Appellate review of the AIA’s new patent-challenge proceedings


Financier Worldwide Magazine

March 2013 Issue

March 2013 Issue

The Leahy-Smith America Invents Act (AIA) creates two important new procedures for challenging US patents at the US Patent and Trademark Office (PTO): post-grant review (PGR) and inter partes review (IPR). The AIA also establishes a new administrative body, the Patent Trial and Appeal Board (PTAB), to adjudicate these contested proceedings. PGR and IPR may provide cost and time advantages over district court litigation.

The US Court of Appeals for the Federal Circuit will have exclusive appellate jurisdiction over PTAB decisions. Accordingly, technology companies and patent practitioners navigating these new procedures must consider how to best position their case for a possible appeal before this court. Then, if faced with an adverse PTAB decision, they must assess the likely outcome of such an appeal, giving careful consideration to the Federal Circuit’s standard of review.

Vital to any appeal is a trial strategy that presents the key facts and preserves all arguments. This will be equally important in PGR and IPR proceedings.

All relevant facts must be developed during the PTAB proceeding. Both PGR and IPR permit factual evidence in the form of affidavits and declarations. Both also provide for limited discovery, including depositions of declarants. Parties may also request and receive, under restricted circumstances, additional discovery. Use these procedures before the appellate stage, as the Federal Circuit will not entertain new facts.

The Federal Circuit also rarely considers new arguments on appeal; therefore, present all issues and arguments to the PTAB to preserve them for appeal. In IPR, petitioners may challenge patent claims only under 35 U.S.C. §§ 102 and 103 on the basis of patents or printed publications. PGR challenges, in contrast, may include any ground related to patentability under § 282. Challenging a patent on all possible grounds may also be imperative in view of the strict estoppel provisions: after a final PTAB decision, a petitioner will be estopped from presenting before the PTO, a district court, or the ITC any ground that the petitioner raised or could have raised during a PGR or IPR. Look for future litigation testing the scope of the estoppel.

Arguments presented to the Federal Circuit, in contrast, should be more restricted. An appeal provides an opportunity to show reversible error in the PTAB’s decision, not to retry the case. In assessing the chances for a successful appeal of an adverse PTAB decision, petitioners and practitioners face a number of considerations. One is the level of detailed consideration the PTAB gave an issue. Did the PTAB consider all the evidence and arguments? Did it provide justifications for its decisions? Gaps in the PTAB’s analysis or reasoning may provide a hook for reversal.

Another consideration is the closeness of the issue, including the persuasiveness of the argument for reversal. Issues in which the law or facts run squarely against reversal should not be appealed, as they distract from more meritorious ones, take up space in briefs, and erode an appellant’s credibility.

These considerations must, however, be viewed in light of the standard of review. Under controlling precedent, the Federal Circuit reviews PTO actions using the standard of review applicable to government agencies under the Administrative Procedure Act (APA). The Federal Circuit will review the PTAB’s legal conclusions de novo but its factual findings for substantial evidence. Accordingly, factual issues will receive far more deferential review than legal ones, a key consideration in deciding which issues to appeal. An adverse PTAB decision on, for example, obviousness or enablement, issues of law based on underlying facts, will give the court more leeway for reversal than an adverse decision on anticipation or written description, both pure issues of fact. Also consider whether to challenge the PTAB’s claim construction, a pure legal issue.

Furthermore, in PGR and IPR proceedings, the PTAB will be at the forefront in applying the AIA’s new first-inventor-to-file provisions. Challenging the PTAB’s legal interpretations of these statutory provisions will present another opportunity for de novo appellate review.

Finally, PGR and IPR will raise new procedural issues, including PTAB discovery rulings. Unlike the decision to initiate a PGR or IPR, the AIA does not shield such rulings from review. And, given the estoppel provisions, a denial of discovery could forever foreclose establishing a potential ground of invalidity. Yet, appealing PTAB procedural rulings will likely not be fruitful. Under the APA, the Federal Circuit will set aside such decisions only if arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law – a difficult standard to satisfy.

The new AIA post-grant proceedings should prove highly attractive to technology companies looking for a quick, cost-effective jurisdiction to challenge competitors’ patents. But at all stages, petitioners should undertake such challenges with a careful eye to future appellate review at the Federal Circuit.


Michael J. Flibbert and Sarah E. Craven, Ph.D. are attorneys at Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. Mr Flibbert can be contacted on +1 (202) 408 4493 or by email: Ms Craven can be contacted on +1 (202) 408 4484 or by email:

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Michael J. Flibbert and Sarah E. Craven

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

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