Does 35 U.S.C. Section 314(d) insulate Patent Trial and Appeal Board interpretations of Section 315(b)’s limitations period for initiating an inter partes review from judicial review?
In this case, the Supreme Court will decide whether 35 U.S.C. § 314(d) precludes judicial review of the Patent Trial and Appeal Board’s (“the Board”) decision to grant an inter partes review after determining that an effective statute of limitations under Section 315(b) does not apply. Thryv, Inc., contends that the plain language of Sections 314(d) and 315(b) and relevant Supreme Court precedent renders such decisions nonappealable. Click-To-Call Technologies counters that the plain language of Section 314(d) contains nothing to indicate that judicial review of the Board’s interpretation of Section 315(b) is prohibited, and that Supreme Court precedent has confirmed this understanding. The outcome of this case will have important implications on the scope of administrative power, incentives for product innovation, and the integrity of the patent system.
Questions as Framed for the Court by the Parties
Whether 35 U.S.C. § 314(d) permits appeal of the Patent Trial and Appeal Board’s decision to institute an inter partes review upon finding that 35 U.S.C. § 315(b)’s time bar did not apply.
Inforocket.Com, Inc. (“Inforocket”) was the original licensee of Patent No. 5,818,836 (“the ‘836 patent”). Click-to-Call Technologies, LP, v. Ingenio, Inc., Yellowpages.com, LLC at 3. In 2001, Inforocket filed suit against Keen, Inc. (“Keen”) alleging Keen’s infringement of the ‘836 patent. Id. After a period of litigation, the parties eventually agreed to a voluntary dismissal “without prejudice” when the two companies merged in 2003. Id. at 4. The merged company renamed itself Ingenio, Inc. (“Ingenio”), which then went through a series of ownership changes. Id.
In 2012, Click-to-Call Technologies, LP (“CTC”) acquired the ‘836 patent and filed suit in the United States District Court for the Western District of Texas alleging infringement of the ‘836 patent against multiple defendants, including Ingenio. Id. at 5. Within a year, several of the putative infringers, including Ingenio (later to be known as Thryv, Inc.), petitioned the Patent Trial and Appeal Board (“the Board”) for an inter partes review (“IPR”), a special type of administrative trial proceeding held at the Board. Id. at 5. In response, CTC contended that 35 U.S.C. § 315(b), which requires a party to request an IPR within one year of being “served with a complaint alleging infringement of the patent,” prohibited an IPR proceeding. Id. at 6. According to CTC, Section 315(b)’s one-year limitations period had long expired because Ingenio’s predecessor company had been “served with a complaint alleging infringement of the ‘836 patent” in the 2001 Inforocket suit. See id. While acknowledging that Ingenio had been so served in 2001, the Board determined that Ingenio could nevertheless proceed with an IPR. Id. at 6–7. The Board reasoned that because the Inforocket suit had been voluntarily dismissed without prejudice, “the effect of service of the  complaint” was “nullifie[d].” Id. CTC requested a rehearing of the Board’s Section 315(b) conclusion, but the Board refused the request. Id. at 7. The Board then issued its Final Written Decision where it reaffirmed its interpretation of § 315(b). Id.
CTC appealed to the Federal Circuit, which initially dismissed CTC’s appeal for lack of appellate jurisdiction. Id. at 8. CTC then appealed to the Supreme Court, which vacated the Federal Circuit’s dismissal and remanded the case for reconsideration due to its intervening decision in Cuozzo Speed Technologies, LLC v. Lee. Id. On remand, the Federal Circuit again dismissed for lack of jurisdiction. Id. at 8–9. CTC then petitioned for a rehearing en banc, which the Federal Circuit granted in light of its decision in Wi-Fi One, LLC v. Broadcom Corp., which removed the jurisdictional bar for CTC’s appeal. Id. at 9.
On rehearing, the Federal Circuit held that the 2001 Inforocket complaint was sufficient to trigger Section 315(b)’s limitations period, notwithstanding that suit’s voluntary dismissal without prejudice. See id. at 10. The court reasoned that, under Section 315(b)’s clear and unambiguous language, the limitations period begins to run once a party is served with a complaint. Id. at 12–15. Nothing in the statute, the court continued, suggests that a subsequent event such as a voluntary dismissal can “un-ring § 315(b)’s time bar.” Id. at 22. In other words, a party “remains ‘served’ with a ‘complaint” even after an action is voluntarily dismissed. Id. at 24. The Federal Circuit accordingly vacated the Board’s Final Written Decision and remanded with directions for the Board to dismiss the IPR proceeding. Id. at 35. The Federal Circuit did not address whether 35 U.S.C. § 314(d), which makes Board decisions “whether to institute an inter partes review under this section . . . final and nonappealable,” would have precluded judicial review of the Board’s decision.
INTERPRETING THE AMERICA INVENTS ACT
Petitioner Thryv, Inc. (“Thryv”) argues that the plain language of the America Invents Act (“the AIA”) indicates that Congress intended to preclude judicial review of Board decisions on whether to grant an IPR. Brief for Petitioner, Thryv Inc. at 16. In particular, Thryv points to Section 314(d), which expressly makes the Board’s decision of whether to grant an IPR “final and nonappealable.” Id. at 17. Section 315(b) is equally clear, continues Thryv, because it plainly states that an IPR “may not be instituted” after a one-year limitations period. Id. According to Thryv, the Board’s decision of whether Section 315(b)’s limitations period applies is part of its larger decision on whether to grant an IPR, and as such is also nonreviewable in court under Section 314(d). See id. at 16–17. Thryv furthermore asserts that the AIA’s restriction of judicial review to issues concerning “patentability” under Section 318(a) reflects Congress’s conscious desire to limit the scope of judicial review to only the merits of Board decisions, not their procedural aspects. Id. at 18–19. This becomes clear, Thryv continues, when one considers Section 141(c), which permits judicial review of the Board’s “final written decision.” Id. According to Thryv, such final written decisions are understood as decisions on the merits. Id. Whether an IPR is timely under Section 315(b), continues Thryv, is a “preliminary procedural issue” and therefore nonreviewable. Id. at 19. While acknowledging that there is generally a “strong presumption [favoring] judicial review of administrative action,” Thryv maintains that this presumption is overcome where, as here, there are “clear and convincing” indicia of Congress’s intent to bar judicial review. Id. at 16–17.
Thryv also contends that, when read as a whole, the AIA makes clear that determinations on Section 315(b)’s limitations period fall within Section 314(d)’s bar on appealability. Id. at 20. In particular, Thryv compares Section 314(d) to other non-appealability provisions within the AIA to argue that Section 314(d) has a broader applicability. Id. at 20–23. For example, Thryv points to Section 303(a), which provides for appeals of patent reexaminations. Id. at 20–21. Thryv then explains that Section 303(c) limits this right of appeal by precluding only one specific issue from appeal, namely, “whether there is a substantial new question of patentability.” Id. at 21. This limitation on appeal is much narrower than Section 314(d), claims Thryv, because Section 314(d) “categorically insulates from appeal” all Board decisions on whether to initiate an IPR. Id. Thryv also points to former Section 312, which concerned a since revoked inter partes reexamination procedure. Id. at 22. Thryv explains that while former Section 312(a) authorized the inter partes reexamination procedure, former Section 312(c) barred any determinations made “under subsection (a)” from judicial review. Id. Thryv thus points out that, had Congress wanted to limit Section 314(d)’s applicability to just Section 314, then it could have done so using language similar to former Section 312(c). Id.
Respondent CTC counters that the Board’s Section 315(b) determinations are not barred from judicial review by operation of Section 314(d). Brief for Respondent, Click-to-Call Technologies, LP at 14. CTC asserts that the plain text of Section 314(d) limits its applicability to Board determinations made “under this section.” Id. As such, continues CTC, Section 314(d)’s bar on judicial review simply does not apply to Section 315(b), because Section 315 is a different section than Section 314. Id. CTC further asserts that this express limitation of Section 314(d) to “this section” reflects Congress’s desire to preserve judicial review for Board decisions arising under Section 315(b). Id. If Congress had intended for Section 314(d) to apply to Section 315(b), claims CTC, then it would have used the more expansive language of “under this chapter” when drafting Section 314(d). Id. CTC observers that Congress indeed used this broader language in other parts of the AIA, including the neighboring provision of Section 314(b). Id. at 14–15. This distinction, CTC argues, demonstrates that Congress knows how to draft broader language and intentionally chose not to do so in crafting Section 314(d). Id. at 15. CTC moreover contends that Section 314(d)’s limiting language of “under this section” would be meaningless if Section 314(d) is read to apply to other parts of the AIA. Id. In other words, explains CTC, disregarding Section 314(d)’s “under this section” language would have the same effect of replacing it with the broader “under this chapter” language. Id. CTC thus concludes that Section 314(d)’s bar on appealability is meant to apply only to determinations made under Section 314(a), that is, to determinations of whether the petitioner has “a reasonable likelihood” of prevailing in an IPR proceeding. Id. at 17.
CTC also asserts that its narrow interpretation of Section 314(d) comports with the AIA’s overarching structure of limiting agency power. Id. at 20–21. For example, notes CTC, Sections 315(a) and (b) contain “detailed and elaborate” provisions that sharply restrict the Board’s authority to initiate an IPR. Id. at 20. CTC contends that Congress would not articulate such stringent limitations on the Board’s authority while simultaneously precluding any opportunity for their judicial enforcement. Id. at 21–22. In addition, CTC argues that while the Board’s admitted subject matter expertise may justify preclusion of judicial review over narrow, technical determinations such as “patentability,” it just as forcefully cuts in favor of judicial review over any Board decision that involves non-technical legal issues such as the Board’s application of Section 315(b). Id. at 22. Moreover, CTC continues, there is no indication that Congress intended to leave unchecked the Board’s power to interpret and execute the AIA. Id. at 23–24. CTC similarly asserts that a broad interpretation of Section 314(d)’s bar on judicial review is incompatible with Section 319, which generally authorizes judicial review of the Board’s “final written decision[s].” Id. at 24. The only requirement for judicial review under, Section 319, CTC continues, is that a party must be “dissatisfied” with the Board’s final written decision. Id. at 24–25.
SUPREME COURT PRECEDENT
Thryv argues that Supreme Court precedent confirms that Board determinations of Section 315(b) are not appealable. Brief for Petitioner at 25. Thryv points to the 2016 decision of Cuozzo Speed Technologies, LLC v. Lee, where the Court stated that, in certain circumstances, Section 314(d)’s bar on appealability extends beyond determinations made under Section 314(a). Id. at 26. Under Cuozzo, explains Thryv, issues that are “closely tied” to the determination of whether to initiate an IPR are also not appealable. Id. Thryv contends that Section 315(b) determinations represent the “closely tied” issues contemplated by Cuozzo, because Section 315(b)’s sole purpose is to set forth when an IPR is timely. Id. at 27–28. In addition, Thryv goes on to distinguish the Court’s 2018 ruling in SAS Institute Inc. v. Iancu from the ruling in Cuozzo. Id. at 29. In SAS, explains Thryv, the Court held that while the Board has discretion in determining whether to initiate an IPR, it cannot limit the scope of an IPR by cherry-picking which claims it chooses to review. Id. While recognizing that SAS renders questions on the scope of an IPR appealable, it does not, argues Thryv, contradict the ruling in Cuozzo that issues “closely tied” to the decision of whether to initiate an IPR are not appealable. Id. In other words, Thryv asserts that the scope of an IPR is separate from the question of whether to initiate an IPR in the first place. Id. at 29–30. Under SAS, asserts Thryv, only issues pertaining the former are appealable. Id.
By contrast, CTC argues that the Supreme Court’s decision in SAS effectively supersedes Cuozzo. See Brief for Respondent at 31. In other words, CTC claims that Thryv misconstrues SAS by reading that decision too narrowly. See id. The proper interpretation of SAS, asserts CTC, is that it confines Section 314(d)’s bar on appealability to determinations made under Section 314(a), in accordance with the statute’s plain text. Id. at 32. As such, continues CTC, SAS ensures that other issues bearing on the decision of whether to initiate an IPR, such issues relating to Section 315(b)’s limitations period, are indeed appealable. Id. at 31–34. CTC claims that this reading of SAS preserves the judiciary’s “traditional reviewing function” and is consistent with the “strong presumption favoring judicial review.” Id. at 31–33. Indeed, continues CTC, the Court in SAS articulated the importance of expansive judicial review as necessary to check extraordinary uses of agency power. Id. at 34. Moreover, claims CTC, even if Cuozzo did extend Section 314(d)’s bar on appealability to questions concerning Section 315(b), any such bar was not absolute. See id. CTC claims that Cuozzo always reserved the possibility for judicial review for situations where the Board exceeds its authority. Id.
IMPACT ON INNOVATION AND PRODUCT DEVELOPMENT
ON Semiconductor Corporation, Semiconductor Components Industries, LLC, and Fairchild Semiconductor International, Inc., (“ON and others”), in support of Petitioner, argue that allowing judicial review of Board decisions on whether to initiate an IPR could undermine an otherwise proper IPR determination that a patent is invalid. See Brief of Amici Curiae ON Semiconductor Corporation, et. al., in Support of Petitioner at 5. If that is the case, ON and others explain, then the patent holder will be able to enforce an otherwise erroneously-issued patent. Id. According to ON and others, this will enable undeserving patent holders to “extract costly licenses” and pursue infringement claims, thereby stifling competition and product development. Id. ON and others argue that these costs, along with the uncertainty inherent in erroneously-issued patents, deters researchers and manufacturers from further developing new products. Id. at 7. Additionally, ON and others contend that when goods protected by erroneously-issued patents remain available in the marketplace, they increase competition for similar goods and drive consumer prices up. Id. at 7–8. For example, AARP and AARP Foundation, also in support of Petitioner, point out that “soaring” prescription drug prices have rendered medications unaffordable for many consumers. Brief of Amici Curiae AARP and AARP Foundation, in Support of Petitioner at 11–12.
Power Integrations, Inc. (“Power Integrations”), in support of Respondent, counters that the availability of judicial review actually promotes innovation and product development. Brief of Amicus Curiae Power Integrations, Inc., in Support of Respondent at 4–5. Power Integrations argues that ON and others exaggerate the value of the IPR process, which does not necessarily guarantee a correct outcome and is susceptible to abuse. Id. at 5. Power Integrations also claims that the IPR process itself creates uncertainty by providing an avenue through which an inventor’s patent may be invalidated. Id. at 4–5. This potential for invalidation, Power Integrations explains, decreases the economic value of patents, which in turn dampens product development. Id. at 5. For example, Power Integrations states, companies in research and development-intensive fields are less likely to make costly long-term investments in new inventions if their ability to secure a patent is uncertain. Id. at 4–5. Power Integrations further asserts that judicial review of Board decisions serves as a deterrent and backstop against frivolous IPR claims, thereby providing investors with additional certainty that their patents will not be erroneously invalidated. Id. at 6, 11.
IMPLICATIONS ON IPR’S EFFICIENCY AND COST-EFFECTIVENESS
Intel Corporation (“Intel”), in support of Petitioner, argues that allowing judicial review of the Board’s Section 315(b) determinations prevents the IPR process from being a quick and cost-effective alternative to litigation. See Brief of Amicus Curiae Intel Corporation, in Support of Petitioner at 18. Indeed, Intel contends, the IPR process was designed to be an efficient means to weed out and revoke erroneously-issued patents, pointing out that Section 316(a)(11) generally requires IPR proceedings to “conclude within one year.” Id. at 20. Allowing judicial review of Section 315(b) determinations, Intel continues, will inevitably lead to “lengthy and costly” appeals. Id. at 22. Intel explains that, because Section 315(b)’s limitations period can be triggered by “service of a complaint on a real party in interest, or privy of the petitioner,” determining whether the limitations period has run is not always straightforward. Id. at 22–23. In other words, Intel clarifies, the limitations period may run not because the IPR petitioner itself had been served with a complaint, but because a “real party in interest” or “privy” was served. Id. at 23. According to Intel, there is no bright line means to determine whether an entity is a real party in interest or a privy. Id. 23–24. Reviewing such determinations, Intel continues, is therefore time-consuming and “fact-intensive.” Id. Intel argues that this fact-intensive nature of certain Section 315(b) determinations strongly incentivizes any party with a “colorable claim” to appeal. Id. at 24. For instance, Intel explains that after the Federal Circuit ruled timeliness determinations to be reviewable in Wi-Fi One, the Federal Circuit has had to preside over many such fact-intensive issues. Id. at 24. This second round of review, Intel concludes, will drag parties into years of costly and protracted litigation without furthering the goals that the IPR process was created to achieve. Id.
Biotechnology Innovation Organization (“BIO”), in support of Respondent, responds that the IPR process actually breeds abuse within the patent system and produces unnecessary and costly litigation. Brief of Amicus Curiae Biotechnology Innovation Organization (“BIO”), in Support of Respondent at 12. The Pharmaceutical Research and Manufacturers of America (“PRMA”) agree, explaining that insulating erroneous Section 315(b) determinations period from judicial review could encourage parties to over-litigate otherwise meritless claims. Brief of Amicus Curiae The Pharmaceutical Research and Manufacturers of America (“PRMA”), in Support of Respondent at 17. By way of illustration, PRMA claims that eighty percent of IPR decisions result in a patent invalidation whereas federal courts invalidate patents in fewer than fifty percent of cases. Id. PRMA explains that a party defending an infringement claim could thus first “test the waters of district court litigation,” and then, if success at court appeared unlikely, stay the court proceeding and initiate an IPR where there is a greater chance of invalidation. Id. The effect, PRMA implies, is that infringement defendants could contravene Section 315(b) to get two bites at the same apple. See id. BIO shares these concerns, arguing that judicial review of whether an IPR is timely under Section 315(b) is necessary to correct erroneous Board interpretations of that section. Brief of BIO at 12. Such judicial review, BIO continues, will thereby foster predictability and give investors confidence in the patent system. Id. PRMA emphasizes the importance of this predictability, explaining that investors devote a tremendous amount of resources in bringing new products to market. Brief of PRMA at 16. The added costs of unnecessary IPRs, PRMA continues, would only increase these development costs and delay innovation. Id. at 17. While conceding that judicial review may prolong the particular decision being appealed, BIO maintains that such delays are well worth the certainty that judicial review provides to future patent holders and challengers. Brief of BIO at 21–22.
- Brooke M. Wilner, Thryv, Inc. v. Click-To-Call Technologies, L.P., Lexology (November 18, 2019).
- Dennis Crouch, Thryv v. Click-to-Call: Accuracy v. Efficiency; Merit v. Technicality, Patentlyo (September 17, 2019).
- Edwin A. Gatz & Brianna Forbes Silverstein, Reading the Supreme Court Tea Leaves in Dex Media Inc. v. Click-to-Call Technologies, LP, The National Law Review (July 29, 2019).
- Susmita Gadre & Stuart Duncan Smith, Supreme Court Preview: What Can a Patent Owner Do When the PTAB Institutes an IPR That the Statute Doesn’t Permit?, Wolf Greenfield Blog (November 14, 2019).