Latest Federal Court Cases, 9/19/22
Polaris Innovations Ltd. v. Brent, Appeal No. 2019-1483 (Fed. Cir. Sept. 15, 2022)
In our Case of the Week, the Federal Circuit provided what appears to be its first precedential opinion construing Section 317 of the Patent Act—a provision concerning the effect of settlement during an America Invents Act (AIA) proceeding. The Court’s opinion construes the statute in ways that may be unexpected for parties who seek to settle inter partes review (IPR) petitions. Read on to understand why.
Polaris sued NVIDIA Corporation for infringement of two patents. NVIDIA filed two IPRs, which matured to a final written decision of invalidity. Polaris appealed. The parties then settled, and NVIDIA withdrew from the appeals. The Patent Trial and Appeal Board (PTAB) intervened to defend its decisions in the IPRs.
The Federal Circuit then issued its opinion in Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019) (Arthrex I). As we explained in a write-up here, Arthrex I held the AIA to be unconstitutional to the extent that the appointment of PTAB judges violated the Appointments Clause of the U.S. Constitution. After Arthrex I issued, the Federal Circuit vacated the final written decisions in the Polaris IPRs in light of Arthrex I and remanded the cases to the PTAB.
The cases were then administratively stayed pending Supreme Court review of Arthrex I. During that suspension, Polaris and NVIDIA jointly moved to terminate the IPRs. Before the PTAB decided the motion, the Supreme Court issued its decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021) (Arthrex II). That decision vacated the Federal Circuit’s opinion in Arthrex I—our write-up about that decision can be found here. That decision thus reinstated the final written decisions in the Polaris IPRs.
Eventually, Chief Administrative Judge Bialick denied the motion to terminate, and Polaris appealed. The Federal Circuit affirmed.
The issue turned on the proper interpretation and application of Section 317. That Section mandates that IPRs “shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed.” Here, the Court held that a final written decision had issued. Polaris argued that it had been vacated at the time the motion to terminate was filed. But the Court held that the vacatur had been itself vacated by the time the motion was heard, and thus, as of the time of the decision, a final written decision had issued, and termination was no longer mandatory.
But the Court went one step further in its interpretation of Section 317. It held that the clause “with respect to any petitioner” was important language in the statute. It resulted in a holding that the IPR itself was not subject to mandatory termination—only the petitioner needed to be terminated from the IPR. Thus, the PTAB is at liberty to maintain any IPR notwithstanding a motion to terminate filed by the sole petitioner and the patent owner.
This holding may have unintended consequences in terms of stifling settlement options in IPRs. Petitioners and patent owners seeking to terminate IPRs as a tool to settle cases have no guarantee that their motion will result in an actual termination of the IPR. Under the Federal Circuit’s opinion, termination is only mandatory to the extent it terminates the participation of the petitioner.
The Court also addressed certain claim construction issues, including issues concerning limitations on the scope of the doctrine of claim differentiation and the construction of claim terms that had little support in the specification.
The opinion can be found here.
By Nika Aldrich
ALSO THIS WEEK
SawStop Holding LLC v. Vidal, Appeals Nos. 2021-1537, -2105 (Fed. Cir. Sept. 14, 2022)
The Federal Circuit affirmed the district court’s grant of summary judgment in favor of the Patent and Trademark Office (PTO) decision to deny patent term adjustments to SawStop. The decision rests on the interpretation of 35 U.S.C. § 154(b)(1)(C), which authorizes extensions when delays are the result of appellate review, specifically when “the patent was  issued under a decision in the review  reversing an adverse determination of patentability.” SawStop had appealed to the PTAB regarding claims for two patents: “the ’476 patent” and “the ’796 patent.” Regarding the ’476 patent, the Federal Circuit held that a patent term extension could not be granted because SawStop’s appeal to the PTAB “resulted in no substantive change in the patentability” of the relevant claim (both the PTO and the PTAB had rejected the claim, but on different grounds). Regarding the ’796 patent, the Federal Circuit held that a patent term extension did not apply because the statute requiring a patent be “issued under a decision in review” means “that at least one claim must ‘issue under’ the mandate of the appellate decision.” In the ’796 patent, the claim appealed to the district court did not issue in the patent.
The opinion can be found here.
By Megan Needham