No Judicial Review of Certain Patent Office Decisions, Supreme Court Holds

No Judicial Review of Certain Patent Office Decisions, Supreme Court Holds

Legal Sidebari

No Judicial Review of Certain Patent Office
Decisions, Supreme Court Holds
April 28, 2020
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. In particular, IPR allows any person, other than the patentee, to petition the PTAB for review of a
patent. After receiving a petition, the PTAB may institute an IPR if it determines that “there is a
reasonable likelihood that the petitioner would prevail.” However, 35 U.S.C. § 315(b) (the so-called
“time-bar”) provides that the PTAB may not institute an IPR if the petition “is filed more than 1 year after
the date on which the petitioner . . . is served with a complaint alleging infringement of the patent.” Under
35 U.S.C. § 314(d) (the so-called “no-appeal provision”), moreover, the PTAB’s determination to institute
an IPR “under this section shall be final and nonappealable.”
In Thryv, Inc. v. Click-to-Call Technologies, LP, decided on April 20, 2020, the Supreme Court interpreted
the no-appeal provision broadly by holding that the PTAB’s determination that an IPR is not time-barred
falls within § 314(d) and therefore may not be appealed. (The case was previewed before argument in this
CRS sidebar.) The decision in Click-to-Call may have considerable implications for the breadth of the
PTAB’s authority moving forward.
Legal Background
Inter Partes Review
Under 35 U.S.C. § 311, any person, other than the patentee, may petition the PTAB to review an issued
patent’s validity on certain grounds. 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 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 an IPR.
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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 § 315(b),
which provides that the PTAB may not institute an IPR if the petition “is filed more than 1 year after the
date on which the petitioner . . . is served with a complaint alleging infringement of the patent.” Under
§ 314(d), the PTAB’s “determination . . . whether to institute an inter partes review . . . [is] final and
nonappealable.”
If the PTAB institutes an 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.
Prior Challenges to the PTAB’s 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
an IPR because it 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 § 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 [an IPR].”
Nevertheless, the Supreme Court indicated that § 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
[an 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.
Supreme Court Decision in Click-to-Call
On April 20, 2020, the Supreme Court issued its decision in Thryv, Inc. v. Click-to-Call Technologies, LP.
Justice Ginsberg’s opinion for seven justices held that the no-appeal provision in § 314(d) bars judicial
review of PTAB determinations regarding § 315(b)’s time-bar. The Court reasoned that the time bar is
part of the institution decision, and therefore barred from review under § 314(d). The Court also
determined that the “purpose and design” of the statute creating IPR reinforces the conclusion that the no-
appeal provision applies to the time-bar because IPR “sought to weed out bad patent claims,” and

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allowing review of the time bar would permit the continued enforcement of patents held to be invalid.
(Justices Thomas and Alito did not join the portion of the opinion addressing the purpose and design of
the statute.)
The Court rejected Click-to-Call’s arguments that § 314(d) does not apply to time-bar determinations,
including its attempt to read § 314(d) as limited to the initial merits determination. The Court found this
argument foreclosed by Cuozzo and inconsistent with related no-appeal provisions that Congress drew
more narrowly. If Congress had intended § 314(d)’s scope to be narrower, the Court reasoned, it would
have used narrower language. Accordingly, the Court vacated and remanded the U.S. Court of Appeals for
the Federal Circuit’s judgment, with instructions to dismiss the appeal for lack of jurisdiction.
Justice Gorsuch dissented, with Justice Sotomayor joining much of that dissent. Justice Gorsuch argued
that § 314(d)’s text indicates that the no-appeal provision only applies to the PTAB’s initial determination
on the merits whether to institute IPR, and not to other determinations. Justice Gorsuch contended that
Cuozzo’s statement to the contrary was not binding and should not control the present case. Moreover,
Justice Gorsuch argued that the presumption of judicial review indicates that the no-appeal provision
should be read narrowly to reach only the initial merits determination. Justice Gorsuch also opined that
the Court’s precedents interpreting the IPR statutes shifted too much power to the PTO at the expense of
the courts, particularly considering that the Director of the PTO is a political appointee. Finally, Justice
Gorsuch criticized the Court’s previous decision upholding the IPR’s constitutionality as part of a trend of
“handing over judicial powers involving the disposition of individual rights to executive agency
officials.”
Implications for Congress
The central question in Click-to-Call is one of congressional intent: whether Congress intended for
§ 314(d) to bar appeals of the PTAB’s determination that § 315(b)’s time-bar applies. Accordingly, the
decision raises questions regarding whether the Court is interpreting the law as Congress intended. Should
Congress disagree with the outcome of Click-to-Call, it could abrogate the decision statutorily by clearly
indicating that the time-bar is appealable. For example, the STRONGER Patents Act of 2019, a bill
introduced in the 116th Congress, would narrow § 314(d) to apply only to the merits determination of the
institution decision, and not procedural determinations like the time-bar. Patent owners contend that
reviewing time-bar determinations provides an important check on the PTAB’s power, and the PTO more
broadly. Not having that check, some argue, allows the PTAB to determine the scope of its own authority
without review by an Article III court.
If Congress chose to reverse the result in Click-to-Call¸ judicial review of time-bar determinations may
result in IPR dismissals after patent claims are invalidated by PTAB. Supporters of appellate review
contend that, because those IPRs are 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.
Allowing judicial review of time-bar determinations, however, may raise the possibility that the PTAB’s
patent invalidation will be set aside because courts disagree with the PTAB’s time-bar conclusion. This
may expose petitioners who successfully invalidated a patent at the PTAB to infringement liability when a
merits determination is undone based on procedural defect. For example, one amicus in Click-to-Call
potentially faced “a new patent damages trial with more than $100 million at stake” after the Federal
Circuit, without disturbing the PTAB’s decision on the merits, 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.

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Author Information

Kevin T. Richards

Legislative Attorney

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