PTAB Practice after SAS Institute v. Iancu

For its first six years, the Patent Trial and Appeal Board often instituted inter partes review on only some of the challenged claims, or on only some of the grounds. A petition might challenge twenty claims on five grounds, and the Board would institute trial on eight claims and two grounds. The rest of the petition dropped out.

The Supreme Court ended that practice in 2018. The change reshaped how the Board handles institution and how estoppel works after a final decision.

What SAS held

In SAS Institute Inc. v. Iancu (2018), the petitioner challenged all sixteen claims of a patent, and the Board instituted review on only some of them. The final written decision addressed only the instituted claims.

The Supreme Court held that this was not permitted. The statute, 35 U.S.C. § 318(a), directs the Board to issue a final written decision on the patentability of any patent claim challenged by the petitioner. Reading that language together with § 314(a), the Court concluded that the petitioner, not the Director, defines the scope of the trial through its petition. The Director has discretion whether to institute, but once review is instituted, it must cover every claim the petition challenges. There is no partial institution.

The USPTO’s response

Within days of the decision, the USPTO issued guidance stating that the Board would institute as to all challenged claims and all grounds presented in the petition, or not at all. Pending trials that had been partially instituted were handled by supplementing the institution decision to add the omitted claims and grounds, often with adjustments to the schedule.

The Office later codified the all-or-nothing approach in a late-2020 final rule, effective in early 2021, which amended 37 C.F.R. § 42.108 to provide that institution covers all challenged claims and all grounds of unpatentability asserted for each claim. The rule’s broader effects on the trial rules are discussed in how the PTAB trial rules have changed since 2012.

Effects on institution decisions

Because the Board can no longer trim a petition, the institution decision became more binary. Some consequences:

• Discretion at the front end. The Board’s discretion under § 314(a) to deny institution became the main tool for managing petitions. Where only a small part of a petition meets the threshold, the Board may consider that in deciding whether instituting a full trial is an efficient use of resources. See the different threshold standards.
• Weak grounds travel with strong ones. If any claim meets the reasonable-likelihood standard and the Board institutes, all grounds come along, including weaker ones the Board would previously have excluded.
• Fuller final decisions. Final written decisions address every challenged claim, which gives the parties and courts a complete record.

Discretionary-denial practice has continued to change since 2018, so current USPTO guidance should be checked.

Effects on estoppel

Partial institution had created a gap in estoppel. Under 35 U.S.C. § 315(e), after a final written decision the petitioner is estopped from asserting invalidity on grounds it raised or reasonably could have raised during the IPR. In Shaw Industries Group, Inc. v. Automated Creel Systems, Inc. (Fed. Cir. 2016), the Federal Circuit held that grounds the Board declined to institute were not raised, and could not reasonably have been raised, “during” the review, so estoppel did not attach to them.

After SAS, that gap largely closed. Every ground in an instituted petition is part of the trial and is addressed in the final decision. Petitioners who lose can expect estoppel to reach all of the grounds they asserted, and the Federal Circuit has since read estoppel to also cover grounds that could reasonably have been included in the petition. The details are covered in estoppel arising from PTAB trials.

What petitioners and patent owners consider now

• Petitioners have reason to focus petitions on their strongest grounds, since every asserted ground will be decided and will carry estoppel.
• Patent owners have reason to address every claim and ground in the preliminary response, since a single strong ground can bring the whole petition into trial.
• Both should treat the institution decision as the key gate: there is no longer a middle outcome.

Key takeaways

• SAS Institute Inc. v. Iancu (2018) held that an instituted IPR must decide every claim the petitioner challenged.
• The USPTO now institutes on all claims and all grounds, or none, and codified this in 37 C.F.R. § 42.108.
• The Board’s discretion over whether to institute at all became more important.
• Estoppel now reaches every ground in an instituted petition, closing the gap left by Shaw Industries.