Federal Circuit Takes Narrow View of Its Ability to Review PTO Decisions Regarding Whether to Institute Inter Partes Review
Written by Craig Countryman
The Federal Circuit recently decided three cases in which it took a narrow view of its ability to review the PTO’s decision regarding whether to institute an inter partes review. In the lead case, St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., __ F.3d ___, 2014 U.S. App. LEXIS U.S. App. LEXIS 7731 (Fed. Cir. Apr. 24, 2014), the Federal Circuit held it had no jurisdiction to hear St. Jude’s appeal challenging the PTO’s decision to deny an IPR request based on 35 U.S.C. § 315(b), which states that IPR “may not be instituted” if the request is filed over a year after the petitioner is “served with a complaint” alleging patent infringement. St. Jude’s argument on appeal was that the one-year bar did not apply to its request because Volcano had brought its patent infringement case against St. Jude in a counterclaim instead of a complaint. But the Federal Circuit found it could not review the PTO’s decision to deny the petition because 35 U.S.C. §314(d), which states that the “determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable,” barred the appeal. The Court rejected St. Jude’s argument that the appeal bar applied only to the PTO decisions denying IPR based on substantive grounds, instead of on a procedural ground based on a source other than section 314, like the one-year bar. After reviewing the structure of the IPR statute, the Federal Circuit explained that it establishes a two-step procedure—(1) a decision regarding whether to “institute” IPR, and (2) the “conduct” of an IPR once it is instituted, which culminates in a “final written decision” on whether the claims are patentable. The Court concluded that the relevant jurisdictional statutes—28 U.S.C. § 1295(a)(4) and 35 U.S.C. § 141—are best interpreted to permit the Federal Circuit to review only the “final written decision” at the end of an IPR, not a decision on whether to “institute” IPR. The Court thus dismissed St. Jude’s appeal for lack of jurisdiction.
The two other cases followed the rationale of St. Jude. In the first, In re Dominion Dealer Solutions, LLC, __ F.3d ___, 2014 U.S. App. LEXIS 7674 (Fed. Cir. Apr. 24, 2014), the Federal Circuit denied a petition for mandamus that challenged the PTO’s denial of an IPR based on substantive grounds. The Court cited St. Jude for the proposition that denials of IPR are non-appealable, making clear it would not permit parties to use mandamus to obtain review where the statute permitted direct appeals. In the second case, In re Proctor & Gamble Co., __ F.3d __, 2014 U.S. App. LEXIS 7677 (Fed. Cir. Apr. 24, 2014), the Federal Circuit denied a mandamus petition that challenged the PTO’s decision to grant an IPR petition. Citing the other two opinions, the Federal Circuit held it had not jurisdiction to review the PTO’s decision to institute IPR before it had issued a “final written decision” at the end of IPR.
These three decisions have important implications for parties requesting IPR. Based on St. Jude and Dominion Dealer, it appears that the Federal Circuit will not accept either direct appeals or petitions for mandamus challenging the denial of IPR, regardless of the reason for the denial. The only remaining potential avenue for judicial review is a suit under the Administrative Procedure Act, but the Federal Circuit may soon eliminate that path as well. The St. Jude opinion remarked that the appeal bar in § 314(d) “may well preclude all review by any route,” and, although the panel added that it “need not decide” that issue, another case will soon squarely present it. The petitioner in Dominion Dealer filed an APA suit in addition to its mandamus petition, and the district court recently dismissed the APA suit, finding that it was barred by § 314(d). So the Federal Circuit will likely have to resolve the question soon. But, based on Proctor & Gamble, it is less clear whether a patentee who believes IPR should not have been instituted can challenge that decision—Proctor & Gamble holds that the patentee may not do so right away, but it explicitly left open the possibility that be able to challenge the PTO’s institution decision at the end of the IPR, as part of the appeal of the “final written decision” on the patentability of the claims. Resolution of this issue must also await a future case.