SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018), established a clear rule requiring institution on all challenged claims in future IPR proceedings. But the Supreme Court’s April 24 decision created immediate uncertainty regarding the hundreds of IPRs in which the PTAB had already instituted review or issued a final written decision on fewer than all claims and all grounds presented in the petition. The Federal Circuit’s immediately apparent interest in SAS transitional issues has led to swift action—the court’s precedential decision in PGS Geophysical AS v. Iancu explains that (1) SAS requires institution on all claims and all grounds presented in a petition for IPR, (2) the Federal Circuit can exercise appellate jurisdiction in pre-SAS cases where the Board granted only partial institution, and (3) parties can waive requests for SAS-based relief on appeal.
PGS Geophysical concerned three IPRs challenging U.S. Patent 6,906,981. The PTAB did not institute on all claims or all grounds presented in the underlying petitions, consistent with its pre-SAS partial institution practices. The PTAB issued mixed final written decisions, upholding some of the challenged claims and canceling others as unpatentable over the asserted prior art. The patent owner appealed as to a subset of the challenged claims, the petitioner settled and withdrew from the appeal, and the Director of the PTO intervened to defend the PTAB’s judgment.
On the first issue, the Federal Circuit concluded that equal treatment of claims and grounds for institution purposes “has pervasive support in SAS.” The court highlighted the Supreme Court’s broad view of the petition’s role in defining the scope of an IPR and concluded that SAS requires “a simple yes-or-no institution choice respecting a petition, embracing all challenges included in the petition.” Accordingly, the PTAB violated SAS in all three IPRs at issue, including those in which the PTAB instituted on all challenged claims but not all grounds raised in the petition.
Second, the existence of non-instituted claims and grounds did not deprive the Federal Circuit of appellate jurisdiction. The Federal Circuit’s jurisdiction requires finality under 28 U.S.C. § 1295 and the Administrative Procedure Act, and the PTAB’s decisions were final—even if erroneous—because they terminated the IPR proceedings as to all claims and grounds at issue. The court drew parallels with a court incorrectly dismissing one count in a two-count complaint during civil litigation. There, the court’s judgment becomes final upon resolving the second count, despite its earlier error, with both counts subject to appeal. In the Federal Circuit’s view, the same principles apply to partial institution in a completed IPR.
Third, the Federal Circuit held that it could resolve the appeal without reopening the non-instituted claims and grounds because no party sought SAS-based relief. The PTAB’s pre-SAS partial institution decisions constitute waivable error, and the Federal Circuit need not act on such errors absent an “appropriate request for relief on that basis.” The court was careful to specify that it did not decide what relief should follow when a party affirmatively requests relief under SAS from a partial institution decision.
On the merits, the court affirmed the PTAB’s obviousness rulings on the narrow factual issues raised by the patent owner.
PGS Geophysical resolves several key issues that will set the ground rules for the glut of appeals from pre-SAS IPR decisions that must now work their way through the system. Importantly, parties to such appeals now have clear notice that an “appropriate request for relief” will be required to pursue a SAS-based remand to revisit claims or grounds omitted from pre-SAS institution decisions.