The First Wave of Post-Grant Appeals

2015 brought the first wave of Federal Circuit decisions in appeals from inter partes review (IPR) and covered business method (CBM) proceedings. The trend has been deference: in 83 post-grant appeals, the Federal Circuit has affirmed in 92%, mostly without opinion. There are a few areas, though, in which the Federal Circuit has addressed interesting new issues.

Several parties have challenged the Board's authority to institute an IPR or CBM. The Federal Circuit has largely rejected such challenges, finding that the appeal bar in 35 U.S.C. § 314(d) deprives it of jurisdiction to consider most of them. For example, In re Cuozzo Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), the Federal Circuit declined jurisdiction over a challenge to the Board's decision to institute based on an obviousness combination that wasn't precisely articulated in the IPR petition. Cuozzo held that the § 314(d) appeal bar applies equally at the final written decision stage and that the Petitioner's failure to cite particular prior art against specific claims wasn't a basis for upsetting the final decision. But the Federal Circuit has examined one institution-related issue: Versata Development Group v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015). It found jurisdiction to consider whether the PTAB properly determined a patent was a "covered business method," because this was a substantive limit on the PTAB's invalidation authority.

The Supreme Court may soon resolve the seeming tension between Cuozzo and Versata, as it has granted certiorari in Cuozzo and will render a decision there by June 2016.

Most losing parties have framed their appeals as matters of claim construction, as this gets de novo review when based on the intrinsic evidence. But this is still a difficult road for Patent Owners, because Cuozzo held that the "broadest reasonable interpretation" (BRI) standard governs. That result sparked considerable controversy five judges dissented from denial of rehearing en banc, and the Supreme Court granted certiorari to resolve the issue.

Applying the current BRI standard, the Federal Circuit has reversed claim constructions in only two IPR appeals: Microsoft v. Proxyconn, 789 F.3d 1292 (Fed. Cir. 2015) and Straight Path IP Group v. Sipnet, 806 F.3d 1356 (Fed. Cir. 2015). The common thread was that the Board ignored express limitations in the claim language. By contrast, Patentees are unlikely to succeed in obtaining a narrower construction if the issue is in any way ambiguous or they are relying heavily on the specification.

The Federal Circuit has rejected most appeals arguing either side of obviousness because the Appellant usually reargues underlying factual findings. The only precedential decision that vacates an obviousness finding is Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015), where the Board might have erroneously excluded a prior art document that reflected the skilled artisan's knowledge, regardless of whether it was part of a formal obviousness combination. Another notable decision is Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064 (Fed. Cir. 2015), which affirmed the invalidation of the broader claims and reversed on the dependent claims, finding those invalid too.

Several other post-grant appeals are still pending, including those addressing the Board's power to invoke the "redundancy" doctrine and the Board's power to "join" additional claims raised in a second IPR petition filed by the same party. Most Appellants will be hard-pressed to find a legal issue that makes their case stand out from the wave of others, while appellees will be content to blend in with the crowd.

This article originally appeared in Fish's 2015 Post-Grant Report. Read the full report here.