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PTAB Partial Institution Decisions are Not Reviewable: Fed. Cir.
Practical Law Legal Update w-001-4898 (Approx. 4 pages)
PTAB Partial Institution Decisions are Not Reviewable: Fed. Cir.
by Practical Law Intellectual Property & Technology
| Published on 02 Mar 2016 • USA (National/Federal) |
In Harmonic Inc. v. Avid Technology, Inc., the US Court of Appeals for the Federal Circuit held that it does not have jurisdiction to review the Patent Trial and Appeal Board's (PTAB) decision to deny institution of inter partes review on some, but not all, of the grounds raised in a petition.
On March 1, 2016, in Harmonic Inc. v. Avid Technology, Inc., the US Court of Appeals for the Federal Circuit held that it lacks jurisdiction to review the Patent Trial and Appeal Board's (PTAB) decision not to institute inter partes review (IPR) on redundant grounds asserted in the petition ( (Fed. Cir. Mar. 1, 2016)).
Harmonic Inc. filed an IPR petition with the PTAB to review the patentability of Avid Technology, Inc.'s US Patent No. 5,495,291 (the '291 Patent), which is directed to a system for decompressing digital video. The PTAB:
- Instituted IPR on claims 1–16 of the '291 Patent, based on Harmonic's argument that the claims were obvious in light of US Patent Nos. 5,159,447 (the '447 Patent) and 5,508,940 (the '940 Patent).
- Refused to institute IPR on claims 1–16 on four other grounds asserted by Harmonic in its petition, calling them redundant of the obviousness ground on which IPR was instituted.
- Did not institute IPR on claims 17–20 on the '291 Patent.
In its Final Written Decision, the PTAB concluded that claims 1–10 of the '291 patent were unpatentable in light of the combination of the '447 Patent and the '940 Patent. However, the PTAB also found claim 11, and its dependent claims 12–16, were patentable. Harmonic appealed both:
- The PTAB's determination that claims 11–16 were patentable over the '447 and '940 Patents.
- The PTAB's refusal to revisit the four other grounds of unpatentability Harmonic asserted in its institution petition.
On appeal, the Federal Circuit first affirmed the PTAB's determination that claim 11 and its dependent claims were not obvious. The Federal Circuit held that there was substantial evidence to support the PTAB's finding that the '447 Patent neither taught nor suggested a key limitation in claim 11.
The Federal Circuit then addressed Harmonic's argument that, after it rejected the instituted obviousness ground, the PTAB should have considered Harmonic's other asserted grounds that the PTAB rejected as redundant.
As a preliminary matter, the Federal Circuit explained that IPRs have two distinct phases:
- The institution phase, which begins with the filing of an IPR petition and culminates in the PTAB's decision of whether to institute an IPR proceeding.
- The merits phase, if IPR is instituted, which begins after the institution decision and culminates in the PTAB's determination of patentability in light of the instituted grounds.
The Federal Circuit then noted that:
- Under 35 USC Section 314(d), it does not have jurisdiction to review an institution decision from the institution phase.
- Under 35 USC Section 141(c), it does have jurisdiction to review a final written decision from the merits phase.
Following recent precedent, the court then stated that Section 314(d) prohibits review of both:
- The PTAB's decision not to institute an IPR.
- The PTAB's decision to institute an IPR, even after the PTAB has issued a final written decision.
Turning to the substance of Harmonic's argument, the court held that it lacks jurisdiction to review the PTAB's decision not to institute on grounds it deems redundant, even if patentability is upheld over the instituted grounds.
Reasoning that a decision to institute on only a subset of the grounds identified in the petition is a combination of the decision to institute or deny, the Federal Circuit held that:
- A decision to institute on only a subset of the grounds identified in the petition is just a combination of a decision to institute and a decision denying institution, neither of which are appealable.
- The PTAB's institution decision in this case is no different than the wholesale institution or denial addressed in its prior decisions.
- The PTAB's decision to institute on one prior art ground or another does not raise fundamental questions about the scope of its statutory authority to deem patents unpatentable, which would trigger Federal Circuit appellate jurisdiction.
- Section 314(d) prohibits Federal Circuit review of a partial institution decision.
- The IPR statutory and regulatory framework, and in particular 37 C.F.R. § 42.108, expressly gives the PTAB authority to institute a partial review based on all or some of the unpatentability grounds asserted in the petition.
The decision underscores the importance for petitioners to carefully select unpatentability grounds to raise in an IPR petition. Counsel should avoid raising redundant grounds and consider raising only the strongest grounds because the PTAB may pick and choose asserted grounds on which to institute a trial.