The Federal Circuit Criticizes A PTAB Partial Institution

The PTAB's practice of partially instituting IPRs has been in the news lately, with Jones Day recently arguing against that practice at the Supreme Court on behalf of the SAS Institute ("SAS"). On December 5, 2017, the week after the Supreme Court arguments, the Federal Circuit issued an opinion taking the PTAB to task for a partial institution, but not for the reasons SAS argued to the Court.

In CFRD Research, Inc. v. Joseph Matal, the Federal Circuit issued an opinion regarding three separate IPRs instituted on U.S. Patent No. 7,191,233. The three IPRs addressed different claims of the '233 patent, using different prior art references. The court addressed each of the IPRs in turn. Of interest is the court's decision regarding Hulu's petition (IPR2015-00259).

In the Hulu IPR, the PTAB instituted only a subset of Hulu's proposed grounds, holding that the other proposed grounds were redundant. The PTAB's decision can be fairly characterized as a partial institution in that it only instituted a portion of Hulu's proposed grounds. Unlike the situation in the SAS case, however, where the PTAB only instituted review of fewer than all of the challenged claims, in Hulu's IPR, the PTAB instituted grounds on all of the claims that Hulu challenged. But the court's comments on the PTAB's partial decision here are nonetheless interesting.

The PTAB instituted an obviousness ground based on a Bates reference in combination with a Chan reference. Hulu had also proposed an obviousness ground based on Bates alone, but the PTAB denied that ground as redundant. On the merits, the PTAB noted that Hulu relied solely on Bates for a particular teaching, but Hulu had argued in the redundant Bates ground that the disputed limitation would have been obvious based on Bates. The PTAB also held that Hulu had not made that argument in the instituted Bates/Chan ground, but even if it had the argument would have been insufficient.

The Federal Circuit disagreed with the PTAB's approach, given the overlap between the...