Supreme Court Inter Parties Review Decision - SAS INSTITUTE INC. v. IANCU
Inter partes review allows private parties to challenge previously issued patent claims in an adversarial process before the Patent Office. At the outset, a party must file a petition to institute review that identifies the challenged claims and the grounds for challenge with particularity. The patent owner, in turn, may file a response. If the Director of the Patent Office determines there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition, the Director can institute review. By statute, the Patent Trial and Appeal Board was obligated to issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.
Here, SAS sought review of respondent ComplementSoft’s software patent, alleging that all sixteen of the patent’s claims were unpatentable. The Director invoked a “partial institution” power to initiate review on only some of the claims and denied review on the rest and the Board’s final decision addressed only the claims on which the Director had instituted review. On appeal, the Federal Circuit rejected SAS’s argument that the patent statue required the Board to decide the patentability of every claim challenged in the petition.
In a win for patent challengers, the Supreme Court held that when the Patent Office institutes an inter partes review, it must decide the patentability of all of the claims the petitioner has challenged. The court looked to the plain text of 35 U.S.C. §318(a) to resolve this case. Because §318(a) uses the word “shall,” which generally imposes a nondiscretionary duty, and the word “any,” which ordinarily implies every member of a group, the Court found that §318(a) must require the Board to address every claim the petitioner has challenged.
The Court denies the existence of any “partial institution” power that could be exerted by the Director of the Patent Office and further indicates that the Director’s decision whether to institute review pursuant to the petition is a simple yes-or-no choice. The Court further opined that §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 that a regime where a reasonable prospect of success on a single claim justifies review of them all.
The Supreme Court differed to the will of Congress in reaching this decision and declined to entitle the Director’s policy argument allowing its use of the “partial institution” power, which power is wholly unmentioned in the statute.
The ruling is this case empowers challengers of patents and, ultimately, should ensure that the issuance of a final written decision that addresses each claim “challenged” by the petitioner will provide clarity to the scope of all of the claims that were initially challenged by the petitioner. It will also allow for appeal of the entirety of the “challenged” claims by the Federal Circuit, which has a reputation of being hostile to patent owners.