Supreme Court Decides that IPR Final Decisions Must Address All Challenged Claims

April 24, 2018
Marshall Gerstein Alert

On April 24, 2018, the Supreme Court issued its decision in SAS Institute, Inc. v. Iancu, holding that if the Patent Office institutes an inter partes review (IPR) proceeding, it must issue a final written decision with respect to the patentability of every patent claim challenged by the petitioner. The Court reversed the Federal Circuit’s judgment, which upheld the Patent Trial and Appeal Board’s (PTAB) common practice of instituting review on some, but not all challenged claims, and then issuing a final written decision addressing only the claims for which review was instituted.

This dispute originated with an IPR petition that SAS Institute, Inc. filed challenging all claims of ComplementSoft LLC’s patent directed to a set of software tools allowing users to develop, edit, and debug software for a particular programming language. The PTAB, following its typical practice, instituted review on some, but not all challenged claims, and then conducted an administrative trial and issued a final written decision addressing the patentability of only the claims for which the IPR was instituted. On appeal, relying on its prior decision in Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir. 2016), the Federal Circuit determined that, based on 35 U.S.C. § 318(a), there is no statutory requirement that the Board’s final decision must address every claim raised in an IPR petition, and that the statute only requires the Board to address the claims for which review was instituted. Judge Newman dissented from the court’s decisions in both Synopsys and SAS Institute. The Federal Circuit’s decision was reversed and remanded, presumably for the court to send the case back to the PTAB for preparation of a final written decision addressing all challenged claims.

In an opinion authored by Justice Gorsuch for a 5-4 majority, the Court explained that the plain meaning of the statute, 35 U.S.C. § 318(a), requires that if the PTAB institutes an IPR, then it must issue a final decision addressing “any patent claim challenged by the petitioner,” and that the rule permitting an IPR “to proceed on all or some” of the grounds raised in the petition, 37 C.F.R. § 42.108(a), was not a proper exercise of rulemaking authority under the statute. The decision is important because it affects hundreds of pending IPR appeals, instituted proceedings, and pending petitions. Although the case specifically addresses IPRs, its reasoning should also apply to post-grant review (PGR) and covered business method review (CBM) proceedings before the PTAB.

The Court determined that because the meaning of the statute was clear, it need not consider the Patent Office’s policy arguments in support of its claimed “partial institution” authority, stating that “[p]olicy arguments are properly addressed to Congress, not this Court.” The Court also determined that, because the statute is not ambiguous, there was no need to defer to the agency’s interpretation of the statute under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984).

Justices Ginsburg and Breyer wrote dissenting opinions, and would have upheld the agency’s interpretation of the statute as permitting IPRs to proceed on some, but not all, challenged claims.

For more information, please contact the authors of this alert or another attorney at Marshall Gerstein.

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