SCOTUS Hears Oral Argument on PTAB's Practice of Instituting Review and Issuing Final Decisions on Fewer Than All Challenged Claims in IPRs

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On Monday, November 27, 2017, the Supreme Court of the United States heard oral argument in SAS Institute Inc. v. Matal et al. regarding whether the Patent Trial and Appeal Board (PTAB) must issue a final written decision as to every claim challenged in the inter partes review (IPR) petition or simply the claims on which the PTAB instituted review, as is the PTAB's current practice. The outcome of this case could widen the breadth of estoppel that attaches to an IPR petitioner because estoppel would likely extend to what would otherwise be non-instituted claims as well if they are included in the final, written decision. Additionally, by making the PTAB's institution decisions a part of a final appealable written decision, this case could potentially open an avenue for an IPR petitioner to appeal the PTAB's institution decision, which is currently prohibited by statute and confirmed under recent Supreme Court precedent.

Following oral argument, it remains unclear how the Court will ultimately decide the issue. However, some of the Supreme Court Justices provided clues as to their views on the issue during oral argument.


Justice Alito Appears to Believe PTAB Must Issue Decisions on All Challenged Claims in the IPR Petition

Justice Alito's questioning focused on the plain language of 35 U.S.C. § 318(a) concerning final written decisions in IPR proceedings. Justice Alito probed Respondents for the source of ambiguity in the language of § 318(a). Justice Alito further questioned whether there was anything in the America Invents Act's (AIA) statutes governing IPRs that prohibited the PTAB from developing a streamlined procedure. Justice Alito did not press much beyond preliminary questioning, but the questions he did ask seem to indicate he favors Petitioner's position requiring the PTAB to issue a final written decision on all the claims challenged in the IPR petition.


Justices Who Appear to Believe PTAB May Issue Decisions on Instituted Claims Only

Justice Sotomayor asked a wide range of questions that were mostly critical of Petitioner's position. Justice Sotomayor alleged that Petitioner sought to circumvent the Supreme Court precedent in Cuozzo1 and noted that in Cuozzo the Court had already clearly decided that appellate courts may not review the PTAB's IPR institution decisions. Further, Justice Sotomayor stated that requesting that appellate courts review the patentability of non-instituted claims would likely violate due process because the patent owner would not have had an opportunity to present its own evidence during the review. Justice Sotomayor suspected that Petitioner really wants to challenge the PTAB's authority to initiate partial reviews, or review fewer than all the claims challenged in an IPR petition, although the AIA does not prohibit institution of such partial reviews. Justice Sotomayor's pointed questions and concerns signaled that she will likely side with Respondents and find that IPR final written decisions may be limited to instituted claims.

While Justice Ginsburg only asked a handful of questions, her questions signaled that she may agree with Respondents. In particular, Justice Ginsburg appeared to be troubled by Petitioner's contention that if the PTAB instituted IPR review based on just a single claim, then it should have to issue a decision on a multitude of otherwise unexamined claims. Justice Ginsburg reiterated the Court's precedent in Cuozzo and thus appeared to share Justice Sotomayor's concern on circumvention of the Court's precedent. Justice Ginsburg also raised a policy concern—that the IPR process is truly meant to give the USPTO a second chance to review its own work for errors, and thus it is the PTAB, not an IPR petitioner, who should control the content of the review.

Justice Kagan mostly focused her questioning on the impractical outcomes that could result by adopting Petitioner's reading of the AIA statutes. Justice Kagan asked Petitioner if the PTAB would be required to provide written decisions on claims that were cancelled or settled in the interim and noted that it would be strange to require the PTAB to issue a decision on patentability for a claim that's only challenge was based on an impermissible ground of review. Justice Kagan explained that the AIA provides a great deal of discretion to the PTAB regarding institution of IPRs and that it would be odd for Congress to give the PTAB such wide discretion, with the exception of the ability to choose to institute review on fewer than all the challenged claims. Justice Kagan's focus on the potential impracticality and inconsistency of Petitioner's interpretation of the AIA indicates that Justice Kagan is likely to find in favor of Respondents.


Justices Whose Views on Proper Scope of Final Written Decisions are Mostly Unclear

Justice Kennedy offered a limited number of questions, which were all directed toward what would essentially be a work-around on the issue. Justice Kennedy asked both sides whether the PTAB could require the IPR petitioner to narrow its petition to only certain claims before instituting review or otherwise deny institution altogether. While his questions could indicate a slight leaning toward finding for Petitioner, Justice Kennedy's position on the appropriate scope of claims to be included in a final written decision remains largely unclear.

Justice Breyer noted that the plain language of § 318(a) appears to favor Petitioner's position. However, Justice Breyer explained that he was having trouble with the impracticality of Petitioner's position that the PTAB would have to review all the challenged claims even if it only thought one of the claims was worthy of instituting review. Justice Breyer seemed to believe that the language of § 318(a) is ambiguous, and that the context of that statutory language favors Respondents' position. Given Justice Breyer's articulation of points favoring both sides, it appears that he has not yet decided his position on the issue.

Justice Gorsuch seemed, at a surface level, to agree with Respondents because he found it simply rational that, at the final decision phase of an IPR the PTAB focuses only on the challenged claims for which review is pending. But Justice Gorsuch appeared to be far more interested in the threshold question of whether it is appropriate for the PTAB to institute partial review. Justice Gorsuch noted that 35 U.S.C. § 314 appears to frame the institution decision as a binary decision rather than one allowing the PTAB to make the decision on a claim-by-claim basis. Additionally, Justice Gorsuch noted that ex parte review expressly grants the USPTO the ability to choose which claims to review while the AIA does not expressly contain a similar provision for IPRs. Justice Gorsuch appears to agree that if the PTAB may institute partial review, then the PTAB only has to issue a final decision on the instituted claims. However, it is not clear that Justice Gorsuch is convinced that the PTAB may institute partial review, and thus his position remains uncertain.

Chief Justice Roberts did not ask questions during oral argument that provided meaningful insight as to his position on the issue.

Justice Thomas did not ask any questions during oral argument.



While we will not have a definite answer until the Supreme Court issues its decision (expected early 2018), after oral argument, there appear to be more Justices currently favoring Respondents' position that the AIA does not, require the PTAB to issue a final written decision on all the claims challenged in an IPR petition. If the Court ultimately sides with Petitioner instead, IPR petitioners could be subject to estoppel with respect to every claim they challenge and the PTAB's institution decisions may become subject to appeal.


1 Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016). Justice Sotomayor specifically references the Supreme Court's Cuozzo opinion to foreclose any outcome where the PTAB issuing a final written decision would allow an IPR petitioner to appeal the PTAB's decision whether or not to institute review of particular challenged claims.


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