A closely watched decision Monday by the U.S. Supreme Court narrowed the scope of what can be appealed during an inter partes review of patent cases, providing some clarity to portions of the America Invents Act that had equally confounded inventors, patent users and patent courts.
In a case that pitted two Dallas lawyers against each other, the court held 7-2 that appellate courts have no authority to review previous decisions made by the Patent Trial and Appeal Board as to whether challenges to patent validity were filed on time.
The question posed before the court thrusted two sections of federal patent law into a clash for authority: Is a patent challenge appealable if it is based on 35 U.S.C. § 315(b), which says an IPR can be denied if the challenging party files it more than a year after they are sued, or is it nonappealable under 35 U.S.C. § 314(d) which holds that a properly rendered administrative ruling on the issue cannot be challenged?
“The agency’s application of § 315(b)’s time limit, we hold, is closely related to its decision whether to institute inter partes review and is therefore rendered nonappealable by § 314(d),” wrote Justice Ruth Bader Ginsburg for the majority.
“This conclusion is strongly reinforced by the statute’s purpose and design,” Justice Ginsburg said. “Congress designed inter partes review to weed out bad patent claims efficiently. Allowing § 315(b) appeals, however, would unwind agency proceedings determining patentability and leave bad patents enforceable.”
The legal dispute began in 2012, when Click-To-Call Technologies sued YellowPages.com, now a part of Thryv Inc., in the U.S. District Court for the Eastern District of Texas alleging infringement on its anonymous phone call system patent.
YellowPages.com asked the Patent and Trial Appeal Board to review the patent in question. Click-To-Call protested, arguing that YellowPages.com was time-barred under the America Invents Act’s one-year limit because the company’s predecessor had been sued over the same patent in 2001.
The PTAB ruled that the 2001 case didn’t bar YellowPages.com’s petition. It also invalidated numerous patent claims, causing Click-To-Call to appeal to the Federal Circuit, which ruled that time-bar decisions can’t be appealed.
But confusion ensued in 2016, when the U.S. Supreme Court held in another case that IPR decisions can be appealed in some situations. That led to the full Federal Circuit to reverse its position in 2018 in a separate ruling, Wi-Fi One v. Broadcom. The court then applied its newest ruling to YellowPages.com’s situation, holding that its IPR was time-barred.
When the U.S. Supreme Court granted review last summer, it ensured that two Dallas appellate lawyers — two friends, actually — would face each other in oral argument at the nation’s highest court: Adam Charnes of Kilpatrick Townsend and solo practitioner Dan Geyser.
Charnes, who argued on behalf of Thryv, said Monday’s ruling is significant because it eliminates the side effect created by the lower court ruling that would allow parties to endure costly IPR proceedings only for them to simply “get thrown out on appeal.
“What the decision does is it means that patents that have been invalidated by the patent office won’t survive on appeal based on a technical time bar,” Charnes told The Texas Lawbook.
On a broader level, Charnes said the opinion could suggest that talk by the larger legal community of the Supreme Court’s “hostility” toward administrative agencies “could be overdone.”
He pointed out that of the five conservative justices, only one — Neil Gorsuch — took the position that granting administrative agencies this extra power endangers the independence of the courts.
“The relevant statute, the presumption of judicial review and our precedent all point toward allowing, not forbidding, inventors their day in court,” Gorsuch wrote in a dissenting opinion, which was joined by Justice Sonia Sotomayor.
“Yet, the court brushes past these warning signs and, in the process, carries us another step down the road of ceding core judicial powers to agency officials and leaving the disposition of private rights and liberties to bureaucratic mercy.”
Geyser, who argued on behalf of Click-To-Call, said the majority opinion lets “the agency override one of the AIA’s express limits on agency authority.”
“It’s now a question for Congress to restore the judiciary’s traditional role in reviewing agency action and saying what the law is,” he said.
The case marked Charnes’ first time to argue before the U.S. Supreme Court, and Geyser’s ninth.
“I’ve argued in many federal courts of appeals and state supreme courts … having done this for almost 30 years I still get nervous when standing up there before any court during the first few seconds,” Charnes said. “I was nervous that day, but it was a lot of fun.
Before the nerves set in, he appeared to feel only excitement back in September, when he tweeted about the Dec. 9 date the Supreme Court had just set for oral argument.
Geyser chimed in too.
“Knock ‘em dead, Adam! Oh, wait a minute …” Geyser commented on Charnes’ tweet.
Geyser told The Texas Lawbook last fall that Charnes has mooted for him twice before as he’s prepared for previous Supreme Court oral arguments.
“I don’t think he’ll moot for me for this one,” Geyser told The Lawbook at the time.
On Monday, Geyser tipped his hat to Charnes for his win.
“If I’m going to have to lose at all, I’ll take losing to my friend, Adam Charnes, who did a truly excellent job with his first Supreme Court argument,” he said.
The Kilpatrick Townsend team representing Thryve also included Mitchell Stockwell, Amanda Brouillette and Jason Steed.