Sas Institute, Inc. v. Complementsoft, LLC.
842 F.3d 1223
Fed. Cir.2016Background
- The appeal concerns the PTO’s practice of “partial” or “selective” institution of inter partes review (IPR), where the PTAB institutes review on some, but not all, claims challenged in a petition.
- SAS Institute filed a petition for rehearing en banc after the court denied rehearing; Judge Newman dissented from the denial, arguing partial institution is inconsistent with the AIA.
- The America Invents Act (AIA) created IPR before the Patent Trial and Appeal Board (PTAB) to provide an administrative alternative to district-court validity litigation, with final written decisions and estoppel effects.
- Statutory provisions relevant to the dispute include 35 U.S.C. §§ 311–318, which define petition content, institution threshold, estoppel, and require a final written decision as to challenged claims.
- The PTO promulgated regulations (37 C.F.R. § 42.108) permitting the Board to institute review on all or some challenged claims and grounds; Judge Newman contends this practice frustrates Congress’s purpose of finality and estoppel.
- The dissent argues partial institution leaves unreviewed claims unresolved (no finality/estoppel), undermining the AIA goal to substitute administrative resolution for litigation and to provide certainty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PTAB may institute IPR on only some challenged claims (partial institution) | Partial institution is unauthorized; AIA requires final decision on each properly challenged claim | PTO argues rulemaking discretion permits selective institution; institution decision is unreviewable | Panel decisions (e.g., Synopsys) upheld PTO practice; dissent argues en banc review should correct it |
| Whether statutory text §318(a) requires final decision on every claim in petition | §318(a) mandates final written decision as to any patent claim challenged by the petitioner | PTO interprets §318(a) as applying to claims the Board actually institutes | Dissent reads §318(a) to require decision on all challenged claims; majority declined en banc review of PTO practice |
| Effect of partial institution on estoppel (§315(e)) | Partial institution prevents estoppel for uninstituted claims, defeating AIA’s finality purpose | PTO practice preserves estoppel only for claims decided in final written decision; uninstituted claims remain for litigation | Dissent: practice undermines estoppel and AIA objectives; court denied rehearing en banc |
| Whether agency practice exceeds statutory authority and must be set aside under APA | Agency action denying decisions on some challenged claims is beyond statute and frustrates Congressional intent | PTO relies on regulatory authority and workload/administrative concerns (§314 discretion) | Dissent urges APA/chevron analysis to reject partial institution; court did not grant rehearing en banc |
Key Cases Cited
- Kungys v. United States, 485 U.S. 759 (statutory interpretation requires giving effect to every clause and word of a statute)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (framework for reviewing agency interpretations of ambiguous statutes)
- Fed. Energy Comm’n v. Democratic Senatorial Campaign Comm., 454 U.S. 27 (courts must reject administrative constructions that frustrate statutory policy)
- Davis v. Michigan Dept. of Treasury, 489 U.S. 803 (statutes construed as a symmetrical and coherent regulatory scheme)
- Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309 (Fed. Cir.) (court panel endorsed PTO’s position that final Board order need not address every claim in the petition)