“All or Nothing” PTAB Institution Practice Coming Soon?
Today, the Supreme Court granted certiorari in SAS Institute Inc., v. ComplemenSoft LLC. As previously explained, SAS argues that partial PTAB trial institutions are inconsistent with the controlling statutes of the America Invents Act (AIA). That is, if the PTAB finds that at least one claim is demonstrated as likely unpatentable, the PTAB should institute trial for all petitioned claims.
The dispute stems from an IPR filing of SAS in which it challenged all sixteen claims of ComplementSoft’s 7,110,936 patent. Trial was instituted for claims 1 and 3-10, but claims 2 and 11-16 were denied institution. On appeal to the Federal Circuit, SAS argued that it was inefficient to institute on only a subset of claims, and that the controlling rule authorizing partial institution (37 C.F.R. § 42.108(a) was in direct conflict with statutes 35 U.S.C. §§ 314(a)/318(a). The Federal Circuit disagreed.
Setting aside for another day the academic debate on the merits, should the high court accept SAS’s argument, Patentees will be significantly prejudiced.
Second, patentees have only recently secured the right to submit new testimonial evidence to avoid institution. Should the all or nothing institution model become reality, there would be even less of an appetite to submit this testimony. As it stands now, there is value in such submissions since avoiding trial on even a subset of claims is, as noted above, of significant value. If Patentees now have to defeat every claim to avoid trial, they are better off keeping their evidence and arguments for trial. In my experience the submission of early evidence fosters settlement.
Third, if the PTAB need only find a single claim of a challenged set susceptible to unpatentability the quality of institution decisions will significantly degrade. For example, as institution would likely analyze the broadest claim, meaningful discussions of narrower claim terms wouldn’t even need to be included in the decision. Likewise, it is human nature that institution will become far more attractive from the agency perspective (or so it will be argued). This is because it is far easier to author an opinion to institute on a single claim as opposed to authoring a denial that would need to address every claim. As it stands, institution decisions offer a great deal of guidance to the parties, and also help facilitate settlements. The loss of quality institution decision would be a loss for both sides.
There will certainly be a significant amount of amicus briefing on this issue in the months ahead. Stay tuned.