Federal Circuit Confirms Reach of Supreme Court’s Cuozzo Decision

By Joe Beauchamp

On October 20, 2016 the Federal Circuit reaffirmed its earlier order in Medtronic, Inc. v. Robert Bosch Healthcare Sys., Inc.  In its original order dismissing the appeal, the Federal Circuit held that it had no jurisdiction over the appeal.  The underlying PTAB actions were terminated by the PTAB on the ground that 35 U.S.C. § 312(a)(2) barred review of the petitions because Medtronic failed to identify all real parties in interest.  Medtronic sought rehearing based on the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).

Although the underlying PTAB proceedings in Medtronic were initially instituted by the Board,  the patent owner was allowed to conduct discovery regarding whether Cardiocom, a subsidiary of Medtronic, was a real party in interest.  Cardiocom had previously filed IPR petitions for the same two patents that were the subject of the Medtronic PTAB proceedings, which were denied institution.  By the time that Medtronic had filed its IPR petitions, Cardiocom was time-barred under 35 U.S.C. § 315(b) from filing any additional petitions.  Hence, if Cardiocom was a real party in interest to Medtronic’s petitions, then Medtronic’s petitions would be time-barred.  The Board ultimately determined that Cardiocom was a real party in interest, and on that basis terminated the proceedings.  The Federal Circuit dismissed the appeal for lack of jurisdiction finding that the Board’s decisions were not appealable under § 314(d).

Medtronic sought rehearing, arguing that the PTAB’s order should not be viewed as a determination to institute proceedings, and therefore, the termination decision should be subject to appellate review.  The Federal Circuit disagreed, finding that a decision whether to institute an IPR proceeding, as well as “a reconsideration of that decision”, are barred from appellate review under § 314(d).  The decision was based in part on the Supreme Court’s guidance in Cuozzo to bar appellate review in cases where the appeal “consist[s] of questions that are . . . closely related” to “the Patent Office’s decision to initiate inter partes review.”

It is clear that the Supreme Court and the Federal Circuit believe Congress ceded institution decisions and many related procedural issues to the realm of unreviewable decisions.  It will be interesting to observe what other issues the Federal Circuit will find to be “closely related” to the PTAB’s decision to institute IPRs.  For example, it is unclear whether an appeal can be maintained from a petition that is denied institution under § 315(e)(1) due to estoppel from a prior final written decision.  Of course, the Supreme Court left open the possibility of alternative review procedures in Cuozzo when it refused to address the question of whether an appeal could be maintained seeking review of institution decisions related to issues that “implicate constitutional questions.”