Supreme Court Hears Appealability Appeal

by Dennis Crouch

The U.S. Supreme Court is set to hear oral arguments on Monday, December 9 in the pending IPR Appeal that is now captioned Thryv, Inc. v. Click-to-Call Technologies, LP (SCT Docket No. 18-916).   The focus of the case is statutory declaration that the PTO Director’s decision of whether to institute an IPR is “final and nonappealable.”  35 U.S.C. § 314(d).  This same issue – albeit slightly different context – was already addressed in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) and SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018).

Question Presented in Thryv: Whether 35 U.8.C. § 314(d) permits appeal of the PTAB’s decision to institute an inter partes review upon finding that§ 315(b)’s time bar did not apply.

The section 315(b) time bar prohibits institution of a petition “filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent.”  Years ago (well before the 1-year date) the patentee Click-to-Call sued Thryv’s predecessor-in-interest for infringement and served the complaint as required under § 315(b).  That lawsuit, however, was voluntarily dismissed without prejudice.  When the defendant later filed its IPR petition, the PTAB found that the dismissal without prejudice effectively nullified the original lawsuit and, as such, did not raise the time-bar. The PTAB then invalidated the claims.  On appeal, the Federal Circuit rejected PTAB’s approach  — holding that the statute does not allow for any exception to the time-bar for cases dismissed without prejudice.  In its petition to the Supreme Court, Thryv asked the court to review both whether (1) the issue is appealable; and (2) the time-bar still applies after a dismissal without prejudice. The Supreme Court granted certiorari, but only as to question 1 – whether the issue is appealable.

The U.S. Gov’t also support’s Thryv’s position — arguing that its institution decisions should not be subject to appeal. Expected at oral arguments:

  • Adam Charnes (Kilpatrick Townsend) is representing the petitioner patent-challenger Thryv.
  • Jonathan Ellis from the Solicitor General’s office is representing the U.S. Gov’t. and splitting time with Charnes.
  • Daniel Geyser (Geyser PC) is representing the patentee Click-to-Call.

Merits Briefing:

For me, the most on-point text comes from the Supreme Court’s 2018 decision in SAS that discusses and applies the court’s prior decision in Cuozzo (2016):

At this point, only one final question remains to resolve. Even if the statute forbids his partial institution practice, the Director suggests we lack the power to say so. By way of support, he points to § 314(d) and our decision in Cuozzo. Section 314(d) says that the “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” In Cuozzo, we held that this provision prevented courts from entertaining an argument that the Director erred in instituting an inter partes review of certain patent claims. The Director reads these authorities as foreclosing judicial review of any legal question bearing on the institution of inter partes review—including whether the statute permits his “partial institution” practice.

But this reading overreads both the statute and our precedent. As Cuozzo recognized, we begin with “the ‘strong presumption’ in favor of judicial review.” Id. To overcome that presumption, Cuozzo explained, this Court’s precedents require “clear and convincing indications” that Congress meant to foreclose review. Given the strength of this presumption and the statute’s text, Cuozzo concluded that § 314(d) precludes judicial review only of the Director’s “initial determination” under § 314(a) that “there is a ‘reasonable likelihood’ that the claims are unpatentable on the grounds asserted” and review is therefore justified. . . . In fact, Cuozzo proceeded to emphasize that § 314(d) does not “enable the agency to act outside its statutory limits.” If a party believes the Patent Office has engaged in “ ‘shenanigans’ ” by exceeding its statutory bounds, judicial review remains available consistent with the Administrative Procedure Act, which directs courts to set aside agency action “not in accordance with law” or “in excess of statutory jurisdiction, authority, or limitations.”

And that, of course, is exactly the sort of question we are called upon to decide today. SAS does not seek to challenge the Director’s conclusion that it showed a “reasonable likelihood” of success sufficient to warrant “institut [ing] an inter partes review.” 35 U.S.C. §§ 314(a), (d). No doubt SAS remains very pleased with the Director’s judgment on that score. Instead, SAS contends that the Director exceeded his statutory authority by limiting the review to fewer than all of the claims SAS challenged. And nothing in § 314(d) or Cuozzo withdraws our power to ensure that an inter partes review proceeds in accordance with the law’s demands.

SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348 (2018). The difficulty here with directly applying SAS is (1) Gorsuch overstated the holding in Cuozzo regarding the “only” thing appealable; (2) SAS was decided in a 5-4 vote with dissenters characterizing Cuozzo has holding “that the Director’s decision whether to institute review is normally not reviewable.”

33 thoughts on “Supreme Court Hears Appealability Appeal

  1. 3

    To return to the actual subject here of this Sup. Ct. case Thryv, Inc. v. Click-to-Call Technologies, LP, I hope everyone notes that regardless of the outcome, only the few folks procrastinating filing IPR petitions for more than a year after they or their privy first get notice of their being sued on that patent will be directly impacted?
    [Editorial: Some of us wish the Supremes would address more important patent law issues. Others are afraid they might.]

    1. 3.1

      Some of us wish the Supremes would address more important patent law issues. Others are afraid they might.

      I hear you there. Most of these same issues that the SCotUS has decided to consider were implicated when the ex parte re-exam provisions were added to Title 35 back in the 1980s. Goodness knows that folks tried to get the SCotUS to consider these issues back then (e.g., Joy Techs. v. Manbeck, 959 F.2d 226 (Fed. Cir. 1992), cert. denied 113 S. Ct. 90), but SCotUS was not interested. Now, in the six years since the AIA came into effect, the SCotUS had taken np fewer than four IPR appeals. Candidly, I am surprised that the Court is taking so much interest in this one end of patent law.

      1. 3.1.1

        We would all be better off if Congress exercised their Constitutional power of jurisdiction stripping of the non-original jurisdiction of patent appeals and removed the Supreme Court from the scene.

        Of course, Congress most likely needs to also reset the CAFC in order to both maintain Marbury and eliminate the fire-hose trained simians of the current CAFC.

        1. 3.1.1.1

          You’d be even better off if “we” just amended their Constitution and made you God Emperor of Patents.

          I mean, why limit your ridiculous and disgusting fantasies? Let your f-re-ak flag fly.

          1. 3.1.1.1.1

            Except for the fact that “my” better is for the betterment of innovation protection and not to ANY sense of personal “Godhood” that your denigration attempts to paint.

            You really do
            S
            U
            C
            K
            at this.

      2. 3.1.2

        ” … I am surprised that the Court is taking so much interest in this one end of patent law.”

        As am I, Greg.

        Unless, of course, they’ve decided to really shake things up in the patent world by using this case as their entree …

        Unless.

        1. 3.1.2.1

          Unless, of course, they’ve decided to really shake things up in the patent world by using this case as their entree…

          Seems to me that your “unless” should be “even if.” The question presented here on which the Court took certiorari is simply too picayune to do much shaking up.

          If the Court really wanted to shake things up, Lord knows they have passed by better opportunities quite recently (e.g. St Regis Mohawks, Sequenom, etc). It seems hard to believe that the Court—wanting to “shake things up”—would pass at those questions presented, but take certiorari on this one.

          1. 3.1.2.1.1

            Agree the odds are very slim indeed Gret. That said, at least when it comes to patents / innovation, SCOTUS doesn’t seem to need much to turn bread crumbs into a full, hot loaf of bread.

            Hmmm . . . now just what is that wonderful aroma wafting from the direction of the kitchen . . .

            1. 3.1.2.1.1.1

              I have to wonder what aroma it is that you have been smelling from the Supremes. It certainly has not been any “warm bread” for innovation protection.

          2. 3.1.2.1.2

            Sorry Greg — “Gret” was of course a typo.

      3. 3.1.3

        Greg, the number of Sup. Ct. cases taken on IPRs can perhaps be explained by at least these two things? An interest in Federal administrative law in general, and ending the deluge of cert petitions attacking various aspects of IPRs on various Constitutional grounds.

        1. 3.1.3.1

          There has been zero sense of “ending any deluge” of Constitutional questions, Paul.

          It is entirely disingenuous of you to attempt to offer that spin — seeing as you have refused to engage on the merits of any actual Constitutional question (begging off with a “I’ll wait to see what may happen” stance at every instance on these blog forums).

    2. 3.2

      only the few folks procrastinating filing IPR petitions for more than a year after they or their privy first get notice of their being sued on that patent will be directly impacted?

      I don’t think “few folks procrastinating” is a fair way to describe this. The “or their privy” part is the main reason this case matters. If a patent holder sues you, you’re on notice that the window to IPR that patent expires in a year. If a patent holder sues someone who may or may not be considered your “privy” or a “real party in interest,” procrastination isn’t the issue. If you guess wrong about what a court will think about your relationship with another party, then depending on timing and a few other things, you may find yourself time-barred from an IPR or lacking standing to appeal.

      Also, the appeal to the Federal Circuit in this case was brought by the plaintiff. The concern from the plaintiff’s side is how many others should be permitted to line up and take seriatim shots at their patents and how much coordination on the other side should be enough to trigger the time bar–is the PTAB the final word on that, or can the plaintiff appeal to the Federal Circuit. Again, nothing to do with procrastination and everything to do with identifying privies and real parties in interest.

      In cases where there’s no question about who’s a privy or real party in interest, it probably doesn’t matter whether a time-bar ruling is appealable or not because that question will just turn on simple math.

      1. 3.2.1

        I agree dcl.

        In fact, there are a few organizations that have set up their complete business model on being a “disassociated” party in interest (a shield against any such time bars against patent holders).

      2. 3.2.2

        dcl, I politely disagree with “If a patent holder sues someone who may or may not be considered your “privy” or a “real party in interest,” procrastination isn’t the issue.”
        If your customer or a prior company you bought [with due diligence] has been sued on a patent you would normally have have had ample warning and time to consider an IPR for what is very much higher than normal odds of being sued on that same patent later yourself.

  2. 2

    You know how the patent maximalists (who are mostly Repu-k-k-k-es and glibertarians, and who whine out of self-interest or misplaced adoration of their rich, greedy masters) are always making laughable assertions about how subject matter eligibility is “totally unpredictable” and “everything is ineligible” etc? It’s nothing but a mindless rhetorical game, as I’ve documented here for many years.

    There’s a good name for that game: epistemological nihilism. Pay attention, Dennis, because you seem to allow yourself to get “played” a lot these couple of years in your desperate attempt to be “liked” by everybody, including the most appalling excuses for humankind on the planet (…. or there is something else going on … we can only guess, Dennis!).

    That’s why this sort of thing coming out of the mouths of the same desperate people is also totally predictable:

    Doug Collins (R-Georgia)somehow kept up his refrain on Wednesday that nobody in the room could agree on the most elementary facts, even as every single fact witness (including those selected by the GOP) and every single legal expert (including one selected by the GOP) agrees substantially on all of the material facts surrounding the Ukraine transaction.

    More here for those with at least the modest level of intellect required to process simple logic and facts: link to lawyersgunsmoneyblog.com

    And don’t miss this: link to supremecourt.gov

    I dare say I could find plenty of attorneys willing to sign on to something like this should Greg DeLassus’ and Kevin Noonan’s disgusting fantasies about subject matter eligibility ever wind up enshrined in a statute.

    1. 2.1

      Translation:

      “Wah”

  3. 1

    OT but interesting, are the published comparisons of PGRs versus IPRs. PGRs allow very much broader unpatentability issues, even §101, §112 and prior products, but only against AIA patents issued less than six months. That is, only against new patents having at least one claim with an effective filing date on or after May 16, 2013.
    By now, most such newly issued patents are AIA patents. Yet the number of PGR petitions has not proportionally increased. PGRs are still rarely used, even though their success rate is higher. Only 67 PGR petitions were filed in 2018 versus 1,608 IPR petitions. Two explanations are the estoppel danger for losing being correspondingly much greater, and the small number of patents that new being sued on.

    1. 1.1

      the estoppel danger for losing being correspondingly much greater

      Just so we are all on the same page, the greater “danger” from estoppel flows from the fact that if 101, 112, and non-printed prior art are “on the table” in a PGR proceeding then the petitioner must raise all those defenses in the PGR proceeding or risk being estopped from raising them in court (or elsewhere). Correct?

      Put another way, if one is particularly averse to that kind of “risk”, then a PGR proceeding can become rather costly in terms of attorney time. As a result, we would expect PGRs to be brought against mostly the worst freshly issued patents with glaring 101 or 112 issues, where the odds of victory are highest (hence the observed higher success rate).

      1. 1.1.1

        Yes, thanks for the add MM, but one minor caveat. Quite a few PGR proceeding have not necessarily been more costly in attorney time because those petitioners took a risky gamble on a pure 101 attack without raising any other PGR-possible invalidity arguments [even though estoppel applies to them whether raised or not].

        1. 1.1.1.1

          Yes. I would guess, though, that those relatively inexpensive “pure 101 attacks” were not deemed to be “risky gambles” by the petitioner but rather “sure things” (or at least as certain as things get in our patent universe). The calculation of “risk” is also presumably made with regards to the cost of not succeeding relative to the cost of not bringing the challenge at all, e.g., the cost of paying a license, shouldering the risk of an infringement suit, losing investment money because the patent is “hanging out there”, etc.

          It’d be interesting to see the claims that were successfully tanked under these “pure 101” challenges raised via PGR (as well as those that survived). I would predict they are among the worst offenders that somehow escape the PTO and either fall right into the Mayo framework (collect data using prior art, and infer) or they are extremely low level “app” type stuff (“access this specific data on the Internet by entering a password” etc).

    2. 1.2

      Paul — PGRs have a 9 months after patent grant or reissue time limit.

      O/T: Anyone know whether CBMs can still be instituted; given the requirement that they must be completed within 12 months (or 18 with good cause), yet there is now less than 1 year before their 9/19 expiration?

      1. 1.2.1

        “Within 12 months” includes values less than 12 months (e.g., 11 months, 1 month, etc) so the fact that the provision sunsets in September of 2020 will not affect the institution of a CBM proceeding.

        More importantly, the sunset date is the last date on which a petition for CBM review can be submitted. The data does not signal the abrupt end of every CBM proceeding that has already begun.

        Thank you for your excellent and thoughtful comment.

        Next up: Is prior art necessary for a working subject matter eligibility screen in a jurisdiction where applicants can recite whatever prior art they want in their claims? Really tricky stuff! Get your thinking caps on, folks!

        1. 1.2.1.1

          Your “next up” is BOTH untethered to the actual patent law written by Congress and an admission that THAT law is not how you feel the law should be.

          Thank you for that.

          1. 1.2.1.1.1

            It’s called sarcasm, sh-thead.

            1. 1.2.1.1.1.1

              Whatever you ‘think’ that you want to call it, what it IS is admission on your part that the law that you merely feel should be is NOT the law as written by Congress.

              It would burn you to no end for Congress to reclaim its full Constitutional authority to provide innovation protection.

              Your cognitive dissonance would go completely off the scale.

      2. 1.2.2

        Yes thanks, it is 9 months from patent issue dates for filing PGRs against them [and I understand that you can’t use an IPR instead until that 9 month time period is over either, per §311].
        As for your CBM sunsetting question, here is that provision in the CBM statute, and I would think (3)(B) here controls?
        “(3) SUNSET-
        (A) IN GENERAL- This subsection, and the regulations issued under this subsection, are repealed effective upon the expiration of the 8-year period beginning on the date that the regulations issued under to paragraph (1) take effect.
        (B) APPLICABILITY- Notwithstanding subparagraph (A), this subsection and the regulations issued under this subsection shall continue to apply, after the date of the repeal under subparagraph (A), to any petition for a transitional proceeding that is filed before the date of such repeal.”

        1. 1.2.2.1

          The USPTO website says: “The program will sunset for new TPCBM petitions on September 16, 2020.”

        2. 1.2.2.2

          Thanks Paul & MM.

          Thought I’d read somewhere earlier this year that since such reviews couldn’t be guaranteed to be completed within the required year from institution, that no new CBMs could be filed after 9/16/19; one year prior to the 9/16/20 expiration of the 8-year program.

          Dennis?

          1. 1.2.2.2.1

            Where did you read that?

            1. 1.2.2.2.1.1

              Don’t remember; wish now I’d kept the source / cite.

              Oh, well. In a little over 9 months from now it won’t matter anyway.

          2. 1.2.2.2.2

            Pro Say, back when the AIA was enacted, at least one commentator did seem to say in an AIA timetable that CBMs would end 9/16/19 [instead of 9/16/20]. But not, I think, based on their prosecution time. More likely the potentially confusing “Sunset” provision “the expiration of the 8-year period beginning on the date that the regulations issued under paragraph (1) take effect.”

            1. 1.2.2.2.2.1

              Thanks Paul. That may be what I’m remembering / thinking of.

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