PGS Geophysical AS, v. Andrei Iancu, Appeal Nos. 2016-2470, -2472, -2474 (Fed. Cir. June 7, 2018)

In appeals from three inter partes review, the Federal Circuit addressed transition issues for cases currently on appeal that were commenced before the Supreme Court’s decision in SAS Institute Inc. v. Iancu.  The SAS decision held that it is improper for the PTO Director to institute inter partes review of only some claims and not others.  See our comprehensive analysis of the SAS decision here.  In PGS, the Federal Circuit held that the holding in SAS also applies to different grounds asserted in a petition, and further held that it still has jurisdiction to review such cases, and that it would not sua sponte reverse cases that were not in accord with SAS.

In PGS, the Petitioner, WesternGeco, filed three petitions for inter partes review, which collectively sought review of all 31 claims of one patent.  The Board instituted all three petitions, but only on certain claims and grounds.  The Board issued three final decisions based on substantially the same reasoning and found some claims anticipated and other claims unpatentable for obviousness.  On appeal, PGS challenged only the obviousness ruling.

The Court first considered whether it had jurisdiction to hear PGS’s appeals in light of SAS.  The Court referred to the Guidance issued by the Board after SAS, which declared “that the Board will now institute on all claims and all grounds included in a petition if it institutes at all.” The Court also reviewed pertinent parts of the SAS decision and held “[w]e read those and other similar portions of the SAS opinion as interpreting the statute to require a simple yes-or-no institution choice respecting a petition, embracing all challenges included in the petition, and we have seen no basis for a contrary understanding of the statute in light of SAS.”

The Court concluded that it had jurisdiction to decide the appeals.  In doing so, it reviewed whether SAS meant that there was no “final agency action” as required for an appeal under the Administrative Procedure Act.  The Court held that the finality standard had been met even though some of the action taken by the Board is now erroneous in light of SAS.  Specifically, there was finality because the Board’s decision terminated the IPR proceedings with respect to all claims and grounds as well as made determinations that affected PGS’s patent rights.

Having found that it had jurisdiction, the Court then considered whether it should decide the appeals without sua sponte remanding for the Board to address the uninstituted claims and grounds.  The Court found no authority that would obligate it to act sua sponte in the absence of a request by the parties. “Even if the Board could be said to have acted ‘ultra vires’ in refusing to institute reviews of some claims and grounds—and then proceeding to merits decisions concerning the claims and grounds included in the instituted reviews—the Board’s error is waivable, not one we are required to notice and act on in the absence of an appropriate request for relief on that basis.”  Here, neither party had requested SAS relief.  Therefore, the Court declined to remand in light of SAS.

The Court thus continued to address the merits of only the instituted (and appealed) claims and grounds.

The patent at issue “claims methods and systems for performing ‘marine seismic surveying’ to determine the structure of earth formations below the seabed.”  The Board concluded that two references, Beasley and Edington, taught all the limitations of the challenged claims.  PGS did not dispute this finding with respect to certain claims, but did dispute it with respect to the claims relating to the use of common mid-point gathers.  In particular, PGS argued the Board erred regarding the motivation to combine Beasley and Edington for these claims.  The Court rejected PGS’s argument finding that the Board properly addressed the motivation question and affirmed the Board’s final written decisions.

For more on the WesternGeco line of cases in anticipation of a forthcoming Supreme Court decision, see our write-up of last month’s opinion concerning other IPRs here.

Opinion can be found here .

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