Tuesday, February 18, 2020

CAFC in Acoustic Technology: We hold that time-bar challenges under § 315(b) are not immune from waiver.

The outcome

On September 8, 2017, the Patent Trial and Appeal
Board instituted inter partes review based on two petitions
filed by Silver Spring Networks, Inc. Nine days after institution,
Silver Spring agreed to merge with Itron, Inc., an
entity undisputedly time-barred under 35 U.S.C. § 315(b).
Silver Spring and Itron completed the merger during the
proceedings. The Board later issued a final written decision and found the challenged claims unpatentable.
On appeal, Acoustic asks that we vacate the Board’s final written
decision on grounds that the inter partes review was timebarred due to Silver Spring’s and Itron’s
merger-related activities. Acoustic also challenges the Board’s obviousness
findings. Because we find that Acoustic waived its timebar and obviousness arguments, we affirm.

Of arguments

Itron advances several arguments in response to
Acoustic’s time-bar arguments. First, Itron argues that
Acoustic waived its time-bar challenge of the IPRs because
Acoustic did not raise those arguments before the Board.


We hold that Acoustic has waived its time-bar challenge to the IPRs because it
failed to present those arguments before the Board. We retain case-by-case discretion
over whether to apply waiver. Monsanto Tech. LLC v. E.I.
DuPont de Nemours & Co., 878 F.3d 1336, 1342 n.8 (Fed.
Cir. 2018). We have “frequently declined to hear arguments that the applicant failed to present to the Board.” In
re Watts, 354 F.3d 1362, 1367 (Fed. Cir. 2004). When a
party raises arguments on appeal that it did not raise to
the Board, they “deprive[] the court of the benefit of the
[Board’s] informed judgment.” In re NuVasive, Inc., 842
F.3d 1376, 1380 (Fed. Cir. 2016) (explaining the importance of “a comprehensive record that contains the arguments and evidence presented by the parties”).
There is no dispute that Acoustic failed to raise § 315(b)
time-bar arguments before the Board. Acoustic became
aware of the merger as of January 8, 2018, more than seven
months before the Board issued its final written decisions.
J.A. 7026. Yet, Acoustic does not provide any reason for its
failure to challenge the proceedings as time-barred. Because Acoustic failed to present its time-bar arguments to
the Board and “deprive[d] the court of the benefit of the
[Board’s] informed judgment,” we exercise our discretion to
apply waiver. In re NuVasive, 842 F.3d at 1380.

Of interest:

Acoustic attempts to excuse its waiver by asserting,
without legal authority, that the time-bar is “jurisdictional” and thus “may be raised at any time.” Appellant
Br. 29. We disagree.

Acoustic is correct that we have previously described
the time-bar restrictions on the Board’s institution powers
as “jurisdictional.” Appellant Br. 29–32 (citing Click-to
Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1325
(Fed. Cir. 2018); Wi-Fi One, LLC v. Broadcom Corp., 878
F.3d 1364, 1373 (Fed. Cir. 2018)). But our application of
waiver differs between challenges to an agency’s “jurisdiction” and challenges to a federal court’s jurisdiction. PGS
Geophysical AS v. Iancu, 891 F.3d 1354, 1362 (Fed. Cir.
2018). As we explained in PGS:
Even if the Board could be said to have acted “ultra
vires” in refusing to institute reviews of some
claims and grounds . . . the Board’s error is waivable, not one we are required to notice and act on
in the absence of an appropriate request for relief
on that basis. Several courts of appeals have recognized the same for a challenge to an agency’s “jurisdiction,” after the Supreme Court, in City of
Arlington v. FCC, rejected a distinction between
agency “jurisdiction” errors and other errors for
certain deference purposes . . . .”
Id. (compiling cases) (citations omitted). We hold that
time-bar challenges under § 315(b) are not immune from

To permit litigants to raise § 315(b) time-bar challenges for the first time on appeal would encourage what
the Supreme Court has referred to as “sandbagging,” i.e.,
“suggesting or permitting, for strategic reasons, that the
[tribunal below] pursue a certain course, and later—if the
outcome is unfavorable—claiming that the course followed
was reversible error.” Freytag v. Comm’r of Internal Revenue, 501 U.S. 868, 895 (1991). Here, had Acoustic raised a
time-bar challenge before the Board, the Board was fully
empowered to dismiss the petitions for untimeliness if the
challenge had merit. But allowing Acoustic to raise a timebar challenge for the first time on appeal would afford it a
significant and unfair advantage: Acoustic could wait for
the Board’s decision on the merits, which if favorable would
have estoppel effect, and then challenge the Board’s jurisdiction on appeal only if the Board finds the claims obvious.
Although we do not address the merits of Acoustic’s
time-bar argument, we note Acoustic’s concerns about the
concealed involvement of interested, time-barred parties.
But because Acoustic never raised this issue to the Board,
we decline to resolve whether Itron’s pre-merger activities
render it a real-party-in-interest, or whether the Board has
any authority or obligation to reevaluate § 315(b) post institution

As to obviousness,

Because Acoustic never presented to the Board the
non-obviousness arguments it now raises on appeal, we
find those arguments waived. In re Watts, 354 F.3d at 1367
(explaining that we have “frequently declined to hear arguments that the applicant failed to present to the Board”);
In re NuVasive, Inc., 842 F.3d at 1380 (explaining that failure to raise arguments to the Board “deprives the court of
the benefit of the Board’s informed judgment.”); see, e.g.,
J.A. 576–578.



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