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The Supreme Court Rejects Partial Decisions from the Patent Office in Inter Partes Reviews

On April 24, 2018, in SAS Institute Inc. v. Iancu, Director, United States Patent and Trademark Office, [Docket # 16-969], , the United States Supreme Court held that “[w]hen the Patent Office institutes an inter partes review it must decide the patentability of all of the claims the petitioner has challenged.”  The Court relied on the plain language of 35 U.S.C. § 318, which states that “[i]f . . . review is instituted and not dismissed,” the Patent Trial and Appeal Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.”  The Court further held that the word “shall” imposes a nondiscretionary duty to address every claim the petitioner has challenged, and that “any” means “every.”  In reliance on the plain language of the statute, the Court held that “[w]here a statute’s language carries a plain meaning, the duty of an administrative agency is to follow its commands as written, not to supplant its command with others it may prefer.”

This issue arose when SAS sought review of all 16 claims of ComplementSoft’s software patent, and the Patent Office, relying on a regulation imposing a power of “partial institution” (37 CFR § 42.108(a)), instituted a review of some claims, and denied review of the rest of the claims.  The Federal Circuit affirmed this approach, but the Supreme Court rejected it, holding that “Congress structured the process such that the petitioner, nor the Director, defines the proceeding’s contours.”  The Supreme Court also rejected the policy argument that “partial institution” is efficient and allows the Patent Office to focus its resources on the most promising challenges, stating that such an argument “is properly addressed to Congress, not this Court.”

This was a 5-4 Supreme Court decision.  Commentators expect that the decision may result in increased Patent Office costs, and increased attorneys’ fees in inter partes challenges, but may also increase the likelihood that District Courts will stay a concurrent litigation, which may result in overall efficiencies.

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