Supreme Court Clarifies Patent-Appeal Process

(CN) – A divided Supreme Court ruled Tuesday that the Patent Trial and Appeal Board must issue written decisions covering all claims challenged in a review petition, not just certain patent claims it decided were worth review.

SAS Institute is an analytics software developer based in North Carolina. It filed an inter partes review, or IPR, petition with the Patent Trial and Appeal Board to review the patentability of a patent held by ComplementSoft LLC, after that company sued SAS for patent infringement in 2012.

IPR allows a third party to ask the board to reexamine claims in an already issued patent and to cancel claims it finds to be unpatentable “in light of prior art.”

The patent at issue involves an “integrated development environment for generating and maintaining source code,” according to court records.

SAS argued that all 16 of the patent’s claims were unpatentable as anticipated or obvious under federal patent law.

The Patent Trial and Appeal Board reviewed some, but not all, of ComplementSoft’s patent claims, and ultimately found all but one reviewed claim unpatentable in view of the prior art.

SAS appealed, arguing the board misconstrued a claim term and erred by not addressing in its final written decision patent claims that SAS petitioned against but that the board did not take up as part of its review.

The Federal Circuit, citing its 2016 decision in Synopsis v. Mentor Graphics, ruled 2-1 that the board did not need to address claims it did not review for its written decision.

After agreeing a year ago to take up SAS’ second appeal, the U.S. Supreme Court reversed the Federal Circuit and ruled 5-4 Tuesday that an IPR decision must address all patent claims that a petitioner challenged.

Justice Neil Gorsuch, the high court’s newest member, delivered the majority opinion, writing that the Patent Trial and Appeal Board “cannot curate the claims at issue.”

“The statute, we find, supplies a clear answer: the Patent Office must ‘issue a final written decision with respect to the patentability of any patent claim challenged by the peti­tioner.’ In this context, as in so many others, ‘any’ means ‘every,’” Gorsuch wrote, citing the relevant federal law. (Emphasis in original.)

Gorsuch was joined in the majority by Chief Justice John Roberts and Justices Anthony Kennedy, Clarence Thomas and Samuel Alito.

Justice Ruth Bader Ginsburg dissented and was joined by Justices Stephen Breyer, Sonia Sotomayor and Elena Kagan.

Ginsburg wrote in her single-page dissenting opinion that the Patent Trial and Appeal Board has the right to reject an entire petition or specific claims it finds unworthy of review.

“Why should the statute be read to preclude the board’s more rational way to weed out insubstantial challenges?” Ginsburg wrote. “The court’s opinion offers no persuasive answer to that question, and no cause to believe Congress wanted the board to spend its time so uselessly.”

Breyer wrote a separate dissent – joined in full by Ginsburg and Sotomayor and in most part by Kagan – saying the statute at issue is ambiguous and agreeing with the Patent Office’s interpretation that it can skip over patent claims that do not have a “reasonable likelihood of success.”

“The statute would seem to give the director discretion…to avoid wasting the board’s time and effort reviewing challenges that it has already decided have no ‘reasonable likelihood of success,’” Breyer wrote.

He continued, “The majority’s interpretation is anomalous in that it is difficult to imagine why Con­gress, with one hand, would make the agency’s weeding-out decision nonreviewable, yet at the same time would make the decision reviewable via the requirement that the board issue a ‘final written’ appealable ‘decision’ with respect to that weeded-out challenge.”

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