Basically, SAS is seeking an end-run around the 314(d) appeal bar.  In other words, had the PTAB simply moved forward with trial on all claims, SAS would have been able to appeal any unfavorable decision on claims 2 and 11-16 (presumably would have been found not unpatentable at the close of trial) as part of its appeal from the Final Written Decision (FWD).  As it currently stands, 314(d) prevents the appeal of claims 2 and 11-16 since they were denied institution.

Setting aside for another day the academic debate on the merits, should the high court accept SAS’s argument, Patentees will be significantly prejudiced.

First, partial institutions are of significant value to patentees.  Frequently, stays of concurrent litigation are avoided since “simplification of issues for trial,” a factor in such determinations, is effectively mooted when it is clear the trial will need to go forward as to at least non-instituted claims.  As between the two options, Patentees, even if later winning on some claims at FWD, will not want their litigation efforts needlessly stalled for an 18 month PTAB proceeding (trial + preliminary proceeding).  Likewise, it would seem unlikely that courts would be interested in lifting a stay during the pendency of an appeal covering all challenged (and presumably litigated) claims.  This would significantly undermine settlement opportunities and unnecessarily expand legal spend, and needlessly expand prosecution history for claims that would have otherwise avoided trial under the current trial framework.

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.

To the extent there is any benefit to an “all or nothing” system it would be the simplification of estoppel determinations.  With no partial institutions or redundancy issues to deal with, district courts may have an easier time grappling with the scope of statutory estoppel.  But, having advocated for this benefit previously, I am now convinced it is not worth the significant drawbacks noted above.

There will certainly be a significant amount of amicus briefing on this issue in the months ahead. Stay tuned.