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Justices to Weigh Patent Board’s Power Over Time-Based Trials

Dec. 9, 2019, 10:30 AM

The authority of courts to second-guess a U.S. Patent and Trademark Office’s decision to hold a patent validity trial based on the timing of a challenge will be tested during oral argument before the U.S. Supreme Court Dec. 9.

Thryv Inc., formerly Dex Media, is arguing that federal courts have no power to review whether the patent office made the right decision to institute an administrative trial known as an inter partes review. Thryv is appealing a Federal Circuit ruling reinforcing that courts can review such decisions when they’re based on timing questions, and agreeing to hear Click-to-Call Technologies LP’s appeal of a decision to hold a hearing that led administrative judges to kill claims in its tech patent.

The justices will have to weigh statutory language and case law to decide if parties can appeal decisions to initiate validity proceedings when there is a time bar dispute.

The outcome, attorneys say, could affect the efficiency and scope of patent office administrative proceedings, where companies battle over patents that can be worth millions of dollars.

“It’s not just a question about the agency’s power,” Paul Gugliuzza, a professor at Boston University School of Law specializing in IP law, said. “It’s whether anyone can oversee what the agency is doing.”

Timely Review

The high court will have to analyze whether a section of the law saying the patent office director’s decision to institute an inter partes review is “final and unappealable” allows appeals when the Patent Trial and Appeal Board declares that a one-year deadline in another section of the law doesn’t apply to the dispute.

The U.S. Court of Appeals for the Federal Circuit said the PTAB wrongly instituted a validity proceeding against Click-to-Call’s U.S. Patent No. 5,818,836, covering anonymous voice communication, because Thryv’s predecessor didn’t file the challenge in time.

The time-bar provision prohibits the board from holding inter partes reviews if a challenge is filed more than a year after a petitioner, privy, or real party in interest is served a complaint alleging they infringed a patent. The PTAB said the deadline didn’t apply in the Click-to-Call case because the patent’s previous owner dismissed its infringement lawsuit.

Thryv, in its Supreme Court petition, argued the Federal Circuit was wrong to rely on exceptions to the no-appeal provision in the high court’s 2015 decision in Cuozzo Speed Technologies, LLC v. Lee. The justices in Cuozzo cited language barring appeals in rejecting a request to review a PTAB decision to hold an inter partes review.

But Thryv claims the ruling “recognized a narrow exception to the non-appealability of institution decisions in the event of the Board’s ‘shenanigans’” and shouldn’t apply to its case.

Thryv also noted that a previous Federal Circuit decision saying time bar determinations can be appealed was “contrary to Congress’s intent.” The full court’s ruling in Wi-Fi One LLC v. Broadcom Corp., cited by a court panel in granting Click-to-Call’s appeal, ran “roughshod over the statute’s plain language,” Thryv said.

Click-to-Call, in its Supreme Court filing, argued that without “exceptionally clear language, there is no reason to believe Congress granted the agency unchecked authority to engage in the type of statutory construction” rarely falling outside judicial review.

Not allowing time bar determinations to be appealed, attorneys say, would give the PTO considerable power.

“If the court were to hold that these institution decisions on the basis of time bar are not reviewable, you could potentially have agency actions that plainly violate the law or just can’t be stopped or overturned by anyone,” Gugliuzza said.

Agency Effect

The efficiency of PTAB proceedings is at stake, observers of the closely-watched case say. Among those that have filed briefs in support of Thryv’s position are Atlanta Gas Company, Intel Corporation, and On Semiconductor Corporation. In Click-to-Call’s corner are The Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization.

“The core issue is whether a decision that a petition is time-barred is reviewable. If it’s not reviewable, that greatly reduces the overall time one of these decisions spends in court,” David Donoghue, leader of Holland & Knight’s national Intellectual Property Group, said.

Others believe that opening the door to time-bar appeals could be costly to everyone involved. The parties could endure a lengthy inter partes review in which parts of a patent were found ineligible for protection, only to have an appeals court “wipe the whole thing out,” Matthew Rizzolo, intellectual property attorney at Ropes & Gray LLP, said.

“It seems like it’s wasteful to have this go through and then potentially be reversed,” Rizzolo said.

Yet other attorneys say that preventing appellate review would give the board too much power.

“Courts in general should not, at the trial level, be the final arbiters of their own jurisdiction,” Kayvan Noroozi, an intellectual property lawyer at Noroozi PC, said. “And certainly administrative agencies also shouldn’t because it puts the incentive in all the wrong places.”

The case is: Thryv, Inc., fka Dex Media, Inc., Petitioner vs. Click-To-Call Technologies, LP, U.S., No. 18-916, oral argument 12/9/19

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Rebecca Baker at rbaker@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com

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