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Supreme Court Uproots Current PTAB Practice by Quashing Partial Decisions

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By Trisha Farmer Lau and David G. Barker

On April 24, 2018, in SAS Institute, Inc. v. Iancu, the Supreme Court held that the Patent Trial and Appeal Board (“PTAB”) must decide the validity of every patent claim challenged when it undertakes inter partes review under the America Invents Act (“AIA”).  In a 5-4 decision, the Court ruled in favor of SAS Institute, Inc., a software developer that filed an inter partes review petition and argued that the PTAB’s final decision must address all challenged claims in the petition.

Before this decision, a U.S. Patent and Trademark Office regulation, 37 CFR § 42.108(a), allowed the PTAB to institute review of some challenged claims and deny review of others in a petition for inter partes review.  Once instituted, the matter proceeded through the PTAB, and, if not ultimately dismissed, the PTAB issued a final written decision on only the claims selected for review.  Such partial decisions could result in additional district court litigation over the same patents.

Looking to the statutory language in 35 U.S.C. § 318(a), the majority held that this regulatory discretion was not permitted.  Noting that the AIA states that the PTAB “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner,” the Court interpreted “any” as meaning “every.”  The Court held that the directive “is both mandatory and comprehensive” and “imposes a nondiscretionary duty.”

The Court’s decision will affect not only PTAB proceedings, but also federal court litigation.  For example, the need to litigate in two places that sometimes arose (in the PTAB for the claims reviewed and in federal court for the claims the PTAB denied review) may lessen.  Also, because the PTAB must now decide all challenged claims, and 35 U.S.C. § 318(a) allows a dissatisfied party to appeal the final decision, the Court’s ruling may give rise to an increase in appeals at the Federal Circuit.