Federal Circuit Judge Richard Taranto  Judge Richard Taranto, U.S. Court of Appeals for the Federal Circuit (Photo: Diego M. Radzinschi/ALM)

The U.S. Court of Appeals for the Federal Circuit is going to continue deciding appeals from the Patent Trial and Appeal Board, even if the PTAB may not have been in compliance with a recent Supreme Court decision.

The high court ruled in April in SAS Institute v. Iancu that the PTAB must institute trial proceedings on all of the patent claims challenged in an inter partes review (IPR) petition, or none at all. The PTAB had been charting a middle path in nearly half of its IPRs, instituting proceedings on only some challenged claims or on a subset of the asserted grounds of invalidity.

While the PTAB has been issuing supplemental institution decisions in pending cases, the Federal Circuit has been trying to figure what to do with cases already decided by the PTAB but not yet final on appeal. At the April 30 oral argument in PGS Geophysical v. Iancu, Judge Richard Taranto had raised the possibility that the appellate court might not have jurisdiction to hear such appeals, and that they might have to be sent back to the PTAB for a do-over.

But those concerns were erased following supplementary briefing from the U.S. Patent and Trademark Office and litigant PGS Geophysical AS.

“We have jurisdiction to address the merits of the board’s final written decisions and … we need not, and will not, sua sponte revive the ‘non-instituted’ claims and grounds,” Taranto wrote in a precedential decision.

PGS is the latest dispute between oil services companies over technological advances for mapping the ocean floor. PGS’ parent, Petroleum Geo-Services ASA, sued Schlumberger subsidiary WesternGeco LLC for patent infringement in the Southern District of Texas. WesternGeco responded with three petitions for IPR that collectively challenged all 38 claims of WesternGeco’s 6,906,981 patent under three separate grounds. The PTAB instituted proceedings on 36 of the 38 claims, on two of the three grounds. In its final written decision the PTAB found 10 claims unpatentable, as anticipated, on the first and 16 claims unpatentable as obvious on the second.

On appeal, PGS challenged only the obviousness ruling as it applied to 10 claims. WesternGeco settled out, and the judgment was defended by the PTO.

Taranto wrote that the court reads SAS—as the PTAB does—as requiring “a simple yes-or-no institution choice respecting a petition, embracing all challenges included in the petition.”

But with neither party to the appeal requesting a remand based on SAS, the Federal Circuit concluded that the PTAB’s judgment is final for purposes of appeal. “Some of what the board did is now seen to be legally erroneous under SAS, but legal error does not mean lack of finality,” Taranto wrote.

“We do not rule on whether a different conclusion might be warranted in a case in which a party has sought SAS-based relief from us,” he added.

Judges Evan Wallach and Kara Stoll concurred in the decision.

On the merits the court upheld the obviousness findings, ruling that the PTAB had properly, if tersely, explained why a skilled artisan would have been motivated to combine the prior art references.

Monica Lateef of the PTO solicitor’s office argued the appeal for the PTO. Williams & Connolly partner David Berl argued for PGS.