The Software IP Report

Federal Circuit Will Not Allow Appeals Of PTAB Decisions Not To Initiate Inter Partes Review

By George Schooff

Categories: The Software IP Report, USPTO Post-Issue Proceedings

In St. Jude Medical, Cardiology Div., Inc. v. Volcano Corp., No. 2014-1183 (Fed. Cir. Apr. 24, 2014), St. Jude sued Volcano for patent infringement.  Volcano counterclaimed against St. Jude, asserting St. Jude was infringing a Volcano patent.  Two years later, the district court dismissed all claims against St. Jude relating to the Volcano patent.  Six months after that, St. Jude filed a petition for inter partes review of the Volcano patent.  Id. at 3.

The Patent Office Trial and Appeal Board (“PTAB”) denied St. Jude’s petition.  According to the PTAB, Volcano’s counterclaim alleging patent infringement constituted a “complaint alleging infringement of the patent” within the meaning of § 315(b).  Section 315(b) serves as a bar to instituting inter partes review of a patent if the petitioner was served with a complaint alleging patent infringement more than a year before.  St. Jude appealed the denial of its petition to the Federal Circuit.  The PTAB moved to dismiss.  Id. at 3-4.

The Federal Circuit granted the motion.  The court pointed out that 35 U.S.C. § 318(a) only authorizes appeals to the Federal Circuit from “the final written decision” of the PTAB.  Id.

Likewise, 35 U.S.C. § 141(c) only authorizes an appeal from a party “dissatisfied with a final written decision of the Patent Trial and Appeal Board under section 318(a).”  Id.

Finally, the Federal Circuit turned to 35 U.S.C. § 314(d).  That subsection is titled “No Appeal,” and states, “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.”  Id. at 2.  While stopping short of saying the PTAB’s decision not to institute an inter partes proceeding is never subject to judicial review–perhaps a challenge under the Administrative Procedure Act?–the Federal Circuit held “[i]t certainly bars an appeal of the non-institution decision here.”  Id. at 5.

The take away?

Counterclaims for patent infringement will be treated as “complaints” for § 315(b) purposes.  Moreover, the fact that a complaint or counterclaim for patent infringement has been dismissed will not toll § 315(b)’s one-year-from-service limitations period for initiating inters partes review.  Consequently, petitioners, their privies, and real parties in interest that have been sued for patent infringement and served with a complaint/counterclaim should be mindful of the deadline, or they may unwittingly forfeit their right to an inter partes patent challenge.