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Patent Office Panel Gets Appeals Clout After High Court Ruling

May 27, 2020, 10:31 AM

A U.S. Patent and Trademark Office panel is poised to assume a larger role in patent validity challenges after a Supreme Court decision making it the final arbiter of certain agency tribunal decisions.

In April, the high court said in Thryv, Inc. v. Click-To-Call Technologies LP that a Patent Trial and Appeal Board decision on whether an accused infringer’s patent challenge was filed on time is not appealable in courts. Challengers have a one-year window from the time they’re served with a complaint for infringement to ask for an inter partes review at the board.

Without other appellate venues, parties in patent disputes could push the patent office’s Precedential Opinion Panel (POP) to reconsider tribunal decisions to allow a validity challenge based on the time-bar, attorneys say.

As a result, the panel could issue more precedential decisions that could clarify rules through cases and promote consistency on the procedures for inter partes review institutions, attorneys say.

The POP, whose three members include agency director Andrei Iancu, has issued only three decisions since it was formed in 2018. But more should be expected, Holwell Shuster & Goldberg LLP counsel Karen Sebaski said.

“I would expect to see a push for consistency and uniformity” about whether an IPR is time-barred, Sebaski said. “The PTAB also could choose to expand the role of the POP panel.”

Patent law says that the board’s decision on whether to grant inter partes review is nonappealable. After the Supreme Court ruling, other PTAB determinations related to institution also may not be reviewable by courts because they are closely tied to PTAB trial institution, as the time bar issue was in Thryv, attorneys say.

The precedential panel could take up more appeals on matters related to institution, including whether a patent challenge has properly identified interested parties.

Thryv “basically gave them total and absolute authority to govern institution decisions,” Dustin Weeks, patent attorney at Troutman Sanders LLP, said about the POP. “They’re like the Supreme Court of the patent office” for institution determinations.

Last Word

The Supreme Court held in Thryv that the no-appeal rule also precludes judicial review of PTAB time-bar determinations.

The PTAB’s time limit is “closely related to its decision whether to institute inter partes review and is therefore rendered nonappealable,” Justice Ruth Bader Ginsburg wrote.

Now other inter partes review issues may prove off limits for judicial review, attorneys say.

Most other “decisions on issues that are tied up with institution are almost completely unreviewable,” said Matt Rizzolo, patent attorney at Ropes & Gray LLP.

Such closely related issues include PTAB decisions based on its requirement that a patent challenger disclose a real party in interest who’s providing direction behind the scenes, or someone with a close relationship to the challenger, known as a privy, Saurabh Vishnubhakat, a Texas A&M University Law professor, said.

For example, a PTAB decision to reject a patent review on grounds that the challenge didn’t list interested parties isn’t appealable because the decision is closely related to an institution decision. The U.S. Court of Appeals for the Federal Circuit recently said it found “no principled reason” why decisions related to real parties in interest wouldn’t be among IPR-related decisions that aren’t appealable.

The interested-party requirement is partly in place to avoid a patent challenger who’s been time-barred to tap another related party to meet the one-year deadline.

Parties may bring more interested-party decisions to the POP for review. And the panel may hold more sway on such decisions, Vishnubhakat said.

“That’s the next logical step in terms of the one year bar,” Vishnubhakat said.

Consistency Push

The changes triggered by Thryv could spur the POP to more frequently clarify its views on when and how it grants inter partes reviews.

One way for the PTAB to expand it could be by adjusting the current criterion of “issues of exceptional importance,” Sebaski said. The current criterion includes issues on rules, regulations and statutes.

Such consistency could be crucial. Issues surrounding institution may now prove to be more contentious, Michelle Armond, founding partner at Armond Wilson LLP, said.

“Time bar and other issues relating to whether an IPR should proceed are going to be fought even more fiercely at the patent office, because we don’t have a routine appellate path,” Armond said.

“I think we might see a deluge to the POP panel with review requests,” Armond said. “The POP panel will have to be a lot more active.”

Tweaking Tactics

Heightened POP authority could also alter attorney strategies.

Thryv provides incentive for patent challengers to try for validity trials “even under circumstances that could be considered barred,” Armond said.

Patent challengers who overcome time bar complaints and get a trial can be more confident that they will ultimately prevail in IPR proceedings because there are more limited avenues for challenging institution decisions later, Armond said.

“I expect Thryv will increase the popularity of IPR proceedings,” she said.

Thryv might force parties to tailor their arguments to patent judges or the PTO director, Rizzolo said. Parties may no longer care to err “on the side of including many arguments in an effort to preserve issues for appeal,” Rizzolo said.

Rizzolo also said he would be hesitant in appealing institution-related decisions to the Federal Circuit unless they involved things like a constitutional issue, such as due process or sovereign immunity, or if the PTAB clearly exceeded its authority, he said.

Parties who are dealt adverse institution decisions may be more likely to reach out to POP as well, Weeks said.

“I am probably more likely to ask the POP to review a panel decision on institution than I would have in the past,” Weeks said.

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

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com

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