Apple Inc. v. Iancu

Background

The Leahy-Smith America Invents Act allows a party to ask the Patent and Trademark Office to review claims in an issued patent through a process called inter partes review, or IPR. The Patent Trial and Appeal Board decides whether to begin that review. The Act states that the Director’s decision whether to institute IPR is final and not appealable, while allowing judicial review of a final written decision concerning patentability.

The plaintiffs challenged two precedential Board decisions: NHK Spring Co., Ltd. v. Intri-Plex Technologies, Inc. and Apple Inc. v. Fintiv, Inc. Together, those decisions established the NHK-Fintiv rule, which identifies six factors the Board may weigh when deciding whether to institute IPR during parallel district-court litigation. The plaintiffs alleged that the rule exceeded the Director’s statutory authority, was arbitrary and capricious and inconsistent with the America Invents Act, and was adopted without required public notice and comment. They brought all three claims under the Administrative Procedure Act.

The defendant moved to dismiss under Federal Rule of Civil Procedure 12(b)(1), which permits dismissal for lack of subject-matter jurisdiction. The plaintiffs moved for summary judgment. The court stated that it would reach only the motion to dismiss.

Standing

The court rejected the defendant’s argument that the plaintiffs lacked standing. Standing is the requirement that a plaintiff show a concrete injury, a connection between that injury and the challenged conduct, and a likely remedy from a favorable decision.

The plaintiffs did not claim that they had a guaranteed right to IPR. Instead, they alleged that applying the NHK-Fintiv rule unlawfully increased the risk that their IPR petitions would be denied and deprived them of the benefits of IPR. The court held that this alleged lost opportunity or substantial risk of harm was enough to establish an injury in fact. It also held that the plaintiffs satisfied the requirements of causation and redressability because the alleged harm was connected to the rule and an injunction could prevent its use.

Judicial Review and Jurisdiction

The court then considered whether the challenge was legally reviewable. The Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee held that challenges closely tied to the Director’s decision to institute IPR may be barred from judicial review under 35 U.S.C. § 314(d). The Supreme Court later held in Thryv, Inc. v. Click-To-Call Technologies that the Director’s application of the IPR time bar was also closely related to institution and therefore not reviewable.

The court concluded that the NHK-Fintiv rule establishes factors closely related to the decision whether to institute IPR. Reviewing the plaintiffs’ challenge would require examining the application and interpretation of statutes related to that institution decision. Relying on Cuozzo and Thryv, the court held that 35 U.S.C. § 314(d) barred judicial review of the challenge.

Disposition

The court GRANTED the defendant’s motion to dismiss for lack of subject-matter jurisdiction. It TERMINATED the plaintiffs’ motion for summary judgment and directed the clerk to close the file. Judge Edward J. Davila did not decide whether the NHK-Fintiv rule violated the Administrative Procedure Act.