IP Law Daily En banc court will not revisit decision affirming PTAB’s authority to institute partial inter partes review
Monday, November 7, 2016

En banc court will not revisit decision affirming PTAB’s authority to institute partial inter partes review

By Cheryl Beise, J.D.

The U.S. Court of Appeals for the Federal Circuit has denied SAS Institute, Inc.’s petition for rehearing en banc of a 2-1 panel ruling upholding the Patent Trial and Appeal Board’s decision to institute review of fewer than all claims challenged by SAS in its petition requesting inter partes review of a patent owned by ComplementSoft LLC. Circuit Judge Pauline Newman dissented from the denial of the petition for rehearing en banc, arguing that the Board’s practice of deciding the validity of only some challenged patent claims contravenes the America Invents Act (SAS Institute, Inc. v. ComplementSoft, LLC, November 11, 2016, per curiam).

SAS Institute, Inc., petitioned for IPR of the ’936 patent, asserting that all 16 claims were unpatentable as anticipated under 35 U.S.C. §102 or as obvious under 35 U.S.C. §103. The Board instituted IPR for claims 1 and 3-10 on obviousness grounds, but did not institute IPR on the other claims. In its institution decision, the Board construed the claim term "graphical representations of data flows" to mean "a depiction of a map of the path of data through the executing source code." In its final decision, the Board adopted a different, narrow construction of "graphical representations of data flows." The Board concluded that claims 1, 3, and 5-10 were invalid for obviousness. With respect to claim 4, the Board determined that the claim was not obvious because the prior art did not satisfy the "graphical representations of data flows" limitation as finally construed.

In a June 10, 2016 decision, a three-judge panel of the Federal Circuit rejected SAS’s argument that the Board erred by not addressing in the final written decision every claim of the ’936 patent that SAS had challenged in its IPR petition. The Board was authorized in its discretion to institute IPR with respect to some of the challenged claims and not others, according to the court. The court also did not disagree with the Board’s obviousness conclusions or its ultimate interpretation of the claim term "graphical representations of data flows." However, the appeals court found that the Board violated the Administrative Procedure Act (APA) by adopting a new construction in its final decision without allowing the parties the opportunity to respond to the change. The Board’s decision upholding the patentability of claim 4 was vacated, and the case was remanded so that the parties could address the new construction.

SAS filed a petition for rehearing en banc. The panel declined to reconsider its decision and a majority of Federal Circuit judges voted to deny SAS’s request for rehearing en banc.

Dissenting opinion. Circuit Judge Pauline Newman dissented from denial of the petition for rehearing en banc for the same reasons she had dissented in part from the panel’s earlier decision. Judge Newman concurred with the panel majority’s decision regarding the Board’s claim construction and its procedural error. However, she disagreed with the majority’s view that the Board, in its discretion, may institute inter partes review of fewer than all claims challenged in the petition for review.

The Board’s practice "partial" or "selective" institution does not conform to the America Invents Act (AIA), according to Judge Newman. Section 318(a) expressly states "the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d)." The Board’s piecemeal review thwarted the AIA’s goal of establishing an administrative procedure for efficient and reliable resolution of certain patent disputes. "The statutory plan is for an alternative to litigation, not duplicative litigation as may arise from partial institution," Judge Newman said.

The case is Nos. 2015-1346 and 2015-1347.

Attorneys: John Marlott (Jones Day) for SAS Institute, Inc. Matthew Topic (Loevy & Loevy) for ComplementSoft, LLC. Nathan K. Kelley, Office of the Solicitor, USPTO.

Companies: SAS Institute, Inc.; ComplementSoft, LLC

MainStory: TopStory Patent FedCirNews USPTO

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