Guest post by Saurabh Vishnubhakat, Associate Professor at the Texas A&M University School of Law and the Texas A&M College of Engineering. Although Prof. Vishnubhakat was an advisor at the USPTO until June, 2015, his arguments here should not be imputed to the USPTO or to any other organization. Prof. Vishnubhakat was counsel of record for the amicus brief by patent and administrative law professors in this case.
In its en banc decision in Wi-Fi One, LLC v. Broadcom Corp, the Federal Circuit held that applications of the one-year time bar for inter partes review are, indeed, subject to judicial review in light of the Supreme Court’s 2016 decision in Cuozzo Speed Techs. v. Lee. The en banc decision, authored by Judge Reyna and joined by eight others, overrules the panel opinion in Achates Reference Publ’g, Inc. v. Apple Inc. The panel in Achates had held that decisions about institution are unreviewable even where the time bar may have been applied incorrectly.
In a previous post discussing the oral argument, I noted three important issues that the court appeared to be considering: the balance of power between the PTAB and the district courts, the balance of supervisory power between the USPTO Director and the Federal Circuit, and the agency’s obligations of reasoned decision-making. The en banc outcome focuses largely on the first of these issues.
The PTAB-District Court Balance of Power
In fact, the issue of court-agency power allocation was central to the whole case. The one-year time bar of 35 U.S.C. § 315(b) forbids inter partes review if the petition is filed more than one year after the petitioner (or its privy or real party in interest) is served with a district court complaint for infringement. Thus, the time bar forces a substitutionary choice: leave the court within a year and come to the PTAB, or do not come to the PTAB at all. This boundary-policing function makes the one-year time bar qualitatively different from other provisions that also bear on the institution phase, such as the pleading requirements at issue in Cuozzo.
The APA Baseline
From looking to Cuozzo, much of the initial debate surrounding this case was over what constituted a “shenanigan.” The Court in Cuozzo had held that routine determinations that are closely tied to institution are unreviewable under 35 U.S.C. § 314(d), but assured that other determinations may remain reviewable. These include appeals based on constitutional arguments, on less closely related statutes, on interpretive issues whose scope and impact extend beyond merely the institution statute, or on agency actions that are plainly ultra vires. These were shenanigans that the Court in Cuozzo did not purport to protect from judicial scrutiny.
Wi-Fi One, however, argued persistently (and sensibly) that the inquiry did not begin with Cuozzo’s exceptions. As the en banc majority here agreed, the baseline should still be a presumed availability of judicial review under the Administrative Procedure Act. That presumption was overcome in Cuozzo, but Broadcom here would have to overcome it anew and had not done so.
This jurisprudential point is an important reminder that each new argument for unreviewability must start from the same APA baseline.
Relatedness to Institution
In this case, the argument for unreviewability failed first because the one-year time bar are not closely related to institution—certainly less closely related than the requirements for a petition, including the particularity requirement at issue in Cuozzo. In construing the nonappealability provision of § 314(d), the Court in Cuozzo had emphasized that what is immune from appeal is institution “under this section,” i.e., section 314. The standard for institution is a reasonable likelihood of success on at least one claim in the patent. The pleading requirements at issue in Cuozzo came from § 312 but were related to institution “under this section” because those requirements directly shaped how the likelihood of success would be evaluated for § 314 purposes. The Director has discretion in this regard, as § 314(a) makes reasonable likelihood of success a necessary condition but not a sufficient one:
The Director may not authorize an inter partes review to be instituted unless . . .
The one-year time bar is different. It is unrelated to institution “under this section” because it has nothing to do with the necessary reasonable likelihood of a petition’s eventual success. Put another way, even a petition that is otherwise certain to succeed must be denied if it comes after the time bar. As a result, though requirements such as pleading and particularity may be folded into the Director’s § 314 discretion to evaluate reasonable likelihood of success, the time bar cannot. The time bar has no analytical connection to evaluating whether a petition is reasonably likely to succeed for § 314(a) purposes. Therefore, the time bar is not unreviewable for § 314(d) purposes.
Scope and Impact
The argument for unreviewability also failed because the one-year time bar reaches, in terms of the “scope and impact” that Cuozzo described, well beyond merely “this section,” i.e., well beyond § 314’s institution decision. The key to this inquiry is the substitution of the agency for district courts as a decision-maker on patent validity. For a boundary-policing statute such as § 315(b), the scope and impact are broad and far-reaching. The time bar is part of a larger set of structural provisions (also including, for example, court-agency estoppel) that strike an interbranch balance of power. As a result, proper enforcement and supervision of the time bar is a concern not solely for the agency, but also for the Article III courts that compete with the agency. As the en banc majority explained:
The timely filing of a petition under § 315(b) is a condition precedent to the Director’s authority to act. It sets limits on the Director’s statutory authority to institute, balancing various public interests. And like § 315 as a whole, [the one-year time bar] governs the relation of IPRs to other proceedings or actions, including actions taken in district court.
Judge O’Malley’s Concurrence
Judge O’Malley joined the en banc majority but also wrote separately to advance a simpler line of reasoning. Her concurring opinion distinguishes between two authorities. One is “the Director’s authority to exercise discretion when reviewing the adequacy of a petition to institute an inter partes review.” The other is the Director’s “authority to undertake such a review in the first instance.” Cuozzo implicates the former and so is unreviewable. By contrast, the present case and others like it implicate the latter, and so the Federal Circuit “sitting in its proper role as an appellate court, should review those determinations.” The goal of such an appellate review should be “to give effect to the congressionally imposed statutory limitations on the PTO’s authority to institute IPRs.”
Interestingly, where the en banc majority opinion emphasized the court-agency allocation of power in deciding patent validity, Judge O’Malley pointed to the agency-legislature allocation of power. It is Congress that delegated to the Patent Office the power of substantive decision-making about patentability and its incidents. But it is also Congress that crafted a fairly bright-line time bar and instructed the Patent Office simply to apply it. For the Director to exercise discretion on the latter, with no judicial oversight, would be inappropriate:
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. I do not see the need to say more.
The Dissent’s Case for Unreviewability
The case also drew a dissent from Judge Hughes joined by Judges Lourie, Bryson and Dyk. In the dissent’s view, the language of § 314(d) is expansive: determinations whether to institute are nonappealable. On this view, the majority’s reading is unjustifiably narrow because it limits the prohibition on judicial review to the § 314 criteria for institution, i.e., the reasonable-likelihood-of-success standard. The majority reads out of the statute other determinations that occur at the institution phase, including application of the one-year time bar. The dissent took a strong textualist approach, admonishing that “[o]ur inquiry should start and end with the words of the statute.”
In support of this textualist view, and in reading Cuozzo, the dissent disagreed about the relatedness of the time bar to institution. The timeliness of a petition is closely related to the institution decision because what is unreviewable is broadly the decision “whether to institute.” Compare, for example, the nonappealability statute for ex parte reexamination, which provides that “[a] determination by the Director . . . that no substantial new question of patentability has been raised will be final and nonappealable.” The decision to proceed is nonappealable, but the decision to refrain is not. For AIA reviews, the unreviewability of the decision does not depend on its outcome. This suggests that the unreviewability of the decision should also not depend on its origins. Institutions should be unreviewable where they are based on timeliness or any other input just as if they were based on the petition’s likelihood of success.
In support of its argument about relatedness, the dissent also pointed to the dissent in Cuozzo itself. Justice Alito, joined by Justice Sotomayor, had criticized the broad reach of the Cuozzo majority’s opinion by arguing that the time bar was closely tied to institution and that their reviewability might rise and fall together. The Cuozzo majority opinion, meanwhile, did not rebut this criticism. The en banc dissent in this case took Justice Alito’s argument and the majority opinion’s silence as a sign of consensus that the time bar was, indeed, “closely related” to institution for Cuozzo purposes:
Moreover, although Justice Alito disagreed with the ultimate result in Cuozzo, even he recognized that “the petition’s timeliness, no less than the particularity of its allegations, is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate . . . review,” and the Court says that such questions are unreviewable.
This issue was also a line of questioning during en banc oral argument—raised by Judge Chen, who ultimately joined the en banc majority. The answer that I had suggested in my recap of that oral argument was that Justice Alito’s argument about the one-year bar should be seen as hortatory, intended first to build a majority and later, when the case was lost, to cabin the impact of the majority’s reasoning. In other words, the dissent did not merely read the majority’s logic broadly but read it broadly as a reason to reject that logic. Indeed, Wi-Fi answered Judge Chen along just these lines by discussing what the Cuozzo dissent was trying to accomplish—limiting nonappealability to a prohibition of interlocutory review—not merely what the dissent said.
Notably the en banc dissent in this case did not address the scope and impact of the one-year time bar, though that was a separate self-imposed limitation on the logic of Cuozzo. The interbranch balance of power and the substitution between the Patent Office and the Article III courts, which figured prominently in Judge Reyna’s majority opinion, were absent from the dissent.
The Way Forward
Looking ahead, it is possible that Broadcom will seek review in the Supreme Court. Following Cuozzo itself and the partial institution/reviewability controversy in SAS Institute v. Matal (and assuming the entire PTAB system is not invalidated in Oil States Energy Services v. Greene’s Energy Group), a grant of certiorari in this case would be a third foray by the Court into the specific issue of Federal Circuit review despite § 314. The en banc dissent has laid out a reasonable roadmap toward a petition for certiorari. It expressly and repeatedly argues that the en banc majority is inconsistent with Cuozzo. It characterizes the en banc outcome as an effort “[t]o sidestep this binding precedent.” And it points to the colloquy between Cuozzo’s own majority and dissent to suggest consensus on the issue now in dispute. Taken together, these arguments invite further Supreme Court clarification.
However, whereas the facts of Cuozzo made a reasonable case for unreviewability—evaluating the requirements of the petition is, after all, part and parcel of determining the petition’s likelihood of success—the facts of Wi-Fi One v. Broadcom suggest a clearer case for the opposite conclusion, especially in light of the scope and impact of the time bar. If the Supreme Court found reviewability in SAS Institute and saw it as a closer case than Wi-Fi One, then there would be little need for further clarification and little reason to grant certiorari in Wi-Fi One. Conversely, if the outcome in SAS Institute were unreviewability, the result would be two Supreme Court decisions denying judicial review and one en banc Federal Circuit decision affording review. This, too, may be ample guidance in the Court’s view, leaving little reason for certiorari in Wi-Fi One. A middle-ground may come in the form of a grant-vacate-remand (GVR) order whereby the Court would grant certiorari, vacate the Federal Circuit decision, and remand for reconsideration in light of SAS Institute. (This was the course that AMP v. Myriad Genetics initially took nearly six years ago in light of the Court’s intervening decision in Mayo v. Prometheus, though the Federal Circuit decision vacated there was that of a panel, not of the en banc Court of Appeals.)
The decision in Wi-Fi One v. Broadcom is the first real test, following Cuozzo, of the broad view that the Patent Office has taken of its immunity from judicial review in PTAB institutions. Going forward, it will likely be the dialogue between the Federal Circuit and the Supreme Court that defines the full contours of the agency’s discretion.