In Medtronic, Inc. v. Robert Bosch Healthcare Systems, Inc., the Federal Circuit considered the impact of Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016) on the scope of appellate review of a PTAB decision to vacate an inter partes review institution decision and terminate the proceeding and concluded there was none.
In this case, Medtronic filed three petitions for inter partes review of two patents owned by Bosch, listing itself as the sole real party in interest. Bosch argued that the petitions should be denied for failure to name Cardiocom (a Medtronic subsidiary) as a real party in interest. Over Bosch’s objection, the Board instituted the IPRs.
Later, based on additional discovery, Bosch moved to terminate the IPRs. The Board agreed that Cardiocom should have been named as a real party in interest based on the evidence, including (1) Cardiocom was the defendant in the corresponding litigation, (2) Cardiocom had previously unsuccessfully filed its own IPR petitions, (3) Cardiocom’s executives communicated with Medtronic while Medtronic’s petitions were being prepared, and (4) Cardiocom paid a portion of the fees for preparing Medtronic’s petitions. Slip op. at 3. In view of its determination, the Board vacated the institution decisions and terminated the proceedings because of Medtronic’s failure to name all real parties in interest.
Medtronic appealed, and the Federal Circuit dismissed the appeal for lack of jurisdiction. Id. Medtronic then petitioned for rehearing.
In the meantime, the U.S. Supreme Court decided Cuozzo. In its opinion, the Court agreed with the Board that its institution decisions are “final and nonappealable” under § 314(d), even after a final Board decision on the merits. Id. at 2136. The Court also held that the statute barred review of “questions that are closely tied” or “closely related” to “the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Id. at 2141-42, quoted in slip op. at 4. However, the Court left open the possibility that other decisions underlying an institution decision may be reviewable, including those decisions “implicat[ing] 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” § 314(d). 136 S. Ct. at 2141, quoted in slip op. at 6. The Federal Circuit acknowledged that § 314(d) “would not categorically bar review of a due process challenge based on insufficient notice that affects an entire proceeding” and “it would not ‘enable the agency to act outside of its statutory limits ….” Slip op. at 6 (quoting 136 S. Ct. at 2141-42).
In supplemental briefing, Medtronic argued, inter alia, that the Board exceeded its statutory authority by terminating the IPRs after institution on a non-merits issue, which the Federal Circuit interpreted as merely arguing that the Board lacked authority to reconsider its institution decision. Id. The Federal Circuit rejected this argument, stating that it would be “difficult to conceive of a case more ‘closely related’ to a decision to institute proceedings than a reconsideration of that very decision…. This is especially so when, as here, the Board’s reconsideration was predicated on a failure to meet the statutory requirements for filing a petition under § 312(a), a provision that ‘define[s] the metes and bounds of the inter partes review process.’” Id. at 5 (internal citation omitted). The panel also rejected the argument on the basis that agencies have inherent authority to reconsider their decisions. Id. at 6-7. The court thus denied Medtronic’s petition for panel rehearing. Id. at 9.
Judges Lourie, Dyk, and Hughes unanimously decided this case, and, given its precedential designation, one may surmise that a majority of the members of the court support the decision. However, with respect to other underlying issues supporting an institution decision, several Federal Circuit panels have been split on the scope of review since the Supreme Court decided Cuozzo. See Wi-Fi One, LLC v. Broadcom Corp., No. 15-1944, 2016 WL 4933298 (Sept. 16, 2016) Reyna, J., dissenting); and Husky Injection Molding Sys. Ltd. v. Athena Automation Ltd., No. 2015-1726, 2016 WL 5335500 (Sept. 23, 2016)(Plager, J., dissenting). Thus, while this case provides the Board and practitioners with an additional data point on the issue of reviewability of Board determinations, the Court is clearly divided in its interpretation of § 314(d) and application of Cuozzo. Thus, one can expect that the Federal Circuit will eventually take a § 314(d) case en banc to better define the dividing line between questions that can be appealed and those that cannot.