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Supreme Court Ruling on Patent Board Appeals May Have Ripple Effect

Jan. 8, 2020, 11:31 AM

The U.S. Supreme Court may be preparing to close an avenue for patent owners to challenge Patent Trial and Appeal Board decisions—a move attorneys say likely would lead to limits on other Federal Circuit reviews.

The question before the justices in Thryv Inc. v. Click-To-Call Technologies LP is whether patent owners can argue on appeal that the PTAB wrongly reviewed a patent because a challenge wasn’t filed in time. Several justices appeared skeptical during oral argument last month about whether patent owners should be able to appeal on that ground.

Shutting the timeliness question off from appeal could restrict the ability of the U.S. Court of Appeals for the Federal Circuit to assess other issues that arise in PTAB proceedings, including disputes over whether a petitioner named all of the parties with an interest in the challenge, attorneys say.

“Presumably, if the time bar is deemed to be not appealable, it opens the door for questions about whether that precedent should apply to other procedural institution issues,” said Edwin Getz, an attorney at Drinker Biddle & Reath LLP who advises companies on intellectual property and information technology matters.

Companies have used timing arguments to unravel PTAB decisions to invalidate patents. The Federal Circuit said such arguments are allowed, despite language in patent law that PTAB institution decisions are “unappealable.”

‘Fairly Broad Effects’

During the Dec. 9 oral argument in the case, Justice Ruth Bader Ginsburg said there was something “unseemly” about undoing a validity decision based on a timeliness issue. Other justices expressed similar concerns.

“I think the takeaway for practitioners is that the Supreme Court is likely going to hold the time bar is non-appealable,” said Jeremy Elman, an IP trial lawyer at White & Case LLP who specializes in patent cases.

Such a ruling could leave patent owners with limited options if they believe the PTAB mistakenly instituted inter partes review—an administrative proceeding that can involve patents that protect valuable drug products or generate substantial licensing revenue—based on a late petition.

But the ruling could have implications for IPRs more generally, with potentially “fairly broad effects on the institution decision and the reviewability of that,” Michael Joffre, co-chair of the appellate practice at Sterne Kessler Goldstein & Fox PLLC, said.

The Federal Circuit has laid out guidance for the PTAB on other issues within the context of disputes over whether an inter partes review petition was filed within one year of the petitioner being sued, such as the requirement that a challenger name all of real parties in interest (RPI) in the proceeding. The court could be constrained from issuing such guidance if time bars can’t be appealed.

The appellate court also has considered, within the context of the time bar, the board’s analysis for whether the petitioner has a close relationship and is in privity with other parties.

“We may not see appeals on the one-year window or appeals on such things as RPI determinations, privity, etc.,” Scott McKeown, leader of the PTAB group at Ropes & Gray LLP, said.

A strict interpretation of the patent law’s bar on appeals from PTAB institution decisions also may impact the reviewability of other related issues.

The PTAB Bar Association in an amicus brief highlighted, among other things, a rule that the PTAB can’t review a patent if the petitioner has challenged the patent’s validity in district court. The bar group also pointed to the application in an inter partes review of a rule that prevents someone who sells a patent from later challenging the patent’s validity, which the Federal Circuit has reviewed before.

“Whatever the outcome, the decision here will have implications for the reviewability of time-bar and other determinations in various situations,” the association wrote in its brief.

Chance to Clarify

The case provides the justices a chance to clarify some of their previous rulings on questions surrounding PTAB decision appeals, attorneys said.

In a 2016 opinion in Cuozzo Speed Technologies LLC v. Lee, the Supreme Court recognized an exception to the appeal bar when the PTAB exceeds its authority or engages in other “shenanigans.” Two years later, in SAS Institute Inc. v. Iancu, the court suggested the bar only prevents judicial review of the board’s initial determination on the patent’s validity.

The justices attempted to reconcile those two statements during oral arguments in Click-To-Call. McKeown and other attorneys said a number of justices appeared to believe that timing and other “technical” issues shouldn’t upend a completed patent validity review.

“My strong suspicion is that they’re looking to rein in some of the issues that have been going up to appeal to the Federal Circuit,” McKeown said.

The case is Thryv, Inc. v. Click-to-Call Techs. LP, U.S., No. 18-916

To contact the reporter on this story: Matthew Bultman at mbultman@correspondent.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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