Federal Circuit Says PTAB Has Authority to Issue Decisions After Statutory Deadline

The U.S. Court of Appeals for the Federal Circuit (CAFC) ruled in a precedential decision today that the Patent Trial and Appeal Board (PTAB) does not lose its statutory authority to issue a Final Written Decision when it misses the 1.5-year deadline to do so, as established by the patent statute.

According to the opinion, which was authored by Judge Dyk, “[t]his appears to be the only proceeding in which the Board has failed to meet the statutory deadline, and this is accordingly a matter of first impression.”

Under Section 326(a)(11) of Title 35, the U.S. Patent and Trademark Office (USPTO) Director must prescribe regulations requiring final determinations in post grant review proceedings to be issued “not later than 1 year after the date on which the Director notices the institution of a proceeding under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 325(c)[.]”

Notably, the statute does not specify the consequences of non-compliance. According to Supreme Court, “even in the face of a statutory timing directive, when a statute does not specify the consequences of non-compliance, courts should not assume that Congress intended that the agency lose its power to act,” continued the opinion. Thus, the CAFC concluded that the Board has authority to issue a decision even after the deadline.

Turning to Purdue’s arguments to the contrary, the court first addressed the contention that the use of “shall” and “requiring” in Section 326(a)(11) deprives the Board of its authority. In Brock v. Pierce Cnty., 476 U.S. 253, 266 (1986), the Supreme Court held that the “requirement that the Secretary ‘shall’ take action within 120 days does not, standing alone, divest the Secretary of jurisdiction to act after that time.” Purdue attempted to distinguish Brock by arguing the use of “requiring” in combination with “shall” in Section 326(a)(11) holds more weight than the language in Brock, but the CAFC said “[t]he word ‘requiring’ simply is the equivalent of ‘shall,’ and Brock governs.”

In addition to other arguments, Purdue also said the exceptions in the statute for “good cause” and “joinder” are proof that “those are the only two limited circumstances under which the Board may issue a Final Written Decision after the one-year deadline.” But the court cited to Barnhart v. Peabody Coal Co., 537 U.S. 149, 159 (2003) as support for its view:

“The existence of statutory exceptions does not show that the Board is without authority to act once the deadline passes. In Barnhart, the statute provided for two exceptions to the deadline and the Court ultimately held the “[i]nitial assignment[s] made after [the deadline were] valid despite [their] untimeliness.”

Furthermore, other sections of the America Invents Act (AIA) mandate that the Board issue a Final Written Decision or use different language to indicate consequences for missing a deadline. For instance, “Section 315(b) contains explicit language denying agency power after a time deadline, saying “[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 . . . is served with a complaint alleging infringement of the patent.” Thus, “[h]ad Congress meant to deprive the agency of power in section 326(a)(11), it knew how to do it,” said the court.

Just as the authority doesn’t disappear after the deadline has expired, neither does the Board’s ability to act, said the CAFC. “If the Board could not issue a Final Written Decision, the parties would be forced to pursue the issue in district court litigation. This is the exact opposite of the purpose of the AIA, which is meant to create a more efficient alternative to district court litigation,” explained the court.

Additionally, as soon as the deadline expires, mandamus relief is available, contrary to Purdue’s contention that “unreasonable delay in the issuance of the decision” must be proven, said the opinion. Purdue could have pursued a mandamus remedy, but it didn’t, and that does not result in a loss of the Board’s ability to issue the decision.

The court also found that the specification for Purdue’s U.S. Patent No. 9,693,961 contained “insufficient blaze marks” and does not provide adequate written description support, thus also  affirming the PTAB’s substantive holding.

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