Biodelivery Sciences Int’l. v. Aquestive Therapuetics, Inc. (Fed. Cir. 2020)
The Federal Circuit has denied en banc rehearing in this case that focuses primarily on the ability of the appellate court to keep the PTAB in-line. In this particular case, the PTAB did not follow a prior remand order from the Federal Circuit. In particular, in a prior SAS appeal, the Federal Circuit indicated that the PTAB should hold trial on “each claim challenged.” Instead, the PTAB decided to dismiss the whole case — finding it it be “inefficient and expensive” to include the additional grounds. Judge Newman argues that such disobedience should be treated swiftly. She writes:
I write because of the significance of the balance of agency and judicial authority, and the rules of procedural law in the administrative state.
Instead of complying with the Remand Order, the PTAB withdrew all of its past actions as to these proceedings, although past actions were not the subject of the remand. . . . Nonetheless, my colleagues hold that the PTAB is not required to comply with the court’s Remand Order, and further hold that this non-compliance is not reviewable. This action raises critical issues of agency authority, judicial responsibility, and the constitutional plan.
Judge Newman dissenting from En Banc Denial.
As noted earlier, all cases of SAS-based remands of instituted IPRs that did not decide all of the petitioned claims should end soon, so this cannot occur again.
Sure, while the instance of SAS remand may be time-bound, but the analysis and takeaways are timeless.
Furthermore, the IPR decision remanded here had not found invalid even the claims the PTAB had decided to try. Those tried claims would normally would have been the broadest, so why would the PTAB on remand want to declare an IPR of claims even narrower than those it had already not found invalid?
While there is no doubt that Judge Newman may be motivated by a decent concern (power and audacity of an Administrative State), she is yet again asleep.
To wit (emphasis added):
“In SAS Institute the Supreme Court held that 35 U.S.C. § 318(a) requires that in an inter partes review the PTAB must decide all of the claims and grounds challenged in the petition. Id. at 1354–58. Since the PTAB had not met this requirement for these cases, our Remand Order instructed:
The Court held that IF the Director institutes review proceedings, the PTAB review must proceed “in accordance with or in conformance to the petition,” including “ ‘each claim challenged’ and ‘the grounds on which the challenge to each claim is based.’ ” – BioDelivery Sciences Int’l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205, 1207 (Fed. Cir. 2018) (“Remand Order”) (quoting SAS Institute, 138 S. Ct. at 1355–56).”
She misses that the Supreme Court holding is NOT a directive of
“you must institute on all grounds,” – bar any other factor (like the factor as to whether to institute at all — which is given WIDE latitude by Congress to the PTAB),
but rather a directive of
“IF you institute, then you must institute on all grounds.”
There is a clear difference, and the PTAB (here at least) simply did not do as Judge Newman thinks that they did.
Now, I will note that there is dicta (read that as overreach) from the Supreme Court in the SAS case that may indicate that what the CAFC wanted with the remand was something different than what the PTAB (properly) did.
This dicta can be found with: “Section 314(a)’s requirement that the Director find “a reasonable likelihood” that the petitioner will prevail on “at least 1 of the claims challenged in the petition” suggests, if anything, a regime where a reasonable prospect of success on a single claim justifies review of them all.”
Let’s all recognize that this is a policy decision being ‘read into’ some supposed intent of Congress. However, this is negated by how Congress actually set up the power of PTAB. So while there is indeed ‘truth’ to the Supreme Court’s holding of the decision to institute being a binary decision, the Supreme Court wanders into the weeds and seems to take away the discretion of the PTAB as to whether to institute or not. As the Court itself in this very case stated (with the actor modified): “if Congress had wanted to adopt the [Supreme Court’s] approach, it knew how to do so.” IF Congress wanted the PTAB to mandatorily institute if but one claim would be considered as having the specified chance of succeeding, Congress knew how to write such a mandatory condition.
The late Ned Heller once supplied a learned reference that discussed the danger of taking Supreme Court dicta and treating that dicta as holding.
This is an instance that reinforces that view.
The remand was to follow SAS, Newman errs by presuming that the remand did not include the factor of whether to institute at all or not. The CAFC can ONLY write a more direct order (they are not Congress) that is limited by the actual holding of the Supreme Court.
Nice insight and analysis I hadn’t considered anon — thanks.
R.I.P. Ned; you are missed.
The text you quoted about “if” the Director decides to institute wasn’t the part of the order actually issuing the remand. That statement comes from the Federal Circuit’s generic discussion and summary of the Supreme Court’s SAS decision, not the portion implementing the remand. The actual remand directive from the original 2018 case (reported at 898 F.3d 1205) said: “Biodelivery’s request for remand to implement the Court’s decision in SAS is granted in Federal Circuit Appeal Nos. 2017-1265, 2017-1266, and 2017-1268.”
That statement, to “implement” the decision in “SAS,” that was the actual mandate with which the PTAB had to comply. There was nothing in the actual remand directive about “if” the Director decides to institute in the operative order. Nor would this have made any sense, since all of the IPRs were already instituted by the Director anyway, by the time of the Federal Circuit’s appeal.
The issue in this case wasn’t really about whether the Director can choose to institute or not; he had already done so in this case, albeit only partially under pre-SAS case law. The issue is that the PTAB responded to the remand by completely vacating the original institution decisions to avoid considering the additional grounds that would otherwise be required to be considered under SAS.
I think Newman’s concern here was legitimate, it raises significant issues about the role of appellate courts and the latitude lower tribunals have in creatively avoiding appellate mandates. Most other circuit courts would have gone absolutely ballistic if a lower court had responded to a remand directive in this fashion.
A difference with no distinction, given that your supplied quote of “to implement the Court’s decision in SAS” carries the effect of my quote with the “IF.”
The actual mandate did no more than what SAS provided, and — as I pointed out, holding is different than dicta — so what SAS provided was simply more than what Newman is recognizing.
The statement of “that would otherwise be required to be considered under SAS.” is in error. As I noted, the holding of SAS is NOT the dicta of SAS. Whether or not Newman’s concerns are valid are just not at point. For what it is worth, I do believe her concerns are valid. It is but her view of SAS that is not.
As I said, even giants sleep.
Think of it this way: it was the institution decision that was defective and the decisionitself had to be started all over.
The first decision is as if it never existed. That first decision was canceled by the holding of SAS. The dicta of SAS cannot do squat (properly).
Here, the PTAB did follow the CFAC remand, although Judge Newman is not recognizing what that remand entailed.
The remand merely entailed the holding of SAS.
It did not entail voiding the first decision and only allowing a second replacement decision of “must apply all claims.”
The content of the second replacement decision IS a decision to institute or not. That part aligns with the binary nature as provided by the holding of SAS.
But that is the extent of the holding.
The CAFC could (and did) remand for the PTAB to redo its institution decision with a replacement institution decision.
The CAFC cannot remand for the PTAB to redo its institution decision with a second replacement institution decision AND require any particular outcome of that second replacement institution decision. There was NO removal of the binary decision to be a required non-binary decision.
… and yet another way to think of it:
The initial institution decision was every bit a “do not institute” (for claims not instituted) as it was a “do institute” (for claims instituted).
There is only ONE entity that gets to decide whether to institute or not.
Forcing the portion that originally had a “do not” into a “do” is every bit the same logically as forcing the portion that originally had a “do” into a “do not.”
The CAFC cannot force one or the other of the binary choice, and Newman would be exactly wrong in the exact degree if the PTAB upon remand came back with an “all in” institution decision and she objected that the initial decision (as to certain claims had already been made and the remand did not include an institution decision that could change what the PTAB had already done.
This is exactly why one MUST be able to recognize (and set aside) dicta of the Supreme Court (exactly how the article supplied by the late Mr. Heller discussed).
Perhaps the best post from the earlier thread: link to patentlyo.com
(if I do say do myself)
Agree with this. SAS held that institution is all-or-nothing. After SAS, where the PTO had done partial institution (i.e., neither all nor nothing), SAS remands were necessarily for the PTO to ask the right question re: institution and give one of the two permissible answers.
In individual cases, where partial institution produced a final written decision, this produces odd or inconvenient results, but I think it has to be right… at least as long as it’s limited to SAS remands. (I’d said something different before but anon’s mostly convinced me).
You seem to be right anon.
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