Facebook v. Windy City – Federal Circuit Justifies Judicial Review of PTAB Joinder Decisions at the Institution Stage

What Do We Know?

1. On September 4, 2020, the Federal Circuit modified and reissued its March 18, 2020 Facebook v. Windy City opinion to address the Supreme Court’s intervening April 20, 2020 Thryv v. Click-to-Call opinion (140 S. Ct. 1367 (2020)). Thryv v. Click-to-Call held that 35 U.S.C. § 314(d) precludes Federal Circuit review of PTAB decisions concerning “‘the application of’ an institution-related statute,” specifically the one-year time bar prohibiting late-filed IPR petitions set forth in 35 U.S.C. § 315(b). Id. at 1373. The threshold issue in Facebook v. Windy City was whether the Federal Circuit had jurisdiction to review PTAB’s decision interpreting 35 U.S.C. § 315(c) to allow Facebook to join its own earlier instituted IPR proceeding in order to challenge additional claims of the same patent.

2. § 315(b) expressly states that the one-year time bar does not apply when an IPR petitioner requests joinder to an earlier instituted IPR under § 315(c). The PTAB ruled, therefore, that § 315(c) permitted Facebook to “join as a party” to its own earlier instituted IPR, even after the one-year time bar had passed.

3. In the modified Facebook v. Windy City opinion, the Federal Circuit distinguished Thryv and held that it does have jurisdiction to review PTAB joinder decisions under 35 U.S.C. § 315(c) because “the joinder decision is a separate and subsequent decision to the institution decision.” The Federal Circuit rejected the USPTO’s argument that, when the PTAB uses the joinder provision of § 315(c) to institute an otherwise time barred IPR review petition, “the Board’s application of 315(c) is ‘integral to, indeed a condition of, institution’” (quoting from Thryv).

4. The panel decision reasoned that the “clear and unambiguous text of § 315(c)” requires two sequential PTAB decisions. First, the PTAB must decide whether the later-filed petition “warrants” institution, a decision the Federal Circuit acknowledged it may not review under § 314(d). Second, the PTAB must then decide whether to permit the joinder applicant to join the earlier instituted IPR proceeding, which makes joinder a separate post-institution decision that is reviewable and avoids the appellate review bar of § 314(d).

Observations and Practice Tips:

1. The Federal Circuit’s Facebook v. Windy City opinion engages in a careful statutory analysis. The court, however, does not explain why a PTAB determination that an IPR petition “warrants the institution of an inter partes review” under the joinder provision of § 315(c), should be considered a non-reviewable institution decision “separate” from a reviewable joinder decision. This is particularly apparent when the IPR petition otherwise would be time barred but for the concurrently filed joinder request.

2. Under § 315(c), a petitioner whose petition is otherwise time barred must file an IPR petition “one month after the institution date of any inter partes review for which joinder is requested . . . accompanied by a request for joinder.” 37 C.F.R. § 42.122(b) (emphasis added); see Facebook v. Windy City, IPR2017-00709, Paper 34 (PTAB Aug. 1, 2017). If PTAB determines the later-filed IPR petition “warrants” institution and, in its discretion, that joinder would be appropriate, PTAB issues a single decision ordering institution, joinder to the previously instituted IPR, and termination of the later-filed IPR in view of the joinder. Id. There is no meaningful separation in the decision making process between institution and joinder at the PTAB.

3. The Federal Circuit’s analysis also does not directly address the impact of the time bar on a joinder decision, as argued by the USPTO. Where the later-filed IPR would otherwise be time barred under § 315(b), PTAB’s application of § 315(c) would appear to be “integral” to the institution decision under the rationale of Thryv. And if the statutory language is “clear and unambiguous,” as stated by the court, why would the last sentence of § 315(b) permit institution of a time-barred IPR by a different petitioner, but block the successful petitioner who wants to challenge additional patent claims raised in the district court infringement proceeding? After all, the successful petitioner will be collaterally estopped in district court if it ultimately loses any of those patent challenges, as happened to Facebook.

4. The Federal Circuit’s Facebook opinion repeatedly asserts that the statutory language is “clear and unambiguous” to avoid giving Chevron deference to the PTAB’s contrary interpretation in Proppant Express v. Oren Techns., IPR2018-00914, Paper 38 (PTAB March 13, 2019) (Precedential). The Proppant decision raises another possible ambiguity by stating that the joinder provision applies to “any person,” namely “every person who properly files a petition that warrants institution.” Id. at 6. If the statue precludes so-called same party joinder, as determined by the Federal Circuit in Facebook v. Windy City, why doesn’t the statute limit joinder requests to “any person other than petitioner”?

5. The Federal Circuit’s modified Facebook v. Windy City opinion signals the court’s willingness to engage in provision-by-provision judicial review of applicable PTAB institution decisions unless expressly prohibited by Supreme Court precedent.

6. Look for the USPTO to request Supreme Court certiorari based on the Thryv decision.