On April 20, 2020, the Supreme Court held that PTAB decisions instituting IPR are final and non-appealable and that the language of 35 U.S.C. § 314(d) “indicates that a party generally cannot contend on appeal that the agency should have refused “to institute an inter partes review.”  Thryv Inc. v. Click-To-Call Technologies LP, case number 18-916, 2020 WL 1906544 at *4, __S.Ct. __ (2020).

The Court’s analysis turned on the scope of § 314(d)’s language that the “determination by the Director whether to institute an inter partes review [IPR] under this section shall be final and nonappealable.” Section 315(b) states that an IPR may not be instituted if the petition is filed “more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging patent infringement.” Thus, the question for the Court was whether the Board’s decision on the one year time bar set forth in § 315(b) falls within the scope of the determination whether to institute deemed final and nonappealable in § 314(d).

In Thryv, 12 years before the IPR petition was filed by Thryv, Click-To-Call (C-T-C) had served Thryv’s predecessor with a complaint alleging infringement of the relevant patent. That infringement complaint had been voluntarily dismissed by C-T-C. Reasoning that a voluntary dismissal leaves the parties in the same position as though the case had never been brought, the PTAB concluded that the earlier suit did not bar institution of Thryv’s petition.  After conducting a trial on that petitions, the PTAB invalidated many of the challenged claims. On appeal, the Federal Circuit determined that the PTAB was incorrect in its interpretation of the effect of the voluntary dismissal. Click-to-Call Technologies, LP v. Ingenio, Inc., Yellowpages.com, 899 F.3d 1321 (Fed. Cir. 2018) (en banc footnote 3). Before the Supreme Court, both Thryv and the government argued that the Federal Circuit lacked jurisdiction to consider the Board’s decision to institute the IPR.

The Supreme Court’s majority agreed. In reaching its decision, it cited to the Court’s prior decision in Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___, which held that the appeal prohibition applies to all matters “closely tied to the application and interpretation of statutes related to” the institution decision. 2020 WL 1906544 at *5. The Court also looked to the purpose of IPR proceedings—efficiently weeding out bad patent claims—to support its conclusion. To allow appeals of the § 315(b) time bar would waste the resources spent adjudicating patentability and would allow bad patents to remain in force. Id. at *5-6.

Justice Gorsuch, in a dissent joined in part by Justice Sotomayor, cited the statute’s language that it is the Director’s determination whether to institute “under this section” (i.e., § 314) that is final and unappealable. The dissent reads this language as limited only to the substantive determination of whether or not the petitioner has shown a reasonable likelihood of prevailing on its invalidity claims. Under this reading, a party could continue to press an argument that the one year time bar prevents the Board from considering the merits throughout the administrative proceeding and on appeal. Thryv at *11.

Justice Gorsuch’s dissent carries forward his reasoning from an earlier dissent in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, 584 U.S. ___ that the Constitution does not authorize “a politically guided agency to revoke an inventor’s property right in an issued patent.” Thryv at *8. In Justice Gorsuch’s view, an agency decision should not be immune from judicial review, particularly where, as here, the government concedes that the patent owner correctly objected to the Board’s time bar determination. The dissent also viewed the majority’s decision as inconsistent with its prior decision in SAS Institute Inc. v. Iancu, 584 U. S. ___ (2018), which allowed appellate review of the Board’s decision not to institute on all grounds raised in an IPR petition. Thryv at *15-16. In SAS, the Court held that the PTAB’s practice of partial institution of only certain claims raised in a petition violated § 318(a)’s provision that the PTAB “shall issue a final written decision with respect to the patentability of any claim challenged by the petitioner.” SAS, 138 S. Ct. at 1354 (emphasis added). The SAS Court summarized Cuozzo, saying that itconcluded that § 314(d) precludes judicial review only of the Director’s “initial determination under § 314(a) that ‘there is a ‘reasonable likelihood’ that the claims are unpatentable on the grounds asserted.” Id. at 1359 (emphasis added). The majority disregards this statement from SAS as an incomplete summary of Cuozzo. Thryv at *7.

The Court’s decision gives the PTAB unfettered power to decide the application of the one-year time bar. Patent owners have expressed concern that this unfettered power weakens the limitations to the scope of IPR that Congress intended when it enacted the AIA. Since patent owners only have one shot to raise the time bar, they should make sure to present the best evidence available in the patent owner’s preliminary response.