St. Jude Medical v. Volcano: No Appeals of Denials to Institute Inter Partes Review

 By: Jesus Hernandez, Blog Editor/Contributor 
TitleSt. Jude Medical v. Volcano Corp., No. 2014-1183 (Fed. Cir. April 24, 2014).
IssueSt. Jude has appealed the Director’s decision not to institute an inter partes review, asserting that this court has subject matter jurisdiction under 28 U.S.C. § 1295 and that 35 U.S.C. § 314(d) does not bar this court’s immediate review of the Director’s decision.
St. Jude Medical at *4.
HoldingWe hold that we may not hear St. Jude’s appeal from the Director’s denial of the petition for inter partes review. We base that conclusion on the structure of the inter partes review provisions [which only permit appeal of written decisions], on the language of section 314(d) within that structure [which distinguishes the standard for conducting a review from the standard for issuing a ‘written decision’], and on our jurisdictional statute read in light of those provisions [which permit appeal only of 'instituted' reviews].
Id. at *4 (text added).
Procedural HistorySt. Jude Medical, Cardiology Division, Inc., petitioned the Director of the United States Patent & Trademark Office to institute an inter partes review of a patent owned by Volcano Corporation. The Director, through her delegee, denied the petition. St. Jude appealed the non- institution decision to this court. Volcano and the Director now move to dismiss.
St. Jude Medical at *2.
Legal Reasoning (O’Malley, Prost, Taranto)
DismissalSix months after […] dismissal [from litigation before the D. Del.], on April 30, 2013, St. Jude filed a petition for inter partes review of the ’994 patent. The Director, through the Board as her delegee, denied the petition. The Board explained that a counter- claim alleging infringement constitutes a “complaint alleging infringement of the patent” within the meaning of section 315(b), which bars institution of an inter partes review of a patent if the petitioner was served with a complaint alleging infringement of the patent more than one year before filing the petition.
St. Jude Medical at *3-4 (text added).
Legal Standard: Dismissal of Inter Partes Review RequestSection 314(d), entitled “No Appeal,” [states]: “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Id. § 314(d). The “conduct” of an inter partes review follows its “institution,” and the Patent Trial and Appeal Board is the one to “conduct each inter partes review instituted under” chapter 31. Id. § 316(c). Unless the review is dismissed, the Board “shall issue a final written decision,” determining “the patentability of any patent claim challenged by the petitioner and any new claim added” during the review under section 316. Id. § 318(a). The final written decision is the only decision that the statute authorizes a dissatisfied party to appeal to this court. Section 319 states that “[a] party dissatisfied with the final written decision of the [Board] under section 318(a) may appeal the decision pursuant to sections 141 through 144.” Id. § 319. Section 141(c) states that “[a] party to an inter partes review . . . dissatisfied with the final written decision of the [Board] under section 318(a) . . . may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.” Id. § 141(c).
Id. at *2-3 (text added).
Inter Partes Review ProvisionsChapter 31 authorizes appeals to this court only from “the final written decision of the [Board] under section 318(a).” Id. § 319. Likewise, section 141(c) in relevant part authorizes appeal only by “a party to an inter partes review . . . who is dissatisfied with the final written decision of the [Board] under section 318(a).” Id. § 141(c). What St. Jude now challenges, however, is the Director’s non-institution decision under section 314(a) & (b). That is not a “final written decision” of the Board under section 318(a), and the statutory provisions addressing inter partes review contain no authorization to appeal a non-institution decision to this court.
St. Jude Medical at *4.
Language of section 314(d)The statute separates the Director’s decision to “institute” the review, § 314, on one hand, from the Board’s “conduct” of the review “instituted” by the Director, § 316(c), and the Board’s subsequent “written decision,” § 318, on the other. And it applies one standard—based on “reasonable likelihood” of success—to the Director’s decision to institute, § 314(a), and another standard— based on “patentability”—to the Board’s decision on the merits, § 318(a). The statute thus establishes a two-step procedure for inter partes review: the Director’s decision whether to institute a proceeding, followed (if the proceeding is instituted) by the Board’s conduct of the proceeding and decision with respect to patentability. […] The statute provides for an appeal to this court only of the Board’s decision at the second step, not the Director’s decision at the first step.
Id. at *4-5.
Interpretation of Jurisdictional StatuteThe chapter 31 provisions, together with section 141(c), make clear that we lack jurisdiction. The statutory grant of subject matter jurisdiction that St. Jude identifies, 28 U.S.C. § 1295(a)(4)(A), authorizes this court to hear “an appeal from a decision of the Patent Trial and Appeal Board of the United States Patent and Trademark Office with respect to a[n] . . . inter partes review under title 35.” That provision is most naturally read to refer precisely to the Board’s decision under section 318(a) on the merits of the inter partes review, after it “conducts” the proceeding that the Director has “instituted.”
Id. at *5-6.
IT IS ORDERED THAT:(1) The motions to dismiss are granted. (2) Each side shall bear its own costs.
St. Jude Medical at *6.
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