WiFi One Touchstone: Closely Related to Patentability Determination?

As I predicted would happen last Spring, the Court held today in Wi-Fi One v. Broadcom (here) that the appeal bar is limited to Director determinations closely related to the preliminary patentability determination, or the exercise of discretion not to institute. As such, questions that may be fully and finally decided before a trial on the merits, such as 315(b), are no longer barred from appeal.

As a reminder, appeals from Inter Partes Review (IPR) decisions of the Patent Trial & Appeal Board (PTAB) are limited in scope by the “appeal bar” of 35 U.S.C. 314(d) — barring the appeal of matters relating to the institution of the IPR proceeding. The appropriate scope of this bar has now been reconsidered by the Federal Circuit in light of the Supreme Court’s decision in Cuozzo Speed Technologies , LLC v. Lee (2016). Specifically, in WiFi One the Federal Circuit considered whether the requirements of 35 U.S.C. 315(b), which explains that an IPR “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent” is within the scope of the 314(d) bar.

Today’s en banc Federal Circuit decision in Wi-Fi One creates an exception to the broad rule of non-appealability of institution decisions, holding that the Federal Circuit may, on appeal from a Final Written Decision of the PTAB, review the PTAB’s decision regarding whether an IPR petition is subject to the one-year bar of Section 315(b). The Court explained 315(b) as a limit on the agency’s jurisdictional authority that should be appealable, distinguishing more “closely related” institution disputes that touch upon the merits of the IPR decision.

The majority explained:

". . .§ 315(b) controls the Director’s authority to institute IPR that is unrelated to the Director’s preliminary patentability assessment or the Director’s discretion not to initiate an IPR even if the threshold “reasonable likelihood” is present. . . . .

Additionally, the time bar is not focused on particular claims, whereas § 314(a)’s threshold determination is; the time bar involves only the time of service of a complaint alleging infringement “of the patent.” Nothing in § 315(b) sets up a two-stage process for addressing the time bar: the time-bar determination may be decided fully and finally at the institution stage.

The time-bar determination, therefore, is not akin to either the non-initiation or preliminary-only merits determinations for which unreviewability is common in the law, in the latter case because the closely related final merits determination is reviewable. . . . .

This reading is consistent with the overall statutory scheme as understood through the lens of Cuozzo’s directive to examine the statutory scheme in terms of what is “closely related” to the § 314(a) determination.

The concurring opinion by Judge O’Malley expressed a simpler distinction:

". . .the question presented for en banc rehearing in this case is much simpler than the majority’s analysis implies; it turns on the distinction between the Director’s authority to exercise discretion when reviewing the adequacy of a petition to institute an inter partes review (“IPR”) and authority to undertake such a review in the first instance. If the United States Patent and Trademark Office (“PTO”) exceeds its statutory authority by instituting an IPR proceeding under circumstances contrary to the language of § 315(b), our court, sitting in its proper role as an appellate court, should review those determinations.

The dissent argues for a strict construction of the appeal bar as previously found in Achates Reference Publishing Inc. v. Apple Inc.

The Federal Circuit’s ruling opens up another avenue for petitioners who are dissatisfied with a PTAB’s Final Written Decision in an IPR proceeding to attack the Board’s rulings. Issues unrelated to the merits of an institution decision, such as the applicability of certain equitable defenses (e.g., assignor estoppel), may now properly reach the Federal Circuit.

WiFi One may also impact the sovereign immunity debate. The expected mandamus challenges to sovereign immunity may be derailed for the time being if such issues may now be reached on appeal (mandamus fails where adequate relief is otherwise available).

Scott A. McKeown is an author of the Patents Post Grant.