Achates Reference Publ'g, Inc. v. Apple Inc.

• Decision Date: 30 September 2015
• Docket Number: Nos. 2014–1767,2014–1788.,s. 2014–1767
• Parties: ACHATES REFERENCE PUBLISHING, INC., Appellant v. APPLE INC., Appellee.
• Court: U.S. Court of Appeals — Federal Circuit

803 F.3d 652

116 U.S.P.Q.2d 1783

ACHATES REFERENCE PUBLISHING, INC., Appellant

v.APPLE INC., Appellee.

Nos. 2014–1767

2014–1788.

United States Court of Appeals, Federal Circuit.

Sept. 30, 2015.

Vincent McGeary, McGeary Cukor LLC, Morristown, NJ, argued for appellant. Also represented by Michael Cukor ; Brad Pedersen, Patterson Thuente Pedersen, P.A., Minneapolis, MN; Wayne S. Breyer, Jason Paul Demont, Kenneth Ottesen, Kaplan, Breyer, Schwarz & Ottesen, LLP, Matawan, NJ.

Joseph Guerra, Sidley Austin LLP, Washington, DC, argued for appellee. Also represented by Jeffrey Paul Kushan, Scott Border, Joseph A. Micallef, Anna Mayergoyz Weinberg.

Kakoli Caprihan, Office of the Solicitor United States Patent and Trademark Office, Alexandria, VA, argued for intervenor Michelle K. Lee. Also represented by Thomas W. Krause Frances Lynch, Jamie Lynne Simpson, Scott Weidenfeller.

Before PROST, Chief Judge, LOURIE and LINN, Circuit Judges.

Opinion

LINN, Circuit Judge.

Achates Reference Publishing, Inc. (“Achates”) appeals from the decisions of the Patent Trial and Appeal Board (the “Board”) in inter partes review (“IPR”) proceedings instituted on petitions filed by Apple Inc. (“Apple”) against Achates' U.S. Patents No. 5,982,889 (the “'889 patent”) and No. 6,173,403 (the “'403 patent”) (collectively, the “patents-at-issue”) and determining that claims 1–4 of the '889 patent and claims 1–12 and 17–19 of the '403 patent were invalid. See Apple Inc. v. Achates Reference Publ'g, Inc., IPR2013–00081, 2014 WL 2530789 (P.T.A.B. June 2, 2014) (“'889 final written decision”); Apple Inc. v. Achates Reference Publ'g, Inc., IPR2013–00080, 2014 WL 2530788 (P.T.A.B. June 2, 2014) (“'403 final written decision”). Achates contends that the Board's decisions were outside of the Board's statutory authority because the underlying petitions for IPR were time-barred under 35 U.S.C. § 315(b). As part of its appeal, Achates also challenges the Board's denial of Achates' motion for discovery. See Apple Inc. v. Achates Reference Publ'g, Inc., 2013 WL 6514049 (P.T.A.B. Apr. 3, 2013) (“Discovery Decision”). Because the Board's determinations to institute IPRs in this case are final and nonappealable under 35 U.S.C. § 314(d), this court lacks jurisdiction and dismisses the appeals.

I. Background

On June 20, 2011, Achates sued QuickOffice, Inc. (“QuickOffice”) along with certain other parties (collectively, the “codefendants”) in district court for infringing the patents-at-issue. See Complaint, Achates Reference Publ'g, Inc. v. Symantec Corp., No. 2:11–cv–00294, 2011 WL 2563126 (E.D.Tex. June 20, 2011), ECF No. 1. One year later, Achates joined Apple in the suit and alleged that it also infringed the patents. See Amended Complaint, Achates Reference Publ'g, Inc. v. Symantec Corp., No. 2:11–cv–00294 (E.D.Tex. June 20, 2012), ECF No. 176. On December 14, 2012, Apple filed petitions for IPR in the United States Patent and Trademark Office (“Patent and Trademark Office”) against each of the patents-at-issue. See '889 final written decision, at *5; '403 final written decision, at *5.

Achates, in responding to the petitions, contended that, based on a blank indemnification agreement, Apple had a relationship with QuickOffice (and maybe other codefendants as well) and that such relationship caused Apple's petitions for IPR to be time-barred under 35 U.S.C. § 315(b). That section states:

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

35 U.S.C. § 315(b). To support its contention, Achates moved for discovery of evidence to prove Apple's specific relationships with the codefendants. The Board denied that motion, finding no basis to believe that even if the blank indemnification agreement had been signed, it would show QuickOffice or any other codefendants to be real parties in interest or in privity with Apple as those terms are used in § 315(b). See Discovery Decision at *1.

The Board found that none of the codefendants were real parties in interest or privies of Apple. Specifically, the Board concluded that there was no evidence that any of the codefendants had “the right to intervene or control Petitioner's defense to any charge of patent infringement” and that Apple and codefendants had “distinct interests in the related [district court] litigation.” See Apple Inc. v. Achates Reference Publ'g, Inc., 2013 WL 8595560, at *9 (P.T.A.B. June 3, 2013) (the “'889 institution decision”); Apple Inc. v. Achates Reference Publ'g, Inc., 2013 WL 8595559, at *10 (P.T.A.B. June 3, 2013) (the “'403 institution decision”). Accordingly, the Board, acting as the Director's delegee, instituted IPR proceedings for both patents.

During the merits phase of the IPRs, Achates continued to argue that Apple's petitions were time-barred under § 315(b). In its final written decisions, the Board reaffirmed its earlier decisions that the IPR proceedings were not time-barred. '889 final written decision at *7; '403 final written decision at *8. The Board ultimately invalidated all the challenged claims as either anticipated and/or obvious. See '889 final written decision at *24; '403 final written decision at *29.

On appeal, Achates challenges the Board's final written decisions, arguing that the Board erred in denying its motions for discovery and in concluding that Apple's petitions were not time-barred under § 315(b). Achates does not appeal the Board's substantive decisions that the challenged claims are invalid. Apple counters Achates' arguments and asserts that because the question of whether the petitions were time-barred goes to the propriety of the decision to initiate the IPR, this court lacks jurisdiction over the appeal under § 314(d). In the alternative, Apple argues that the Board's decisions should be affirmed on the merits.

II. Discussion

A. The Statutory Background

In 2011, Congress amended title 35 of the United States Code to create IPR, post-grant review (“PGR”) and covered business method review (“CBMR”) proceedings. See 35 U.S.C. §§ 311 –319(IPR) ; Id. at §§ 321–329(PGR); Leahy–Smith America Invents Act (“AIA”) § 18, Pub.L. No. 112–29, 125 Stat. 284, 329–31 (2011) (CBMR). CBMR proceedings are “regarded as, and ... employ the standards and procedures of, a [PGR] under chapter 32 [§§ 321–329] of title 35, United States Code, subject to” certain exceptions not relevant here. AIA § 18(a)(1).

Both IPR and CBMR proceed in two stages. In the first stage, the Director determines whether to institute IPR or CBMR. By regulation, “[t]he Board institutes the trial on behalf of the Director.” 37 C.F.R. § 42.4 ; see also 37 C.F.R. §§ 42.100(a) (explaining that IPR proceedings are subject to these trial procedures); 42.300(a) (same for CBMR). In the second phase, the Board conducts the IPR or CBMR proceedings on the merits and issues a final written decision.

Based on the petitions and any responses, the Board decides whether there are sufficient grounds to institute the proceedings—in IPR petitions there must be a “reasonable likelihood” that the petition will prevail, 35 U.S.C. § 314(a), and in CBMR petitions it must be “more likely than not,” 35 U.S.C. § 324(a). An IPR proceeding “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” § 315(b). No analogous time-bar exists for CBMR proceedings. IPR proceedings are not limited to specific types of patents. On the other hand, CBMR proceedings are only permitted “for a patent that is a covered business method patent.” AIA § 18(a)(1)(E). Importantly, identically worded statutory provisions make explicit that “[t]he determination by the Director whether to institute [IPR or CBMR] under th[ese] section[s] shall be final and nonappealable.” See § 314(d) and § 324(e), respectively.

If a proceeding is instituted, the Board considers the merits and “issue[s] a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added” during the proceedings. 35 U.S.C. §§ 318(a)(IPR), 328(a) (CBMR). “[P]art[ies] dissatisfied with the final written decision of the Patent Trial and Appeal Board under section [s] [318(a) or 328(a) ] may appeal the decision pursuant to sections 141 through 144.” Id. §§ 319(IPR), 329 (CBMR). Sections 141 through 144 of title 35 generally explain that Board decisions are appealable to this court. Of particular relevance, 35 U.S.C. § 141(c) states, with emphasis added:

A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318(a) or 328(a) (as the case may be) may appeal the Board's decision only to the United States Court of Appeals for the Federal Circuit.

B. This Court's Precedent

This court first addressed the reviewability of a Board decision not to institute an IPR in St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed.Cir.2014). In that case, the court recognized that “the [IPR] statute separates the Director's decision to ‘institute’ the review, § 314, on one hand, from the Board's ‘conduct’ of the review ‘instituted’ by the Director, § 316(c), and the Board's subsequent ‘written decision,’ § 318, on the other.” Id. at 1375. Because the Director's decision not to institute an IPR was not a “final written decision” under § 318(a), it was held not within this court's statutory grant of authority to review under §§ 141(c) or 318(a). See id. Moreover, the court held that the appeal of the non-institution decision was within the...