Apple, Inc., et al. (Cisco, Google, Edwards LifeSciences (“Apple”)) v. USPTO
Docket No. 2022-1249 (https://cafc.uscourts.gov/opinions-orders/22-1249.OPINION.3-13-2023_2093598.pdf)
LOURIE, TARANTO, STOLL
March 13, 2023
Brief Summary: DC decision dismissing its action against the USPTO regarding its IPR institution decision affirmed, but reversed as to Apple’s argument regarding the USPTO’s rulemaking process.
Summary: Apple appealed DC dismissal of its action against the USPTO (“Director”) as it and “four other companies that have repeatedly been sued for patent infringement and thereafter petitioned the Director of the Patent and Trademark Office (PTO) to institute inter partes reviews (IPRs), under 35 U.S.C. §§ 311–319, so that the PTO’s Patent Trial and Appeal Board could adjudicate the petitions’ unpatentability challenges to patent claims that had been asserted against them in court.” The “plaintiffs challenge instructions the Director issued to the Board to inform it how to exercise, under delegation by the Director, the Director’s discretion whether to institute a requested IPR” under the APA (5 sections 701-706 (e.g., “‘preclude judicial review’ of the challenged agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1)”), arguing “that the instructions are likely to produce too many denials of institution requests.” The FC panel explained that “[f]rom the outset of the IPR program, the Director delegated the institution authority to the Board” which the FC has upheld (Arthrex, US 2021; Thryv, US 2020), “the statute uses no language commanding institution”, “Congress not only left the discretion to the Director but also protected its exercise from judicial review, even regarding the mandatory threshold conditions for institution, at least where, as here, the court challenge is not on a constitutional ground” (Cuozzo, US 2016; 35 USC section 314(d)), although “any institution decision made by the Board as delegatee of the Director is subject to reversal by the Director” (In re Palo Alto, FC 2022). The FC panel also explained that the Director has discretion “for denying IPR petitions based on pending parallel litigation” based on six factors (the “Fintiv instructions”) including “other circumstances that impact the Board’s exercise of discretion, including the merits” (NHK, PTAB 2018 and Apple v. Fintiv, PTAB 2020 (both precedential) (“the advanced state of the district court proceeding” involving the same patent to deny institution, reasoning that, given the projected trial date in the parallel court case, conducting an IPR would be an inefficient use of agency resources”; “a holistic view of whether efficiency and integrity of the system are best served by denying or instituting review”)). Apple’s suit appealed here challenged the Fintiv instructions as “contrary to the IPR provisions”, “arbitrary and capricious”, and “issued without compliance with the notice and-comment rulemaking requirements”. The USPTO moved to dismiss “because (1) “statutes preclude judicial review” of the matters presented and (2) the challenges are to “agency action [that] is committed to agency discretion by law” and the FC panel affirmed under section 701(a)(1) (citing SAS (US 2018), Thryv, Cuozzo, Arthrex, Ethicon (FC 2016), St. Regis (FC 2018)). The FC panel also concluded “Apple has standing to press the challenge to the Director’s instructions as invalid for want of notice-and-comment rulemaking” “because of the infringement suit” (focusing “on Apple alone”) (Summers, US 2009; Lujan, US 1992 (“injury in fact” (“actual or imminent, not conjectural or hypothetical”), “causal connection”, “likelihood that ‘the injury will be redressed’”)) and therefore reversed and remanded this part of the decision.