PGS Geophysical: Partial Institution and Remand

by Dennis Crouch

PGS Geophysical AS v. Iancu, Appeal No. 16-2470 (Fed. Cir. June 7, 2018) (PGS I) (precedential)
PGS Geophysical AS v. Iancu, Appeal No. 17-1582 (Fed. Cir. June 18, 2018) (PGS II) (non-precedential)

Our timeline for theses appeals probably began with WesternGeco’s infringement lawsuit against its Norwegian competitor PGS. In the S.D.Tex. lawsuit, PGS counterclaimed alleging infringement of its U.S. Patent Nos. 6,906,981 and 6,026,059.  WesternGeco then petitioned the PTO to begin Inter Partes Review Proceedings against those patents. Happy to oblige, the PTO partially instituted the IPRs and eventually cancelled a number of claims of each patent.  In the midst of the appeal WesternGeco and PGS settled settled their dispute. On appeal, however, the PTO intervened to defend its decision.  In its decisions, the Federal Circuit has largely affirmed, I raise a few interesting points from the decisions below.

Partial Institution: In SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018), the Supreme Court held that the statute does not permit the PTO Director to partially institute IPR proceedings.  Nevertheless, the court held in these cases that no remand was necessary reconsider institution since neither party nor the intervenor requested that action.  In PGS I, the court explained:

We have uncovered no legal authority that requires us sua sponte to treat the Board’s incorrect denial of institution as to some claims and grounds either as a basis for disturbing or declining to review the Board’s rulings on the instituted claims and grounds or as a basis for reopening the IPRs to embrace the non-instituted claims and grounds.

In its brief, the PTO further argued that

The failure of the Board’s final written decision to address the non-instituted claims was not ultra vires and if it were, this Court would still have jurisdiction to review the decision. The Board’s final written decision on a subset of the claims challenged in the petition did not exceed the authority given it by Congress and is not
an ultra vires act. If anything, the Board did the opposite; it improperly constrained its own authority by not adjudicating the merits of patentability for all the claims challenged in the petition. This may have been an error, but it was not ultra vires.

In its decisions, the Federal Circuit did not particularly address this contention by the Office.

Neither PGS I or PGS II involved a remand.  Thus, the procedural setup of this case may be contrasted with Medtronic, Inc. v. Barry, 2017-1169, 2018 WL 2769092 (Fed. Cir. June 11, 2018).  That IPR appeal resulted in a remand and a statement by the Federal Circuit that “we understand . . . that [the Board] will consider the previously non-considered grounds on remand.”  In PGS II, the court explained that “Neither party seeks a remand pursuant to which the Board would be required to adjudicate the claims on which the IPR was not instituted.”

No Consolidation of Appeals: The appeals here involved two different patents, but were both related to the same infringement lawsuit and thus would have parallel impact to that litigation.  I find it interesting however, that the Federal Circuit did not consolidate the appeals in any way, and the judical panels were entirely different from one another.

Broadest Reasonable Interpretation: Finally, I’ll note that as the PTO continues to consider whether to continue to apply BRI, the PTAB and courts continue to cancel patent claims based upon the current rule.

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