In Maxlinear, Inc. v. CF Crespe LLC, [2017-1039] (January 25, 2018), the Federal Circuit we vacated and remanded the PTAB’s determination that dependent claims were not unpatentable  in view of the Federal Circuit’s intervening affirmance of a second IPR that claims 1 and 17 unpatentable.

The case involved U.S. Patent No. 7,075,585 on a broadband television signal
receiver for receiving multi-standard analog television signals, digital television signals and data channels.  The Board found the only two independent claims 1 and 17 were not shown to be unpatentable, and thus did not reach the patentability of the dependent claims.

The Federal Circuit held that the two IPR’s that found claims 1 and 17 unpatentable, were binding “as a matter of collateral estoppel” in this case.  The fact that the other IPR’s became final while this case was pending on appeal is irrelevant.  The preclusive effect of the prior adjudications, and subsequent affirmations, has finally resolved the issue of the unpatentability of independent claims 1 and 17 and dependent claim 20 in this proceeding. Thus, the sole
remaining question at issue is whether the dependent claims 4, 6-9, and 21, not addressed in the earlier IPRs, are unpatentable.

Since the patentability of claims 1 and 17 was the sole basis for the Board’s decision in this IPR, and the Board had not separately addressed the dependent claims, the Federal Circuit set aside the decision as to the dependent claims and remanded for further consideration.

In Arthrex, Inc. v. Smith & Nephew, Inc., [2017-1239] (January 24, 2018), the Federal Circuit affirmed the Board’s entry of an adverse judgment pursuant to 37 C.F.R. § 42.73(b) in an IPR, after patent owner Arthrex disclaimed all claims that were the subject of the petition, despite Arthrex’s express request that no adverse judgment be entered.

After first considering and concluding that the adverse judgment was appealable, the Federal Circuit then considered whether the entry of adverse judgment was proper.  Although Arthrex specifically stated that it was not requesting an adverse judgment, the Federal Circuit found that the application of the rule on its face does not turn on the patentee’s characterization of its own request.  The rule gives the Board authority to construe a patent owner’s actions as a request for an adverse judgment, suggesting the Board’s characterization of the action rather than the patent owner’s characterization is
determinative.

The Federal Circuit held that 37 C.F.R. § 42.73(b) permits the Board to enter an adverse judgment when a patent owner cancels all claims at issue after an IPR petition has been filed, but before an institution decision.

How this affects Arthrex remains to be seen.  The Federal Circuit noted that at  the time of the adverse judgment, Arthrex had two pending continuation
patent applications that the estoppel provision would impact, and that those two applications have since issued as patents. However, Arthrex recently filed another continuation application, which remains in prosecution and therefore is
affected by the adverse judgment.  The Federal Circuit is indicating that the current prosecution is complicated by the adverse judgment, although it did not comment on the effect on the patents that issued from the applications that were pending at the time of the adverse judgment.

The estoppel provisions prevent a patentee “from taking action inconsistent
with the adverse judgment, including obtaining in any patent . . . [a] claim that is not patentably distinct from a finally refused or canceled claim.”  The estoppel provision prevents a patent owner from obtaining a patent on a pending application, but does it also prevent a patent owner from defending a claim an issued patent?  If not, then Arthrex erred by doing the right thing and disclaiming unpatentable claims; instead it should have dragged out the proceedings while rushing to get its pending applications to issue.

In Wi-Fi One, LLC v. Broadcom Corp., [2015-1945, 2015-1946](January 8, 2018) the Federal Circuit, en banc, held that the bar on judicial review of institution decisions in 35 U.S.C. §314(d) does not apply to timebar determinations made under § 315(b), overruling Achates
Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015).

Wi-Fi argued that the Director lacked authority to institute IPRs under
§315(b) because petitioner Broadcom was in privity the defendants that the prior owner of the patents (Ericsson) served with an infringement complaint more than a year before Broadcom filed the IPRs.  The Board nonetheless instituted the IPRs, finding that Wi-Fi Wi-Fi had not shown that Broadcom was in privity with the defendants in the prior litigation.  In its Final Written Decision, the challenged claims were found unpatentable.

Wi-Fi appealed the Final Written Decisions, asking the Federal Circuit to reverse or vacate the Board’s time-bar determinations, but a panel of the Federal Circuit found the §315(b) time-bar rulings nonappealable under Achates.  Wi-Fi petitioned for rehearing en banc, asking the Federal Circuit to consider whether Achates should be overruled, and hold that the Director’s § 315(b) time-bar determinations are subject to judicial review.

The majority started its analysis with the the “strong presumption”
favoring judicial review of administrative actions, including the Director’s IPR institution decisions.  In view of this strong presumption, the Federal Circuit said it would abdicate judicial review only when Congress provides a “clear and convincing” indication that it intends to prohibit review.  The Federal Circuit found no clear and convincing indication in the specific statutory language in the AIA, the specific legislative
history of the AIA, or the statutory scheme as a whole that demonstrates Congress’s intent to bar judicial review of § 315(b) time-bar determinations.

The Federal Circuit said that §315(b), which controls the Director’s authority to institute IPR that is unrelated to the Director’s preliminary  patentability assessment or the Director’s discretion not to initiate an IPR even if the threshold “reasonable likelihood” is present.  Because §314(a) does not mention the timer bar, the PTO’s position that the time-bar determination is unreviewable runs counter to the principle, as reflected in Cuozzo, that favors reading the statute to comport with, not depart from, familiar approaches to comparable issues.  The majority found this reading was consistent with the overall statutory scheme as understood through the lens of Cuozzo’s directive to examine the statutory scheme in terms of what is “closely related” to the § 314(a) determination.

The Federal Circuit concluded that whether a petitioner has complied with §315(b) has nothing to do with the patentability merits or discretion not to institute.  Thus, the majority said that the statutory scheme as a whole demonstrates that § 315 is not “closely related” to the institution decision addressed in § 314(a), and it therefore is not subject to §314(d)’s bar on judicial review.

Moreover the Federal Circuit observed that timely filing of a petition under § 315(b) is a condition precedent to the Director’s authority to act, and said that enforcing statutory limits on an agency’s authority to
act is precisely the type of issue that courts have historically reviewed.

The Federal Circuit said that the Supreme Court in Cuozzo instructed that the “strong presumption” favoring judicial review “may be overcome by ‘“clear and convincing”’ indications, drawn from ‘specific language,’ ‘specific legislative history,’ and ‘inferences of intent drawn from the statutory scheme as a whole,’ that Congress intended to bar review.” However, finding no such clear and convincing indications, the Federal Circuit held that the Director’s time-bar determinations under §315(b) are not exempt from judicial review, and overruled Achates’s contrary conclusion.

In Ericsson Inc. v. Regents of the University of Minnesota, [IPR2017-01186, IPR2017-01197, IPR2017-01200, IPR2017-01213, IPR2017-01214, IPR2017-01219 (December 19, 2017), Chief Administrative Patent Judge Ruschke, writing for an expanded panel of the PTAB, held that 11th Amendment immunity is available to States as a defense in an inter partes review.  The 11th Amendment states;

The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.

So in holding that the 11th Amendment applies, the Board is conceding that it is exercising the “Judicial power” of the United States.  This was the issue in Oil States energy Services, LLC v. Greene’s Energy Group, LLC where Petitioner struggled to establish that inter partes reviews are adjudicatory in nature.  In Ericsson, the Board conceded the point, stating “IPR is an adjudicatory proceeding of a federal agency from which state entities are immune.”

Ultimately the Board found that Minnesota waived its immunity by enforcing the patents in court.

To the extent that the Supreme Court in Oil States needs to decide whether IPR’s are adjudicatory proceedings involving judicial power, it has the USPTO’s admission in Ericsson.

In Idemitsu Kosan Co., Ltd. v. SFC Co. Ltd., [2016-2721](September 15, 2017), affirmed the PTAB decision that claims of U.S. Patent No. 8,334,648 were invalid for obviousness.

On appeal Idemitsu argued that the Board erred in finding that prior art taught combining the particular compounds for the purpose of creating a light emitting layer in an electroluminescent device.  The Federal Circuit found that what Idemitsu characterizes as an argument raised “too late” was simply the by-product of one party necessarily getting the last word.
Idemitsu argued that the prior art teaches away from combinations, and SFC simply countered, as it was entitled to do. The Federal Circuit found that to the extent Idemitsu suggests that the Board could not reach a counterargument because it was not preemptively addressed by the petition or institution decision, Idemitsu is plainly mistaken. The Federal Circuit noted that there is no requirement, either in the Board’s  regulations, in the APA, or as a matter of due process, for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial.