Versata Development Group, Inc. v. SAP America, Inc.
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Full Opinion
Opinion for the court filed by Circuit Judge PLAGER.
Opinion concurring in part and dissenting in part filed by Circuit Judge HUGHES.
IntROduction
This is a covered business method (âCBMâ) patent case, under § 18 of the Leahy-Smith America Invents Act (âAIAâ), Pub.L. No. 112-29, 125 Stat. 284
SAP requested that the USPTO institute review of the validity of certain claims in U.S. Patent No. 6,553,350 (â'350 patentâ). The '350 patent is owned by the appellant, Versata Development Group, Inc. (âVersataâ), who had sued SAP for infringing the patent. In its petition to the USPTO, SAP alleged that the patent was a covered business method patent.
Covered business method patents are subject to the special provisions of AIA § 18. See 125 Stat. at 329-31.
In addition to the merits of the decision rendered by the PTAB (which held the claims at issue invalid), the parties to the appeal dispute several predicate issues. These include:
⢠if the PTAB makes an initial determination under § 18 of the AIA that the patented invention qualifies for âcovered business methodâ treatment under § 18, may a court review that issue when reviewing as part of a final written decision the invalidation of claims under the authority of § 18?
⢠if the answer is yes, for purposes of post-grant review by the USPTO how*1311 is the term âcovered business method patentâ to be understood, and does the patent at issue here qualify as a CBM patent?
⢠if the PTAB correctly determines that under § 18 of the AIA a patent comes within the definition of a CBM patent, what are the criteria for determining whether the patent is excluded from review under § 18 because the patent falls within the statutorily-excepted category of âtechnological invention,â and hĂłw do those criteria apply to the '850 patent?
⢠if, in deciding the merits of the caseâ the validity of the challenged claims in the patent â the PTAB is called upon to engage in claim construction, does the PTAB apply the USPTOâs general rule of the âbroadest reasonable interpretation,â or does it apply the judicial standard of the âone correct constructionâ?
⢠finally, on appeal at the final written decision stage to this court, during which we must decide whether the PTAB applied the substantive tests for validity correctly, may a court determine whether as an initial matter the PTAB chose the correct substantive tests to apply, and did the PTAB apply them correctly here?
After determining the answers to these queries, contested by the parties, as explained below, we address their application to the '350 patent at issue.
Background
The '350 Patent
Versata owns the '350 patent, entitled âmethod and apparatus for pricing products in multi-level product and organizational groups.â '350 patent, col. 1, ll. 1-3. The âinvention operates under the paradigm of WHO (the purchasing organization) is buying WHAT (the product).â Id. at col. 3, ll. 24-25. An example of the WHO/WHAT paradigm, known in the pri- or art according to the patent, is depicted in Figure 1 of the '350 patent, reproduced below:
[[Image here]]
See id. at col. 4, ll. 17-18.
The '350 patent, however, states that prior art pricing tables for WHO/WHAT required large data tables. See id. at col. 1, ll. 52-59. The patent is said to improve upon the prior art and reduce the need for
[[Image here]]
See id. at col. 4, ll. 24-25.
Similarly, a product group hierarchy is defined that can be applied to products (WHAT). Id. at col. 3, ll. 41-42. Pricing information is then associated with the customer and product groups. Id. at col. 8, ll. 17-25. Special pricing adjustments may be defined as applying to all members of a specific customer group or a specific product group. Id. at col. 3, ll. 26-49.
We are concerned with claims 17 and 26-29. Claim 17 recites a âmethod for determining a price of a product offered to a purchasing organizationâ comprising certain steps. Id. at col. 20, 1. 66 â col. 21, 1. 29. Claim 26 recites a âcomputer readable storage media comprising: computer instructions to implement the method of claim 17.â Id. at col. 21, ll. 61-62. Claim 27 recites a âcomputer implemented method for determining a price of a product offered to a purchasing organizationâ comprising certain steps. Id. at col. 21, 1. 63â col. 22, 1.12. Claim 28 recites a âcomputer readable storage media comprising: computer instructions to implement the method of claim 27.â Id. at col. 22, ll. 13-14. Claim 29 recites an âapparatus for determining a price of a product offered to a purchasing organizationâ comprising certain limitations. Id. at col. 22, ll. 15-35.
Claim 17 is representative:
A method for determining a price of a product offered to a purchasing organization comprising: arranging a hierarchy of organizational groups comprising a plurality of branches such that an organizational group below a higher organizational group in each of the branches is a subset of the higher organizational group; arranging a hierarchy of product groups comprising a plurality of branches such that a product group below a higher product group in each of the branches in a subset of the higher product group; storing pricing*1313 information in a data source, wherein the pricing information is associated, with (i) a pricing type, (ii) the organizational groups, and (iii) the product groups; retrieving applicable pricing information corresponding to the product, the purchasing organization, each product group above the product group in each branch of the hierarchy of product groups in which the product is a member, and each organizational group above the purchasing organization in each branch of the hierarchy of organizational groups in which the purchasing organization is a member; sorting the pricing information according to the pricing types, the product, the purchasing organization, the hierarchy of product groups, and the hierarchy of organizational groups; eliminating any of the pricing information that is less restrictive; and determining the product price using the sorted pricing information.
Id. at col. 20, l. 66âcol. 21, l. 29.
Prior Litigation
On April 20, 2007, Versata, along with Versata Software, Inc. and Versata Computer Industry Solutions, Inc., sued SAP for, inter alia, infringement of the '350 patent in the U.S. District Court for the Eastern District of Texas. The case proceeded to trial, and a jury found infringement and awarded damages. The district court upheld the infringement verdict but reversed other rulings unrelated to the '350 patent, resulting in a new trial on damages. A jury then found that SAPâs post-patch software continued to infringe and awarded lost-profits damages and reasonable royalty damages. The district court upheld those awards.
SAP appealed the district courtâs final judgment to our court. In Versata Software, Inc. v. SAP Am., Inc., 717 F.3d 1255 (Fed.Cir.2013), we affirmed the 'juryâs infringement verdict and damages award, but vacated as overbroad a permanent injunction entered by the district court. Id. at 1258. The case was remanded for the district court to enter an order conforming to our opinion. Id.; see also Versata Computer Indus. Solutions, Inc. v. SAP AG, 564 Fed.Appx. 600 (Fed.Cir.2014) (per curiam).
Covered Business Method Patent Review
While all that was going on, SAP on September 16, 2012, petitioned the PTAB to institute a covered business method review of Versataâs '350 patent on the grounds that claims 17 and 26-29 of the patent were unpatentable for failure to comply with 35 U.S.C. §§ 101, 102, and 112, 1st and 2nd paragraphs. On January 9, 2013, the PTAB granted SAPâs petition and instituted a covered business method review of the '350 patent. In accordance with the statutory standard for instituting a review, the PTAB determined that claims 17 and 26-29 were more likely than not unpatentable under 35 U.S.C. §§ 101 and 102. The PTAB declined to review the claims under § 112 because, in the PTABâs view, SAP had not met the standard in that regard. Versata did not seek rehearing of the decision to institute.
Subsequently, at SAPâs request, the PTAB agreed to forego the § 102 review and expedite the § 101 review. On June 11, 2013, the PTAB issued its final written decision cancelling claims 17 and 26-29 as unpatentable under § 101. Versata sought rehearing of the final written decision, which the PTAB denied. Versata then appealed the final written decision to this court; that is the case we decide here.
Proceedings Before the District Court
Before turning to the case before us, there is one additional litigation to be noted which is of direct relevance to this case. On March 13, 2013, while the PTAB was conducting its CBM review, Versata sued
The district court held that it lacked subject matter jurisdiction âbecause the AIAâs express language, detailed structure and scheme for administrative and judicial review, legislative purpose, and nature of the administrative action evince Congressâs clear intent to preclude subject matter jurisdiction over the PTABâs decision to institute patent reexamination [sic ] proceedings.â Versata Dev. Corp. v. Rea, 959 F.Supp.2d 912, 915 (E.D.Va.2013). The district court also held that âthe decision to institute post-grant review is merely an initial step in the PTABâs process to resolve the ultimate question of patent validity, not a final agency action as contemplated by 5 U.S.C. § 704.... Plaintiff retains an alternative adequate remedy through appeal to the Court of Appeals for the Federal Circuit.â Id. On October 5, 2013, the district court denied Versataâs motion to alter or amend the judgment. Versata appealed the district courtâs judgment to this court; that appeal is pending as Ver-sata II.
We have jurisdiction over this case, Ver-sata I, pursuant to 28 U.S.C. § 1295(a)(4)(A).
Discussion
Ultimately the issue to be decided on appeal concerns the substantive merits: whether the PTAB ruled correctly that the challenged earlier-issued claims of the '350 patent are invalid for the reasons given by the PTAB, namely, non-compliance with 35 U.S.C. § 101. Before addressing this ultimate merits issue, however, we must address the several predicate issues of process and procedure that the parties raiseâ issues that could have decisive effect on the outcome of the case regardless of its substantive merits.
Issue Number 1 â Judicial Review
The initial decision to institute review in response to a petition is the first step in the post-grant review process. In this case, the PTAB at the initial decision to institute stage determined that the petition to review the '350 patent should be granted. In making that determination, the PTABâs three-judge panel concluded:
⢠that the '350 patent was a âcovered business method patentâ as that term is defined in the statute;
⢠that it was not a âtechnological invention,â a statutorily-stated exception to that definition;
⢠that § 101 was applicable to patents reviewed under the CBM process;
⢠and that, as required by § 324(a), âit is more likely than not that at least 1 of the claims challenged in the petition is unpatentable.â
In its patent ownerâs preliminary response at the decision to institute stage, Versata had challenged each of these propositions. The PTAB addressed Versataâs arguments and rejected them.
After a review is instituted, the review proceeds to a trial before the PTAB, and concludes with the PTABâs âfinal written decisionâ: âthe [PTAB] shall issue a final written decision with respect to the patent-ability of any patent claim challenged by the petitioner.â § 328(a). Section 329 further provides for appeal of that decision to the Court of Appeals for the Federal Circuit pursuant to §§ 141-144; section 144 provides that â[t]he United States Court of Appeals for the Federal Circuit shall re
Before us then are the merits of the final written decision rendered by the PTAB in this case. To be clear, it is the merits of the final written decision that are on appeal; we are not here called upon to review the determination by the PTAB whether to institute a CBM review, and indeed the statute expressly instructs that we may not:
The determination by the Director whether to institute a post-grant review under this section shall be final and nonappealable.
35 U.S.C. § 324(e) (emphasis added). As noted, this statute is applicable to post-grant reviews and CBM proceedings; the PTAB acts for the Director in deciding whether to institute a review, see 35 U.S.C. § 326(c); 37 C.F.R. § 42.4 (2014).
Turning to the merits, the PTAB, in its final written decision, held Versataâs CBM patent claims 17 and 26-29 unpatentable under 35 U.S.C. § 101, and ordered them cancelled. Versata on appeal challenges that holding on multiple grounds:
⢠Versataâs patent does not claim a âcovered business method,â and in any event falls within the safe harbor of a âtechnological inventionâ;
⢠The PTAB does not have authority to review CBM patents for subject-matter eligibility under 35 U.S.C. § 101;
⢠The PTABâs claim construction is wrong, it applied the âbroadest reasonable interpretationâ to its claim construction, which it should not have, and had it correctly analyzed § 101 under the proper claim construction it would not have reached the holding it did.
SAP responds that, absent a finding that these issues are either non-appealable or waived, on the merits the USPTO correctly held that the '350 patent is a âcovered business method patentâ under § 18(a)(1)(E), and that the AIA authorizes § 101 subject-matter eligibility as a ground for CBM review.
The USPTO entered the case as interve-nor, as authorized by § 143. The USPTO devotes a substantial part of its brief to the argument that this court lacks jurisdiction to review the Directorâs decision to institute a post-grant review of the '350 patent. On its face that argument would appear curious, since as earlier explained the issue on appeal before the court is only the merits of the final written decision. However, the USPTO makes the point that the question of whether the patent at issue here falls within the scope of the PTABâs authority under § 18 as a âcovered business method patentâ (not one claiming a âtechnological inventionâ) was decided by the PTAB at the decision to institute stage, and on that basis it is immunized from later judicial review at the final decision stage.
SAP, but not the USPTO, makes the additional argument that, under the specific terms of the judicial review bar in § 324(e), supra, we do not have authority to review any questions decided by the PTAB in the course of making its initial decision to institute review, including whether ineligibility under § 101 is a permissible ground for invalidation under the CBM authority invoked by the PTAB.
Thus, the USPTO contends that the CBM-speeific invalidation here must be upheld even if the PTAB incorrectly interpreted the statute regarding what is a CBM patent and the patent is not a CBM patent under the correct law, and SAP further contends that the invalidation under § 101 must be upheld even if the PTABâs CBM-invalidation authority does not permit invalidation under § 101.
This is the first case challenging the scope of § 324(e) at the final written decision stage. There are, however, several
In St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., 749 F.3d 1373 (Fed.Cir.2014), the first of the interlocutory review cases, the patentee had initiated an infringement suit. The defendant in the suit counterclaimed, asserting infringement .of the defendantâs patent by the initiating patentee. The initiating pat-entee then sought post-grant review of the defendantâs patent under the IPR provisions. The PTAB decided not to institute review, a decision the patentee appealed directly to this court.
We held that the patenteeâs appeal of the PTAB'decision was statutorily barred by § 314(d), and granted the motion by the defendant and the USPTO to dismiss the appeal. In its decision to deny direct review, our court examined the application of § 314(d) to the case. As noted, this section â 314(d)âis the counter-part to the one with which we' are concerned hereâ § 324(e), except that 314(d) applies specifically to IPR cases, whereas 324(e) applies to PGR and CBM (§ 18) cases.
The court commented that § 314(d) âmay well preclude all review by any route, which we need not decide. It certainly bars an appeal of the non-institution decision here.â 749 F.3d at 1376. The court thus distinguished the question of the availability of immediate âappealâ under 35 U.S.C. §§ 141(c) and 319, which it was deciding, from the question of âreviewâ (in the course of bringing other actions, such as appeals from final decisions or APA actions in district cqurt), which it expressly said it was not deciding. The court based its holding âon the structure of the inter partes review provisions, on the language of section 314(d) within that structure, and on our jurisdictional statute read in light of those provisions.â Id. at 1375.
The same day the court issued St. Jude, we issued two other opinions reaching the same result under the same statute, though in different procedural contexts. See In re Dominion Dealer Solutions, LLC, 749 F.3d 1379 (Fed. Cir.2014) (PTAB declined to institute IPR review; held, for the reasons explained in St. Jude, we did not have jurisdiction to hear petitionerâs mandamus action challenging the PTABâs decision); In re Procter & Gamble Co., 749 F.3d 1376, 1377 (Fed.Cir.2014) (PTAB granted rather than refused to institute IPR review; held, that for the same reasons, the difference between a denial and a grant of review made no difference to our mandamus jurisdiction â âimmediate review of such a decision is not available in this court.â).
In its opinion in In re Procter & Gamble Co., the court explained what it was not deciding:
It is a separate question whether section 314(d) means that the decision to institute the review is unchallengeable later â if the Board reaches a decision under section 318(a) and an appeal is taken under section 319 [appeal to this court of the final written decision of the PTAB], Perhaps section 314(d)âs broad language precludes all judicial review of the institution decision, even in an eventual section 319 appeal. We need not decide that question, which can be addressed in a section 319 appeal. Nor need we address whether an immediate challenge could be brought in district court [through an APA action].
749 F.3d at 1379.
Again, the statutory references are to the IPR ch. 31 provisions, which, though not directly applicable to CBM cases, par
Two other recent opinions by this court warrant comment since they arise directly under chapter 32 and § 18, and, though they involve different fact settings from those discussed above, they cast light on how we are to understand § 18.
This court reversed the district courtâs denial of the stay. We noted that the district court had erred to the extent it had undertaken a review of the merits of the PTAB decision to institute review. We said:
Indeed, a challenge to the PTABâs âmore likely than notâ determination at this stage amounts to an improper collateral attack on the PTABâs decision to institute CBM review, and allowing it would create serious practical problems .... Congress clearly did not intend district courts to hold mini-trials reviewing the PTABâs decision on the merits of the CBM review.... The stay determination is not the time or the place to review the PTABâs decisions to institute a CBM proceeding.
Id. at 1313.
And in Benefit Funding Systems LLC v. Advance America Cash Advance Centers Inc., 767 F.3d 1383 (Fed.Cir.2014), the question was whether a district court decision to grant a stay of proceedings was proper pending the outcome of an on-going post-grant review at the PTAB.
The patenteeâs sole argument on appeal was that the USPTO could not institute review proceedings of a CBM patent on the' grounds of a violation of § 101. Section 101 specifies the kinds of inventions that are patentable and is an issue in this case as well. In affirming the district courtâs stay determination, we said â â[t]he stay determination is not the time or the place to review the PTABâs decisions to institute a CBM proceeding.â â Id. at 1386 (quoting VirtualAgility, 759 F.3d at 1313). We then added:
This is not to say that a patent owner could never attack the PTABâs authority to conduct CBM review. â Indeed, Appellants might potentially challenge that authority in the context of a direct appeal of the PTABâs final decision.... They simply cannot mount such a challenge as a collateral attack in opposition to a stay. Having rejected Appellantsâ argument as an impermissible collateral attack, we do not address the underlying merits of that attack, namely whether § 101 is a valid ground for CBM review.
Id.
Returning to the case before us, Versa-ta, as earlier noted, had brought an action in the U.S. District Court for the Eastern District of Virginia, under the Administrative Procedure Act (âAPAâ), to prevent the PTAB from proceeding with the § 18 CBM review of the '350 patent at issue in this case. Versata challenged the authority of the PTAB to have instituted the review of the '350 patent under § 18; SAP
In support of its motions to dismiss, the USPTO argued, consistent with the suggestion noted supra in Benefit Funding, that there was an available remedy under the AIA statute â the issues decided by the PTAB at the institution stage are preserved for review at the time of an appeal to the Federal Circuit of the PTAJBâs final written decision. The district court granted the USPTOâs motions and SAPâs motion and dismissed Versataâs APA complaint on two alternative grounds, including that âan adequate remedy exists by way of direct appeal [of the final written decision] to the Federal Circuit.â Versata Dev. Corp., 959 F.Supp.2d at 927.
The district court suit involved essentially the same parties, the same patent, and the same basic issues. Accordingly, based on the USPTOâs representations to the district court, despite (or in accordance with) the provisions of § 324(e), this court should entertain and decide the predicate questions raised by the parties regarding the USPTOâs authority over this patent, and whether the proper law was applied. This is so even though the challenged decisions were initially made at the decision to institute stage.
The USPTO, however, now represented in this appeal by the Department of Justice Civil Division Appellate Staff, advises the court that the Government has reconsidered its position. The Government now argues for what it characterizes as a âjurisdiction[al]â bar on this courtâs review of at least some of the issues decided at the initial decision to institute stage. Intervenorâs Br. at 13. Some of the Governmentâs language suggests a bar on reviewing any PTAB determination made when instituting review. This language would seem to cover even whether § 101 is an available ground of invalidation, but the Government does not expressly make that contention. Its nonreviewability argument is limited to the contention that we may not review whether the '350 patent is a CBM patent under § 18. (Judge Hughes likewise limits his Dissent in Part to the CBM question.)
In response to the Governmentâs new position, Versata argues that the Government is estopped from reconsidering its position in the district court APA action, citing New Hampshire v. Maine, 532 U.S. 742, 749, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001). The Government responds that it is better that it acknowledges its errors rather than compound them.
Ordinarily, the Governmentâs willingness to confess error should be encouraged. However, given the fact that the district court action and this appeal share the same parties, the same patent, and the same contested issues, there is a âbait-and-switehâ aspect to the Governmentâs newly-arrived-at position: when it helps the Governmentâs position, a predicate issue, they argue, can be reviewed on appeal; but when it might hurt, the issue becomes not reviewable.
Fortunately, we need not judge the astuteness of the Governmentâs confession. Nor, in deciding the question of reviewability, need we decide the strength of Versa-taâs estoppel position. This is because the Government was right the first time â for the reasons we shall next explain, its original position on reviewability, with some clarification, was the correct one.
We have before us Versataâs appeal from the final written decision of the PTAB invalidating Versataâs patent under § 18 authority, an authority limited to CBM patents. On the reviewability issue that divides Versata and the Government, Versata argues that the invalidation must be reversed as beyond the § 18 authority because the '350 patent is not actually a CBM patent under the law if properly
To determine this reviewability issue, two related questions must be answered: first, does the § 324(e) judicial review bar permit judicial review, when conducted with regard to the final written decision, of PTAB compliance with any requirement that involves the ultimate authority of the PTAB to invalidate a patent; second, if yes, is the restriction of § 18 to CBM patents such a limit. We answer both questions in the affirmative, and therefore reject the contention that we may not review whether the '350 patent is a CBM patent covered by § 18.
As to the first question: what § 324(e) says is that â[t]he determination by the [PTAB] whether to institute a post-grant review under this section shall be final and nonappealable.â 35 U.S.C. § 324(e) (emphasis added). That language does not by its terms apply to limits on the authority to enter a âfinal written decisionâ invalidating a patent. Institution and invalidation are two distinct actions by the PTAB. In addition to being deeply embedded in federal administrative law,
The distinct agency actions do not become- the same just because the agency decides certain issues at both stages of the process. Nor do they become the same just because the agency chooses, or even follows a congressional directive, to decide an issue determining final-action authority at the initiation stage and then does not revisit the issue later. Early-stage decision of a basic authority question can make sense as an efficiency matter. There is no good reason to launch a proceeding if it is clear that the agency will have no authority to act at its conclusion. On the other hand, some determinations normally made at the initiation stage may not affect authority to render a final decision whenever made.
Overlap of issues is not determinative, neither is the timing determinative. Indeed, the Government implicitly agrees. Unlike SAP, it pointedly does not contend that § 324(e) bars our review of whether § 101 is an available ground for invalidation under § 18, regardless of when the PTAB considered that issue.
It would not only run counter to the language of § 324(e) to read it as barring review of whether the PTAB exceeded statutory limits on its authority to invalidate. It would also run counter to our long tradition of judicial review of government actions that alter the legal rights of an affected person, a hallmark of
It has long been the law that â[a]d-ministrative determinations must have a basis in law and must be within the granted authority.... An agency may not finally decide the limits of its statutory power. That is a judicial function.â Soc. Sec. Bd. v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 90 L.Ed. 718 (1946). The Supreme Court has repeatedly emphasized âthe strong presumption that Congress intends judicial review of administrative action,â and that â[f]rom the beginning âour cases [have established] that judicial review of a final agency action by an aggrieved person will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress.â â Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667, 670, 106 S.Ct. 2133, 90 L.Ed.2d 623 (1986) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967)).
More specifically, when doubt about congressional intent exists, the general presumption favoring judicial review of rights-changing administrative action is controlling. Block v. Cmty. Nutrition Inst., 467 U.S. 340, 351, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984). As a result, an agency seeking to overcome this strong presumption faces a âheavy burdenâ' and must do so by âclear and convincingâ evidence. Bowen, 476 U.S. at 671-72, 106 S.Ct. 2133. The Supreme Court recently reiterated the agencyâs heavy burden to overcome the strong presumption against unreviewability. See Mach Mining, LLC v. E.E.O.C., - U.S. -, 135 S.Ct. 1645, 1651, 191 L.Ed.2d 607 (2015).
Congress explained the anomalous nature of a bar to judicial review of final agency action:
Very rarely do statutes withhold judicial review. It has never been the policy of Congress to prevent the administration of its own statutes from being judicially confined to the scope of authority granted or to the objectives specified. Its policy could not be otherwise, for in such a case statutes would in effect be blank checks drawn to the credit of some administrative officer or board.
S.Rep. No. 79-752, at 26 (1945); H.R.Rep. No. 79-1980, at 41 (1946) (same); Bowen, 476 U.S. at 671, 106 S.Ct. 2133 (quoting same).
Here, nothing in § 324(e) meets the high standard for precluding review of whether the PTAB has violated a limit on its invalidation authority under § 18.
As to the second question implicit in the Governmentâs nonreviewability contention: one of the limits on § 18 invalidation authority is that the patent at issue be a CBM patent. Congress created a special review regime, over and above any other authority the PTAB might have, for reviewing and invalidating patents that qualify as CBM patents. And it put a time limit (eight years) on the PTABâs authority under that regime. This requirement defines the-PTABâs authority to invalidate under § 18. If a particular patent is not a CBM patent, there is no proper pleading that could be filed to bring it within the PTABâs § 18 authority.
In so concluding, we need not and do not consider all of the various determinations the PTAB may make to initiate proceed
The Government and SAP have not identified any reason to draw different conclusions. It is clear from the legislative history of the AIA that Congress purposely set out to create a relatively simple and expedited administrative process. See, e.g., H.R.Rep. No. 112-98, at 48 (2011), 2011 U.S.C.C.A.N. 67, 78. However, nothing in that purpose precludes or argues against this court, in an appeal of a final written decision, deciding contested questions regarding premises necessary to the agencyâs ultimate relied-on authority to take the action on appeal â here, invalidation of the patent claims under the CBM authorization â just because the agency first addressed those premises at the initiation stage of the proceeding. The appeal process, with its inherent delays, is already committed. Any further delay caused by having the court decide as part of the basic merits ease a predicate issue such as raised here, would be limited. Indeed, when the answers to these predicate issues are decided as a matter of precedent, further delay, if any, will be minimal, if not essentially disappear.
The parties, digging through the legislative record, come up with competing statements from various legislators with regard to the possible scope of the issues to be heard on appeal. Even assuming such statements are thought to be relevant, the variety of conflicting views illustrates why we must focus on the structure and language of the act, not on what its advocates and detractors may say about it.
Looking at the structure of § 18, the Government, in support of its new-found position against judicial review, notes that the only provision of the AIA that allows an appeal to this court from a post-grant review proceeding is § 329; that section authorizes judicial review of the âfinal written decisionâ of the PTAB made pursuant to § 328(a). The government reads this as limiting review to only the final written decision, and not anything in the initial decision to institute. But that of course begs the question â what aspects of the final written decision are subject to review?
The Government finds significance in the fact that § 328(a) directs the PTAB to issue a decision with respect to the patentability of any patent claim. Putting this provision together with § 329, the Government argues that on appeal the court is limited to only what the PTAB is directed to do. But that is a non-sequitur. The statutory description of an agencyâs decisional duties does not necessarily define the scope of an appellate courtâs ultimate merits considerations.
The Government also draws parallels between this issue under the AIA and the USPTOâs practice in the prior-established ex parte reexamination proceedings, and in its prior practice under the now-superseded provisions for inter partes reexamination. We do not find that either of those proceedings, established under different statutory provisions and dealing with different issues, is controlling here. It is worth noting, however, that the pre-AIA case law made clear that limitations on the scope of reexamination authority were re