SAS Inst. Inc. v. Iancu
| Decision Date | 24 April 2018 |
| Docket Number | No. 16–969.,16–969. |
| Citation | 138 S.Ct. 1348,200 L.Ed.2d 695 |
| Parties | SAS INSTITUTE INC., Petitioner v. Andrei IANCU, as Director, United States Patent and Trademark Office, et al. |
| Court | U.S. Supreme Court |
Gregory A. Castanias, Washington, DC, for Petitioner.
Jonathan C. Bond, Washington, DC, for Respondents.
Michael Kanovitz, Matthew V. Topic, Loevy & Loevy, Chicago, IL, for Respondent ComplementSoft, LLC.
John A. Marlott, Jones Day, Chicago, IL, David B. Cochran, Jones Day, Cleveland, OH, Gregory A. Castanias, Jones Day, Washington, DC, for Petitioner.
Nathan K. Kelley, Solicitor, Thomas W. Krause, Deputy Solicitor, Joseph G. Piccolo, Robert J. McManus, Associate Solicitors, United States Patent and Trademark Office, Alexandria, VA, Jeffrey B. Wall, Acting Solicitor General, Malcolm L. Stewart, Deputy Solicitor General, Jonathan C. Bond, Assistant to the Solicitor General, Mark R. Freeman, Joshua M. Salzman, Attorneys, Department of Justice, Washington, DC, for Federal Respondent.
A few years ago Congress created "inter partes review." The new procedure allows private parties to challenge previously issued patent claims in an adversarial process before the Patent Office that mimics civil litigation. Recently, the Court upheld the inter partes review statute against a constitutional challenge. Oil States Energy Services, LLC v. Greene's Energy Group, LLC, ––– U.S. ––––, ––––, 138 S.Ct. 1365, ––––, ––– L.Ed.2d ––––, ante, p. ––– –. Now we take up a question concerning the statute's operation. When the Patent Office initiates an inter partes review, must it resolve all of the claims in the case, or may it choose to limit its review to only some of them? The statute, we find, supplies a clear answer: the Patent Office must "issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." 35 U.S.C. § 318(a) (emphasis added). In this context, as in so many others, "any" means "every." The agency cannot curate the claims at issue but must decide them all.
"To promote the Progress of Science and useful Arts," Congress long ago created a patent system granting inventors rights over the manufacture, sale, and use of their inventions. U.S. Const., Art. I, § 8, cl. 8 ; see 35 U.S.C. § 154(a)(1). To win a patent, an applicant must (among other things) file "claims" that describe the invention and establish to the satisfaction of the Patent Office the invention's novelty and nonobviousness. See §§ 102, 103, 112(b), 131; Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ––––, –––– – ––––, 136 S.Ct. 2131, 2136–2137, 195 L.Ed.2d 423 (2016).
Sometimes, though, bad patents slip through. Maybe the invention wasn't novel, or maybe it was obvious all along, and the patent owner shouldn't enjoy the special privileges it has received. To remedy these sorts of problems, Congress has long permitted parties to challenge the validity of patent claims in federal court. See §§ 282(b)(2)–(3). More recently, Congress has supplemented litigation with various administrative remedies. The first of these was ex parte reexamination. Anyone, including the Director of the Patent Office, can seek ex parte reexamination of a patent claim. §§ 302, 303(a). Once instituted, though, an ex parte reexamination follows essentially the same inquisitorial process between patent owner and examiner as the initial Patent Office examination. § 305. Later, Congress supplemented ex parte reexamination with inter partes reexamination. Inter partes reexamination (since repealed) provided a slightly more adversarial process, allowing a third party challenger to submit comments throughout the proceeding. § 314(b)(2) (2006 ed.) (repealed). But otherwise it too followed a more or less inquisitorial course led by the Patent Office. § 314(a). Apparently unsatisfied with this approach, in 2011 Congress repealed inter partes reexamination and replaced it with inter partes review. See 35 U.S.C. §§ 311 – 319 (2012 ed.).
The new inter partes review regime looks a good deal more like civil litigation. At its outset, a party must file "a petition to institute an inter partes review of [a] patent." § 311(a). The petition "may request to cancel as unpatentable 1 or more claims of [the] patent" on the ground that the claims are obvious or not novel. § 311(b) ; see §§ 102 and 103. In doing so, the petition must identify "each claim challenged," the grounds for the challenge, and the evidence supporting the challenge. § 312(a)(3). The patent owner, in turn, may respond with "a preliminary response to the petition" explaining "why no inter partes review should be instituted." § 313. With the parties' submissions before him, the Director then decides "whether to institute an inter partes review ... pursuant to [the] petition." § 314(b). (In practice, the agency's Patent Trial and Appeal Board exercises this authority on behalf of the Director, see 37 C.F.R. § 42.4(a) (2017).) Before instituting review, the Director must determine, based on the parties' papers, "that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition." 35 U.S.C. § 314(a).
Once the Director institutes an inter partes review, the matter proceeds before the Board with many of the usual trappings of litigation. The parties conduct discovery and join issue in briefing and at an oral hearing. §§ 316(a)(5), (6), (8), (10), (13). During the course of the case, the patent owner may seek to amend its patent or to cancel one or more of its claims. § 316(d). The parties may also settle their differences and seek to end the review. § 317. But "[i]f an inter partes review is instituted and not dismissed," at the end of the litigation the Board "shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner." § 318(a).
Our case arose when SAS sought an inter partes review of ComplementSoft's software patent. In its petition, SAS alleged that all 16 of the patent's claims were unpatentable for various reasons. The Director (in truth the Board acting on the Director's behalf) concluded that SAS was likely to succeed with respect to at least one of the claims and that an inter partes review was therefore warranted. But instead of instituting review on all of the claims challenged in the petition, the Director instituted review on only some (claims 1 and 3–10) and denied review on the rest. The Director did all this on the strength of a Patent Office regulation that purported to recognize a power of "partial institution," claiming that "[w]hen instituting inter partes review, the [Director] may authorize the review to proceed on all or some of the challenged claims and on all or some or the grounds of unpatentability asserted for each claim." 37 C.F.R. § 42.108(a). At the end of litigation, the Board issued a final written decision finding claims 1, 3, and 5–10 to be unpatentable while upholding claim 4. But the Board's decision did not address the remaining claims on which the Director had refused review.
That last fact led SAS to seek review in the Federal Circuit. There SAS argued that 35 U.S.C. § 318(a) required the Board to decide the patentability of every claim SAS challenged in its petition, not just some. For its part, the Federal Circuit rejected SAS's argument over a vigorous dissent by Judge Newman. SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341 (2016). We granted certiorari to decide the question ourselves. 581 U.S. ––––, 137 S.Ct. 2160, 198 L.Ed.2d 230 (2017).
We find that the plain text of § 318(a) supplies a ready answer. It directs that "[i]f an inter partes review is instituted and not dismissed under this chapter, the [Board] shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner ...." § 318(a) (emphasis added). This directive is both mandatory and comprehensive. The word "shall" generally imposes a nondiscretionary duty. See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35, 118 S.Ct. 956, 140 L.Ed.2d 62 (1998). And the word "any" naturally carries "an expansive meaning." United States v. Gonzales, 520 U.S. 1, 5, 117 S.Ct. 1032, 137 L.Ed.2d 132 (1997). When used (as here) with a "singular noun in affirmative contexts," the word "any" ordinarily "refer[s] to a member of a particular group or class without distinction or limitation" and in this way "impl[ies] every member of the class or group." Oxford English Dictionary (3d ed., Mar. 2016), www.oed.com/view/Entry/8973 (OED) (emphasis added) (all Internet materials as last visited Apr. 20, 2018). So when § 318(a) says the Board's final written decision "shall" resolve the patentability of "any patent claim challenged by the petitioner," it means the Board must address every claim the petitioner has challenged.
That would seem to make this an easy case. Where a statute's language carries a plain meaning, the duty of an administrative agency is to follow its commands as written, not to supplant those commands with others it may prefer. Social Security Bd. v. Nierotko, 327 U.S. 358, 369, 66 S.Ct. 637, 90 L.Ed. 718 (1946). Because SAS challenged all 16 claims of ComplementSoft's patent, the Board in its final written decision had to address the patentability of all 16 claims. Much as in the civil litigation system it mimics, in an inter partes review the petitioner is master of its complaint and normally entitled to judgment on all of the claims it raises, not just those the decisionmaker might wish to address.
The Director replies that things are not quite as simple as they seem. Maybe the Board has to decide every claim challenged by the petitioner in an inter partes review. But, he says, that doesn't mean every challenged claim gains admission to the review process. In the Director's view, he retains discretion to...
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