In Husky Injection Molding v. Athena Automation, the Federal Circuit has again refused to review a decision underlying the Board’s institution decision, in this case, whether the Petitioner was barred from filing an inter partes review petition based on assignor estoppel. As in Achates, the court concludes that it lacks jurisdiction to conduct a review of the assignor estoppel issue relying on selective portions of Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) and its pre-Cuozzo jurisprudence.
The Federal Circuit begins its analysis by discussing the Supreme Court’s Cuozzo opinion:
The Court relied on two aspects in particular: the language of § 314(d), and the nature of the legal dispute at issue.
With respect to the first, the Court noted that § 314(d) unquestionably provides that the determination whether to institute inter partes review “shall be final and nonappealable.” … Id. at 2139-40.
With respect to the second, the Court noted that “the legal dispute at issue [there was] an ordinary dispute about the application of certain relevant patent statutes concerning the Patent Office’s decision to institute inter partes review,” particularly the “related statutory section, § 312,” and that the express language of § 314(d) “must, at the least, forbid an appeal that attacks a ‘determination . . . whether to institute’ review by raising this kind of legal question.” Id. at 2139. The Court emphasized that review is foreclosed “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Id. at 2141 (emphasis added).
Slip op. at 10-11.
The Federal Circuit acknowledges, however, that the Supreme Court “did … leave open the possibility that § 314(d) may nevertheless allow for review of appeals that ‘implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.”’ Id.” Slip op. at 11. It further acknowledged that the Court “did not ‘categorically preclude review’ of any final decision where the agency acted outside of its statutory authority, e.g., ‘canceling a patent claim for “indefiniteness under § 112” in inter partes review.’ Id. at 2141–42; see also 35 U.S.C. § 311(b) (‘A petitioner may request to cancel [a claim] only on a ground that could be raised under section 102 or 103.’).” Slip op. at 11.
While recognizing these arguably broad exceptions allowing for review, the Federal Circuit then shifts to its pre-Cuozzo jurisprudence to conclude that review is foreclosed. The Federal Circuit relies on its pre-Cuozzo test – a test previously used to justify why some pre-institution determinations are subject to review, such as whether a patent is a CBM patent, and others are not, such as determining, whether the real party-in-interest has been named and whether a petitioner is barred by the one year time bar. That test, referred to as the Board’s “ultimate authority to invalidate” test is as follows:
[W]e may review a challenge to the institution decision if it relates to the Board’s ultimate authority to invalidate a particular patent. That ultimate invalidation authority is purely tied to the patent challenged and the nature of the review requested; it is not a question of who petitions for review. Achates, 803 F.3d 652; see Wi-Fi One, LLC v. Broadcom Corp., 2015-1944, slip op. at 8–9 (Fed. Cir. Sept. 16, 2016) (holding that Achates remains good law in light of the Supreme Court’s decision in Cuozzo II, specifically concluding that § 315 is a statute closely related to the decision whether to institute); Versata Dev. Grp., Inc. v. SAP Am., Inc., 793 F.3d 1306 (Fed. Cir. 2015), cert. denied, No. 15-1145, 2016 WL 1029054 (U.S. June 27, 2016).
Slip op. at 11-12.
The Federal Circuit then attempts to tie its pre-Cuozzo test to that of the Court by establishing a “two-part inquiry” for determining whether an issue is subject to review. First, the Federal Circuit asks
whether the challenge at issue is “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” or if it instead or if it instead “implicate[s] constitutional questions,” “depend[s] on other less closely related statutes,” or “present[s] other questions of interpretation that reach, in terms of scope and impact,” “well beyond ‘this section.’” Cuozzo II, 136 S. Ct. at 2141 (emphasis added). If the latter, our authority to review the decision to institute appears unfettered. But if the former, § 314(d) forbids our review.
Slip op.at 14. The Federal Circuit then identifies “[o]ne further exception” that requires a second inquiry:
[W]e must ask if, despite the challenge being grounded in a “statute closely related to that decision to institute,” id. at 2142, it is nevertheless directed to the Board’s ultimate invalidation authority with respect to a specific patent, id. at 2141; see also Versata, 793 F.3d at 1319–20; Achates, 803 F.3d at 657. If so, we may review the challenge.
Slip op. at 14.
In applying the above analysis to the assignor estoppel issue in Husky Injection Molding, the Federal Circuit determines that (1) it does not fall under any of the exceptions identified by the Supreme Court; (2) it does not derive from any statute but rather is an equitable doctrine; (3) § 311(a), which permits any person except the patent owner to file a petition , is the only statute implicated; and (4) “an interpretation of § 311 … to either include or foreclose assignor estoppel is very ‘closely related’ to any decision to initiate inter partes review.”
Slip op. at 16-17 (emphasis in original).
Finally, the court turned to its “ultimate authority to invalidate” test. Id. at 17. Since that authority “derives from the patent challenged and the type of review requested; it is not a question of who petitions for review” and thus “a bar preventing particular petitioners from challenging a patent does not impact the Board’s invalidation authority, for ‘[t]he Board may still invalidate a claim’” via another properly-filed petition. Id. at 17. Since “assignor estoppel implicates who may petition,” the Federal Circuit concluded it lacked jurisdiction to review the estoppel issue. Id. at 18-19.
Judge Plager dissented with respect to the reviewability issue, expressing concern that the “majority’s view may contribute to the already-existing confusion regarding which matters this court can review on appeal from a final decision by the Board.” Plager, slip op. at 1. In his view, “the Court took an intermediate position that fundamentally altered the playing field.” Judge Plager criticized the majority’s views in this case as “unnecessary commentary approving prior cases that may no longer be good law in light of Cuozzo,” and found “unhelpful” the majority’s “discussion of why the question of the application of assignor estoppel to this case does not relate to ‘the Board’s ultimate invalidation authority.’” Id. at 8. Judge Plager would have the Federal Circuit consider anew whether it is obligated to review issues it has previously declined to review, such as “filing deadlines and joinder and estoppel issues.” Id. at 8 (citing Judge Reyna’s concurring opinion in Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944, 2016 WL 4933298, at *8-9 (Sept. 16, 2016)).
The Husky Injection Molding opinions reflect a very divided Federal Circuit. Clearly, we have not heard “the last word” on reviewability. It is reasonable to expect that the Federal Circuit will take the right case en banc, and perhaps that the Supreme Court will step in again, particularly when the Federal Circuit adopts a rigid framework such as its “ultimate authority to invalidate” test.