Supreme Court Holds that the PTAB Has the First and Last Word In Determining Whether IPRs Are Time-Barred

The Supreme Court in a 7 -2 decision held that a decision by the PTAB on whether an inter partes review (IPR) is time-barred is NOT reviewable by the courts. THRYV, INC. v. CLICK-TO-CALL TECHNOLOGIES, LP. 590 U.S. ____ (2020). In other words, the PTAB’s decision to institute an IPR or not based on whether the IPR was timely filed (i.e., within one year of being served with a complaint asserting infringement of the challenged patent) is final and nonappealable.

The patent at issue in Thryv was awarded in 1998 and the subject of a suit between the parties/predecessors back in 2001. That suit was resolved and dismissed without prejudice. After a new lawsuit was filed 12 years later, Thryv petitioned for the subject IPR, which resulted in the 13 claims being cancelled.

Now there are two key provisions in play from the AIA: §§ 314(d) and 315(b). 35 U.S.C. §314(d) says “NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” At the same time, 35 U.S.C. §315(b) says “PATENT OWNER’S ACTION.—An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent…”

During the IPR, the PTAB ruled that the first lawsuit did not count towards the §315 (b) clock because a dismissal with prejudice does not trigger the one year clock of §315 (b). Click-to-Call appealed, but Thryv argued that the PTAB’s decision was not appealable under §315(b). The CAFC agreed and dismissed the appeal. The Supreme Court then made its first grant of certiorari, vacated the CAFC judgement and remanded in view of its intervening Cuozzo decision. Following the remand, the CAFC held in Wifi Once, LLC v. Broadcom Corp. that “time-bar determinations under §315(b) are appealable” notwithstanding §314(d). 878 F. 3d 1364, 1367 (CAFC 2018). Applying Wifi Once, the CAFC vacated the PTAB’s final written decision and remanded with instructions to dismiss. The second grant of certiorari followed.

The Supreme Court doubled down on its Cuozzo decision, reiterating that:

Section 314(d)’s text renders “final and nonappealable” the “determination by the Director whether to institute an inter partes review under this section.” §314(d) (emphasis added). That language indicates that a party generally cannot contend on appeal that the agency should have refused “to institute an inter partes review.”

Determining whether an IPR is barred by application of § 315 (b) is “closely tied to the application and interpretation of statutes related to” the institution decision. Cuozzo at 579 U.S. ____(slip op., at 11) The Court felt that a §315(b) challenge “easily meets that measurement” rendering it nonappealable.

In supporting its decision the Court dove into policy reasons, describing how a §315(b) appeal would only take place after a party lost on validity, thereby preserving bad patents if §315(b) was interpreted differently.

Recent decisions had clarified that the time-bar challenge must be timely raised before the PTAB (i.e., it cannot be raised for the first time on appeal). Acoustic Tech., Inc. v. Itron Networked Solns., Inc., No. 2019-1059 (Fed. Cir. Feb. 13, 2020). Thryv takes the final step, confirming that this issue must be raised at, and is entirely up to, the PTAB.

Thryv will likely escalate challenges at the institution stage regarding the applicability of the 1 year time bar. Patent Owners may benefit from aggressively searching for evidence that the petitioner has a relationship (e.g., real party in interest or privy thereof) to a party previously sued on the challenged patent. In preparing a post grant challenge, Petitioners should fully consider the effects of any prior lawsuits asserting the challenged patent against related entities (or entities in their supply chain).