Arthrex, Inc. v. Smith & Nephew, Inc.
880 F.3d 1345
| Fed. Cir. | 2018Background
- Petitioners Smith & Nephew and ArthroCare filed an IPR petition challenging claims 1–9 of Arthrex’s U.S. Patent No. 8,821,541.
- Before the Board decided whether to institute the IPR, Arthrex statutorily disclaimed claims 1–9 under 37 C.F.R. § 42.107(e).
- The PTAB nevertheless entered an adverse judgment under 37 C.F.R. § 42.73(b), which the PTAB construed to permit adverse judgment when all challenged claims are disclaimed after a petition is filed but before institution.
- The adverse judgment triggered estoppel under the Board’s rules, affecting Arthrex’s pending and subsequently issued continuation applications.
- Arthrex appealed; petitioners moved to dismiss for lack of jurisdiction, arguing appeals lie only from a "final written decision" under 35 U.S.C. § 319. The Federal Circuit rejected that jurisdictional challenge.
- The court limited its review to whether the Board’s adverse judgment was appealable and whether § 42.73(b) permitted the PTAB to enter such an adverse judgment pre-institution; it did not decide whether the PTO had statutory authority to promulgate § 42.73(b).
Issues
| Issue | Arthrex's Argument | Petitioners' Argument | Held |
|---|---|---|---|
| Whether the Board’s adverse judgment is appealable | Appeal available despite no final written decision under § 319; § 1295(a)(4)(A) supplies jurisdiction | Appeals limited to final written decisions under § 319 | Court: appealable under § 1295(a)(4)(A); § 319 does not preclude § 1295 jurisdiction |
| Whether § 42.73(b) authorizes adverse judgment when patentee disclaims all challenged claims pre-institution | Board rule inapplicable because Arthrex expressly said it did not request adverse judgment and because subsection (2) refers to "in the trial" (i.e., post-institution) | Board may construe disclaimer as request for adverse judgment; "in the trial" can mean "for trial" so rule applies pre-institution | Court: PTAB interpretation reasonable; § 42.73(b) permits adverse judgment after petition filing even before institution when all challenged claims are cancelled |
| Whether the patentee’s statement that it did not request adverse judgment prevents entry of adverse judgment | Such a statement should control and prevent adverse judgment | A patent owner cannot avoid adverse judgment merely by labeling its action; Board may construe actions as requests for adverse judgment | Court: Patentee’s characterization does not control; Board may construe acts as requests for adverse judgment |
| Whether this appeal requires resolving the PTO’s statutory/regulatory authority to adopt § 42.73(b) | Arthrex waived statutory challenge and did not press it here | Petitioners relied on regulatory text and PTAB practice; court need not reach authorizing statute | Court: Did not decide statutory authority; reserved that question for another day |
Key Cases Cited
- Mach Mining, LLC v. EEOC, 135 S. Ct. 1645 (2015) (strong presumption of judicial review for final agency action)
- Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016) (institution decisions are nonappealable under § 314(d))
- St. Jude Medical v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014) (discussing scope of § 1295 jurisdiction and appealability of institution decisions)
- In re Arunachalam, 824 F.3d 987 (Fed. Cir. 2016) (finality requirement for appeals under § 1295)
- Copelands’ Enters., Inc. v. CNV, Inc., 887 F.2d 1065 (Fed. Cir. 1989) (finality and appealability principles)
- Brecht v. Abrahamson, 507 U.S. 619 (1993) (court free to address issues not squarely decided previously)
- Block v. Community Nutrition Inst., 467 U.S. 340 (1984) (statutory preclusion of review requires clear implication)
- Shaw Indus. Group, Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016) (IBR does not begin until instituted)
- Brown & Williamson Tobacco Corp. v. FDA, 529 U.S. 120 (2000) (agency cannot act inconsistent with Congress’ statutory structure)
- Ron Pair Enters., Inc. v. United States, 489 U.S. 235 (1989) (plain statutory language controls)
- Williams v. Taylor, 529 U.S. 362 (2000) (give effect to every clause and word in statutory interpretation)