Supreme Court Justices See No Appeal for Preliminary AIA Review Decisions
What matters isn't the time bar that limits some patent validity challengers, the justices suggest. What matters is whether a patent is valid at the end of the day.
December 09, 2019 at 05:01 PM
5 minute read
Time bar, shmime bar.
The U.S. Supreme Court sounded ready Monday to rule that U.S. Patent and Trademark Office (USPTO) decisions on the timeliness of administrative patent validity challenges are not appealable to Article III courts.
That would give the USPTO unfettered authority to decide whether a party properly sought review under the America Invents Act (AIA) within a year of being sued for patent infringement, or was in privity with a supplier, business partner or other party who had been sued.
Such a ruling in Thryv v. Click-to-Call Technologies would surely anger patent owners, who have frequently challenged inter partes review proceedings on those grounds and won at the U.S. Court of Appeals for the Federal Circuit.
Daniel Geyser of Geyser P.C. argued for patent owner Click-to-Call Technologies LP that it makes no sense for Congress to have written important protections such as the time bar into the AIA if there's no mechanism for enforcing them. Executive agencies are "more likely to follow the law correctly when someone knows they're checking their homework," he said.
"That's true in practice, I grant you that," Justice Brett Kavanaugh said.
But Kavanaugh and other justices pointed to an AIA provision that says "NO APPEAL" from decisions to institute proceedings. And several other justices pointed out that even if the courts were to overturn an inter partes review (IPR) proceeding on timeliness grounds, another petitioner that isn't barred could come along afterward and invalidate the patent anyway.
Under Geyser's reading, Justice Elena Kagan said, "We go through the entire process, soup to nuts, and then we get to the end and somebody says, you know, the time bar wasn't applied correctly. We throw it all out and we start all over again on something that we know by now is an invalid patent."
"There's something unseemly about nullifying the determination on the merits," Justice Ruth Bader Ginsburg added.
"What's so terrible" about barring appeals, Justice Stephen Breyer asked. Even if an appeal is successful on procedural grounds, "the director could do this on his own" by invalidating a patent in an ex parte reexamination. Geyser protested that that's an entirely different type of proceeding.
Since the AIA was enacted in 2011, the Federal Circuit and the Supreme Court have gone back and forth on the proper reading of Section 314(d). At first the Federal Circuit interpreted it as blocking review of all findings the Patent Trial and Appeal Board makes in its initial decision to review a patent. That includes the timeliness question.
Then in 2016, the Supreme Court ruled in Cuozzo v. Lee exceptions can be made in the case of PTO "shenanigans," such as violating due process or its statutory limits. The Federal Circuit then ruled en banc that timeliness issues can be reviewed after all.
The Supreme Court seemed to endorse that rationale in last year's SAS Institute v. Iancu, in which Justice Neil Gorsuch wrote that 314(d) precludes judicial review only of the merits of whether the claims are unpatentable.
Ginsburg asked Kilpatrick Townsend & Stockton partner Adam Charnes, representing Thryv, how he would reconcile the language in SAS with his position. "We don't think that's a complete summary of what Cuozzo said," is how Charnes diplomatically put it.
"So do you think that was just a wrong sentence?" Ginsburg asked.
"I wouldn't say it was wrong. What I'd say is that the court had no need to describe Cuozzo more broadly," Charnes said.
Assistant to the Solicitor General Jonathan Ellis was more blunt. "I do think that sentence is wrong, and I think it's incomplete," he told the court. But "that's not a problem" for this case because "it just wasn't at issue in SAS."
Not only is it not wrong, it's central to the holding of SAS, Geyser argued. "That is an absolute part of the core holding of the case in rejecting what the government eventually framed as their primary submission," he said.
Gorsuch was about the only justice who sounded firmly in Geyser's corner. Suppose the PTO director hypothetically has "a political mission, perhaps, to kill patents" and waves through a petition that is clearly time-barred. "You're saying that is a shenanigan this court cannot review," Gorsuch asked Charnes, representing Thryv Inc.
"I'm not sure exactly what the court meant [by] a shenanigan," Charnes answered. He said there would be no appeal under 314(d). But if the case were as egregious as Gorsuch described, he said, the patent owner could seek mandamus review at the Federal Circuit.
There was a light moment during the hearing when Geyser offered to waive his unofficial two-minute period free from judicial questions, but said he would "otherwise start by underscoring the truly extraordinary nature" of his opponent's argument.
Chief Justice John Roberts soon cut in. "If you're going to waive your two minutes, I'm not going to sit back," the chief justice said.
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