PTAB Time Bar Application in Instituting IPR Proceedings Nonappealable

By on May 7, 2020

Addressing the scope of review of the Patent Trial and Appeal Board’s (PTAB’s) application of the one-year time bar of 35 USC § 315(b) in deciding whether to institute an inter partes review (IPR) proceeding, the Supreme Court of the United States held that application of the time bar by the PTAB is nonappealable. Thryv, Inc. v. Click-to-Call Techs., LP, Case No. 18-916 (Supr. Ct. Apr. 20, 2019) (Ginsburg, Justice) (Gorsuch, Justice, joined in part by Sotomayor, Justice, dissenting). The Court explained that an appeal based on the PTAB’s application of the time bar for filing an IPR petition is prohibited under 35 USC § 314(d), which states that the PTAB’s decision on institution “shall be final and nonappealable.”

Click-to-Call owns a patent related to technology for anonymous telephone calls. In 2001, the patent was asserted against a predecessor in interest to Thryv, but the case ended in a voluntary dismissal. In 2013, Thryv filed an IPR petition (under its former name of Ingenio) challenging certain claims of the patent. Click-to-Call argued that because of the 2001 lawsuit, Thryv’s privy had been served with a complaint more than one year earlier and the petition was time barred under § 315(b). The PTAB disagreed and instituted an IPR proceeding. After the PTAB’s final decision invalidated the challenged claims, Click-to-Call appealed, claiming that the PTAB exceeded its authority to issue the final decision because, if it had properly applied the time bar of § 315(b), the IPR proceeding should never have been instituted.

The US Court of Appeals for the Federal Circuit dismissed the appeal for lack of jurisdiction on the basis that § 314(d) precludes judicial review of the PTAB’s application of § 315(b). The Supreme Court, soon after its intervening decision in Cuozzo Speed Technologies, LLC v. Lee (IP Update, Vol. 19, No. 7), granted certiorari, vacated the judgment and remanded. The Federal Circuit then dismissed the appeal on the same basis as it had previously. However, in light of its en banc decision in Wi-Fi One, LLC v. Broadcom Corp. (IP Update, Vol. 19, No. 10) holding that “the time-bar determinations under § 315(b) are appealable,” the Federal Circuit granted panel rehearing and held that the PTAB erred by instituting the IPR because the petition was time barred due to the service of the complaint in the 2001 lawsuit. The Supreme Court granted certiorari to resolve whether the PTAB’s application of § 315(b) is reviewable (IP Update, Vol. 21, No. 5).

The Supreme Court largely reiterated its reasoning in Cuozzo and held that because the § 315(b) time bar is “closely tied to the application and interpretation of statutes related to” the institution determination, a party may not appeal the PTAB’s application of the one-year time bar of § 315(b). Click-to-Call argued that § 314(d)’s prohibition on appealing institution decisions should be limited to the PTAB’s determination “under this section,i.e., only as to the requirements listed in § 314. The Court rejected that argument, explaining that Cuozzo, a case that addressed the nonappealability of PTAB decisions dealing with the requirement of “particularity” in connection with petitions under § 312(a)(3), foreclosed that argument. The Court noted that its understanding of the statute aligned with the America Invents Act’s goal of weeding out “bad patents,” because it focuses appeals on the substantive issues of patentability. Allowing appeals because of a defect in the institution decision would allow a patent to survive, even though the PTAB already determined it to be unpatentable.

Noting the presumption favoring judicial review, Justice Ginsburg allowed that the Supreme Court in Cuozzo did “reserve judgment” on whether § 314(d) would bar all appeals, such as those “that implicate constitutional questions.” However, the Court explained that since the time bar question is closely related to the institution decision, the time bar issue did not meet that criterion. The Court observed that § 315(b) “governs institution and nothing more,” and therefore any appeal is merely “a contention that the agency should have refused ‘to institute an inter partes review.’”

The Court also distinguished its decision in SAS Institute, which held that the PTAB’s application of § 318(a) was appealable. SAS Institute addressed the manner in which the agency’s review proceeds once instituted, not whether the PTAB should have instituted a proceeding (IP Update, Vol. 21, No. 5).

In a lengthy dissent, Justice Gorsuch would have limited § 314(d)’s prohibition on appeal to application of the subsections “under this section” of § 314, as explicitly stated in the text of the statute, especially given the strong presumption in favor of judicial review. Gorsuch argued that under the majority’s interpretation, “this section” becomes superfluous, even though that same phrase provides substantive importance in many other sections of the America Invents Act. Gorsuch also suggested that Oil States, which held that IPR proceedings were not an unconstitutional taking of property, was wrongly decided.

Practice Note: In the wake of its decision in Thryv, the Supreme Court remanded two cases back to the Federal Circuit to be reconsidered: Atlanta Gas Light Co. v. Bennett Regulator Guards Inc., Case No. 18-999, and Superior Communications Inc. v. Voltstar Technologies Inc., Case No. 18-1027. The Court also rejected a petition seeking a ruling inconsistent with Thryv: Arris International Limited v. ChanBond LLC, et al., Case No. 19-455.

Paul Devinsky
Paul Devinsky advises clients on patent, trademark and trademark litigation and counseling, as well as copyright counseling. He is also active in intellectual property (IP) licensing, transactions and due diligence, as well as post-issuance US Patent and Trademark Office (USPTO) proceedings such as reissues and inter partes review, covered business method patent review and post grant review, and appellate (Federal Circuit) advocacy. Read Paul Devinsky's full bio.