CyWee Group Ltd. (“CyWee”) has been bouncing between the Federal Circuit and Patent Trial and Appeal Board (“Board”) with its administrative challenges after two inter partes review (“IPR”) proceedings invalidated the claims of its patents. Now, the Federal Circuit has resolved CyWee’s remaining procedural challenges, affirming the Board’s decisions in CyWee Grp. Ltd., v. Google LLC, 59 F.4th 1263 (Fed. Cir. 2023).
For some context, a bit of information about the procedural history of the two IPRs at issue may be helpful. Google LLC (“Google”) challenged CyWee’s patents in two IPRs in 2018. CyWee filed a preliminary patent owner response in each proceeding and the Board instituted each IPR within three months of the preliminary responses. Because other parties joined the IPRs after institution, the Board extended its typical 12 month deadline for a final written decision to 13 months. The Board issued its final written decision determining all challenged claims as unpatentable for obviousness within the new deadline.
CyWee appealed the decisions, challenging the constitutionality of the administrative patent judges under the Appointments Clause. The Federal Circuit had addressed this in its then-binding precedential Arthrex decision and rejected CyWee’s arguments. Shortly after the decision, the Supreme Court issued its Arthrex decision, United States v. Arthrex, Inc., 210 L. Ed. 2d 268 (June 21, 2021), which would allow the Acting Director of the patent office to decide whether to rehear any of the cases.
CyWee requested rehearing of the IPR decisions by the Director. The request for rehearing was referred to the Commissioner for Patents, who denied rehearing and ordered the Board’s decisions as the final decisions of the agency.
Again, CyWee appealed the decisions, raising additional procedural problems with the Director’s review of the decisions. The Federal Circuit rejected all of the additional challenges, foreclosing future avenues parties unsatisfied with IPR results may pursue.
First, the court rejected all of CyWee’s constitutional arguments that the Commissioner had authority to perform the review and the Appointments Clause challenges regarding the institution decisions. The Federal Circuit found that its prior decisions in Arthrex, Inc. v. Smith & Nephew, Inc., 35 F.4th 1328 (Fed. Cir. 2022) and In re Palo Alto Networks, Inc., 44 F.4th 1369 (Fed. Cir. 2022) compelled such a result.
A second set of challenges were directed to the timeliness of the institution decisions and final written decisions. According to CyWee, making the institution decisions and final written decisions within the statutory time limits was insufficient. CyWee argued that the Director must have the opportunity to review the Board’s decisions and must make such review within the statutory deadlines. The Federal Circuit found these arguments to be meritless. The statutes state when an institution must be made and when a final written decision must be issued. Here, the Director permissibly delegated that authority to the Board and the Board met those requirements. Nothing in the statutes or associated rules and regulations require the Director’s review of those decisions to be within the same time period, it can be later. As the delegating official, the Director maintains the power to review the decisions of the delegee.
After Arthrex, it appears that the realm of administrative and constitutional challenges to IPR decisions is continuing to shrink, which may ultimately bring more certainty to the framework underlying the IPR proceedings.