On April 20, the U.S. Supreme Court issued its decision in Thryv, Inc. v. Click-to-Call Techs., LP, No. 18-916 (S. Ct. Apr. 20, 2020), finding that the PTAB’s decision to deny institution of an IPR under 35 U.S.C. § 315(b) is not appealable. This case effectively wipes out the Federal Circuit’s time-bar case law and makes the PTAB the sole and final decision maker for all time-bar related issues. With no appellate route for such issues, Petitioners need to carefully consider all facts that might implicate a time bar to inform the timing of their petitions. And now it is even more important for Patent Owners to craft their time-bar defenses as persuasively as possible, particularly since some defenses may require discovery, such as proving that an unnamed party is a privy served with a complaint more than a year before the petition’s filing date. The PTAB requires a strong showing before granting any discovery.
Section 315(b) sets a one-year time bar where “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” And, section 314(d) specifies that the PTAB’s “determination…whether to institute an [IPR] under this section shall be final and nonappealable.” The dispute before the Supreme Court turned on whether the phrase “under this section” of § 314(d) applied only to the PTAB’s decision whether or not to institute on substantive decisions under § 314, or whether that section applied to the one-year time bar of § 315(b) as well. In a 7-2 decision, the Court held that decisions under § 315(b) are not appealable.
The Facts, Holding, and Ramifications
The underlying facts of this case are important. More than a year before the IPR petition’s filing date, the Patent Owner had served the Petitioner with a complaint for patent infringement. That action was eventually voluntarily dismissed. Under the PTAB’s law of the time, the PTAB held that a voluntary dismissal did not invoke the one-year time bar of § 315(b). The Patent Owner appealed to the Federal Circuit in Click-To-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018), and the court reversed, holding that the filing of an action that was voluntarily dismissed nevertheless triggered § 315(b)’s time-bar. The Supreme Court vacated that decision and remanded with instructions to dismiss the appeal for failure of appellate jurisdiction. The Supreme Court did not reach the issue of whether a voluntary dismissal starts the one-year time bar, nor could it because it lacked jurisdiction. As such, the Court only addressed the appealability of decisions under § 315(b).
The Supreme Court’s decision also overturned the Federal Circuit’s en banc holding in Wifi-One, LLC v. Broadcom Corp, 878 F.3d 1364 (Fed. Cir. 2018)(en banc). There, the Federal Circuit held that the USPTO’s determinations under § 315(b) were appealable because that timeliness determination “‘is not “closely related” to the institution decision addressed in § 314(a).'”
The Supreme Court supported its § 314(d) interpretation by explaining that the America Invents Act’s purpose was to “weed out bad patent claims efficiently.” Therefore, “[a]llowing § 315(b) appeals would tug against that objective, wasting the resources spent resolving patentability and leaving bad patents enforceable.”
The Supreme Court then addressed two prior decisions it issued concerning IPR procedure: Cuozzo and SAS. It explained that its decision in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) was “fatal” to Click-to-Call’s interpretation that § 314(d)’s limitation on appeals applied only to substantive determinations of whether to institute an IPR. In Cuozzo, the Court held unreviewable the PTAB’s application of 35 U.S.C. § 312(a)(3) (the provision requiring challenges be made with particularity). Therefore, § 314(d) mandates that the PTAB’s decisions to institute are “final and nonappealable.” Furthermore, the Court’s holding in SAS Institute Inc. v. Iancu, 138 S.Ct. 1348 (2018) did not compel a different result because this appeal did not challenge “the manner in which the agency’s review ‘proceeds’ once instituted, but whether the agency should have instituted review at all.” The Court thus determined that this decision was in accord with its prior precedent.
The PTAB’s case law now exclusively governs all time-bar determinations, which as of today, would apply the one-year time bar to any Petitioner served with a complaint more than a year before the petition’s filing date, even if the district court action is eventually dismissed voluntarily or even if the plaintiff lacked standing. Infiltrator Water Techs., LLC v. Presby Patent Trust, Case IPR2018-00224, Paper 18 (P.T.A.B. Oct. 1, 2018) (Precedential) (citing Click-to-Call, 899 F. 3d at 1325 and Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co., Nos 2017-1555, 2017-1626 (Fed. Cir. 28, 2018 (non-precedential decision where the court found that “[j]ust as the statute includes no exception for a voluntarily dismissed complaint, it includes no exception for an involuntarily dismissed complaint.”). Interestingly, in Infiltrator Water Techs., the PTAB recognized that its case law did not treat a voluntary dismissal as starting the one-year time bar prior to the Federal Circuit’s Click-to-Call case. Practitioners therefore need to wait and see if the PTAB will revert to its prior rule or continue to follow the Click-to-Call rule.
In the meantime, Petitioners need to treat all complaints served on them or any privy as starting the time-bar clock and should time their petitions accordingly. Patent Owners, on the other hand, need to diligently research all possible time-bar issues immediately after having a petition filed against them and before their preliminary response is due, which is only three months after the petition is filed. An effective defense may arise when an unnamed privy or real party in interest was served more than one year before the petition’s filing date. To put on such a case, Patent Owners may need discovery, for example, on the relationship between the Petitioner and privies that may have been sued. The PTAB however is reluctant to grant discovery. So, Patent Owners should obtain as much evidence as possible as quickly as possible to show the PTAB that there is a time-bar issue worthy of granting discovery.
If you have questions about what this case means for your business, please contact the authors.