Achates References v. Apple (Fed. Cir. 2015)
At the conclusion of its Inter Partes Review Proceeding (IPR), the Administrative Patent Trial and Appeal Board (PTAB) concluded that several claims of Achates’ patents were invalid. U.S. Patents No. 5,982,889 (claims 1-4); and No. 6,173,403 (claims 1-12 and 17-19).
Institution Not Appealable: In the appeal, the Achates argued that the review should never have been instituted – because it was time-barred under § 315(b). That provision bars institution of an IPR if “the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” Achates argument was that it had already sued other Quickbook for infringement more than 1-year before Apple’s petition and alleged that the other companies were either real-parties of interest or privies of Apple based upon an indemnification agreement between the parties. The PTAB rejected that argument and also rejected Achates request for discovery from Apple on the topic. In particular, the Board held that the Quickbook would not be seen as a privy or real-party-in-interest even if Quickbook had indemnified Apple for infringement liability. Of some interest, the Board reaffirmed its not-time-barred institution decision in its final written decision.
On appeal the Federal Circuit did not rule on the PTAB’s interpretation of privy and real-party-in-interest, but instead ruled that it had no jurisdiction to review the PTAB’s institution decisions:
We thus hold that 35 U.S.C. § 314(d) prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the Board’s final written decision.
In reaching its conclusion, the court relied upon Cuozzo and distinguished Versata II.
We agree with Apple and the Patent and Trademark Office that Versata II is limited to the unique circumstances of CBMR and that, following Cuozzo, the Board’s determination to initiate the IPRs in this case is not subject to review by this court under 35 U.S.C. § 314(d).
First, the § 315(b) time bar does not impact the Board’s authority to invalidate a patent claim—it only bars particular petitioners from challenging the claim. The Board may still invalidate a claim challenged in a time-barred petition via a properly-filed petition from another petitioner. . . .
In addition, the time-bar here is not like the CBM classification addressed in Versata II. Versata II found that review of the CBM determination was proper because the determination was the “defining characteristic” of the Board’s “authority to invalidate” a patent in the specialized CBMR process. . . . Whether an IPR petition is filed one year after the petitioner is served with an infringement complaint or one year and a day is not such a characteristic because compliance with the time-bar does not itself give the Board the power to invalidate a patent.