Decision to Deny Institution not Reviewable Despite Prior PTAB Trial

By Marc Blackman

In a split decision, the Federal Circuit dismissed three consolidated appeals holding that the PTAB’s decisions to deny institution were not appealable even though the PTAB previously had instituted the IPRs and proceeded through trial.  BioDelivery Sciences Int’l, Inc. v. Aquestive Therapeutics, Inc., 2019-1643, 2019-1644, 2019-1645 (Fed. Cir. Aug. 29, 2019).  Although the Supreme Court’s Cuozzo decision held that the PTAB’s decision whether to institute an IPR is not appealable, this case presented the unique situation of the PTAB instituting IPRs then, on remand, changing course and deciding to deny institution.

In 2014, BioDelivery Sciences International, Inc. filed three IPR petitions challenging U.S. Patent No. 8,765,167.  Collectively, the petitions contained seventeen grounds.  In 2015 (prior to the Supreme Court’s ruling in SAS), the PTAB instituted review on a single ground in each petition.  On the fourteen non-instituted grounds, the PTAB found that the petitions failed to establish a reasonable likelihood of prevailing on the merits.  The IPRs proceeded through trial with the PTAB issuing final written decisions sustaining the patentability of the challenged claims.

During the appeal of the final written decisions, the Supreme Court issued its SAS decision.  As a result, the CAFC vacated the final written decisions and remanded for the PTAB to implement the Supreme Court’s SAS decision.

On remand, the PTAB reconsidered its institution decisions and exercised its discretion to deny institution.  The PTAB stated “[b]ecause the overwhelming majority of unpatentability grounds presented by Petitioner fail to meet the standard for institution of inter partes review, [the PTAB found] that instituting trial as to those grounds at this time is neither in the interest of the efficient administration of the Office, nor in the interest of securing an inexpensive resolution of this proceeding.”  BioDelivery appealed these denials.

On appeal, the CAFC reiterated that the PTAB’s decision whether to institute an IPR is not appealable.  Despite previously deciding to institute IPRs, the CAFC recognized that “administrative agencies possess inherent authority to reconsider their decisions.”  The CAFC further found that the PTAB properly reconsidered its institution decisions in view of SAS and exercised its discretion not to institute IPRs.

Judge Newman dissented finding that the PTAB did not follow the CAFC’s remand order.  Judge Newman viewed the remand order – requiring the PTAB to implement the Supreme Court’s SAS decision – as an order for the PTAB to issue final written decisions addressing all of the challenged grounds.  Although recognizing that the PTAB does have discretion whether to institute an IPR, Judge Newman stressed that the PTAB already had instituted the IPRs, conducted trials and issued final written decisions.

This decision reaffirms that the PTAB’s decision whether to institute an IPR is final and not appealable even in the unique circumstance of the PTAB modifying its institution decision after proceeding through trial.