Eastern District of Virginia Decides PTAB Decision to not institute IPR is Not Appealable

A patent owner insists that your company infringes a patent and makes a claim of patent infringement.  You have settled patent infringement assertions before, but this patent seems invalid over known prior art.  You consult with your patent counsel and a decision is made to file a petition for inter partes review (IPR) under the new post-grant challenges afforded by the America Invents Act.

A lot of hard work goes into preparing the IPR petition.  You include a declaration by an expert and multiple prior art grounds of invalidity.  You file your petition, knowing that in six months you will get a decision on whether the Patent Trial and Appeal Board (PTAB) will institute trial.  You get notice that a decision has been made and you read it, only to learn that your petition for IPR has been denied in total.  You believe the decision not to institute is a mistake.  What do you do?

To know your options you consult the statute:

§ 314. Institution of inter partes review

. . .

(d) NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

Final and nonappealable?  That does not sound good.  After all, you recall hearing something about requests for reconsideration.  So you consult the CFR:

§ 42.71 Decision on petitions or motions.

. . .

(c) Petition decisions. A decision by the Board on whether to institute a trial is final and nonappealable. A party may request rehearing on a decision by the Board on whether to institute a trial pursuant to paragraph (d) of this section. When rehearing a decision on petition, a panel will review the decision for an abuse of discretion.

(d) Rehearing. A party dissatisfied with a decision may file a request for rehearing, without prior authorization from the Board. The burden of showing a decision should be modified lies with the party challenging the decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was previously addressed in a motion, an opposition, or a reply. A request for rehearing does not toll times for taking action. Any request must be filed: . . .  (2) Within 30 days of the entry of a final decision or a decision not to institute a trial.

You prepare and file a request for rehearing according to the rules, but the PTAB affirms its earlier decision.  What can you do now?

Petitioners are starting to explore different avenues to attempt to challenge a decision not to institute trial.  Some have filed for relief in the Eastern District of Virginia, some have appealed to the Court of Appeals for the Federal Circuit, and some have made claims in both courts.  A recent decision by the Eastern District of Virginia relies on § 314(d) to hold that appeals of PTAB decisions to not institute trial are  final and nonappealable.

In Dominion Dealer Solutions, LLC, v. Michele K. Lee, 3:13CV699, ____ (E.D. Va. 2014), Judge Robert E. Payne denied  Dominon’s challenge of the PTAB’s decision not to institute trial in five IPR petitions filed by Dominion against patents owned by AutoAlert, Inc.  The court instead granted the PTO’s motion to dismiss based on its interpretation that the PTAB’s decision not to institute trial is final an nonappealable under 35 U.S.C. § 314(d).

As it turns out, the Federal Circuit already has a petition for mandamus from Dominion requesting relief from the PTAB decision to not institute IPR.  It will be interesting to see how the Federal Circuit decides that petition, because that may be an indicator of the Federal Circuit’s approach to other persons that are also seeking a writ of mandamus — some of which we will be discussing in future posts.