On Monday, January 8, 2018, the en banc Federal Circuit held in Wi-Fi One, LLC v. Broadcom Corp. that PTAB time-bar determinations under 35 U.S.C. § 315(b) are appealable because they do not fall within the scope of the judicial-review prohibition of § 314(d). This decision overruled Achates Reference Publishing, Inc. v. Apple Inc., which was decided before the Supreme Court interpreted § 314(d) in Cuozzo Speed Technologies, LLC. v. Lee, but as we reported at the time, it was unclear whether time-bar determinations fell within the concerns of "shenanigans" expressed by Justice Breyer. The original panel decision in Wi-Fi One, authored by Judge Bryson and joined by Judge Dyk, determined that the Cuozzo v. Lee decision did not change anything ("We see nothing in the Cuozzo decision that suggests Achates has been implicitly overruled."). On the other hand, Judge Reyna writing separately believed that such decisions should be subject to review after Cuozzo. Nevertheless, he concurred in the decision because he believed Wi-Fi One had not shown that Broadcom was either a real party in interest in the underlying litigation at question, or was in privity with one of the defendants of that case. Judge Reyna, as author for the majority for the current en banc decision, got his chance to explain why he believes time-bar determinations are now appealable. The other two Wi-Fi One panel judges joined the dissent penned by Judge Hughes (which was also joined by Judge Lourie, a member of the original Achates panel). Rounding out the opinions, Judge O'Malley filed a concurrence because she thought resolution of the question simply turned on the distinction between authority to exercise discretion when reviewing the adequacy of a petition and authority to undertake such a review in the first instance. This, of course, harkens back to the "ultimate authority to invalidate" standard articulated in Versata Dev. Grp., Inc. v. SAP America, Inc. for CBM review. The Court did not extend the ruling to any other disputes arising from §§ 311-314, but this decision will certainly pave the way for more challenges (and potentially more appealable issues).
The Wi-Fi One case stems from a 2010 lawsuit filed by Telefonaktiebolaget LM Ericsson ("Ericsson") in U.S. District Court for the Eastern District of Texas. Ericsson asserted U.S. Patent Nos. 6,772,215 ("Method for minimizing feedback responses in ARQ protocols"), 6,466,568 (Multi-rate radiocommunication systems and terminals), and 6,424,625 ("Method and apparatus for discarding packets in a data network having automatic repeat request") against multiple defendants. The Court indicated that the technical aspects of these patents were not relevant to the opinion, but those interested can look to the panel decision for a description of the technology. Importantly, Broadcom, the company that filed the three IPR petitions at issue in this case, was never a defendant in the litigation. Nevertheless, the Patent Owner (which became Wi-Fi One during the course of the IPR proceedings when Ericsson transferred ownership) alleged that Broadcom was in privity with one or more of the defendants in the Texas litigation. Because the IPR petitions were filed more than a year after the commencement of that case, Wi-Fi One argued they were time-barred. The Board denied Wi-Fi One the opportunity to take discovery regarding the relationship of the parties, and the Federal Circuit denied a petition for a writ of mandamus. Ultimately, the Board instituted the IPRs, and issued Final Written Decisions finding the challenged claims unpatentable. After the Federal Circuit panel affirmed because it found Achates unchanged by Cuozzo, the Court granted Wi-Fi One's petition for rehearing en banc to answer the question:
Should this court overrule [Achates] and hold that judicial review is available for a patent owner to challenge the PTO's determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. § 315(b) governing the filing of petitions for inter partes review?
In deciding the question in the affirmative, the majority started at the same place the Supreme Court did in the Cuozzo decision, with the recognition that there is a strong presumption favoring judicial review of administrative actions. Correspondingly, Congress must provide "clear and convincing" indications that it intends to prohibit appellate review. The majority did not find such strong indications in the statutory language, the legislative history, or the statutory scheme as a whole. Specifically, 35 U.S.C. § 314(d) recites: "No Appeal—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable." The natural reading, according to the majority, is that this bar is limited to determinations to institute as set forth in § 314. It is § 314(a) that both identifies the threshold requirement for institution ("a reasonable likelihood that petitioner would prevail with respect to at least 1 of the claims challenged in the petition") and provides that the director has discretion not to institute. Section 315(b), instead, controls the authority to institute IPRs unrelated to the preliminary patentability assessment even should a "reasonable likelihood" be found. "The time-bar determination, therefore, is not akin to either the non-institution or preliminary-only merits determinations for which unreviewability is common in the law, in the latter case because the closely related final merits determination is reviewable."
The majority also found that the overall statutory scheme supported its conclusion, especially in view of Cuozzo's directive to examine determinations that are "closely related" to § 314(a). For example, there are preliminary procedural requirements found in §§ 311-313 that are closely related to the preliminary patentability determination (or the discretion not to institute). On the other hand, the majority believed that the time-bar determination was fundamentally different than any such determination. It also found such a determination to not be "some minor statutory technicality," as referred to in Cuozzo. Instead, "[t]he time bar is not merely about preliminary procedural requirements that may be corrected if they fail to reflect real-world facts, but about real-world facts that limit the agency's authority to act under the IPR scheme." Because "enforcing statutory limits on an agency's authority" is the type of issue that has been historically reviewed, the majority held "that time-bar determinations under § 315(a) are reviewable by this court." The case was remanded to the merits panel to consider the Wi-Fi One's time-bar appeal.
Judge O'Malley agreed with much of the reasoning of the majority, but she filed a concurrence because she thought that resolution of the question presented was much simpler. She pointed out that it was important for the Court to address time-bar determinations to "give effect to the congressionally imposed statutory limitations on the PTO's authority to institute IPRs" She essentially reiterated the position she expressed in her concurrence in the Click-To-Call Technologies, LP v. Oracle Corporation remand from the Supreme Court (see "IPR Update -- Is Reviewability of Time-Bar Institution Decisions Headed En Banc?"). That case was "GVR'ed" for further consideration in view of Cuozzo v. Lee after that decision was issued. Click-To-Call was a per curiam decision, concluding that Achates had not been overturned by the Cuozzo decision, and in any event it was also bound by the Wi-Fi One case. But Judge O'Malley wrote a separate concurrence to express her belief that the issue should be addressed en banc. In that decision, as well as the present concurrence, she focused on the difference between a petition for a PTAB post-grant proceeding (whether IPR, CBM, PGR, or derivation) and the act of institution by the PTAB as provided for by the statute. Believing that Congress established this distinction, she pointed out that "315(b)'s bar on institution in necessarily directed to the PTO, not those filing a petition to institute." The statute commands that an IPR proceeding "may not be instituted" by the Board if the petition is time barred. As she put it, "Congress is well versed in establishing statutory time bars. Congressional discretion should control the application of such time bars, not that of the Director of the PTO." Correspondingly, she added that she did "not see the need to say more."
The dissent, written by Judge Hughes, did not believe that appealability prohibition found in 35 U.S.C. § 314(d) was so limited because Congress's intent to prohibit judicial review was "clear and unmistakable." In so doing, it identified a couple of problems with the majority's position. First, it looked at the impact of the Director's decision regarding real parties in interest under different scenarios. On the one hand, if the patent owner alleges that an unidentified third party that has not been sued is a real party in interest, the Board's determination either way would not be reviewable (because the time bar would not be implicated). However, if the unidentified third party had been sued more than a year prior, than such a determination would be reviewable (at least according to the majority decision). Therefore, according to the dissent, the exact same determination would lead to different conclusions regarding appealability, which it found to be illogical. But is it? In the former example, the determination would have no practical consequences -- if that decision could be appealed, nothing would change. However, if the decision of the Board results in the institution of a case that should have been time-barred, that would contravene the Congressional limits on the PTAB's authority to review cases using the IPR mechanism. It seems to be just such a decision that the courts should be reviewing.
The second problem identified by the dissent is that vacating the invalidity decisions of the Board based on such threshold questions as timeliness or real parties in interest would "squander the time and resources spent adjudicating the actual merits of the petition." While it is true that this would disturb the initial reason why IPRs were established in the first place ("providing quick and cost effective alternatives to litigation"), such may be the cost necessary to protect Patent Owners. Without the threat of judicial review, the PTAB has no particular incentive (outside the desire to get the case right in the first place) to develop procedures to get the question of real parties in interest correct. Instead, with the knowledge that their decisions could be reviewed, the Board will certainly be motivated to try to get the answer right in the first place.
Again, this case is limited to the time-bar issue found in 315(b), and the Court explicitly did not decide whether all disputes arising from §§ 311-314 are final and nonappealable. Nevertheless, it will certainly open the door to other challenges of determinations made by the PTAB at the institution stage. It will be interesting to see if this is a limited example or if the flood gates of appellate review are now open.
Wi-Fi One, LLC v. Broadcom Corp. (Fed. Cir. 2018) (en banc)
Panel: Chief Judge Prost and Circuit Judges Newman, Lourie, Bryson, Dyk, Moore, O'Malley, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll
Opinion by Circuit Judge Reyna, joined by Chief Judge Prost and Circuit Judges Newman, Moore, O'Malley, Wallach, Taranto, Chen, and Stoll; concurring opinion by Circuit Judge O'Malley; dissenting opinion by Circuit Judge Hughes, joined by Circuit Judges Lourie, Bryson, and Dyk.
