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Justices Limit Role of Courts in Patent-Validity Disputes

The Supreme Court on Monday ruled courts cannot hear appeals claiming the Patent and Trademark Office took up an untimely request to examine an already issued patent.

WASHINGTON (CN) — The Supreme Court on Monday ruled courts cannot hear appeals claiming the Patent and Trademark Office took up an untimely request to examine an already issued patent.

The America Invents Act set up a process that allows any person to ask the Patent and Trademark Office to review whether a patent it has already issued is valid. Called inter partes review, or IPR, the process plays out before the Patent Trial and Appeal Board.

Among the restrictions the law sets out on the process is a one-year window within which petitioners can ask for IPR after being served with a patent infringement complaint. 

Click-to-Call Technologies in 2011 acquired a patent for an anonymous telephone communication system and in May 2012 filed a patent infringement lawsuit against Ingenio. The patent had a decade earlier been tied up in litigation between two other companies, but the companies agreed to voluntarily dismiss the suit after they agreed to merge and form Ingenio. 

Ingenio petitioned for inter partes review less than a year after Click-to-Call filed its lawsuit, but Click-to-Call argued the petition was untimely because Ingenio’s predecessor had actually been served with the pre-merger litigation in 2001. The Patent and Trial Appeal Board disagreed, ruling the voluntary dismissal of the earlier litigation made it as if the suit had never been brought. 

As a result, the clock on the one-year time requirement never started, the board ruled. 

The board eventually found the claims in Click-to-Call’s patent unpatentable and the company appealed to the Federal Circuit, claiming the board should never have undertaken review of the patent.

The appeals court initially dismissed the appeal based on a bar on appellate review of the board’s decision on whether or not to undertake the inter partes review process, but reversed after an en banc decision in an earlier case it had relied upon in the Click-to-Call appeal.

Ingenio’s successor, Thryv, appealed the decision to the Supreme Court.

Vacating the Federal Circuit’s decision, the high court ruled 7-2 on Monday that federal law does not allow an appeal of the Patent Trial and Appeal Board’s decision that a patent challenge was filed on time.  

Justice Ruth Bader Ginsburg wrote for the majority that the statute at issue bars an appeal of the board’s decision to review a patent and the board’s application of the law’s time limit is “is closely related to its decision whether to institute inter partes review and is therefore rendered nonappealable.”

“By providing inter partes review, Congress, concerned about overpatenting and its diminishment of competition, sought to weed out bad patent claims efficiently,” Ginsburg wrote. “Allowing §315(b) appeals would tug against that objective, wasting the resources spent resolving patentability and leaving bad patents enforceable.”

The majority also rejected Click-to-Call’s argument that another section of the patent law allows it to appeal the board’s decision.

“Click-to-Call presses an alternative reason why the Board’s ruling on its §315(b) objection is appealable. The Board’s final written decision addressed the §315(b) issue, so Click-to-Call argues that it may appeal under §319, which authorizes appeal from the final written decision,” Ginsburg wrote. “But even labeled as an appeal from the final written decision, Click-to-Call’s attempt to overturn the Board’s §315(b) ruling is still barred by §314(d).”

Justice Neil Gorsuch dissented and was joined by Justice Sonia Sotomayor. Gorsuch said the majority’s ruling “carries us another step down the road of ceding core judicial powers to agency officials and leaving the disposition of private rights and liberties to bureaucratic mercy.”

“Today the Court takes a flawed premise – that the Constitution permits a politically guided agency to revoke an inventor’s property right in an issued patent – and bends it further, allowing the agency’s decision to stand immune from judicial review,” Gorsuch wrote. “Worse, the Court closes the courthouse not in a case where the patent owner is merely unhappy with the merits of an agency’s decision but where the owner claims the agency’s proceedings were unlawful from the start.”

Dan Geyser, an attorney with Dallas-based Geyser P.C representing Click-to-Call, said in an email Monday he was disappointed the court failed to grapple with some of his brief’s key arguments, but there was little his team could do to change the majority’s mind if they were unmoved by Gorsuch’s dissenting opinion.

“The Court let the agency override one of the [America Invents Act’s] express limits on agency authority,” he wrote. “It’s now a question for Congress to restore the judiciary’s traditional role in reviewing agency action and saying what the law is.”

Adam Charnes, an attorney with Dallas-based Kilpatrick Townsend representing Thryv, did not return a request for comment Monday.

The Justice Department declined to comment on the ruling.

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