Federal Circuit Summary

Before Wallach, Taranto, and Stoll. Appeal from the Patent Trial and Appeal Board.

Summary: The Federal Circuit determined that it had jurisdiction to hear an appeal from a Board decision in an IPR even though the Board erred in limiting the scope of the IPR by not instituting on all claims and grounds.

PGS owned a patent directed at methods and systems for marine seismic surveying. A competitor filed three petitions for IPRs against PGS’ patent. The Board instituted the three IPRs but only for some of the claims and not on all grounds. PGS appealed the Board’s decision as to obviousness of certain claims. During the course of the appeal, PGS and the competitor settled. However, the Director intervened to defend the Board’s decisions.

The Federal Circuit explained that in SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court held that the IPR statute does not permit partial institution on an IPR petition. Thus, under a post-SAS analysis, the Board erred in limiting the scope of the IPRs it instituted and the scope of its final written decisions. However, the Federal Circuit concluded it still had jurisdiction to address the merits of the Board’s decisions and did not need to remand to the Board to address the claims and grounds the Board excluded from the IPRs. Specifically, the Federal Circuit found that the standard for final agency action under the Administrative Procedure Act, 5 U.S.C. § 704 was met. Here, the Board issued institution decisions and final decisions in each IPR and even if erroneous, the decisions terminated the IPR proceedings as to all claims and grounds. The Federal Circuit drew an analogy to civil litigation and the situation where a district court incorrectly dismisses one count early in a case and proceeds to judgment on the merits on the second count only. Once the second count is resolved, both counts are subject to appeal. The Federal Circuit stated that “legal error does not mean lack of finality.” Here, the Federal Circuit also noted that neither party sought SAS-based relief, and thus the Federal Circuit did not determine whether a different conclusion may be warranted if a party had sought SAS-based relief. On the merits, the Court affirmed the Board’s decision as to obviousness of certain claims in PGS’ patent.

This case is: PGS GEOPHYSICAL AS v. IANCU

Written by: Vicki Y. Nee and Nicole R. Townes

Edited by: Paul Stewart