The United States Supreme Court in SAS Institute struck down the Patent Trial and Appeal Board’s practice of instituting inter partes review (IPR) on only a subset of claims challenged in the petition. SAS Institute Inc. v Iancu, 584 U.S. ___, No. 16-969 (2018). Thus, the Board’s final written decisions in IPRs must address the patentability of all challenged claims.
The Board’s claim-by-claim “partial institution” practice was based on the United States Patent and Trademark Office (USPTO) rule stating that the Board “may authorize the review to proceed on all or some of the challenged claims.” 37 CFR § 42.108(a). Pursuant to this rule, the Board has routinely instituted IPRs on only a subset of challenged claims. In those instances, the non-instituted claims have not been further addressed during the trial or in the final written decision.
SAS Institute challenged this practice, arguing that it was contrary to 35 U.S.C. §318(a)’s mandate that the Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” (emphasis added). The Federal Circuit rejected this argument, and affirmed the Board’s partial institution practice.
In a 5-4 decision authored by Justice Gorsuch, the Court reversed, holding that the Board “cannot curate the claims at issue but must decide them all.” The Court did not find any basis in the text of §§ 311-318 for discretion to pick and choose among the challenged claims. The Court instead held that, while the text gives the Board discretion whether to institute a review, that choice is binary—either to institute the review on all challenged claims or not at all.
This decision could significantly impact the Board’s and petitioners’ practices going forward. For example, all-or-nothing institution has the potential to increase the administrative resources required to adjudicate instituted IPRs. In pending IPRs in which some or all briefing has already been completed, additional briefing may be required to permit the parties to address challenged claims on which the Board previously declined to institute review.
This decision will also expand the scope of § 315(e) estoppel in some instances to include patent claims that previously might have been denied institution, but now must be addressed.
There remains an open question, however, about the application of estoppel when a claim is challenged on multiple grounds. While precluding institution of only a subset of challenged claims, the Court did not directly address the Board’s current practice of picking and choosing which grounds to institute. This practice has led to disagreements among district courts about whether § 315(e) estoppel applies to grounds denied institution on the merits. Compare Biscotti Inc. v. Microsoft Corp., 2017 WL 256231 (E.D. Tex. May 11, 2017) (holding that estoppel applies) with Douglas Dynamics, LLC v. Meyer Prods. LLC, 2017 WL 1382556 (W.D. Wis. Apr. 18, 2017) (holding that estoppel does not apply). This decision is not likely to resolve this disagreement.