A party deciding whether to file a petition for inter partes review ("IPR") of a patent under the America Invents Act ("AIA") faces a major uncertainty: Is it worthwhile to file a petition if the Patent Trial and Appeal Board ("PTAB") can decide to review only some of the challenged patent claims? And what happens then? Some of this uncertainty may be resolved in the Supreme Court’s next term because on May 22 the court granted a petition for writ of certiorari asking the court to determine that the PTAB may not pick and choose which claims to review. The decision will have an important impact on patent litigation tactics:
- A petitioner’s prospect of obtaining a final written decision on anticipation or obviousness of every challenged claim may enhance the value of the significant initial investment required to file an IPR petition.
- A decision approving the PTAB’s partial institution practice may encourage petitioners to narrowly tailor future petitions to address only those claims having the greatest impact on their non-infringement positions.
- Patentees may face high risk in having all-or-nothing decisions rendered on all challenged claims in AIA reviews, where discovery and testimony are more narrowly circumscribed than in district court actions.
In SAS Institute Inc. v. Lee and ComplementSoft, LLC, 2017 WL 468440 (U.S., May 22, 2017) (No. 16-969), the Supreme Court has decided to review the question of whether the AIA, specifically AIA Section 318(a), empowers the PTAB to review only some of the patent claims challenged in an IPR petition.
In the underlying dispute, ComplementSoft sued SAS for patent infringement, and then SAS filed for an IPR of the patent in the PTAB, asserting that all 16 claims of the patent were anticipated by or obvious over prior art. The PTAB instituted IPR as to only nine of the 16 claims. After the PTAB rendered its final written decision on the nine claims, SAS challenged the PTAB’s decision at the Federal Circuit, arguing that by failing to render a decision on all 16 claims, the PTAB failed to comply with Section 318(a), which provides that the PTAB "shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." The Federal Circuit affirmed, and SAS petitioned the Supreme Court to take the case. The U.S. Patent and Trademark Office ("USPTO") intervened to defend the PTAB’s discretion to institute review, and issue a final decision, as to only a subset of the challenged claims.
The grant of SAS’s petition for writ of certiorari puts before the Supreme Court the opposing views on "partial institution," i.e., whether the AIA permits the PTAB to pick and choose which of the challenged claims it will review in an IPR petition. SAS argues that the language of Section 318(a) obligates the PTAB to render a final written decision on all challenged claims. SAS states that construing the statute otherwise creates an "absence of finality [that] negates the AIA’s purpose of providing an alternative and efficient forum for resolving patent validity issues," citing the dissent in a prior Federal Circuit decision construing Section 318(a), Synopsis, Inc. v. Mentor Graphics Corp.
The USPTO contends that no sensible reading of the AIA as a whole shows Congressional intent to force the agency to review challenged claims on an all-or-nothing basis. Countering SAS’s argument that the pick-and-choose approach leads to piecemeal litigation, the USPTO contends that the structure of the AIA reveals that Congress did not expect that an IPR would fully obviate the need for district court litigation between the parties on invalidity questions.
The Supreme Court’s decision, expected during its October 2017 term, will have a fundamental impact on patent litigation strategy.