March 7, 2016

Federal Circuit Reaffirms Non-reviewability of PTAB’s Institution Decisions

The Federal Circuit reiterated this week, in Harmonic Inc. v. Avid Technology, Inc (2015-1072), that it does not have jurisdiction to review the PTAB’s institution decisions, including decisions to institute an IPR, decisions to deny institution of an IPR, and decisions to institute on only a subset of grounds identified in a petition.

Harmonic petitioned for IPR alleging that all twenty claims of Avid’s patent 5,495,291 were unpatentable in view of several different prior art grounds. The Board instituted IPR of claims 1-16 based on one ground and disposed all other grounds directed to these claims as redundant. The Board then issued a final decision concluding that claims 11-16 were confirmed as patentable. Harmonic appealed and argued that the Board should have considered the other prior art grounds that were not instituted, especially after finding claim 11 patentable in view of the instituted ground. The court disagreed, citing several cases, summarized below, where it declined to review the Board’s institution decisions based on the plain language of 35 USC 314(d), which states that a “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”

The court cited St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014), holding that it lacked jurisdiction to review the Board’s decision to not institute an IPR proceeding since the Board determined that the petition was time-barred; In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), where the court rejected the patent owner’s argument that 314(d) does not preclude but postpones review of institution decisions until after issuance of the final decision, and declined to decide whether the Board improperly instituted an IPR on certain claims since it relied on prior art not identified in the petition; Versata Development Group Inc. v. SAP America Inc., 793 F.3d 1306 (Fed. Cir. 2015), where the court clarified that the Board’s institution decisions in the CBM context are also nonappealable under 35 USC 324(e), but held that the Board’s determination that the patent was a CBM patent was not an institution decision and was reviewable because that determination involved the Board’s ultimate authority to deem the patent unpatentable under the CBM review proceedings; Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015), where the court declined to review the Board’s institution decision premised on IPR petitions that the patent owner argued contravened section 315(b)’s time bar because the time bar is simply a procedural rule that does not itself give the Board the power to deem a patent unpatentable; and Synopsys Inc. v. Mentor Graphics Corp., __ F.3d __, 2016 WL 520236 (Fed. Cir. 2016), where the court declined to review the Board’s decision to institute review for some, but not all, of the claims challenged in the petition, but held that the Board is not required to address all claims raised in an IPR petition in its final decision under 35 USC 318(a).

Relying on this precedent, the court reiterated that section 314(d) prohibits review of the decision to institute an IPR as well as the decision to deny institution of an IPR and clarified that a decision to institute on only a subset of grounds identified in a petition is simply a combination of the two and is likewise unreviewable. The court emphasized that the Board’s decision to institute on one prior art ground or another does not raise fundamental questions about the scope of its statutory authority to deem patents unpatentable and is simply the Board’s exercise of its institution authority in a given case, which is unreviewable.

The court explained that the Board’s reference to the non-instituted grounds as redundant simply meant that the claims addressed by the non-instituted grounds were already addressed by the instituted grounds and therefore did not alter the court’s decision. Noting that 35 USC 314 does not compel the PTO to institute an IPR proceeding in any instance, the court opined that the Board may choose to institute some grounds and not institute others as part of its comprehensive institution decision consistent with 37 CFR 42.108, which permits the Board to institute on a subset of claims challenged in a petition. The court was unwilling to change its opinion because the Board found claim 11 patentable over the instituted ground since the court noted that the Board’s patentability determination was distinct from the Board’s institution decision, which remained unreviewable.