Guest Post: Challenging PTO Institution Policies (If Not Institution Decisions)

The following is a guest post by Oliver Richards (Fish & Richardson).  Mr. Richards is a NYU Law alum and a former clerk for Judge Dyk on the Federal Circuit. 

After several rounds at the Federal Circuit and a trip to the Supreme Court, the law surrounding what aspects of the PTAB’s decision to institute on a petition for inter partes review remains unclear.  In light of the Federal Circuit’s decision to again revisit this issue in the grant of a petition for rehearing en banc in Wi-Fi One, LLC v. Broadcom Corporation (No. 2015-1944, -1945, -1946), I wanted to share a few thoughts on what, exactly, should be reviewable under 35 USC 314(d).   I believe that the yes/no decision of the PTAB as applied to any particular petition should be unreviewable.  However, in my view, review of PTAB regulations should be available either through appeal from the PTAB, or (preferably) through an APA challenge in district court. [1]  The distinction between review of specific PTAB institution decisions and general review of PTAB regulations and policies, I believe, makes sense for at least three reasons:

First, this distinction comports with the language of the statute.  314(d) prohibits judicial review of “[t]he determination . . . whether to institute an inter partes review.”  The statute should be read to mean what it says.  A review of “the” decision to institute in any case is not allowed.  General review of any agency regulation is not review of “the determination . . . whether to institute” even if the result of that review overturns the decision in any particular case.

In McNary v. Hatian Refugee Ctr. Inc., 498 US 479 (1991) the Supreme Court drew a similar distinction relating to reviewability of “special agricultural worker” (“SAW”) eligibility decisions of immigration officials under the provisions of the Immigration Reform and Control Act of 1986.  In McNary, the Supreme Court was asked whether 8 U.S.C. § 1160(e)—which prohibits “administrative or judicial review of a determination respecting an application for adjustment of status”—deprived a district court of jurisdiction over a suit challenging agency policies and procedures.

The Supreme Court allowed the challenge.  According to the Court, “[t]he critical words in § 210(e)(1) … describe the provision as referring only to review ‘of a determination respecting an application’ for SAW status. Significantly, the statutory reference to “a determination” describes a single act rather than a group of decisions or a practice or procedure employed in making decisions.”  McNary, 498 U.S. at 491–92.  Thus the language prohibiting review indeed prohibited “direct review of individual” determinations but did not prohibit “general collateral challenges to unconstitutional practices and policies used by the agency in processing applications.”    “[H]ad Congress intended the limited review provisions of § 210(e) of the INA to encompass challenges to INS procedures and practices, it could easily have used broader statutory language” such as by prohibiting “all causes arising under any of the provisions” of the immigration program as it had done in other places.  Id. at 494. [2]

In my view, the patent law’s statutory language – “The determination . . . whether to institute” similarly indicates that § 314(d) was intended to apply to only individual determinations, not to prohibit any and all review of PTO procedures and policies relating to institution.

Second, the distinction strikes a fair balance between making sure the PTAB is complying with its statutory mandate and maintaining the efficiency of the IPR system.  Perhaps wary of a flood of appeals clogging the courts and the corresponding slow down in IPR determinations, Congress choose efficiency in section 314(d) by prohibiting an appeal relating to every single IPR institution decision.  On the other hand, allowing parties to turn to courts to check potentially problematic regulations or practices by the PTAB is an important check on that body’s power.  See, e.g., Unwired Planet, LLC v. Google Inc., 841 F.3d 1376, 1382 (Fed. Cir. 2016) (concluding that the PTAB’s definition of a “covered business method patent” exceeded the statute.”)[3]   Prohibiting challenges to each and every institution decision but allowing general challenges provides for efficient review of PTAB regulations, policies, and procedures without slowing down the whole IPR system.

Third, the distinction is consistent with most Federal Circuit decisions on the topic.  Although the distinction I suggest was not provided as the reasoning, the CAFC has notably found many PTAB regulations/policies relating to institution reviewable.  See, e.g., Ethicon Endo-Surgery, Inc. v. Covidien LP, 812 F.3d 1023 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.4 – “Institution of trial.  The Board institutes the trial on behalf of the Director”); Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir. 2016) (hearing a challenge to 37 C.F.R. § 42.108, titled “Institution of inter partes review”).  The cases where the Federal Circuit has found issues not to be reviewable are typically cast in case-specific ways.  See, e.g.,  Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) (reviewing “whether Apple’s petition was time barred”); Cuozzo, 793 F.3d at 1272 (“Cuozzo argues that the PTO improperly instituted IPR on claims 10 and 14 because the PTO relied on prior art that Garmin did not identify in its petition as grounds for IPR as to those two claims.”)

Any resolution of the reviewability issue must comply with the statute, must put teeth to Congress’s embrace of efficiency, and at the same time must make sure that the rights of patent holders are adequately protected.  The approach I have outlined above, in my view, adequately balances efficiency with appropriate supervision of the PTAB.   I’m curious to see what you all think, and I look forward to reading the comments.

Note: The views views expressed here are solely my own and do not necessarily reflect the views of my firm or any clients.

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[1] The CAFC left open the question of whether the APA allowed for challenges to PTAB regulations in district court in Synopsys, Inc. v. Lee, 812 F.3d 1076 (Fed. Cir. 2016).   From a practical standpoint, an APA challenge in a district court would seem to be a better option–the parties will have an opportunity to develop a fuller record removed from the facts of any particular IPR, and a district court may well provide a better first look than than the agency that promulgated the challenged regulation.

[2] NcNary follows other Supreme Court decisions distinguishing between specific challenges to a particular determination and general challenges to regulations.  See Bowen v. Michigan Acad. of Family Physicians, 476 U.S. 667, 675 (1986).

[3] For individual determinations where the PTAB clearly exceeds its statutory authority, mandamus remains available.  See, e.g., In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1274 (Fed. Cir. 2015),  aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).