Review of PTAB Trial Orders Debated by CAFC

In recent weeks, the CAFC has twice considered whether or not the trial orders of the USPTO’s Patent Trial & Appeal Board (PTAB) become appealable once a final written decision is issued. First, on November 3, 2014, the CAFC heard arguments directed to this issue in In re Cuozzo Speed Technologies LLC. The Cuozzo appeal stemmed from the very first Inter Partes Review (IPR) ever filed. Cuozzo appealed the Board’s determination of unpatentability and argued that the IPR never should have been instituted in the first place. This past Wednesday in an appeal stemming from  the very first CBM filed, Versata Development Group v. SAP America, Inc, a similar threshold argument was made to the Court.

Can the CAFC consider an otherwise nonappealable PTAB trial order in reviewing a final written decision?

As a reminder, the CAFC has already determined that 35 U.S.C. § 314 precludes interlocutory appeal from a PTAB Trial Order. In fact the statute is quite clear on this issue.

§ 314. Institution of inter partes review
. . .
(d) NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

Less clear, is whether or not threshold issues decided in the trial order become appealable once the PTAB has finished the trial.

During Wednesday’s 90-minute oral argument in Versata Judge Neuman was of the opinion that the purpose of §314 was to keep interlocutory appeals from disrupting the trial timeline, and perhaps once the work was done by the agency, the totality of agency actions should be available for review. This consideration was especially critical in the Versata appeal as a key argument was whether or not the challenged patent truly qualified as a “covered business method.” Versata insisted that the PTAB’s definition of business method was not properly grounded in a “financial product or service” as allegedly required by the controlling statute. The Court seemed unimpressed with Versata’s proposed definition. Instead, the Court spent much of the oral argument time exploring the justiciability issue (not surprising given the recent Cuozzo debate and the broader applicability to their work). The panel noted how an ultra vires action of the agency might go unchecked absent review of PTAB trial orders. The Solicitor explained that judicial review bars were not uncommon in administrative law.

Other issues explored during the Versata argument included the applicability of BRI to AIA trial proceedings (an issue also debated in the Cuozzo case), the impact of parallel decisions in the district court, and patentability of computer implemented methods under 35 U.S.C. § 101. The Solicitor was impressive in her response to these varied issues and had a strong knowledge of patent office post-grant history and procedures. With respect to the application of BRI, the PTO explained that the AIA provided more than just procedural rule making authority, and contemplated merger, and consolidation with other office proceedings that applied BRI. It was also explained that amendment was possible before the PTAB, theretofore the court’s blessing of BRI was equally applicable to AIA proceedings. Judge Neuman was skeptical as to amendment options and remarked that the “rumor” was amendment was near impossible.   

The Versata argument’s focus on broader ranging AIA policy issues makes it far more interesting as compared to most appeals from the PTO. Both the Cuozzo and Versata decisions will be significant for post-grant patent practitioners in the month’s ahead. You can access these oral argument recordings (here).