Final and Nonappealable: construed as “may be reconsidered” and not reviewable in “at least some circumstances.”

BioDelivery Scis. Int’l v. Aquestive Therapeutics, Inc. (Fed. Cir .2019)

The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

35 U.S.C. 314(d).

In 2014, BioDelivery filed three separate IPR petitions against Aquestive’s U.S. Patent 8,765,167.  The USPTO partially-instituted the proceedings (on some, but not all grounds) but then sided with the patentee — finding that the claims had not been proven unpatentable. BioDelivery then appealed to the Federal Circuit who vacated the final written decision on SAS grounds — holding that the USPTO cannot partially institute an IPR.

Back on remand, the PTAB essentially restarted the whole case at institution and eventually decided not to institute the case at all (terminating all three IPR petitions).  BioDelivery then appealed again — arguing that the appeal should have remained instituted and that the PTAB should not have reconsidered that decision.

Back on appeal, the Federal Circuit reconstituted the same panel of Judges Newman, Reyna and Lourie.

Not Final Final: In its decision, the Federal Circuit first held that the “final” aspect of an institution decision does not mean that it cannot be reconsidered.  Rather, “administrative agencies possess inherent authority to reconsider their decisions, subject to certain limitations, regardless of whether they possess explicit statutory authority to do so.” Medtronic, Inc. v. Barry, 891 F.3d 1368 (Fed. Cir. 2018). Without interpreting the statutory meaning of “final,” the Board simply concluded that it does not clearly deprive the Board of its “inherent default authority.” (Note a minor problem with the decision in how it conflates statutory authority given to the Board with statutory authority given to the Director who then administrative delegated that authority to the Board).

NonAppealable: Although the “final” portion of the statute carried no weight, the court here ultimately dismissed the appeal — finding that it fell squarely within the nonappealable provision.

Congress clearly intended to bar review of institution decisions in at least some circumstances by passing the “No Appeal” provision—§ 314(d).

In Cuozzo, the Supreme Court explained that an appeal focused on the likelihood of success element of institution would be barred by the provision.  Here, the majority identifies BioDelivery’s appeal as “merely challenge the Board’s determination not to institute review, something the Board has discretion to do even upon a showing that there is a ‘reasonable likelihood of success with respect to at least 1 claim challenged’ in the petition.”

Judge Reyna wrote this order for the majority panel joined by Judge Lourie. Judge Newman wrote in dissent. Judge Newman argued that the prior appellate decision “ordered further proceedings in conformity to the Court’s ruling in SAS” and that the PTAB’s dismissal avoided that order.

= = = =

The patent here covers a dissolvable thin-film used for drug delivery (Clozabim).

34 thoughts on “Final and Nonappealable: construed as “may be reconsidered” and not reviewable in “at least some circumstances.”

  1. 6

    Not sure exactly what Judge Newman was thinking here. But as Greg has stated, even giants sleep.

    If Wikipedia can be believed, the lady is 92 years old and in a sane country she would have been forced to retire twenty years ago (or at least around the time when she went off the deep end and began peddling the notion that we all needn’t to worry about not enough patents being granted on “technology” that human beings were incapable of describing.

    On the other hand, I don’t blame her for hanging on if it means that the ps-ch-0 @ h0les in the Ferderlist W@nk Club are denied a chance to appoint her replacement.

    1. 6.1

      Your views are seriously skewed by your feelings, and you attribute animus entirely unsupported by ANYTHING.

      1. 6.2.1

        6, note how Malcolm is only about forcing (typically) Pro patent elders out – what would you think he would say about the Notorious G(insburg)?

          1. 6.2.1.1.2

            “Ginsberg should have resigned during Obama’s first term.”

            That’s a fact, and I stand to this day amazed that she did not. No matter whether you’re a person that wants her seat on whichever side it was craziness for her to not get out in Obama’s first term, and very latest at beg of his 2nd.

  2. 5

    How’s that “let’s get into bed with the NRA” thing working out, Repu k k k es?

    Anybody out there want to admit publicly that they didn’t vote for Mango Sh-tstain?

    Come on, snowflakes. Be brave! Own the bloodbaths.

    1. 5.1

      What the F has this to do with patent law….?

      How is this different than the dozens of non-patent law posts already expunged?

      Does Malcolm simply NOT THINK (or think that being on topic) is something that applies to him, or – most likely — he is simply being like Trump and just v0m1ting out his unrestrained feelings?

        1. 5.1.1.1

          ?

          Tell me Malcolm, who has had more posts expunged for being inappropriate than anyone?

          Tell me Malcolm, who has had more posts expunged for being inappropriate than all others combined?

      1. 5.1.2

        “Derp someone criticized my super s-h-tt-y politics on the Internet derp call the wahmbulance derp Jane Fonda derp derp!”

        Choose your sides, Bildo. And then own it.

        1. 5.1.2.1

          Your Derp dance and your propensity for one-bucketing are noted.

          “Own it” – coming from the person least likely to own their own lack of control of their emotions and vent their feelings inappropriately on a Patent Law blog is noted.

      2. 5.1.3

        “Patent law isn’t derp political derp derp!” <— actual stated belief of Bildo, espoused here on numerous occasions, but probably just another attempt to squelch a particular discussion that makes Bildo and his wingnert buddies … uncomfortable, shall we say?

        Much, much more of this to come, by the way. Get used to it.

        1. 5.1.3.1

          Your Derp dance and nonsensical reply are noted.

          Try to get right what I have actually stated.

          Much, much more of this to come, by the way. Get used to it.

          Find an appropriate forum.

  3. 4

    There is a logical reason for the PTAB on remand to not conduct IPR proceedings against previously unconsidered claims in some cases. At that point in time there has been a full trial on the previously considered claims in which the patent owner has had the opportunity to rebut or demonstrate weaknesses in the petitioners invalidity arguments.

      1. 4.1.1

        It would not appear to be a basis for denial of IPR institution on remand if any of the petitioned claims had been held UNpatentable.

  4. 3

    Re; “..administrative agencies possess inherent authority to reconsider their decisions, subject to certain limitations, regardless of whether they possess explicit statutory authority to do so.” Medtronic, Inc. v. Barry, 891 F.3d 1368 (Fed. Cir. 2018).”
    This has been demonstrated several times by PTO solicitors declining to defend PTAB ex parte decisions on appeal at the Fed. Cir. and/or working out settlements with applicants. The Beauregard claims case being a leading example of such an undecided appeal.

  5. 2

    Per DeLassus’s second comment (1.1)–how far does this precedent really go? Is it limited to SAS remands, or can the PTAB reconsider institution any time there’s a remand?

    Suppose in a world where the SAS pipeline long gone, PTAB institutes on all claims and grounds and issues a mixed decision. Claims 1 and 3 are invalid; claims 2 and 4 survive. The Federal Circuit finds an error of claim construction that affects claims 3 and 4, so it affirms as to claims 1 and 2, but vacates and remands as to claim 3 and 4. On remand, the PTAB (as the Director’s representative, acting with delegated authority) says “That sounds like a lot of work. In our discretion, we reconsider our institution decision and deny institution of this petition.”

    One side or the other tries to appeal (either the petitioner because it wants the patent dead or the patent owner because it wants the petitioner estopped in district court), and under this morning’s decision the Federal Circuit would say “too bad; no jurisdiction.” Right?

    I rarely say this, but I think Judge Newman might have the better of the argument here.

    1. 2.1

      Hm, interesting point. I would like to think that a new panel of the CAFC considering that appeal would consider the circumstances materially different enough to distinguish yesterday’s precedent. If this hypothetical future panel really were to consider BioDelivery to be binding in that case, however, that would be an unfortunate outcome that would vindicate Judge Newman’s dissent here.

      Incidentally, this touches obliquely on a point that the CAFC wrote off too cavalierly back in Microsoft Corp. v. Proxyconn, 789 F.3d 1292 (Fed. Cir. 2015). In that case, the patentee had argued that the PTAB does not have jurisdiction to hear a remand. 35 U.S.C. §316(a)(11) provides that “the final determination in an inter partes review [must] be issued not later than 1 year after the date on which the Director notices the institution of a review under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months.” In other words, by statute the whole process must be wrapped up no later than 18 months after institution. If the remand comes after that point (and the remand always comes after that point), then the PTAB simply has no more statutory authority to deal with the case.

      There really should not be such a thing as a remand in an IPR. If the PTAB gets it right in all particulars, then the CAFC should affirm. If the PTAB gets it wrong on one or more material points, the decision should simply be reversed (at least as to the claims on which the error bears).

      1. 2.1.1

        Interesting. I’d either missed or forgotten that aspect of Proxyconn. Looking back, I don’t think I see it in the FedCir opinion.

        I’m not sure you’re right about the effect of the deadline, though. As far as I know, there’s a substantial body of precedent holding that, in general, agencies don’t lose the power to act when they miss statutory deadlines unless Congress specifically says that they do. See, e.g., Brock v. Pierce County, 476 U.S. 253, 260-66 (1986); Gottlieb v. Pena, 41 F.3d 730, 733-34 (DC Cir 1994) (discussing Brock). I also think that if the CAFC limited itself to affirming or reversing the PTAB, it would invite complaints about due process and overstepping its appellate role. It’s somewhat unsatisfying to say that this all means that the statutory deadline is effectively toothless, but I think that’s how a lot of deadlines end up working in practice.

        1. 2.1.1.1

          unless Congress specifically says that they do.

          Isn’t this exactly what Congress IS saying…?

        2. 2.1.1.2

          Looking back, I don’t think I see it in the FedCir opinion.

          Correct. The patentee made the argument (listen to the oral arguments), but the CAFC brushed it off so entirely that they did not even deign to address it in the opinion.

        3. 2.1.1.3

          [A]gencies don’t lose the power to act when they miss statutory deadlines unless Congress specifically says that they do.

          But this is not a case of the agency “missing” a deadline. In 999 out of 1000 of these appeals, the agency gives the final decision by the statutory deadline, and then between when the final decision issues and the CAFC’s remand order arrives, the full 18 month term has run. Nothing is “missed” here, the time is simply used up.

          The whole reason that Congress created the 18-month hard deadline is that they wanted IPRs to be able to simplify litigation. This was meant to correct the error of the old inter partes re-exam system, where the re-exam could drag on for years and years, making district court litigation more complicated and more time consuming. The whole idea is that the IPR process was going to be short because it would be statutorily mandated to be short. Any interpretation of the IPR statute that allows for the whole process to turn back into an endless series of rounds on the carousel in the manner of the old inter partes re-exam defeats the very purpose for which IPRs are created.

          Courts are supposed to give effect to the will of Congress. Congress made its will clear in §316(a)(11). It is perverse for courts to apply §316(a)(11) in a way that defeats the purpose for which Congress crafted it.

          1. 2.1.1.3.1

            Thanks Greg – that’s the answer that I thought would be for my question at post 2.1.1.1.

      2. 2.1.2

        And for my hypothetical, I agree that some panels might hesitate to apply this decision that broadly, but I’m not what legal difference there is between SAS remands and other remands, under the majority’s reasoning here.

        To make the hypothetical simpler, suppose the PTAB started reconsidering institution every time the Federal Circuit remands. A remand creates additional work. As you note, remand proceedings may be in tension with the text or purpose of the statutory deadline. And, like any reversed tribunal, the PTAB might sometimes thing that the Federal Circuit gets it wrong a lot. Therefore (hypothetically), to further the goals of efficiency, predictability, statute-compliance, and correct decisionmaking, the PTAB’s policy is that it will now reconsider institution in ever remand, and will presumptively un-institute everything so that its APJs can concentrate on their main work rather than the extra homework the CAFC sometimes assigns.

        The way the BioDelivery majority reads 314(d), I’m not sure why that wouldn’t work.

        1. 2.1.2.1

          The way the BioDelivery majority reads 314(d), I’m not sure why that wouldn’t work.

          Agreed. I would like to think that a subsequent panel would distinguish rather than apply BioDelivery in these circumstances. I agree, however, that Judge Reyna’s opinion in BioDelivery is written so broadly that it would not be crazy for the next panel to write “our decision here is controlled by our precedent in BioDelivery… .”

          1. 2.1.2.1.1

            … reminds me of the Sovereignty question answered by the courts — first in regards to “mere” Tribal Sovereignty (but answered there in such a manner as not being so limited), and then NOT being so limited when State Sovereignty came ‘round.

      3. 2.1.3

        As a wise commenter here noted, 35 usc 316(a)(11) is not really a “statutory” deadline. The statute directs that the Director “shall prescribe regulations” requiring the one-year extendable deadline. Statutory deadlines cannot be waived; regulations usually can be.

    2. 2.2

      I rarely say this, but I think Judge Newman might have the better of the argument here.

      I rarely say this, but I think Judge Newman was asleep at the switch and does NOT have the better side of the argument here.

      Her position is that the PTAB did not follow orders and apply the SAS case law.

      But that is exactly what they did.

      That case law made the matter into a BINARY decision, and one based on the entire petition.

      The PTAB did exactly that: made a binary decision based on the entire petition.

      Notably missed by Judge Newman here is that the BEST arguments put forth by the challenger had lost.

      Which makes the binary decision only that much easier when the worse arguments are added to an already losing case – the arguments not even rising to a level to institute.

      Not sure exactly what Judge Newman was thinking here. But as Greg has stated, even giants sleep.

  6. 1

    Both sides (Reyna’s majority opinion and Newman’s dissent) have good arguments here, although in the abstract, I think that Judge Newman had the better argument. Neither possible outcome for this case is fundamentally “unjust” (although I bet that BioDelivery is really kicking themselves for pressing the SAS point on appeal). Now that there is a controlling precedent on this point, we can all live with it going forward.

    1. 1.1

      The issue will largely cease to matter in a ~1 year, after which most all the cases that can be affected SAS will have worked their way out of the pipeline.

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