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Board's Discretionary Power in IPR has Limits

With the Leahy-Smith America Invents Act (AIA) signed into law on September 16, 2011, the Congress expanded the ways in which a third party may challenge the validity of a patent at the USPTO. These additional ways included inter partes review (35 USC 311 to 319) and post grant review (35 USC 321 to 329) - there was also a transitional post grant review specifically related to covered business method patents.

Along with the AIA, the Board of Patent Appeals and Interferences (BPAI) was renamed as Patent Trial and Appeal Board (PTAB or Board). The PTAB includes the Director, the Deputy Director, the Commissioner for Patents, the Commissioner for Trademarks, and the administrative patent judges. The PTAB handles decision-making for appeals, derivation proceedings, post-grant reviews (including covered business method reviews), and inter partes reviews. There are more than 300 people serving in many positions on the Board. It is not clear how many of these 300 people are administrative judges that make decisions in post-grant reviews and inter partes reviews, but perhaps not enough judges given the range of proceedings the Board is expected to handle and the Board's apparent use of discretionary power to limit the scope of proceedings.

In SAS Institute Inc. v. Iancu (Supreme Court, April 2018), the petitioner asked the Supreme Court to review a decision of the Federal Circuit that the Board (or PTAB) is not required to decide the patentability of every claim challenged in a petition to institute review of a patent under 35 USC 318(a).

For background purposes, SAS Institute Inc. (SAS) filed a petition to review all the 16 claims of a patent. The Board acting on behalf of the Director of the USPTO, Andrei Iancu, concluded that SAS was likely to succeed with respect to at least one of the claims and that an inter partes review was therefore warranted. However, when the Board issued a final written decision, the Board only issued a decision on claims 1, 3, 4, and 5-10 and did not address the remaining claims. SAS then asked the Federal Circuit to review the decision of the Board, arguing that under 35 USC 318(a) the Board is required to decide the patentability of every claim challenged in its petition, not just some of the claims challenged.

35 USC 318(a) — If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d).

It appears that the Board, or the Director, understood “any patent claim” in 35 USC 318(a) as a permission to pick and choose which of the claims challenged by the petitioner to address in the final written decision. For the Board’s interpretation of “any patent claim,” we get an exposition of the meaning of “any” in the opinion of the Supreme Court. The Supreme Court indicated that the word “any” naturally carries “an expansive meaning.” According to the Supreme Court, “when used as here with a ‘singular noun in affirmative contexts,’ the word ‘any’ ordinarily ‘refers to a member of a particular for group of class without distinction or limitation’ and in this way "implies every member of the class or group." The affirmative context is "shall issue," where the Supreme Court has interpreted shall as must. In a nutshell, the Supreme Court concluded that SAS is right and is entitled to a final written decision addressing all of the claims it has challenged.

It would have been interesting to know the reasoning behind the Board choosing to review some claims while ignoring other claims. For example, were the ignored claims mere duplicates of the reviewed claims? Or was the Board short on time and drawing straws on which claims to review? But these were not the questions before the Supreme Court as the courts are interested in interpreting the law, not administrative efficiency.

Further Reading: Guidance on the impact of SAS on AIA trial proceedings by the USPTO