In AC Technologies S.A. v. Amazon.com, the Federal Circuit confirmed the PTO’s interpretation of SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348, 1355 (2018) (discussed in greater detail here) requiring that the PTAB address each ground of invalidity raised in an instituted petition in its final written decision. 912 F.3d 1358 (Fed. Cir. 2019).
As we previously discussed [here], the patent office guidance issued after SAS requires the Board to institute both on all invalidity grounds and on all claims raised in an instituted petition–this despite the fact that SAS said only that review of all challenged claims was required, but was silent on a requirement that all grounds be reviewed. In AC Technologies, the Federal Circuit relied upon several of its recent cases to hold that precedent mandates that the Board consider all grounds of unpatentability raised in an instituted petition.
Amazon filed a petition for IPR presenting three grounds. At institution, the Board instituted on Grounds 1 and 2. With respect to Ground 3, the Board found the third ground moot. In its final written decision, based on its claim construction, the Board found that Ground 2 anticipated every claim except claims 2, 4, and 6. The final written decision did not address whether those claims would have been obvious under Amazon’s Ground 3. On that basis, Amazon moved for reconsideration. Both parties submitted additional argument, expert declarations, and exhibits. The Board held that claims 2, 4, and 6 were unpatentable under Ground 3.
AC appealed, arguing that the Board erred procedurally when it invalidated claims based on a ground for which it did not institute in its institution decision. The Federal Circuit pointed to two (post-SAS) cases as holding that, if the Board institutes an IPR, it must address all grounds of unpatentability raised by the petition: Adidas AG v. Nike, Inc., 894 F.3d 1256, 1258 (Fed. Cir. 2018) (remanding non-instituted grounds for review) and BioDelivery Scis. Int’l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205, 1208 (Fed. Cir. 2018) (“Post-SAS cases have held that it is appropriate to remand to the PTAB to consider non-instituted claims as well as instituted grounds.”) These prior decisions had determined remand was appropriate, and in Adidas, the Federal Circuit went so far as to say that “[e]qual treatment of claims and grounds for institution purposes has pervasive support in SAS.” Adidas, 894 F.3d 1256, 1258 (quoting PGS Geophysical AS v. Iancu, 891 F. 3d 1354, 1360 (Fed. Cir. 2018)). But the court goes further in AC in stating that the Board would have violated the statutory scheme had it not reconsidered its final written decision to address all grounds raised in the petition. Further, the Federal Circuit determined that the Board complied with due process requirements by allowing AC to take discovery and submit additional briefing on the non-instituted ground. Though AC did not receive a hearing specific to that ground, it also never requested any such hearing.
With this decision, the Federal Circuit gives the force of law to the PTO’s interpretation of SAS Institute, and avoids any confusion that may have remained regarding whether or not the Board must institute as to both all challenged claims and all raised invalidity grounds. This has been answered with a resounding yes.