Federal Circuit denies en banc rehearing, IPR proceedings can be instituted for less than all of the challenged claims

Judge Pauline Newman of the United States Court of Appeals for the Federal Circuit, dissented.

SAS Institute, Inc. v. Complementsoft, LLC,  (Fed. Cir. Nov. 7, 2016) (Before Prost, C.J., Newman, Lourie, Dyk, Moore, Reyna, Wallach, Taranto, Chen, Hughes, and Stoll, J.) (Dissenting opinion, Newman, J.)

The Federal Circuit denied appellant SAS’s petition for rehearing en banc from a decision by the Patent Trial and Appeal Board, without an explanatory opinion.

Judge Newman dissented. Without discussing the facts of the case, she undertook to review the statutory provisions for inter partes review (“IPR”) proceedings under the America Invents Act (“AIA”). According to Newman, the Court should have granted the petition, in order to correct the Patent Office position that “the final order of the [Patent Trial and Appeal] Board need not address every claim raised in the petition for review.”

The PTO created the Patent Trial and Appeal Board (“PTAB”) under the AIA, in part to hold inter partes review proceedings that achieve a final resolution of patent validity disputes by agency action instead of through litigation. The PTAB has sole discretion to decide whether to institute review as to some, but not all, of the patent claims challenged in the proceeding. This so-called “partial” or “selective” institution produces a final validity determination as to the selected claims but leaves the unselected claims “dangling.” Under the estoppel provisions of the AIA, final PTAB decisions in IPR proceedings are given preclusive effect in later district court proceedings but only with regards to claims that were instituted in the proceeding.

According to Judge Newman, a review of the statutory provisions of the AIA makes it clear that, if the PTAB decides to institute review, it should do so for all of the challenged claims, not just some of the challenged claims. The “partial institution” practice currently exercised by the PTAB “foils the legislative purpose of resolving certain patent issues in an administrative forum,” and SAS’s petition for rehearing en banc should have been granted so that the Court could correct, or at least address the issue.

The PTO’s position that IPR proceedings can be instituted for less than all of the challenged claims remains intact, at least until the Court chooses to address the issue at a later time. 

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