Thryv v. Click-To-Call: Barring judicial review does not make IPRs more efficient.

Zachary Silbersher

The United States Supreme Court has issued its ruling in Thryv, Inc. v. Click-To-Call Technologies, LP.  The case is either surprising or unsurprising given your palette for the changing nature of patent rights.  But one thing is certain—the stripping of appellate review for institution decisions deprives litigants of valuable jurisprudence that would otherwise make the IPR process more predictable and more efficient.

As many commenters have pointed out, the Supreme Court has essentially held that the PTAB can do whatever it wants.  Absent judicial review of institution decisions hinging upon a time-bar determination, the statute’s directive that petitions are not to be instituted if filed within more than one year after an infringement complaint now amounts to nothing more than a suggestion.  The underlying IPR in the Thryv case is instructive.  The Board initially determined that the § 315(b) bar did not bar institution because the district court complaint was dismissed without prejudice.  Whether or not that is faithful rather erroneous interpretation of the statute, the Board has spoken and the Federal Circuit will never weigh in. 

What is the underlying motivation for the Court’s decision?  The majority opinion dutifully parses the requisite statutory language to arrive at its determination that § 314(d) precludes judicial review of the agency’s application of § 315(b).  Yet, the Court does not hide what it views to be the underlying policy rationale for precluding judicial review of institution decisions related to a time-bar determination, namely, the efficient resolution of patentability.  

The Court repeatedly returns to this goal as guiding all interpretations of the Patent Statute’s implementation of IPR proceedings.  The Court state’s that the AIA’s purpose “strongly reinforce[s]” its conclusion in this case.  That purpose?  “weed out bad patent claims efficiently”  (Slip Op. at 8).  Elsewhere, the Court describes the goal of § 315’s preclusion of judicial review as “preventing appeals that would frustrate efficient resolution of patentability.”  (Id. at 12). 

 In fact, the principle rationale articulated for the Court’s decision prioritizes elimination of “bad patent claims” over time-bar violations of the statute.  The Court states, “[a] a successful § 315(b) appeal would terminate in vacatur of the agency’s decision; in lieu of enabling judicial review of patentability, vacatur would unwind the agency’s merits decision.”  (Slip Op. at 9).  In other words, despite the statute’s proscription on IPRs in violation of the time-bar, if they happen to result in invalidation, then apparently the Supreme Court believes that surely there can be no dispute that it is better to kill a patent, be it in violation of the law, rather than not kill it all.  This despite the fact that the time-bar itself, so easily sacrificed in the name of killing “bad patents,” was itself intended to be a tool expedite review of patentability. 

Why does precluding judicial review of institution decisions enhance efficient resolution of patentability?  Putting aside the question of whether this is, in fact, the underlying goal of the AIA’s implementation of IPRs, it is peculiar to suggest that appellate review of an agency decision undermines efficient resolutions of those types of agency determinations.  Is not the opposite true?

Judicial review is not just about the right or privilege enjoyed by specific litigants who do not prevail within a lower tribunal.  Judicial review is about more than simply correcting erroneous applications of law or findings of fact by lower courts in specific instances.  Appellate review is also about developing a jurisprudence.  That jurisprudence emerges from an aggregated body of caselaw.  That collection of precedent builds a network of guides and signposts for future litigants to make informed decisions about the merits of a case before filing—including whether or not they will run afoul of such alleged statutory prescriptions as the time-bar.

Patent litigation has historically only had a passing relationship with motions to dismiss under Rule 12(b)(6).  That is because, for a long time until recent amendments, patent complaints were assessed against liberal notice pleading requirements.  Yet, in many other areas of litigation, the motion to dismiss for a failure to state a claim is a major milestone of every action.  Litigants scrutinize 12(b)(6) precedents in advance to determine whether or not a case should even be filed.  That precedence, that caselaw, that jurisprudence, acts as a mechanism for plaintiffs to self-select out of cases that are likely too weak to pass the motion-to-dismiss stage.  It also acts as a mechanism for plaintiffs to tailor their allegations to better meet the criteria for adequately stating a claim for relief.

The institution decision in an IPR shares a lot with a motion to dismiss.  While there are noteworthy differences, the institution decision nevertheless asks whether or not the petitioner, subject to further discovery, has shown that a challenged claim is most likely unpatentable.  This is not miles away from the question whether a plaintiff, taking its allegations as true, has adequately stated a claim for relief.  

Yet, in the wake of Cuozzo and now Thryv, the IPR institution decision lacks a body of jurisprudence to guide petitioners and patent-owners alike.  The history of Click-To-Call’s experience is a case in point.  Absent judicial review of institution decisions invoking the time-bar, absent Federal Circuit precedent on how to interpret § 315, it remains difficult for litigants to know for sure whether prior litigations dismissed without prejudice will or will not block institutions of IPRs.  That is what appellate courts are for—to resolve interpretive splits over which lower tribunals disagree. 

We previously blogged about at least one instance of disagreement at the PTAB over the standard for instituting an IPR.  There are undoubtedly more.  There is a lot to be said about the Thryv decision, from many perspectives.  But regardless of pro- or anti-patent partisanship, the absence of appellate review for institution decisions, which has been cemented by both Cuozzo and Thryv, will prevent development of a needed jurisprudence to guide future litigants before the PTAB.  The IPR process—whatever its ultimate goals—remains less, not more, efficient, because of it.