In the wake of SAS Institute v. Iancu, the PTAB has sometimes expanded pending IPRs to include previously un-instituted grounds. But can the PTAB rely on SAS to retroactively deny institution? A recent decision says yes, in at least some circumstances. And while the facts of this case are unusual, it nevertheless demonstrates that petitioners should be cautious when relying on SAS to try to induce the PTAB to reconsider grounds that it didn’t originally find persuasive.
In BioDelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc. f/k/a MonoSol Rx LLC , the PTAB instituted trial on only a subset of claims from one out of seven grounds, and later upheld the challenged claims in its final written decision. SAS was decided while BioDelivery’s appeal was pending, so BioDelivery asked the Federal Circuit to remand to the PTAB to reconsider the non-instituted grounds. The Federal Circuit agreed, over the patent owner’s and USPTO’s objections. On remand, however, the PTAB asked for briefing on why it should not simply vacate the prior institution decision and deny institution altogether.
BioDelivery raised a number of arguments, all ultimately unsuccessful. For example, it argued that the PTAB lacked authority to reconsider institution under the no-appeal provision in 35 U.S.C. § 314(d). In response, the PTAB noted that the statutes and regulations governing IPRs permit the PTAB itself to reconsider its own institution decisions. BioDelivery also cited a number of post-SAS cases where the Board had expanded pending trials to include non-instituted grounds. The PTAB distinguished those cases on their facts, noting that in those cases, a significant portion of the original grounds had been instituted, whereas only one of BioDelivery’s seven grounds had been instituted and that ground was later rejected in the final written decision.
Petitioners with pending appeals in partially instituted cases should not automatically assume that remand to the PTAB to implement SAS will result in expansion of the trial. Rather, petitioners should carefully examine the original institution decision and consider the risk that remand might instead result in outright termination. More broadly, this case serves as a reminder that, post-SAS, the PTAB is unlikely to undertake the burden of trial on many grounds that it finds unpersuasive solely for the sake of a single ground that may have some merit.
The retroactive denial also raises another interesting question: does the estoppel that would ordinarily result from the final written decision still apply? This appears to be an issue of first impression, but depending on the resolution, BioDelivery may end up benefiting from the Board’s decision—even if not the way it originally intended—by being free to present its full invalidity case in district court.