Last week, the Federal Circuit issued a per curiam Order in BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc., denying a petition for a panel rehearing or rehearing en banc filed by Appellant BioDelivery Sciences International, Inc. Judge Newman dissented from the denial of the petition for rehearing en banc.
The dispute between the parties arose when BioDelivery sought inter partes review of claims 1, 4, 6–9, 11, 12, 26, 27, 32, 38, 44, 51, 58, 65, 72, 82, 109, and 125–127 of U.S. Patent No. 8,765,167, citing seven prior art grounds of anticipation or obviousness. The U.S. Patent and Trademark Office Patent Trial and Appeal Board instituted the IPR on most, but not all, of the challenged claims, and on one of the grounds. The PTAB ultimately issued a Final Written Decision finding claims 1, 4, 11, 12, 26, 27, 44, 51, 58, 65, 72, 82, and 125–127 of the '167 patent to be patentable.
BioDelivery appealed to the Federal Circuit, which received briefing and argument before the Supreme Court issued its decision in SAS Institute Inc. v. Iancu. On BioDelivery's motion, the Federal Circuit directed the PTAB "to implement the Court's decision in SAS." In response, the PTAB "modif[ied its] Decision to Institute and instead deny the Petition in its entirety, thereby terminating [the] proceeding," and in particular, "ORDERED that Petitioner's request for inter partes review of claims 1, 4, 6–9, 11, 12, 26, 27, 32, 38, 44, 51, 58, 65, 72, 82, 125–127 of the '167 patent is denied and no inter partes review is instituted."
Judge Newman, dissenting from the denial of the petition for rehearing en banc, stated that: "I write because of the significance of the balance of agency and judicial authority, and the rules of procedural law in the administrative state." Noting that the Supreme Court in SAS held that 35 U.S.C. § 318(a) requires that in an inter partes review the PTAB must decide all of the claims and grounds challenged in the petition, Judge Newman indicated that "the PTAB had not met this requirement for these cases [the appeal consolidated three separate PTAB decisions]." In particular, Judge Newman noted that "[t]he PTAB did not comply with the Remand Order, stating that it would be inefficient and expensive to include the additional claims and grounds," with the PTAB explaining in its Decision on Remand that "[b]ecause the overwhelming majority of unpatentability grounds presented by Petitioner fail to meet the standard for institution of inter partes review, we find that instituting trial as to those grounds at this time is neither in the interest of the efficient administration of the Office, nor in the interest of securing an inexpensive resolution of this proceeding." In her dissent, Judge Newman writes that:
[M]y colleagues hold that the PTAB is not required to comply with the court's Remand Order, and further hold that this non-compliance is not reviewable. This action raises critical issues of agency authority, judicial responsibility, and the constitutional plan.
Judge Newman declares that "[m]y concern is with the PTAB's position that it need not follow the court's Remand Order, for reasons of efficiency and expense," adding that "[s]uch agency authority cannot be discerned in the America Invents Act, and contravenes decades of constitutional jurisprudence." Citing Banks v. United States, 741 F.3d 1268, 1276 (Fed. Cir. 2014) (quoting Briggs v. Pa. R. Co., 334 U.S. 304, 306 (1948)), Judge Newman notes that agency action is bound by the mandate rule, which:
[D]ictates that 'an inferior court has no power or authority to deviate from the mandate issued by an appellate court.' Once a question has been considered and decided by an appellate court, the issue may not be reconsidered at any subsequent stage of the litigation, save on appeal.
Judge Newman also observes that "[t]he legislative record contains no contemplation of a PTAB procedure whereby, after full PTAB trial and decision and appeal to the Federal Circuit, the PTAB could annul the appeal and remove the entire action and decisions and procedure from history, insulated from review." As a result, Judge Newman found the PTAB's action in this case to be "seriously flawed." According to Judge Newman, "[t]he PTAB's refusal to comply with our Remand Order to implement the Supreme Court's ruling warrants en banc attention," and she therefore dissented from the denial of the petition for rehearing en banc.
BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc. (Fed. Cir. 2020)
Per curiam
Before Chief Judge Prost and Circuit Judges Newman, Lourie, Dyk, Moore, O'Malley, Reyna, Wallach, Taranto, Chen, and Hughes; dissenting opinion by Circuit Judge Newman
