Federal Circuit approves PTAB practice of addressing patentability of only instituted claims in final written decisions

In Synopsys, Inc. v. Mentor Graphics Corp., a split Federal Circuit panel held that final written decisions in IPR proceedings need not address all claims challenged in the petition. Nos. 2014-1516, 2014-1530 (Fed. Cir. Feb. 10, 2016).

In its institution decision, the Board instituted review of only some of the claims challenged in the petition. In the final written decision, the Board found a subset of those instituted claims unpatentable. Consistent with Board practice, the final written decision did not address the patentability of challenged claims that were not instituted.

On appeal, in addition to substantively disputing the Board’s decision that some of the instituted claims were not anticipated, the Petitioner argued that the Board erred by not addressing in the final written decision the patentability of the claims that were challenged in the petition but not instituted. The petitioner based its argument primarily on the requirement in 35 U.S.C. § 318(a) that the Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.”

The Federal Circuit majority disagreed that the AIA requires the Board to address all challenged claims in the final written decision. The majority concluded that § 314(a), which prohibits institution unless “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition,” strongly implies that the Board can “pick and choose among the claims in the decision to institute.” Given that not all challenged claims are required to be part of the trial, the majority argued that it would not make sense to require a final decision on the non-instituted claims.

In her dissenting opinion, Judge Newman argued that § 314(a) does not authorize the Board to “pick and choose” which claims to institute and that § 318(a) requires the Board to address every challenged claim in the final written decision. Judge Newman argued that, besides being contrary to statutory requirements, the Board’s practice frustrates the purpose of IPRs as a “complete substitute” for the invalidity phase of district court litigation based on patents and printed publications.

This decision is yet another example of the Federal Circuit being broadly deferential to the PTO with regard to its procedures for administering the AIA post-issuance proceedings.