Recent Federal Circuit Decision Suggests Patent Challengers Cannot Invoke Arthrex

A recent decision by the US Court of Appeals for the Federal Circuit suggests that petitioners who unsuccessfully challenge patents in an inter partes review (IPR) at the Patent Trial and Appeal Board (PTAB) cannot rely on Arthrex—which held that PTAB administrative patent judges (APJs) were not constitutionally appointed—to gain another hearing before a newly appointed panel of APJs.

On January 28, in Ciena Corp. v. Oyster Optics, LLC,[1] the Federal Circuit denied a motion to vacate and remand the PTAB’s IPR decision. Petitioner Ciena had challenged the patent at the PTAB after being sued by Oyster for patent infringement in district court. The PTAB instituted an IPR, but ultimately determined that the challenged claims were not unpatentable.

Ciena appealed, claiming that because the decision had been rendered under a system for appointing APJs, which Arthrex had held was unconstitutional, Ciena was entitled to a remand for a new hearing on the merits in front of a new panel of PTAB APJs.[2]

The Federal Circuit disagreed, reasoning that, as the petitioner, Ciena should have known of the structural defect addressed in Arthrex, and thus had forfeited any structural challenges to the IPR proceedings.[3] In other words, Ciena’s decision to avail itself of the IPR process amounted to a waiver of any argument that the appointment of the original panel of APJs was unconstitutional. The Federal Circuit then found no other reason that it should otherwise intervene to address any issues of constitutionality, in part because Arthrex had already “remedied the structural defect” by severing the portion of the statute that provided removal productions to APJs.[4] The rest of Ciena’s appeal, however, will continue.[5]

In another pending case that bears on the ability of patent challengers to assert Arthrex, United Fire Protections Corp. v. Engineered Corrosion Solutions, LLC,[6] the US Patent and Trademark Office (USPTO), as intervenor, is urging the Federal Circuit to deny an appeal from a petitioner attempting to bring an Arthrex challenge against the PTAB’s decision not to institute an IPR. In its recently filed brief, the USPTO argued that “[t]he determination by the Director whether to institute an [IPR] under this section is final and nonappealable,” and even if it were not, under Ciena, the petitioner has forfeited any Arthrex complaints about the process.[7]

While the post-Arthrex landscape is still evolving, and the Federal Circuit will have the final word on United Fire Protections Corp., these early indications suggest that Arthrex remedies may be limited to patent owners and not petitioners.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact the authors, Dion M. Bregman (Silicon Valley) and Lindsey M. Shinn (San Francisco), or any of the following lawyers from Morgan Lewis’s post-grant proceedings team:

Boston
Joshua M. Dalton

Century City
Andrew V. Devkar

Chicago
Jason C. White

Houston
C. Erik Hawes
Rick L. Rambo

Philadelphia
Louis W. Beardell, Jr.

San Francisco
Brent A. Hawkins

Silicon Valley
Andrew J. Gray IV
Michael J. Lyons

Washington, DC
Jeffrey G. Killian, Ph.D.
Robert Smyth, Ph.D.