As reported earlier, the Federal Circuit recently affirmed the PTAB’s final written decision in SAP v. Versata, No. 2014-1194 (Fed. Cir. 2015), its first final written decision in a CBM review. As part of that decision, the Court determined that it had jurisdiction to determine whether the patent at issue was a “covered business method patent” within scope of the PTAB’s authority for a CBM review under Section 18 of the American Invents Act (“AIA”), and that such review by the Court was not precluded by 35 U.S.C. § 324(e), which provides that a decision to institute a CBM review is “final and nonappealable.” In a dissenting-in-part opinion, Judge Hughes took the position that the Federal Circuit lacks jurisdiction to review the Board’s decision to institute a CBM review, which includes the Board’s determination that the challenged patent claims a “covered business method.” The dissent raises some interesting questions as to whether the majority opinion is consistent with the statute concerning institution of CBM reviews, and with the Federal Circuit’s IPR decision in In re Cuozzo, No. 2014-1301 (Fed. Cir. 2015).

As pointed out by the dissent, § 324(e) of the patent statute (which address institution of both post-grant review and CBM proceedings) provides that the Board’s decision “to institute a post-grant review under this section shall be final and nonappealable.” 35 U.S.C. § 324(e) (emphasis added). Because the determination of whether a challenged patent claims a “covered business method” is made as part of the Board’s institution decision, not the final written decision, according to the dissent § 324(e) precludes review of that decision.

The analogous statutory section addressing institution of IPRs similarly provides that the Board’s decision to institute “shall be final and nonappealable,” 35 U.S.C. § 314(d), and the Federal Circuit in In re Cuozzo interpreted this provision to “bar review of all institution decisions, even after the Board issues a final decision.” According to the dissent, the majority opinion in Versata, permitting review of whether the challenged patent was CBM-eligible, directly conflicts with In re Cuozzo.

Despite the dissent’s view that § 324(e) precludes judicial review of the institution decision, the dissent stated that in the event an agency “plainly violates an unambiguous statutory mandate,” the Court would be permitted to review such a decision, even if the statute bars judicial review. The dissent then effectively did review the Board’s decision, concluding that the Board “reasonably interpreted” its statutory authority and “properly applied its interpretation to Versata’s patent,” such that the Board’s decision did not give rise to an exception that would permit review under such circumstances.

According to the majority, its decision is not inconsistent with either § 324(e) or In re Cuozzo, because the Court has authority as part of a review of a CBM final written decision, to determine whether the PTAB exceeded statutory limits on its authority for CBM reviews as provided by § 18 of the AIA.

Resources & Info

Arthrex and the Supreme Court Resource Center

In United States v. Arthrex, Inc., the Supreme Court has heard whether 125+ PTAB decisions rendered through October 2019 must be remanded for new decisions. Read about how that issue developed through our post.

Learn more

Our Team

PTABWatch, provided by Marshall, Gerstein & Borun LLP, analyzes and reports recent developments concerning Post-Grant Proceedings at the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office (USPTO), including Inter Partes Review (IPR), Post Grant Review (PGR), and Covered Business Method (CBM) proceedings.