Supreme Court Strikes Down PTAB Partial Decisions
Share us on: By Matthew Bultman
Law360 (April 24, 2018, 10:24 AM EDT) -- The U.S. Supreme Court ruled Tuesday the Patent Trial and Appeal Board must decide the validity of every challenged claim when it agrees to institute America Invents Act reviews, a departure from the PTAB’s current practice, which could have wide-ranging implications for cases at the board.
The Supreme Court, in an 5 to 4 decision, ruled in favor of software developer SAS Institute Inc., which had argued the PTAB should not be able to select a subset of challenged claims to rule on. It contended the PTAB’s final decisions must address all of the claims in a petition.
“[E]verything in the statute before us confirms that SAS is entitled to a final written decision addressing all of the claims it has challenged and nothing suggests we lack the power to say so,” Justice Neil Gorsuch wrote for the majority.
Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan dissented.
The PTAB has been operating under a system in which the board could agree to review some challenged claims and deny review of others. Following an institution decision, the case would proceed to a final decision where the board determined which of the instituted claims, if any, were invalid.
SAS challenged this practice after it brought a petition seeking inter partes review of a ComplementSoft LLC patent covering a system for generating computer code.
In its Supreme Court brief, SAS argued the PTAB’s “partial-decision process” went against lawmakers' goal of making AIA reviews an efficient alternative to costly district court litigation. It said the law was clear that if review was instituted, the board must decide the validity of all challenged claims.
The USPTO, for its part, defended the process as a way to streamline reviews. It maintained there is nothing in the AIA that precludes the PTAB from instituting review of, and deciding on, just some claims, and it said that SAS misunderstood Congress’ aims in passing the law.
“Inter partes review was not designed to displace litigation altogether,” it wrote in a brief filed with the court in September. “As other features of the statute reflect, inter partes review was designed not merely to resolve private disputes, but to provide an administrative mechanism for the USPTO to correct patent claims that were erroneously issued.”
The case focused on IPRs, in particular, but the issues overlap with other AIA reviews, including covered business method and the post-grant review. Many attorneys have said a ruling in favor of SAS will affect not just the PTAB and its workload but also litigants.
For example, various district courts have held that when the PTAB does not institute IPR of a claim, an accused infringer is not prevented from making similar invalidity arguments in district court. This estoppel attaches to final decisions, however.
The Supreme Court’s ruling could also have an impact on appeals. Challengers are generally not able to appeal institution decisions that go against them but are, in most circumstances, able to appeal final decisions from the board.
During November arguments, some justices appeared willing to leave the board’s practice in tact but others, including Justice Samuel Alito, seemed to embrace SAS’ arguments.
SAS Institute is represented by Gregory A. Castanias, John A. Marlott and David B. Cochran of Jones Day.
The U.S. Patent and Trademark Office is represented by its own Nathan K. Kelley, Thomas W. Krause, Joseph G. Piccolo and Robert J. McManus and Jeffrey B. Wall, Malcolm L. Stewart, Jonathan C. Bond, Mark R. Freeman and Joshua M. Salzman of the U.S. Department of Justice.
The case is SAS Institute Inc. v. Iancu, case number 16-969, in the U.S. Supreme Court.
--Editing by Sarah Golin.
