Last Week in the Federal Circuit (July 20-24): More Challenges To PTAB Authority

Maybe it was the heat in DC, or maybe it was the reduced caseload in the summer (see here), but the Federal Circuit issued just 4 opinions last week, 3 precedential and 1 non-precedential. The Court also issued 1 order denying a petition for a writ of mandamus. We’ve got our other usual statistics below and our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 3

Non-precedential opinions: 1

Rule 36: 0

Longest pending case from argument: Gensetix, Inc. v. Baylor College of Medicine, No. 19-1424 (171 days)

Shortest pending case from argument (non-Rule 36): Uniloc 2017 LLC v. Hulu, LLC, No. 19-1686 (76 days)

Case of the week: Uniloc 2017 LLC v. Hulu, LLC, No. 19-1686 (July 22, 2020)

Panel: Judges O’Malley, Wallach, and Taranto, with Judge Wallach writing the majority opinion and Judge O’Malley dissenting.

You should read this case if: You have an IPR matter involving claim amendments.

This week’s case addresses two important issues related to amending claims in an IPR—whether the Board can approve proposed substitute claims after a district court judgment holding all original claims of a patent invalid, and whether the Board can review Section 101 challenges to those substitute claims. A divided majority in Uniloc answered both questions in the affirmative.

Hulu and Netflix petitioned for inter partes review of all claims of a Uniloc patent related to streaming media. During the IPR, Uniloc moved to amend, proposing three substitute claims, but made its request contingent on the Board finding the three original independent claims of the patent unpatentable. The Board issued a final decision finding all three of those independent claims, and many of the dependent claims, unpatentable. The Board also rejected Uniloc’s proposed substitute claims solely because it concluded those claims were unpatentable under 35 U.S.C. § 101. Roughly a week after the Board’s final decision, the Federal Circuit affirmed a district court judgment that all of the original claims were invalid under Section 101.

On appeal from the IPR, the Federal Circuit first rejected Hulu’s argument that the case became moot once the Court affirmed the district court judgment that all original claims were invalid. Hulu premised that argument on its position that the Board lacks statutory authority to consider substitute claims in an IPR once all original claims have been held invalid in parallel proceedings. The majority saw no basis in the statute for that position, and it held that the Patent Office’s contrary position was at least reasonable. The majority disagreed with Judge O’Malley’s dissenting view that the word “substitute” in 35 U.S.C. § 316(d) implied that there must be an existing original claim to give up.

On the merits, the Federal Circuit rebuffed Uniloc’s sole challenge to the Board’s Section 101 determinations—that the Board exceeded its statutory authority by addressing Section 101 in the first place. The Court held that although 35 U.S.C. § 311(b) limits the grounds for instituting review of issued claims to anticipation and obviousness, that limit is inapplicable to proposed substitute claims. Section 311 specifically refers to grounds for challenging “claims of a patent,” but proposed substitute claims are not yet claims of a patent. And other parts of the statutes governing IPRs, such as 35 U.S.C. § 318, repeatedly refer to Board determinations on the “patentability” of substitute claims. Yet Section 101 is a requirement of patentability. The Court also reasoned that Uniloc’s contrary position would be “grossly out of keeping with the statutory regime as a whole,” in part because it could require the Board to issue new patent claims—subject to the statutory presumption of validity—that had never been reviewed for Section 101 compliance. Judge O’Malley again disagreed with the majority, emphasizing in her dissent that “the clear framework of the IPR provisions” limits the Board’s authority to considering only anticipation and obviousness challenges for both original and substitute claims.

Samuel B. Goldstein co-authored this article as an associate in our Appellate + Supreme Court practice before departing the firm for a judicial clerkship.