The Patent Trial and Appeal Board (PTAB) must issue a final written decision on every claim challenged by a petitioner in an inter partes review (IPR) proceeding, the Supreme Court held recently.
In SAS Institute, Inc. v. Iancu, the Court not only overruled the U.S. Court of Appeals for the Federal Circuit, but also struck down the PTAB’s long-standing practice of only issuing decisions on claims for which it instituted an IPR – not necessarily all claims challenged in a petition.
Now that the PTAB must issue a final written decision on every challenged claim in a petition that is instituted, it may change its institution decision-making process when faced with, for example, long petitions that contain a multitude of challenges, says Arthur J. Bobel, a member in Leydig’s San Francisco Bay Area office.
“Prior to the Court’s decision, petitioners typically would throw everything against the PTAB wall to see what would stick, with the hope that at least one viable challenge would get them to an instituted IPR,” Bobel says. “But if the PTAB now must issue decisions on all of those weaker challenges, as opposed to being able to summarily set them aside, it may be inclined to reject such petitions and refuse to institute. That could happen even when petitions contain challenged claims that have a reasonable likelihood of being invalid.”
35 USC § 318(a) states, “If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d).”
In its 5-4 decision, the Court held that the plain language of §318(a) requires that the PTAB decide “every claim the petitioner has challenged.” Noting that neither §318(a), nor any other section of the America Invents Act gives the PTAB the power to partially institute an IPR in response to a petition, the Court concluded that Congress intended for the petitioner – not the PTAB – “to define the contours of the proceeding.” While the PTAB has wide discretion as to whether to initiate an IPR, “nothing suggests the Director enjoys a license to depart from the petition and institute a different inter partes review of his own design.”
Since all challenged claims in a petition will now receive a final written decision in an instituted IPR, petitioners should be judicious in deciding whether to include weak challenges with ones more likely to result in the institution of an IPR, says Gregory C. Bays, a member in Leydig’s Chicago office.
“Previously, petitioners could feel fairly confident that their weaker challenges would simply be carved out and set aside by the PTAB when it instituted an IPR, leaving the petitioner with a potential second bite of the apple down the road,” Bays says. “Now that the PTAB must issue a final written decision on all submitted challenges, estoppel will attach to everything included in the petition if an IPR is instituted. This may incentivize petitioners to more cautiously choose which claims to challenge and, in some circumstances, to focus their petitions on the claims for which they have the strongest arguments.”