Supreme Court to Address No-Appeal Provision for Patent Challenges

Supreme Court to Address No-Appeal Provision for Patent Challenges

Legal Sidebari

Supreme Court to Address No-Appeal
Provision for Patent Challenges
December 4, 2019
In 2011, Congress enacted major patent reform in the Leahy-Smith America Invents Act (AIA). The AIA,
among other things, created inter partes review (IPR), an adversarial procedure during which the U.S.
Patent & Trademark Office’s (PTO’s) Patent Trial & Appeal Board (PTAB) reviews the validity of issued
patents. IPR allows any person, other than the patentee, to petition the PTAB for review. After receiving a
petition, the PTAB may institute review if it determines that “there is a reasonable likelihood that the
petitioner would prevail.” Under 35 U.S.C. § 314(d) (the so-called “no-appeal provision”), moreover, the
PTAB’s determination to institute IPR “under this section shall be final and nonappealable.” In Thryv, Inc.
v. Click-To-Call Technologies, LP, the Supreme Court is expected to address the breadth of the no-appeal
provision; specifically, whether a party may appeal the PTAB’s determination that an IPR is not time-
barred. The decision in Click-to-Call may have considerable implications both for the scope of the
PTAB’s authority and the role of IPRs in invalidating incorrectly issued patents.
Legal Background
Inter Partes Review
Under 35 U.S.C. § 311, any person, other than the patentee, may petition the PTAB to review a patent’s
validity. The petitioner may assert, for example, that the patented invention would have been obvious, and
thus a patent should not have been issued. The patent owner may then file a preliminary response. The
PTAB then decides, based on the petition and preliminary response, whether “there is a reasonable
likelihood that the petitioner would prevail with respect to at least 1 of the [patent] claims challenged in
the petition.” If the PTAB determines that there is a reasonable likelihood that the petitioner will prevail,
it may formally institute IPR.
In addition to demonstrating a reasonable likelihood of success on the merits, the petition must also meet
a number of procedural requirements. For example, the petitioner must identify all real parties-in-interest;
identify the challenged patent claims and the grounds for the challenge “with particularity”; and pay a fee
set by the PTO. The petitioner also must establish that the petition is not time-barred under 35 U.S.C.
§ 315(b), which provides that an IPR may not be instituted if the petition “is filed more than 1 year after
Congressional Research Service
https://crsreports.congress.gov
LSB10374
CRS Legal Sidebar
Prepared for Members and
Committees of Congress

Congressional Research Service
2
the date on which the petitioner . . . is served with a complaint alleging infringement of the patent.” Under
section 314(d), the PTAB’s “determination . . . whether to institute an inter partes review . . . [is] final and
nonappealable.”
If the PTAB formally institutes IPR, the PTAB conducts a streamlined administrative proceeding to
adjudicate the validity issues presented in the petition. During the IPR proceedings, the parties file further
arguments, and the patent owner may move to amend the patent. The PTAB then holds a hearing and
issues a final written decision explaining whether the challenged patent claims are valid.
Appeal of the Decision to Institute IPR Proceedings
Cuozzo Speed Technologies, LLC v. Lee
Parties have been litigating the scope of the no-appeal provision since IPR first became available. In fact,
the first Supreme Court decision to address IPR, Cuozzo Speed Technologies, LLC v. Lee, involved the
scope of the no-appeal provision. Cuozzo, a patent owner, argued that the PTAB had improperly instituted
IPR because it eventually invalidated certain patent claims on bases only implicitly raised in the petition.
Thus, Cuozzo argued, the petition had not identified the challenged claims or grounds “with particularity”
as required by 35 U.S.C. § 312(a)(3).
The Supreme Court held that the no-appeal provision rendered the PTAB’s decision to institute on those
bases nonappealable. While the Supreme Court recognized a “‘strong presumption’ in favor of judicial
review” that could only “be overcome by ‘clear and convincing’ indications” from Congress, it held that
the language in section 314(d) met that standard. To hold otherwise, the Court reasoned, would undercut
the congressional objective of allowing the PTO to revisit patentability determinations. Specifically, the
Court doubted that Congress would have given the PTO these review powers if it “thought that the
agency’s final decision could be unwound under some minor statutory technicality related to its
preliminary decision to institute [IPR].”
Nevertheless, the Supreme Court indicated that section 314(d)’s scope is not boundless. In particular, the
Court cautioned that the no-appeal provision “applies where the grounds for attacking the decision to
institute [IPR] consist of questions that are closely tied to the application and interpretation of statutes
related to the” decision to institute. Thus, the Court stated that it was not deciding whether the no-appeal
provision would apply to “appeals that implicate constitutional questions, that depend on less closely
related statutes, or that present other questions of interpretation that reach, in terms of scope and impact,
well beyond ‘this section.’” The Court also indicated that “shenanigans” where the PTAB acted beyond
its statutory jurisdiction would be reviewable.
Wi-Fi One, LLC v. Broadcom Corp.
In its en banc decision in Wi-Fi One, LLC v. Broadcom Corp., decided after Cuozzo, the U.S. Court of
Appeals for the Federal Circuit (Federal Circuit) held that, despite the no-appeal provision, parties may
challenge a PTAB’s decision that a petition was not time-barred. Specifically, the Federal Circuit
determined that there was no clear and convincing indication in section 314(d), the statutory structure of
the AIA, or its legislative history that demonstrated congressional intent to insulate the time-bar from
appeal. In the Federal Circuit’s view, Cuozzo’s limitation of the no-appeal provision to “closely related”
statutes meant statutes closely related to the threshold determination whether the petitioner had a
reasonable likelihood of prevailing. The court reasoned that unlike other statutory provisions detailing
procedural requirements (including section 312(a)(3), which was held to be unreviewable in Cuozzo), the
time-bar did not relate to that threshold determination. Instead, the Federal Circuit concluded that the
time-bar limited the PTAB’s authority to review a patent, and thus was “precisely the type of issue that
courts have historically reviewed.”

Congressional Research Service
3
Judge Todd Hughes, joined by three other judges, dissented on the basis that the majority’s reading of the
no-appeal provision was too narrow and was contradicted by Cuozzo. In the minority’s view, section
314(d)’s statement that “[t]he determination . . . whether to institute” IPR is “final and nonappealable”
meant that all aspects of the institution decision, including the time-bar, could not be appealed. The
dissent further contended that the time-bar is “closely related” to the decision to institute because it is part
of that decision. The minority also argued that appeal of the time-bar could implicate and allow the
review of other issues that were not separately appealable, such as section 312(a)(2)’s requirement that a
petitioner identify the real party-in-interest. Finally, the dissent asserted that allowing review of the time-
bar would allow a patent owner to unwind the PTAB’s invalidation of a patent on a “minor statutory
technicality related to its preliminary decision to institute,” in contravention of Cuozzo.
Thryv, Inc. v. Click-To-Call Technologies, LP
Click-To-Call raised the issue whether the filing of a complaint that was later dismissed voluntarily
without prejudice started the time-bar period. The PTAB held that such a complaint did not implicate the
time-bar, and invalidated the challenged patent claims. The Federal Circuit disagreed, holding that a
voluntarily dismissed complaint begins the time-bar period. The court therefore set aside the PTAB’s
decision invalidating the patent claims and ordered the PTAB to dismiss the IPR.
The petitioner sought Supreme Court review of: (1) whether the no-appeal provision permits appeal of the
PTAB’s application of the time-bar; and (2) whether a dismissal without prejudice started the section
315(b) clock. The Supreme Court granted certiorari, limited to the first question, on June 24, 2019.
Arguments Before the Supreme Court
The arguments raised in the briefing filed with the Supreme Court largely track the arguments between
the majority and dissent in Wi-Fi One. Echoing Judge Hughes’s dissent, Thryv contends that section
315(b) “specifies when an IPR ‘may not be instituted,’” and the no-appeal provision specifically bars
review of the decision to institute. Thus, because section 315(b) states a condition for institution, Thryv
argues, the no-appeal provision bars appellate review. Moreover, Thryv continues, a similar no-appeal
provision in a statute governing another PTO review procedure explicitly limits the appealability bar to a
particular section; this shows that Congress knows how to write more limited no-appeal provisions when
it intends to do so. That Congress instead enacted a broad no-appeal provision for IPR, Thryv argues,
indicates that the Federal Circuit’s narrow reading is incorrect.
Thryv further contends that under Cuozzo, the time-bar is not reviewable and does not fall within any of
Cuozzo’s exceptions. Accordingly, to Thryv, Wi-Fi One’s narrow reading of the no-appeal provision is
inconsistent with Cuozzo. Finally, Thryv argues that allowing review of the time-bar is inconsistent with
IPR’s overall purpose of providing a quick, efficient process to adjudicate patent validity because it would
allow a conclusion of patent invalidity to be set aside for a procedural defect after more than two years of
litigation, while allowing continued enforcement of an invalid patent. The U.S. government intervened
when the case was before the Federal Circuit, and filed a brief in the Supreme Court agreeing that the
Federal Circuit’s decision should be reversed for essentially the same reasons Thryv advances. The
government also emphasizes that the no-appeal provision is broader than no-appeal provisions that
Congress enacted in governing past PTO administrative reviews.
Click-To-Call responds that barring review of the time-bar effectively gives the PTAB unreviewable
power to define the scope of its own jurisdiction, and that the language of section 314(d) does not
overcome the strong presumption of judicial review. Click-To-Call contends that the no-appeal provision
is limited to determinations “under this section”—that is, determinations under section 314. (Click-To-
Call argues that the section 312(a)(3) determination held nonappealable in Cuozzo was in essence a
challenge to the PTAB’s section 314 determination.) As such, because the time-bar falls under section

Congressional Research Service
4
315, Click-To-Call argues that the no-appeal provision cannot apply. If Congress intended for the no-
appeal provision to apply to the time-bar, Click-To-Call continues, Congress would have used the
language “under this chapter,” as it did in other sections of the IPR statute.
Click-To-Call further contends that while the no-appeal provision forecloses review of the PTO’s
discretion, the section 315(b) time-bar is mandatory, not discretionary. While the PTO has expertise in
making the kind of patent validity determinations that fall within the decision to institute, Click-To-Call
argues that the PTO does not have the same level of expertise in the kinds of issues that underlie the time-
bar determination. Finally, Click-To-Call argues that, even if a PTAB final decision invalidating a patent
is set aside due to the time-bar, the decision will still have persuasive force in other proceedings.
Implications for Congress
The central question in Click-To-Call is one of congressional intent: whether Congress intended for
section 314(d) to bar appeals of the PTAB’s determination whether section 315(b)’s time-bar applies.
Accordingly, the decision may raise questions regarding whether the law is being enforced as Congress
intended. Should Congress disagree with the outcome in Click-To-Call, it could choose to abrogate the
decision statutorily by clearly indicating whether the time-bar is appealable. For example, the
STRONGER Patents Act of 2019, a bill introduced in the 116th Congress, would amend the IPR statute
so that the no-appeal provision would explicitly apply only to the threshold determination whether it is
reasonably likely that the petitioner will prevail.
A holding that the time-bar determination is appealable could have considerable implications for IPR.
Allowing appeal of the time-bar may raise the possibility that the PTAB’s patent invalidation will be set
aside because the Federal Circuit disagrees with the PTAB’s time-bar conclusion. One amicus, for
example, is facing “a new patent damages trial with more than $100 million at stake” after the Federal
Circuit set aside the PTAB’s invalidation of a patent based on time-bar issues. Moreover, parties expend
significant resources litigating IPRs. Patent challengers contend that those resources would be wasted if
the IPR could be later dismissed on appeal due to time-bar issues, thereby arguably frustrating the
congressional purpose of IPR: providing a faster, more affordable alternative to district court litigation.
Patent owners, however, contend that reviewing time-bar determinations provides an important check on
the PTAB’s power, and the PTO more generally. To the extent that application of the time-bar results in
IPR dismissals where patent claims were invalidated, supporters of appellate review contend that, because
those IPRs were time-barred, they should not have been instituted in the first place. Under this view,
appealability may uphold the balance Congress created in the AIA and help to protect the significant
investment needed to receive a patent in the first place.
Click-To-Call is set for argument before the Supreme Court on December 9, 2019.

Author Information

Kevin T. Richards

Legislative Attorney

Congressional Research Service
5
Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan shared staff
to congressional committees and Members of Congress. It operates solely at the behest of and under the direction of
Congress. Information in a CRS Report should not be relied upon for purposes other than public understanding of
information that has been provided by CRS to Members of Congress in connection with CRS’s institutional role.
CRS Reports, as a work of the United States Government, are not subject to copyright protection in the United
States. Any CRS Report may be reproduced and distributed in its entirety without permission from CRS. However,
as a CRS Report may include copyrighted images or material from a third party, you may need to obtain the
permission of the copyright holder if you wish to copy or otherwise use copyrighted material.

LSB10374 · VERSION 1 · NEW