreed and, in an en banc decision, held that the PTAB’s decision regarding the 1-year time bar was appealable and, moreover, that Thryv’s petition was time-barred by virtue of the 2001 complaint, regardless of what happened in that lawsuit after the complaint was served on Thryv’s predecessor. As a result, the CAFC vacated the PTAB’s decision cancelling Click-to-Call’s patent claims.
Upon Thryv’s further appeal, the Supreme Court has now held that the PTAB’s consideration of the 1-year time bar question is, indeed, nonappealable as per the language of 35 U.S.C. § 314(d). The CAFC’s contrary en banc decision was vacated with instructions to dismiss the appeal. The Court explained that by the plain text of the statute, “a contention that a petition fails under [the 1-year time bar of] § 315(b) is a contention that the agency should have refused ‘to institute an inter partes review’” and therefore is barred by § 314(d). Although § 314(d) bars appeal of the PTAB’s decisions “under this section”—that is, Section 314—and the 1-year time bar appears in § 315, the Supreme Court noted that the authorization for IPR appears in § 314, so “every decision to institute” an IPR “is made ‘under’” Section 314.
The Supreme Court’s decision was not unanimous. Justice Ginsburg wrote the opinion of the 7-member majority. Justice Gorsuch filed a blistering dissenting opinion, in which Justice Sotomayor joined in part. According to Justice Gorsuch, the Court is making a mistake by “not only requiring patent owners to try their disputes before employees of a political branch, but limiting their ability to obtain judicial review when those same employees fail or refuse to comply with the law.” The dissent further states: “Nothing in the statute commands this result, and nothing in the Constitution permits it.” This position is at least difficult to reconcile with the language of 35 U.S.C. § 314(d) itself, as enacted by the United States Congress and signed into law by then-U.S. President Obama: “NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”
Surely Justice Gorsuch must concede that it is the will of Congress that some aspects of the Director’s institution decision should be insulated from judicial review. The parade of evils that could theoretically result from the USPTO Director’s politically-motivated control over PTAB institution decisions regarding the 1-year time bar provision could arise just as easily, if not more so, from politically-motivated skewing and control of the substantive analyses that are part of the PTAB’s institution decision processes, as well. In other words, if any aspect of the Director’s institution decision, such as the substantive issue of whether the petitioner will more likely than not succeed in establishing unpatentability of at least one challenged patent claim, is insulated from judicial review, then what difference does it make that other aspects of that decision, such as compliance with the 1-year time bar, are likewise nonappealable? Justice Gorsuch’s comment that “[n]o one can doubt that this regime favors those with political clout, the powerful and the popular” appears to apply with equal force regardless of which aspect of the institution decision is immune from judicial review, but that is exactly what Congress has said in the NO APPEAL provision. Whether Congress was wise or unwise to enact Section 314(d) is a different debate, and is not properly Justice Gorsuch’s concern.
Another legal problem mentioned by Justice Gorsuch in dissent has, however, been created by the Supreme Court’s decision vacating the CAFC’s en banc decision below. It was in that particular CAFC decision that the Court of Appeals held that the mere act of service of a complaint starts the 1-year time bar clock of 35 U.S.C. § 315(b) ticking, regardless of whether that complaint was later voluntarily dismissed without prejudice or resulted in a full trial on the merits, or anything in between those two extreme situations. Different PTAB panels had previously reached opposite conflicting conclusions on this issue. The CAFC’s en banc decision, having been vacated, is no longer valid precedent, even though this issue was not the subject of Thryv’s appeal to the Supreme Court. While the now-vacated CAFC en banc decision may still be considered persuasive authority, it is no longer binding precedent on the Director or litigants. Accordingly, patent owners and petitioners alike are now free to raise and litigate the same legal question already decided by the en banc CAFC – surely a waste of judicial resources.
In sum, unless and until Congress feels that the Supreme Court has mistakenly interpreted the “NO APPEAL” language more broadly than was intended when the AIA was enacted into law, PTAB institution decisions addressing the 1-year time bar issue will be immune from judicial appeal and oversight, whether those decisions favor the petitioner or the patent owner.