SAS Institute v. Lee: Partial Institution of Inter Partes Review

by Dennis Crouch

The Supreme Court has agreed to hear a new AIA-trials case: SAS Institute v. Lee

The inter partes review appeal focuses on the procedural question of whether the America Invents Act permits the USPTO to partially institute IPR proceedings – as it has been doing. SAS argues instead that the statute requires a full up/down vote on a petition and, if granted, the Patent Trial and Appeal Board (PTAB) must then pass final judgment on all petitioned claims:

Whether 35 U.S.C. § 318(a) … requires [the] Board to issue a final written decision as to every claim challenged by the petitioner, or whether it allows that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner, as the U.S. Court of Appeals for the Federal Circuit held.

As I previously wrote,

The basic setup here is that SAS argues that the PTO cannot partially institute IPR proceedings since the statute requires that PTO “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” 35 U.S.C. § 318(a)

Although a somewhat sideline issue, it will likely have its biggest impact on estoppel resulting from AIA trials and, as a result, may also shift filing strategy.

AIA Trial Docs:

 

 

29 thoughts on “SAS Institute v. Lee: Partial Institution of Inter Partes Review

  1. The Supremes taking this case makes reversal likely of the Fed. Cir. decision allowing PTAB discretion as to which petition-contested claims may proceed through an IPR to a decision. In the latest “Patents Post Grant” Blog Scott A. McKeown notes potential effects of that on stays of parallel D.C. litigation and estoppels.
    Another issue is what about IPR contested claims which are so ambiguous to be resolved, claims with no spec support at all, etc.? The IPRs statute does not have any basis for rendering any final decisions on any pre-existing claims on other than 102 or 103 issues based only on patents or publications.

    1. Paul, if there is no description, there still is ordinary meaning to one of skill in the art. And if the claim is ambiguous, PTO could adopt a construction that is the broadest of the reasonable constructions available.

      1. By definition, there is no “ordinary meaning” to indefinite claims. And we all know that in the s0 fti e w0 ftie “arts”, at least, a major part of the game is played at the level of coining terms or co-opting terms from other arts and then using the terms as placeholders for “whatever wasn’t taught in the references being cited against us.”

        This is another reason that the CBM review should be both continued and expanded.

        1. MM, except for the CBM part, I fully agree. I have seen enough file histories in the software arts to know that it is not an accident that attorneys working in this field are trained to do this.

          Another thing I see is that these specs are simply filled with an enormous amount of detail describing everything that is known. Just, when it gets down to the new stuff, we suddenly revert to fuzziness or things like, “If you do the new stuff, you achieve these great results.” But the new stuff is never described.

          It is good to see that the Federal Circuit is catching on.

  2. Dennis – I think your reading of the statute is overly myopic. You focus on the last part, shall issue a final written decision with respect to the patentability of any patent claim challenged, while giving short shrift to the precedent condition: If an inter partes review is instituted and not dismissed under this chapter.

    Say a petition raises both reasonable and unreasonable grounds. Should the PTO not institute a partial review on the reasonable grounds, while rejecting the unreasonable ones? The unreasonable grounds are not instituted, so they do not meet the precedent condition above. Thus the language you focus on about a written decision is never triggered for those grounds, because they were never instituted.

    The formal (and inefficient) way to do this would be to split petitions raising multiple grounds. If a petition raises both reasonable and unreasonable grounds,
    the office could deny while suggesting a re-petition on only the reasonable grounds would be accepted. This wastes everyone’s time and resources. Why not have the office just split the petition itself, and institute on only the reasonable grounds without forcing a second round of petitioning? That’s the most reasonable and efficient way to handle it.

    Your approach would force the office to address both the reasonable and unreasonable grounds in every petition. This encourages petitioners to throw as many arguments as possible into each petition, just to see what sticks. As long as there is at least one valid ground, the petition must be instituted and all the garbage arguments must be dealt with as well. This just wastes everyone’s time and resources on issues that go nowhere.

    What exactly would you have happen here? If your interpretation of the statute is adopted, how would you deal with the flood of junk arguments which must now be responded to? How is your outcome a win for anyone?

    If the grounds are instituted, that’s another story. Then a written decision is required. But not on grounds never instituted. That’s the worst kind of bureaucratic busywork that helps no one.

      1. No “any” is not the issue. “any” is in the latter half of the statute, which is only triggered by the precedent condition. If the board doesn’t institute on a particular grounds, then that ground is not part of the “any” grounds that were instituted.

        I realize the statute is slightly ambiguous but this is the only sensible interpretation. Dennis’s reading creates gross inefficiencies and perverse incentives.

        1. Be careful with that “only sensible,” as you might slide from “interpretation” into “rewriting.”

          It is a known fact that the AIA is written p00rly – such is not – and cannot be – a call for rewriting by the courts.

          1. I take your point, but this is not rewriting. It’s basic statutory construction. My interpretation gives full weight to all the words in the statute. Dennis’s does not. That’s all I mean by sensible.

    1. Could the solution to your problem simply be the Board imposing sanctions against the petitioner under 37 C.F.R. § 42.12? If the grounds are “unreasonable” as you suppose, sanctions seems appropriate.

      1. No sanctions don’t help. It’s very easy to put together a long list of prior art that is relevant but duplicative and not particularly helpful. “unreasonable” here simply means “petition grounds that aren’t likely to succeed”, i.e. grounds that normally would not be instituted. That’s very different from a position that’s legally unreasonable and subject to sanctions.

  3. I am neither pleased nor disappointed to see them take cert on this one, but I am surprised. It just strikes me as such a very small issue to merit SCotUS attention.

    1. Not nearly as small as “I demand that the Federal Circuit writes the words ‘our opinion’ in their Rule 36 judgments.”

      1. Reminds me of the demand of the Supreme Court for the lower courts to actually go through the four factors equity test concerning injunctions….

    2. Greg, since cert is now granted, here is a repeat of my comment posted before that in the prior blog on this case. The first part addresses the surprise question:
      “As what can be presented as a rather straightforward issue of statutory interpretation, this would seem to potentially have a better chance for a cert grant than many of the other, universally unsuccessful, cert attacks on IPR procedures?
      If cert is granted here it will have a significant effect on IPR petitions. Making decisions as to which claims to challenge [given IPR page limits, etc.] far more critical. Especially for D.C.s that do not enforce the clear intent of the elimination of ambiguous FRCP Form 18 style complaints with no indication of which claims and which products are allegedly infringed.”

      1. If cert is granted here it will have a significant effect on IPR petitions.

        I agree with this. I do not know if you are familiar with the economist Russ Roberts, but he frequently likes to observe that the phrase “statistically significant” is a touch misleading, because the a result that explains only 0.00001% of a phenomenon can still fit into the 95% confidence interval. This might be “statistically” significant, but it has essentially no “significance” as a causal explanation for the phenomenon being discussed.

        I think of this as we discuss “significant” effect on IPR petition strategies. I am sure that this case bids fair to change how IPR petitions construct their petitions, but that strikes me as a very small part of the U.S. patent system—to say nothing of its importance to the U.S. legal system overall. It would have been interesting to be a fly on the wall of the cert conference, to hear why this question was interesting to (at least) four justices.

        1. Greg, yes, numerically insignificant as compared to total patent numbers. But note that IPR petitions may well be impacting a quarter or more of all patent SUITS, where big money is, or was. The sustained level of outrage among many patent attorneys and investors about having patent validity challenged much faster and cheaper that way is not insignificant either.

  4. Doesn’t “any” mean one or more? If so, wouldn’t the PTAB be required to provide a final written decision as to at least one of the challenged claims? Any doesn’t mean all.

    1. Mike, the PTAB does that now, but the statutory interpretation question here is does the PTAB have to render a final decision as to EVERY claim challenged by the IPR petitioner?

    2. Mike, the clear import is that, since the petitioner does not have to challenge all the claims in the patent, the Board must rule on any of the claims he does challenge.

      1. Why?

        As noted in the link, Comgress could have used the word “all” instead of the word “any,” and the word “any” carries the plain meaning of “one or more” with discretion (at least one definition of the word).

        Your view here sounds more like a no-discretion “all.”

    1. …as soon as such admonition can be properly and cogently traced to actual words of Congress, that will happen.

      Not a moment prior to that though – and rightfully so, eh?

      1. as soon as such admonition can be properly and cogently traced to actual words of Congress, that will happen.

        Not a moment prior to that though

        Actually software per se is already excluded. And a fair amount of “configured” media and hardware is already in the trash bucket. And more to come!

        The thing is: Congress never said “logic is eligible for patenting.” It’s kind of a problem for you.

        But go ahead and keep denying it.

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