Case No. 16-969 | Fed. Cir. Decision
Patents are immensely important in society because they protect inventors from having ideas and processes stolen, which in turn “promote[s] the Progress of Science and useful Arts.” U.S. Const. art. 1 § 8, cl. 2. Because of this importance, there are often changes made to existing laws and procedures that attempt to further this protection. The Court’s second patent case also deal with the Patent Trial and Appeal Board (“PTAB”). For people new to patent law it bears repeating what the PTAB does. The PTAB streamlines the patent challenge process and allows an individual to challenge the validity of an existing patent through a process known as inter partes review (“IPR”). IPR is an adjudicatory process where the PTAB first decides whether full review of the patent is warranted. If the PTAB decides that full review is necessary, the second step is for the PTAB to conduct that full review and issue a written decision. All PTAB decisions can be appealed to the United States Court of Appeals for the Federal Circuit, which is the only appellate court with jurisdiction to hear patent cases. While using the PTAB’s process is not the only way that a patent can be challenged, it has proven to be a popular method.
In 2006, ComplementSoft, LLC obtained U.S. Patent No. 7,110,936 (the “’936 patent”). The ‘936 patent was for generating and maintaining source code that allows users to “develop, edit, and debug software for a particular programming language.” SAS Inst. Inc. v. ComplementSoft, LLC, 825 F.3d 1341, 1346 (Fed. Cir. 2016). SAS Institute Inc. (“SAS”) filed for IPR, arguing that all sixteen of the ‘936 patent’s claims were unpatentable. SAS argued that the patent included elements that were prior art, meaning that the patent utilized designs already in use and therefore could not be patented by ComplementSoft, LLC. The PTAB initiated review on some, but not all, of the patent’s claims and ruled that “claims 1, 3, and 5–10 of the ‘936 patent were unpatentable as obvious in view of the prior art.” SAS Inst. Inc. v. ComplementSoft, LLC. The PTAB found that claim 4 was patentable.
SAS appealed the PTAB’s ruling because the PTAB only reviewed some of the patent’s claims–the ones that the PTAB deemed “substantial–which SAS argued directly contradicted the federal statute relating to decisions by the PTAB. The statute states that “[i]f an inter partes review is instituted and not dismissed under this chapter, 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 . . . .” 35 U.S.C. § 318 (2012). As SAS challenged all of the patent’s claims, and the PTAB did not issue a final written decision on all of the claims, SAS argued that the patent review and final decision was incorrect.
On appeal to the United States Court of Appeals for the Federal Circuit, a divided panel upheld the PTAB’s decision based on a 2016 Federal Circuit decision that stated the PTAB need only issue a final written decision on the claims for which review was granted, and the claim-by-claim approach the PTAB took was not in violation of the federal statute. Judge Newman, who dissented in the 2016 decision, again dissented here arguing that the claim-by-claim approach is ineffective and defeats the purpose of the PTAB to efficiently rule on the validity of a patent so that other inventors know whether they can base new items on that patent. The Supreme Court agreed to hear SAS’s challenge to determine, essentially, whether “any patent claims” as written in 35 U.S.C. § 318(a) means “all.”