Friday, June 10, 2016

Judge Newman discusses the AIA in the SAS INSTITUTE, INC. case

Of the CAFC decision:

SAS Institute, Inc. filed an inter partes review (“IPR”)
petition with the Patent Trial and Appeal Board (“Board”)
to review the patentability of ComplementSoft’s U.S.
Patent No. 7,110,936. The Board instituted an IPR
proceeding on some, but not all, of the ’936 patent claims
challenged in SAS’s petition. The Board ultimately found
all of the instituted claims, except for claim 4, unpatentable
in view of the prior art. SAS argues on appeal that
the Board misconstrued a claim term and that the Board
erred by not addressing in the final written decision
claims SAS petitioned against, but that the Board did not
institute as part of the proceeding. ComplementSoft
cross-appeals two of the Board’s claim constructions. For
the reasons below, we agree with the Board on all of the
challenged constructions and determine that the Board
did not need to address in its final written decision claims
it did not institute. We also vacate the Board’s determination
that claim 4 is patentable and remand so that the
parties may address a new construction that the Board
adopted in its final written decision after interpreting the
claim differently before.

Judge Newman writing separately:

I write separately because the PTAB’s practice of deciding
the validity of only some of the patent claims
challenged in the petition does not conform to the America
Invents Act. I stated these concerns in Synopsys, Inc., v.
Mentor Graphics Corp., 814 F.3d 1309, 1324, 117
U.S.P.Q.2d 1753, 1765 (Fed. Cir. 2016) (Newman, J.,
dissenting). The facts and rulings in the present case
further illuminate the error in the PTO’s adoption of rules
that depart from the legislative plan. The exclusion of
some of the challenged claims from the statutory procedures
and estoppels of the AIA, accomplished by accepting
some of the claims for which review is sought while ignoring
others, in the PTO’s absolute discretion, serves no
purpose other than to negate the intended legislative
purpose of the AIA.
The PTO practice replaces the benefits of the America
Invents Act with new disadvantages, for, after the extensive
(and expensive) proceedings of inter partes review,
the parties are left with unaddressed claims to the same
patented invention, claims that can be litigated as if no
post-grant proceeding had occurred. This departure from
the legislative purpose is illustrated in this case more
strongly than in Synopsys, for here the PTAB issued a
split final decision, invalidating eight petitioned claims
while validating one of the petitioned claims, simultaneously
ignoring seven other petitioned claims that were
properly presented for review. The split decision, following
a partial institution, adds to the uncertainty of the
claims that the PTAB chose not to review. The legislative
plan contains no hint of such intentional irregularity


These universally emphasized AIA purposes fall flat
when the PTO chooses to review some but not all of the
challenged claims in the petition, leaving the other claims
presumably alive and well. The legislation does not
contemplate such a procedure. The legislation provides
only for a PTO proceeding that subjects “any patent
claim challenged by the petitioner and any new claim
added” during the proceeding to be fully and finally
decided through the PTO proceeding and its subsequent
appeal, bringing “more certainty in litigation.” 157 Cong.
Rec. S948 (Feb. 28, 2011) (statement of Sen. Leahy on
Senate consideration of S. 23) (emphasis added).
This finality is achieved by the estoppel provisions as
applied to the decision on every claim challenged by the
petitioner as to every issue raised or that could have been
raised. America Invents Act: Hearing on H.R. 1249 Before
the House Comm. on the Judiciary, 112th Cong. 12 (2011)
(statement of David Kappos, Director, USPTO) (“Those
estoppel provisions mean that your patent is largely
unchallengeable by the same party.”). However, when
review is declined as to some claims that may be of litigation
interest, the partial institution practice cannot be a
“complete[] substitute for . . . [a] portion of civil litigation.”
This contravenes a primary purpose of the AIA.
During oral argument of this appeal, the court questioned
PTO counsel on the relationship between the
conduct of reexamination proceedings, the conduct of inter
partes review proceedings, and the legislative purpose of
the AIA’s post-grant procedures. Oral Argument at


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