In GTNX, Inc., v. Inttra, Inc., — F.3d —, 2015 WL 3692319 (Fed. Cir. June 16, 2015), the Federal Circuit held that a Patent Owner’s failure to invoke the statutory bar set forth in 35 U.S.C. § 325(a)(1) prior to an institution decision by the Board does not constitute a waiver, and the Court reiterated that it lacks jurisdiction with respect to appeals of institution decisions.

Under § 325(a)(1), a post-grant review proceeding may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.

The Petitioner’s parent company, GT Nexus, Inc., filed a declaratory judgment suit seeking to invalidate the Patent Owner’s four patents directed to shipping methods. In early 2014, and while GT Nexus, Inc.’s suit was still pending, the Petitioner filed a petition for CBM review of the same four patents that were the subject of the declaratory judgment suit. On August 12, 2014, the Board instituted CBM review of all four patent patents.

On October 14, 2014, the Board granted the Patent Owner authorization to file motions to dismiss the CBM proceedings under § 325(a)(1) in view of the declaratory judgment suit filed by the Petitioner’s parent company. In opposing the motions, the Petitioner argued that the Patent Owner had waived its § 325(a)(1) argument by not presenting it before institution or within the 14-day period for requesting reconsideration of the institution decisions under 37 C.F.R. § 42.71.

On December 10, 2014, the Board granted the Patent Owner’s motions to dismiss and vacated the institution decisions. In so ruling, the Board held that § 325(a)(1) is a statutory requirement and, thus, a Congressional limitation on the Board’s jurisdiction. Characterizing the dismissals as final written decisions under 35 U.S.C. § 328, the Petitioner appealed the dismissals to the Federal Circuit pursuant to 35 U.S.C. §§ 141 and 329.

In St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., which we wrote about here, the Federal Circuit held that the appeal authorization found in 35 U.S.C. § 141(c) was limited to the final written decision on patentability. The relevant statutory authority states “[a] party to . . . a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section . . . 328(a) . . . may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.” In GTNX, the Federal Circuit characterized the Board’s decision to dismiss the CBM proceedings as a decision on institution of the proceedings, rather than a final written decision on patentability. Reiterating that appeals of institution decisions are precluded by 35 U.S.C. § 314(d), the Court concluded that it lacked jurisdiction for the appeal under § 141(c).

The Federal Circuit alternatively considered whether mandamus relief was available to the Petitioner under the All Writs Act, 28 U.S.C. § 1651, and found that mandamus relief was not available because the Petitioner had not shown a right to the requested relief. In support of this conclusion, the Court noted that administrative agencies possess inherent authority to reconsider their decisions, and suggested that such inherent authority authorized the Board to grant the Patent Owner’s motion to reconsider the institution decisions even though the Patent Owner’s arguments under § 325(a)(1) were untimely.

Some takeaways from this decision are:

  • A patent owner’s statutory bar defense under § 325(a)(1) is not subject to waiver. If the patent owner does not raise this defense in a timely manner (e.g., before an institution decision), the patent owner should seek permission from the Board to raise the defense in a motion to dismiss.
  • In In re Cuozzo Speed Techs., LLC, No. 2014-1301 (Fed. Cir. Feb. 4, 2015), which we wrote about here, the Federal Circuit indicated that while an institution decision is not appealable, it may be reviewable under mandamus. The Federal Circuit’s decision in GTNX further clarifies when mandamus relief may be available and suggests that mandamus relief may be available to a party to an IPR, CBM, or PGR proceeding if that party can demonstrate its right to the requested relief.