Federal Circuit Confirms PTAB’s Jurisdiction Over Expired Patents

The U.S. Court of Appeals for the Federal Circuit (CAFC) handed Apple a win when it confirmed today in a precedential opinion that the U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) has jurisdiction over expired patents brought before it in inter partes review (IPR) proceedings.

While the CAFC has previously ruled in appeals from the PTAB involving expired patents, it has not “squarely addressed” the subject until now. The present appeal involves three IPR decisions brought by Apple, Inc. challenging various claims of Gesture Technology Partners’ U.S. Patent No. 8,878,949 for image capture technology. In three separate decisions also issued today, the CAFC affirmed the PTAB on a number of other claims.

The court’s precedential ruling dealt with claims 1–3, 5–10, and 12–17, which the PTAB held unpatentable, and claims 4, 11, and 18, which the Board said Apple had not shown to be unpatentable. However, the CAFC limited its discussion to claims 1– 7 because it separately affirmed the Board’s decision holding claims 8–18 unpatentable in an ex parte reexamination decision.

Before turning to the issue of obviousness and Apple or Gesture’s arguments on appeal and cross-appeal, the opinion addressed Gesture’s contention that the Supreme Court’s decision in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC precludes finding that the PTAB has jurisdiction over expired patents. According to the CAFC opinion, Gesture argued:

“[Oil States] explained that the ‘decision to grant a patent is . . . the grant of a public franchise,’…and once a patent expires ‘the public franchise ceases to exist and the patent owner no longer has the right to exclude others.’”

After expiration of the patent, the patent owner’s right becomes “limited to collecting damages that formerly existed through an infringement action in an Article III court,” and thus only such a court has jurisdiction, said Gesture.

The CAFC, however, responded that, while its previous decisions on cases involving expired patents already “implicitly assum[e] that the Board had jurisdiction in such cases,” since it had not squarely addressed the issue before, it would take the time to confirm it now.  “Gesture’s argument that the ‘public franchise ceases to exist’ after a patent expires…is incompatible with the Court’s logic in Oil States,” wrote the CAFC:

“There, the Court’s conclusion that an IPR falls under the public rights doctrine was based on the fact that the procedure involves a ‘second look’ at the earlier determination of granting a public right in the first place…. The review of an earlier grant of a patent thus inherently involves the adjudication of a public right, and it is irrelevant whether the patent has expired, since the patent itself continues to confer a limited set of rights to the patentee.”

Essentially, since a patentee still retains “some” rights after expiration of a patent, such as collection of damages for past infringement, this in turn creates a live case or controversy, which can be adjudicated via IPR/ the PTAB.

Turning to the claims, the CAFC affirmed the Board’s decision of unpatentability as to Gesture’s cross-appeal, and on Apple’s appeal, reversed the Board’s decision that claim 4 was not unpatentable. The CAFC chiefly said that the PTAB should have considered Apple’s expert testimony on that claim because it “was sufficiently confined to the argument made in Apple’s IPR petition to warrant consideration by the Board.” The court thus ultimately affirmed the PTAB’s decision that claims 1-3 and 5-7 were unpatentable as obvious and reversed the decision that claim 4 was not unpatentable.

Image Source: Deposit Photos
Author: dndavis
Image ID: 665802652