This shouldn’t be a surprise—four years ago, in Cuozzo Speed, the Court held much the same, saying that courts could not review determinations to institute based on alleged violations of “this section” of the U.S. Code. It left open the possibility of review based on violations of the Constitution or of the Administrative Procedure Act, or of the Patent Office acting in ways plainly contrary to the statute.
By contrast, in Thryv the Patent Office had taken a reasonable interpretation of the statute—indeed, an interpretation that had previously been repeatedly upheld by panels of the Federal Circuit. . In that circumstance, the Supreme Court has laid to rest the idea that an appeal of institution is permitted.
This shouldn’t be surprising. If the problem is the rule that the Patent Office is applying, it should have been challenged when the rule was made—and if the rule was never promulgated in the first place, then challenges under the APA remain available. (In fact, a recent Federal Circuit opinion suggested that all PTO procedural rules not made via notice-and-comment are illegitimate.)
And if the problem is that the rule is right, but was misapplied by the panel, then the harm is already experienced and impossible to mitigate by the time appeal rolls around. Dismissing the invalidation of an invalid patent just because of a procedural defect at institution only creates more harm by leaving an invalid patent around.
And the ultimate determination that a patent is invalid is still reviewable, meaning that a valid patent will still survive even if the threshold determination of institution is in error. That is, effectively, a harmless error—the only loss the patent owner experiences is the cost of defending their patent, a cost they’d have incurred anyway in asserting it. While that kind of expense is important, the expenses other parties incur in defending themselves against invalid patents are as well—expenses that inter partes review helps reduce.
There are sure to be concerns that the Patent Office could now do whatever it wants without any possibility of review. But if the Office truly exceeds the statute—not adopts an interpretation that is reasonable given panel decisions, even if eventually overturned en banc—remedies remain. For egregious violations, the Court leaves open the possibility of mandamus. And for actions that are arbitrary and capricious, or which violate due process, or which are clearly outside the permissible bounds of the statute, such as institution of an IPR based on § 112, review remains possible.
The Court simply held that, as it said four years ago, the statute doesn’t generally permit review of a decision to take a case long after the case is already decided.