No Appeals Please – Patent Board Decision Whether to Grant Inter Partes Review Is Final

Inter partes review was introduced as part of the American Invent Act to reduce the amount of patent litigation in district courts.  Since its conception, inter partes review (IPR) has become a popular alternate forum; however, the road to an IPR is not automatic.

On April 24, 2014, the Federal Circuit published three precedential orders refusing to hear appeals from the Patent Trials & Appeal Board (PTAB) regarding requests for IPRs.  Citing 35 U.S.C.  § 314, the Federal Circuit held the decision to grant or deny the institution of an IPR is solely up to the PTAB. 

Inter Partes Review

IPR is a trial proceeding limited to reviewing the patentability of a claim on the grounds of anticipation or obviousness and based only on prior art consisting of patents or printed publications.  In contrast, an IPR petitioner cannot challenge the validity of a patent for indefiniteness.  Other proceedings and timing may affect an IPR. 35 U.S.C. § 315.  For example, an IPR may not be instituted if the petition is filed more than one year after the petitioner is served a complaint alleging patent infringement.  Additionally, an IPR may not be instituted if the petitioner filed a civil action challenging the validity of the patent prior to requesting an IPR.

Final written decisions of the PTAB are directly appealable to the Federal Circuit.  In contrast, a party cannot appeal the PTAB’s decision to institute an IPR.  Specifically, section 314(d) states the determination by the Director whether to institute an IPR shall be final and nonappealable.  Parties have explored different approaches to challenging the PTAB’s decision to institute IPRs including requesting reconsideration, filing for relief in district court and, appealing and/or seeking writ of mandamus to the Federal Circuit.

Denial of IPR is Final

In St. Jude Medical, Cardiology Div. v. Volcano Corp, St. Jude filed suit against Volcano for patent infringement.  Volcano counterclaimed alleging St. Jude infringed its patent.  Based on the parties’ stipulation, all claims relating to Volcano’s patent were dismissed.  Six month later, St. Jude petitioned for an IPR of Volcano’s patent. 

The PTAB denied the IPR petition reasoning that Volcano’s counterclaim triggered section 315(b) which bars institution of an IPR if the petitioner was served with a complaint alleging infringement of the patent more than one year before filing the petition.  St. Jude appealed to the Federal Circuit and the court dismissed explaining that the statue authorizes appeals to the Federal Circuit only from a final written decision of the PTAB.

The same day, the Federal Circuit dismissed a petition for mandamus for In re Dominion Dealer Solution, LLC that also challenged a PTAB’s decision. In response to allegations of patent infringement, Dominion filed several petitions for IPR arguing that the patents were obvious, thus, unpatentable.  The PTAB denied the IPRs.  Dominion filed requests for rehearing arguing that unrebutted evidence demonstrated a reasonable likelihood that the challenged claims are invalid.   The PTAB denied rehearing.  Dominion filed an action in the Eastern District of Virginia challenging the PTAB’s decision under several statutes including the Declaratory Judgment Act and also filed a petition of writ of mandamus with the Federal Circuit.  The Eastern District of Virginia dismissed holding that the statutory language of section 314(d) prohibits IPR petitioners from appealing the decision of the PTAB to the federal court.  Referring to the St. Jude Medical decision, the Federal Circuit restated that a patent challenger may not appeal a non-institution decision to the court.   The court concluded that Dominion lacked any ‘clear and indisputable’ right to challenge a non-institution decision directly to the Federal Circuit, including by way of mandamus.

Grant of IPR is Final

In another writ of mandamus, Procter & Gamble (P&G) challenged the grant of an IPR.  P&G owns three patents relating to methods for whitening teeth that were involved in two district court actions.  P&G alleged patent infringement against Team Technologies, Inc., in the Southern District of Ohio and in the District Court of New Jersey, Clio USA, Inc., filed a declaratory judgment action against P&G.  Clio subsequently dismissed its action without prejudice and petitioned the PTAB for an IPR.  P&G argued that Clio’s earlier filed declaratory judgment action barred the institution of an IPR.  The PTAB disagreed and granted the IPR.  The PTAB reasoned that because the declaratory judgment action was dismissed without prejudice, the action never existed.  P&G requested rehearing which was denied and then filed a writ of mandamus to the Federal Circuit.

Reiterating St. Jude and Dominion, the Federal Circuit held for the same reason that it lacked jurisdiction to hear the appeal of a decision denying institution of an IPR, it also lacked authority to hear appeal of the grant of an IPR.

Takeaways

In light of these decisions, parties must be mindful that regardless of whether the PTAB grants or denies a petition for an IPR, the decision is final.  Importantly, parties should understand the parameters of section 315 barring a petitioner from filing an IPR.

More by | Angela Foster Angela Foster , Law.com Contributor
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