Previously Exercised Discretion Eliminated by SAS

While most remember the Cuozzo appeal as challenging the Patent Trial & Appeal Board’s (PTAB) claim construction practices, it also challenged the Board’s discretion to institute claims on grounds not presented in the IPR petition. But, the High Court deemed this issue unreachable given the appeal bar of 35 U.S.C. § 315(b). Still, the Federal Circuit has expressly endorsed the Board’s ability to modify the grounds presented in trial petitions.

Today, the Federal Circuit has made clear in Sirona Dental SystemsGMBH v. Institut Straumann AG (precedential) that the Supreme Court’s decision in SAS Institute eliminates any ability of the Board to modify a petitioner’s trial grounds.

In the Sirona appeal, Patent Owner challenged the Board’s final written decision, arguing that the Board relied on theories that first appeared in the final written decision. In doing so, Patent Owner argued that the Board violated the APA when it put together its own obviousness theory that did not appear in the petition. While the Court did not find that the Board had switched grounds, the dicta made quite clear that to do such is improper after SAS, explaining (here):

An inter partes review must proceed “in accordance with or in conformance to the petition.” SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1356 (2018) (internal quotations omitted). “Nothing suggests the Director enjoys a license to depart from the petition and institute a different inter partes review of his own design.” Id. (emphasis in original). “The rest of the statute confirms, too, that the petitioner’s petition, not the Director’s discretion, is supposed to guide the life of the litigation.” Id. “[T]he statute tells us that the petitioner’s contentions, not the Director’s discretion, define the scope of the litigation all the way from institution through to conclusion.” Id. at 1357. It would thus not be proper for the Board to deviate from the grounds in the petition and raise its own obviousness theory, as Sirona contends.

In the past if the Court found such an argument compelling, it would have remanded, faulting the Board for not providing the requisite notice and opportunity to respond under the APA.  Post-SAS, the Court is now saying “you can’t move the target, PTAB.”

In this decision patent owners may have finally found some value in SAS.