In BioDelivery Sciences Int’l v. Aquestive Therapeutics, Inc., the Federal Circuit confirmed that the PTAB has broad discretion to reconsider institution decisions and terminate instituted proceedings even after trial has ended and, furthermore, that such decisions are non-appealable under 35 U.S.C. § 314(d). In a series of IPRs dating back to 2015, the Federal Circuit dismissed the petitioner’s appeals seeking to undo a post-SAS PTAB decision on remand that vacated institution decisions and terminated the IPRs because only three of 17 grounds were deemed to have a reasonable likelihood of prevailing.

Back in 2015, BioDelivery filed three petitions asserting 17 grounds of unpatentability against a patent owned by Aquestive. The PTAB instituted on three grounds, one in each petition, and denied the remainder. Ultimately, the PTAB issued final decisions confirming patentability in each IPR. BioDelivery appealed. In the intervening period, the Supreme Court decided SAS Institute Inc. v. Iancu, which forbids the practice of instituting on some, but not all, claims and grounds in a petition. On appeal, the Federal Circuit remanded in light of SAS.

On remand, the PTAB reconsidered its institution decisions and, instead of conducting proceedings anew on all grounds raised in the petitions, elected to vacate its institution decisions and terminate the IPRs. BioDelivery appealed again, arguing that the PTAB lacked authority to reconsider its institution decisions and was required to consider and adjudicate the other 14 grounds. Aquestive moved to dismiss the appeals as foreclosed by § 314(d), which prohibits the appeal of institution decisions. The Federal Circuit agreed with Aquestive, confirming that the PTAB has authority to reconsider its institution decisions and terminate instituted IPRs.

Interestingly, the majority opinion observed that (as a practical matter) requiring the PTAB to adjudicate 14 additional grounds on remand that were found not to meet the standard for institution “would contravene the Director’s statutory charge to consider the efficiency of the Patent Office in conducting IPR proceedings.” Judge Newman dissented on grounds that, in her view, implementing SAS required issuing final decisions addressing all challenged claims.

This case is significant because it underscores the role of “efficiency” in the institution calculus, suggests that the PTAB is justified in denying institution when only a relatively small number of grounds are deemed viable, and confirms that the PTAB has broad, unchecked discretion to reconsider and vacate its institution decisions and terminate proceedings at any stage.

This article appeared in the September 2019 issue of PTAB Strategies and Insights. To view our past issues, as well as other firm newsletters, please click here.