SAS Institute Inc v Iancu: SCOTUS Rules Inter Partes Review Proceedings Must Address All Claims

May 31, 2018
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In SAS Institute Inc v Iancu, SCOTUS Ruled That When the USPTO Conducts Inter Partes Review, it Must Decide Patentability of All Challenged Claims

In SAS Institute Inc v Iancu, the U.S. Supreme Court ruled that when the United States Patent and Trademark Office (USPTO) conducts an inter partes review, it must decide the patentability of all challenged claims. The decision follows the Court’s prior ruling in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC upholding the validity of the entire inter partes review process.

SAS Institute Inc v Iancu: SCOTUS Rules Inter Partes Review Proceedings Must Address All Claims

Photo courtesy of Samuel Zeller (Unsplash.com)

Legal and Factual Background of SAS Institute Inc v Iancu

Inter partes review (IPR) allows private parties to challenge previously issued patent claims in an adversarial process before USPTO. The Director of the USPTO may institute a review after determining “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” Pursuant to 35 U.S.C. §318(a), the USPTO “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” at the close of the litigation.

SAS Institute Inc. (SAS) sought review of respondent ComplementSoft’s software patent, alleging that all 16 of the patent’s claims were unpatentable. Relying on a USPTO regulation (37 CFR §42.108(a)) recognizing a power of “partial institution,” the Director instituted review on some of the claims and denied review on the rest. The Patent Trial and Appeal Board’s (Board) final decision addressed only the claims on which the Director had instituted review. On appeal, the Federal Circuit rejected SAS’s argument that §318(a) required the Board to decide the patentability of every claim challenged in the IPR petition.

Supreme Court Rejects USPTO Regulation

By a vote of 5-4, the Supreme Court reversed. In an opinion written by Justice Neil Gorsuch, the majority held that the USPTO must decide the patentability of all challenged claims. 

In reaching its decision, the Court relied on the plain text of §318(a). “The word ‘shall’ generally imposes a nondiscretionary duty, and the word ‘any’ ordinarily implies every member of a group,” Justice Gorsuch explained. “Thus, §318(a) means that the Board must address every claim the petitioner has challenged.”

The Court also rejected the USPTO’s argument that the Director has the discretion to institute a partial review, concluding that both the text and context strongly counsel against inferring such a power. Justice Gorsuch wrote:

Section 314(a)’s requirement that the Director find “a reasonable likelihood” that the petitioner will prevail on “at least 1 of the claims challenged in the petition” suggests, if anything, a regime where a reasonable prospect of success on a single claim justifies review of them all. Again, if Congress had wanted to adopt the Director’s claim-by-claim approach, it knew how to do so. See §304. Nor does it follow that, because §314(a) invests the Director with discretion on the question whether to institute review, it also invests him with discretion regarding what claims that review will encompass.

Justice Gorsuch went on to note that the USPTO should raise its concerns about IPR proceedings with Congress. “The Director’s policy argument—that partial institution is efficient because it permits the Board to focus on the most promising challenges and avoid spending time and resources on others—is properly addressed to Congress, not this Court,” he wrote. 

The Court’s decision in SAS Institute Inc. v. Iancu will likely impact how both petitioners and patent holders approach IPR proceedings. We encourage businesses to consult with an experienced patent attorney regarding the potential implications for your organization.

If you have any questions about the case, please contact us

Do you have any questions? Would you like to discuss the matter further? If so, please contact me, David Einhorn, or the Scarinci Hollenbeck attorney with whom you work at 201-806-3364.