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Federal Circuit Okays PTAB Practice of Reviewing Less Than All Challenged Claims in IPR

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Federal Circuit Okays PTAB Practice of Reviewing Less Than All Challenged Claims in IPR

Inside a recent decision, a 3-judge panel from the U.S. Court of Appeals for that Federal Circuit ruled the U.S. Patent and Trademark Office (USPTO) Patent Trial and Appeal Board (PTAB) behaved correctly in giving your final decision regarding some – although not all – claims challenged within an inter partes review proceeding underneath the America Invents Act. Synopsys, Corporation. v. Mentor Graphics Corp., No. 2014-1516 (Given. Cir. February. 10, 2016). Consequently, the PTAB’s practice of decreasing to initiate overview of all patent claims challenged in AIA tests, departing the status of some patent claims in limbo, continues.

Practice Points

  • Divided Federal Circuit panel rules that PTAB may conduct IPR proceedings on less than all claims challenged in a petition, applying the “reasonable likelihood” test on a claim-by-claim basis.
  • Following earlier decisions, the court effectively held that the PTAB’s decision whether to institute review is immune from appellate review.
  • At least until the PTAB’s practice is reviewed by the Supreme Court, IPR final decisions may leave patents “wounded, but not dead” by invalidating some claims, but leaving others in place.

Background

Mentor is the owner of U.S. Patent No. 6,240,376, relevant to some process for tracing coding errors in the style of computer chips. Synopsys filed a petition for inter partes review (IPR) challenging 29 claims within the ‘376 patent for the reason that they are invalid considering reported prior art. The PTAB implemented overview of 12 from the challenged claims, but rejected to examine 17 claims as Synopsys’ petition unsuccessful to satisfy the “reasonable likelihood” of success threshold. See 35 U.S.C. § 314(a). Simultaneously, the PTAB declined Mentor’s argument the petition was time-barred. Throughout the ensuing IPR proceeding, the PTAB refused Mentor’s motion to amend several challenged claims. In the ultimate decision, the PTAB discovered that three claims under review were invalid as anticipated, however the remaining 14 claims under review weren’t invalid. Both sides become a huge hit towards the Federal Circuit.

Federal Circuit Decision

Inside a 2-1 decision compiled by Circuit Judge Timothy B. Dyk, the government Circuit confirmed the PTAB proceedings in most respects. A legal court noted that, under its decision in In re Cuozzo Speed Techs., LLC, 793 F.three dimensional 1268 (Given. Cir. 2015), which is contended in the Top Court later this season, the PTAB’s decision to institute an IPR isn’t reviewable on appeal. Since Synopsys challenged the scope from the PTAB’s ultimate decision, however, the government Circuit ruled it had become in a position to consider if the PTAB was needed to deal with all of the challenged claims in the ultimate decision.

The appeals court held the PTAB’s practice of reviewing some, although not all, challenged patent claims within an IPR proceeding was in line with both text from the AIA and also the USPTO’s rules regulating the AIA trial proceedings. A legal court pointed to language within the AIA that directs the USPTO to initiate review whenever a individual demonstrates an acceptable likelihood it would prevail regarding a number of the “claims challenged within the petition[,]” 35 U.S.C. § 314(a), however the statute provides the PTAB final written decision must include any “claim challenged through the individual.” 35 U.S.C. § 318(a). A legal court found the various words utilized by Congress a powerful indication they have different meanings, recommending the claims addressed within the ultimate decision might be not the same as individuals challenged within the petition for review. Additionally, a legal court noted that since a complete record is produced at trial just for claims that the PTAB implemented review, it might make no sense to want the PTAB to rule around the validity of claims challenged within the petition by having an incomplete record. A legal court noted:

[The AIA] is quite clear that the PTO can choose whether to institute inter partes review on a claim-by-claim basis. In deciding when to institute IPR, the statute requires a claim-by-claim inquiry to determine whether “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a) (emphasis added). Unless at least one of the claims satisfies this inquiry, the [PTAB] cannot institute. The statute strongly implies that the initiation decision be made on a claim-by-claim basis and that the [PTAB] can pick and choose among the claims in the decision to institute. In fact, nothing in § 314 requires institution of inter partes review under any circumstance.

Slip op. at 10. In addition, a legal court held the rules adopted to apply § 314(a), 37 C.F.R. § 41.108, were an acceptable interpretation from the statute along with a proper exercise of regulating authority. A legal court wasn’t convinced by isolated claims within the AIA legislative history showing that AIA tests were intended as a “complete substitute” for federal court lawsuit. It noted that, “[f]loor claims with a couple of people from the legislative branch cannot supplant the written text from the bill as passed.” Slip op. at 11. Thus, the government Circuit ruled the AIA only mandates that the IPR final written decision address the claims that review was started.

Around the merits from the PTAB’s decision, the government Circuit confirmed the PTAB’s decision that three claims within the ‘376 patent were invalid. A Legal Court also switched aside what exactly on appeal elevated by Mentor. First, it held the PTAB’s decision the petition for review wasn’t time-barred wasn’t appealable. Slip op. at 24, stating Achates Reference Publ’g, Corporation. v. Apple Corporation., 803 F.three dimensional 652, 658 (Given. Cir. 2015). A legal court also confirmed the PTAB’s ruling denying Mentor’s request to amend claims throughout the IPR proceeding. In line with recent Federal Circuit choices, a legal court ruled the PTAB rules correctly put the burden around the patent owner to show that the suggested amendment presents claims which are patentable, and Mentor unsuccessful to show patentability within the very prior art reported by Synopsys in the petition.

Circuit Judge Pauline Newman authored a extended dissent, quarrelling the result what food was in odds with the objective of the AIA by staying away from “finality” in administrative challenges to patent validity, and leading to duplicative and potentially sporadic federal court and PTAB rulings.

Practical Significance
Because the legal and public policy arguments in Judge Newman’s dissent substantially overlap with appellant’s argument in Cuozzo, which is contended in the Top Court this term, the final Court’s decision in Cuozzo will probably shed some light around the divided opinion in Synopsys. As the specific publication of the proper scope of the ultimate decision might not get addressed in Cuozzo, the best issue of whether an establishment decision is reviewable after ultimate decision is going to be made the decision.

 

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