SAS Institute Inc. v. Iancu

SAS Institute versus Iancu, decided April 24th, 2018. By a vote of five to four, in an opinion by Justice Gorsuch, the Supreme Court reversed the Federal Circuit and held that when the Patent Office institutes an inter partes review, it must decide the patentability of every claim the petitioner has challenged — not only the claims the agency chooses to take up. The statute leaves no room for the Patent Office's practice of partial institution. Here's the brief.

SAS Institute petitioned for inter partes review of a software patent owned by ComplementSoft, alleging that all sixteen of the patent's claims were unpatentable. The Director of the Patent Office concluded that SAS was likely to prevail on at least one claim and that review was therefore warranted. But instead of taking up all sixteen claims, the Director instituted review on only some — claims one and three through ten — and denied review on the rest. He did so under a Patent Office regulation that recognized a power of partial institution, allowing review to proceed on all or some of the challenged claims.

At the end of the proceeding, the Patent Trial and Appeal Board issued a final written decision addressing only the instituted claims. It said nothing about the claims the Director had refused to review. SAS appealed, arguing that the statute required the Board to decide the patentability of every claim it had challenged. The Federal Circuit rejected that argument, over a vigorous dissent by Judge Newman. The Supreme Court granted cert to decide the question itself.

The question was narrow: when the Patent Office institutes an inter partes review, must it resolve every claim the petitioner challenged, or may it review only some?

The answer turned on a single sentence. Section 318(a) provides that if an inter partes review is instituted and not dismissed, the Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner. Two words did the work. "Shall," the Court explained, generally imposes a nondiscretionary duty. And "any," used with a singular noun in an affirmative context, carries an expansive meaning — it implies every member of the class. The asserted partial-institution power appeared nowhere in that text.

The Court held that the plain text of section 318(a) supplied the answer.

The directive was both mandatory and comprehensive, the Court reasoned, so the Board had to address every claim the petitioner raised. Because SAS challenged all sixteen claims, the Board had to decide all sixteen.

The statute's structure reinforced its text. Congress built inter partes review to be guided by the petition: the petitioner, not the Director, defines the contours of the proceeding.

The Director's choice at institution, the Court noted, is a binary one — whether to institute review pursuant to the petition, not whether and to what extent. When Congress wanted to authorize claim-by-claim, agency-led review, as in the ex parte reexamination statute, it knew how to say so.

The Director's remaining arguments fell to the text. His policy case for partial institution — that it lets the Board focus on the most promising challenges — was for Congress to weigh, not the Court.

And because traditional tools of interpretation resolved the meaning, the Court owed the agency no Chevron deference; nor did section 314(a)'s bar on appealing institution decisions foreclose review of whether the Director had exceeded his statutory authority.

Justice Ginsburg dissented, joined by Justices Breyer, Sotomayor, and Kagan; she suggested the Board could still decline an overbroad petition and invite a narrower one — what she called a more rational way to weed out insubstantial challenges. Justice Breyer also dissented, and would have found the statute ambiguous and deferred to the Patent Office's reasonable reading under Chevron.

SAS Institute ended the practice of partial institution. It stands for a straightforward proposition: in an inter partes review, the petition defines the proceeding from institution through final decision, and the Board must decide the patentability of every claim the petitioner challenged — all of them, or none.

SAS Institute versus Iancu, 584 U.S. 357, decided April 24th, 2018. I'm Kyle Coleman. Thanks for watching.