SAS Institute Inc. v. Iancu
138 S. Ct. 1348, 200 L. Ed. 2d 695 (2018)
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Rule of Law:
Under 35 U.S.C. § 318(a), when the U.S. Patent and Trademark Office institutes an inter partes review, it must issue a final written decision on the patentability of all patent claims challenged by the petitioner, not just a subset of those claims.
Facts:
- SAS Institute Inc. filed a petition with the U.S. Patent and Trademark Office (USPTO) for an inter partes review of a software patent held by ComplementSoft.
- In its petition, SAS alleged that all 16 of the patent's claims were unpatentable.
- The Director of the USPTO determined there was a reasonable likelihood that SAS would prevail on at least one of the challenged claims.
- Relying on a USPTO regulation authorizing 'partial institution,' the Director instituted an inter partes review on only a subset of the claims SAS challenged (claims 1 and 3-10).
- The Director denied review for the remaining claims challenged in SAS's petition.
- At the conclusion of the proceeding, the Patent Trial and Appeal Board (PTAB) issued a final written decision addressing only the patentability of the claims on which review had been instituted.
Procedural Posture:
- SAS Institute Inc. filed a petition with the U.S. Patent and Trademark Office (USPTO) for an inter partes review of all 16 claims of a patent held by ComplementSoft.
- The Director of the USPTO instituted review on only a subset of the challenged claims.
- The Patent Trial and Appeal Board (PTAB) issued a final written decision addressing only those claims on which review was instituted.
- SAS appealed the PTAB's decision to the U.S. Court of Appeals for the Federal Circuit, with SAS as the appellant.
- The Federal Circuit rejected SAS's argument, affirming the PTAB's actions.
- The U.S. Supreme Court granted certiorari to review the Federal Circuit's decision.
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Issue:
Does 35 U.S.C. § 318(a), which requires the Patent Trial and Appeal Board to issue a final written decision as to 'any patent claim challenged by the petitioner,' obligate the Board to address every claim challenged in the petition, or may it institute review on only some of the challenged claims?
Opinions:
Majority - Gorsuch
Yes. When an inter partes review is instituted, the Patent Trial and Appeal Board must issue a final written decision with respect to every patent claim challenged by the petitioner. The plain text of § 318(a) is unambiguous and controlling. The word 'shall' imposes a mandatory, nondiscretionary duty, and the word 'any' in this context means 'every.' Therefore, the Board must address all claims challenged. The structure of the inter partes review statute confirms that the petitioner, not the Director, defines the scope of the proceeding through its petition. Unlike other patent statutes, such as for ex parte reexamination, Congress did not grant the Director authority to selectively choose which claims or grounds to review. The Director's decision is a binary choice 'whether' to institute review pursuant to the petition, not 'whether and to what extent.' The agency's policy arguments about efficiency are matters for Congress, and because the statute is clear, Chevron deference to the agency's interpretation is inappropriate.
Dissenting - Ginsburg
No. The Board should not be required to address every claim challenged in the petition. The Court's reading of the statute is overly rigid or 'wooden.' Since the Director has complete discretion to deny a petition altogether, it is more rational to allow the Director to weed out insubstantial challenges by instituting review only on meritorious claims. This approach prevents the Board from wasting its time and resources on frivolous challenges, which aligns with the goal of an efficient administrative process.
Dissenting - Breyer
No. The statute is ambiguous, and the agency's reasonable interpretation allowing for partial institution should receive Chevron deference. The phrase 'any patent claim challenged by the petitioner' in § 318(a) contains a gap; it does not specify whether it refers to all claims in the initial petition or only those claims that survive the institution phase to be part of the review proceeding itself. It is illogical and inefficient for Congress to require the Board to conduct a full review and issue an appealable final decision on claims it has already determined lack a reasonable likelihood of success. The agency's interpretation is a reasonable way to manage its docket and focus on substantial patentability challenges.
Analysis:
The Supreme Court's decision in SAS Institute fundamentally altered the practice of inter partes review (IPR) by eliminating the USPTO's long-standing practice of 'partial institution.' This ruling shifts significant control over the scope of an IPR from the agency to the petitioner, making the petitioner the 'master of its complaint.' As a result, when the PTAB institutes review, it is now bound to address all challenged claims, which provides petitioners with greater certainty but also obligates the Board to adjudicate potentially weaker arguments. This decision strengthens the adversarial nature of IPRs, making them more analogous to district court litigation where a plaintiff is entitled to a decision on all claims raised.
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