Don?ÇÖt Worry ?Çô You Got This: the Federal Circuit Clarifies the PTAB?ÇÖs Power to Review IPR decisions after Cuozzo.
The Patent Trial and Appeals Board (PTAB) has authority to review institution decisions for inter partes reviews (IPRs), according to the Federal Circuit?ÇÖs October 20 decision in Medtronic v. Robert Bosch Healthcare.1?áThis decision comes after Medtronic petitioned for rehearing after the Supreme Court?ÇÖs decision in Cuozzo Speed Technologies, LLC v. Lee.2
The Medtronic suit began in 2013 when Bosch alleged that Cardiocom, LLC (a subsidiary of Medtronic) infringed Pat. Nos. 7,769,605 and 7,870,249, directed to patient monitoring systems.?á Cardiocom then petitioned for inter partes review (IPR) of the two patents. After those petitions were denied, Medtronic filed an additional three petitions for the same two patents, listing Medtronic as the sole real party in interest.?á Even though Bosch argued that the petitions should be denied because Medtronic failed to name Cardiocom as a real party in interest as required under 35 U.S.C. ?º 312(a)(2), the PTAB instituted IPR proceedings.?á Later on, the PTAB granted additional discovery requests by Bosch.?á Evidence from discovery eventually led to the PTAB?ÇÖs termination of the proceedings after reconsidering Medtronic?ÇÖs failure to comply with the ?º 312 requirements.?á After the termination, Medtronic appealed to the Federal Circuit for lack of jurisdiction and mandamus relief.?á The Federal Circuit dismissed the appeal, finding that the court only has jurisdiction over final PTAB opinions.
With this backdrop, the Supreme Court decided Cuozzo in June of this year.?á The unanimous Cuozzo decision included two important points relating to IPRs:?á First, the Court held that 35 U.S.C. ?º 314 bars challenges to the U.S. Patent and Trademark Office (USPTO) authority on institution decisions for IPRs.3 ?áIn particular, the Court clarified that USPTO decisions on institution are ?Ç£final and unappealable.?Ç¥4 Second, the Court upheld the USPTO regulation that requires the PTAB to apply the Broadest Reasonable Interpretation (BRI) standard in IPR proceedings.5?á Later in June, the Federal Circuit decided to ?Ç£take on the issue of appealability?Ç¥ in view of the Cuozzo decision and a panel requested briefing from the parties.6
In its briefing, Medtronic argued two main points:?á First, Medtronic contended that the Federal Circuit was not barred from reviewing certain types of PTAB decisions discussed in Cuozzo, including ?Ç£appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation.?Ç¥7?á Second, Medtronic argued that the case implicated a constitutional question because of due process concerns over the ?Ç£inconsistent?Ç¥ application of party requirements under ?º 312.8
The Federal Circuit?ÇÖs Reasoning
The Federal Circuit rejected both of Medtronic?ÇÖs arguments.?á In addressing the appealability issue, the panel stated, ?Ç£[i]t would be strange to hold that a decision to institute review would not be reviewable but a reconsideration of that decision would be reviewable,?Ç¥9 especially in this case where the statutory requirements for filing a petition were not met by Medtronic.?á The panel further bolstered the PTAB?ÇÖs authority by referring to the authority to reconsider decisions as ?Ç£inherent?Ç¥ and a ?Ç£default?Ç¥ authority.10?á In addressing the constitutional question, the panel held that Medtronic had not demonstrated entitlement to mandamus relief because there was no ?Ç£clear and indisputable?Ç¥ right to relief in the statutes relating to institution decisions for IPRs.11?á Therefore, the Federal Circuit once again found review of institution decisions and appeals thereof precluded by ?º 314(d).
The decision of the Federal Circuit in Medtronic is instructive on several points.?á First, practitioners are now put on notice of the broad authority of the PTAB over both substantive and administrative matters of IPR proceedings.?á Cuozzo and Medtronic seem to define a single path through IPR proceedings that is, from start to finish, under the complete control of the PTAB.?á In this regard, the Medtronic decision follows a trend of the Federal Circuit repeatedly finding institution decisions to be unreviewable by the Federal Circuit itself.?á Recent examples include Wi-Fi One, LLC v. Broadcom Corp.12 and Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd.,13 both decided in quick succession during September of this year.
Second, Medtronic serves as a reminder of the importance of real party in interest requirements for IPR petitions.?á In particular, the Federal Circuit was persuaded to terminate the IPR proceedings based on ?Ç£collective evidence that Medtronic was acting as a proxy for Cardiocom.?Ç¥14?á This language seems to signal that the Federal Circuit is willing to investigate and enforce high standards for disclosing real parties in interest.
1 No. 2015-1977 (Fed. Cir. Oct. 20, 2016).
2 136 S. Ct. 2131 (2016).
3 Id. at 4.
4 Id. at 3.
5 Id. at 13.
6 Id. at 4.
8 No. 2015-1977 at 8.
9 Id. at 5.
10 Id. at 7.
11 Id. at 8.
12 No. 15-1944, 2016 WL 4933298 (Fed. Cir. Sep. 16, 2016).
13 No. 15-1726, 2016 WL 5335500 (Fed. Cir. Sep 23, 2016).
14 No. 2015-1977 at 3.