Share, Linked In, , , Google Plus

Print

Posted in:

En Banc at the Federal Circuit: Scope of Available Review of Threshold Issues

On Thursday of last week, the Federal Circuit sitting en banc heard oral arguments in Wi-Fi One, LLC v. Broadcom Corporation. At its core, this rehearing focuses on the relatively narrow issue of whether USPTO determinations regarding the timeliness requirements of 35 USC § 315(b) are eligible for judicial review. However, based on the questions posed by the judges of the Federal Circuit, the decision in this case could have broader applicability in interpreting the Supreme Court’s Cuozzo decision and its interpretation of the scope of § 314(d), which states that certain decisions regarding institution of IPRs are not reviewable.

To put the appeals in context, this case began with three IPRs filed by Broadcom in 2013. Throughout the process, from pre-institution motions, post-institution argument, requests for rehearing, and through appeals to the Federal Circuit, the Patent Owner (Wi-Fi One, LLC became the Patent Owner while the IPRs were in progress), had pursued a theory that the IPRs were not allowed under § 315(b). This section requires that IPRs be filed within 1 year of service of a complaint alleging infringement of the patent to the petitioner, a real party in interest to the IPR, or a privy of the petitioner. As the patents had been asserted in litigation more than one year prior to the filing of the IPRs, Wi-Fi One’s position was that if either Broadcom could be shown to be in privity with the defendants of that litigation, or those defendants could be shown to be real parties-in-interest to the IPRs, the IPRs should either not be instituted, be dismissed, or be overruled (depending on the timing in the case) under § 315(b).

Wi-Fi One sought discovery on the privity issue prior to institution of the IPRs, but the Board denied the motion for insufficient evidence that there was more than a mere possibility that evidence would be uncovered showing privity. Despite that, Wi-Fi One maintained its position that § 315(b) should bar the IPRs following institution and through the Final Written Decision by the Board. Ultimately, the Board found claims of the challenged patents unpatentable, and also addressed the § 315(b) issue, maintaining its position that Wi-Fi One had not demonstrated that petitioner was in privity with the litigation defendants or that any defendants were real parties-in-interest to the IPRs.

After denial of requests for rehearing, Wi-Fi One appealed the three IPRs to the Federal Circuit. While the appeals challenged the Board’s findings of unpatentability, they heavily focused on whether the Board’s decision regarding § 315(b) was reviewable. Central to these appeals is the scope of § 314(d), which states that institution determinations of inter partes reviews are nonappealable. Although Wi-Fi One presented a few positions and theories on why the scope of § 314(d) should not prevent the review, the panel essentially held that the issue had been decided in a prior Federal Circuit case, Achates Reference Publishing, Inc. v. Apple Inc. That case held that § 314(d) prohibited review of Board determinations based on the time-bar of § 315(b), both as part of the institution decision, or “even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the Board’s final written decision.”

Addressing this case, Wi-Fi argued that Achates had been implicitly overruled by the Supreme Court in Cuozzo Speed Technologies, LLC v. Lee which also dealt with § 314(d). The Federal Circuit panel decided that not only did Achates remain intact, but that Cuozzo held that statutes related to decisions to institute IPRs were not reviewable, and that § 315 thus fell into the scope of Cuozzo’s holding. Wi-Fi’s arguments based on statutory language, and that the issue had come back up post-institution, were also rejected as having been previously decided in Achates.

Identical petitions for rehearing and rehearing en banc were filed by Wi-Fi One in each of the three appeals. Wi-Fi One argued that the Supreme Court in Cuozzo provided new guidance to the Federal Circuit on § 314(d) issues, and left it to the Federal Circuit to decide those issues in light of its holding. The cases were ultimately accepted for en banc review with supplemental briefs requested on the limited question of whether Achates should be overruled with respect to whether PTO decisions regarding § 315(b) should be reviewable. Following grant of the petition, the Patent Office intervened to join the case.

Finally arriving at the oral arguments last week, as might be expected, the discussion centered on interpretations of Cuozzo and how the Supreme Court dealt with § 314(d). Judges had tough questions for all of the arguing parties, Wi-Fi One, Broadcom and the USPTO, addressing the scope of what Cuozzo had decided and what it had left for lower courts, how to read the details of Cuozzo and how to possibly distinguish it.

Wi-Fi One attempted to steer the conversation towards not just what the Supreme Court had held in Cuozzo, but how they had reached that decision. Namely, they argued that the strong presumption favoring judicial review had to be overcome by “clear and convincing indications that Congress intended to bar review.” While the Supreme Court had found that to be the case for the sections addressed in that case, it was Wi-Fi One’s position that none of the Supreme Court, the prior panel opinions, or Achates had addressed that point sufficiently.

Many questions to counsel for Wi-Fi One seemed concerned with the procedural consequences should the court rule in their favor. Judge Newman seemed concerned with the timing and form of future challenges: whether they would be interlocutory reviews, mandamus petitions, or would only come on appeal of final written decisions. When counsel responded that it would be reviewable after the final decision as such issues often continued during the trial phase, Judge Prost was interested in whether time bar issues would be reviewable if it was not addressed in the final written decision.

Judge O’Malley seemed interested in the recourse each party would have with a time bar ruling going against them and possible asymmetry created by allowing an appeal of a final written decision when an appeal of a denied institution decision was not allowed. Judges Hughes and Bryson dug into this issue as well, asking whether a petitioner could appeal a time bar question if it was ultimately decided against them in a final written decision.

Questions from the court on the core issue began with attempting to draw the line between what Cuozzo had found to be unavailable for review and what it had left open for future decisions. Judge Dyk, for example, asking similar questions to counsel for Wi-Fi One during both his argument and rebuttal, asked whether the Cuozzo opinion, which addressed portions of § 312, also addressed other portions of the same section, such as requiring the identification of all real parties in interest.

Judge Chen, however, asked questions which seemed to ponder whether the Supreme Court had in fact already addressed § 315(b). His questions included what effect Justice Alito’s dissenting opinion in Cuozzo, which characterized the majority opinion, had in interpreting the holding. Justice Alito’s opinion, for example, criticized the majority opinion for making “courts powerless to correct such abuses” as instituting IPRs which should have been barred under § 315(b). Counsel’s response that the majority attempted to explicitly draft a narrow holding touched upon possibly the central dispute in this case, as many of the judge’s questions to counsel for Broadcom concerned exactly how narrowly that holding should be read.

For example, Judges Chen and Prost seemed concerned with questions regarding the text of § 314(d) in interpreting not only the statute, but also in interpreting the Supreme Court’s reading of that section and the explicitly narrowed scope of the Cuozzo opinion. Judges O’Malley, Wallach, and Stoll questioned how the Cuozzo majority’s statements as to the intended scope of its holding should be interpreted. Namely, is the section of statute regarding the time bar sufficiently “closely related” to institution decisions or is it one of unnamed “less closely related statutes.”

Other than the scope of what the Supreme Court had held to be unreviewable as closely related to institution decisions, several judges had questions which indicated that allowing institution in cases where the time bar applied could raise potential constitutional issues. Judges Newman, Reyna, and O’Malley asked questions on whether institution decisions allowing IPRs in cases which should not be allowed under the time bar were in fact examples of “shenanigans” referred to by the Supreme Court if such institutions are outside the statutory authority of the director of the USPTO.

The government argued that the Cuozzo decision gave the clear impression that it was meant to bar judicial review of several portions of the statue, including the time bar, that are considered during institution decisions, and that most reviews of such issues should be limited to clear, facially obvious violations of statute. Several issues were focused on policy and consequences, for example, a question acknowledging PTAB expertise in matters of patent law, but questioning whether they had expertise in determining issues such as privity which could raise concerns about their decisions on such matters being unreviewable. Policy issues such as this were countered by the government position that patents found invalid should not be restored based on reversals of procedural threshold questions.

Ultimately, predicting the ultimate outcome or how any judge might decide based on this oral argument would require reading more into the judges’ questions and apparent attitudes than is warranted. It is interesting to note, however, that many questions to counsel for Wi-Fi One seemed to focus on procedural and policy consequences should review be allowed, while the bulk of questions to counsel for Broadcom were focused on distinguishing § 315(b) from the sections dealt with by Cuozzo or determining the limits of the Supreme Court’s intended holding in that case.

While Cuozzo and the statutory language was obviously the central point of arguments yesterday, it is also clear that policy considerations and the impact on the appeals process moving forward were on many judges’ minds.