Introduction

The Supreme Court case SAS Institute Inc. v. Andrei Iancu, as Director, United States Patent and Trademark Office, et al. addresses a pivotal issue in patent law concerning the scope of inter partes review (IPR) proceedings. The case pits SAS Institute, a petitioner challenging the validity of ComplementSoft's software patent, against the Director of the United States Patent and Trademark Office (USPTO). Central to the dispute is whether the Patent Office can institute an IPR covering only some of the claims challenged by the petitioner or must address all claims as per the statutory requirements.

Summary of the Judgment

Delivered by Justice Gorsuch, the Supreme Court held that once the Patent Office institutes an inter partes review, it must decide the patentability of every claim the petitioner has challenged. The Court interpreted the statutory language of 35 U.S.C. §318(a), emphasizing that the terms "shall" and "any" are mandatory and comprehensive, respectively. Consequently, the Director's power of "partial institution," which allowed limiting the review to only certain claims, was found to be inconsistent with the statutory text. The decision reversed the Federal Circuit's earlier ruling and mandated that the Patent Trial and Appeal Board address all challenged claims in its final written decision.

Analysis

Precedents Cited

The Court referenced several key precedents to underpin its ruling:

• Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984): Utilized to discuss the deference owed to administrative agencies in interpreting statutes.
• Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. ___ (2016): Distinguished from the present case, reaffirming limited judicial review over the Director's decision to institute IPR based on a likelihood of success on at least one claim.
• Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998): Cited to interpret the mandatory nature of the word "shall" in statutory language.
• UNITED STATES v. GONZALES, 520 U.S. 1 (1997): Emphasized the broad meaning of "any" in statutory context.
• Nassar, 570 U.S. 338 (2013): Highlighted the presumption of deliberate congressional intent in statutory interpretation.

Legal Reasoning

The Court applied a textualist approach, focusing on the plain language of the statute. It emphasized that:

• The word "shall" in §318(a) imposes a mandatory duty on the Patent Trial and Appeal Board to decide the patentability of claims challenged by the petitioner.
• The term "any" inherently means "every" in this context, ensuring that all challenged claims must be addressed.
• The Director's "partial institution" power, derived from a Patent Office regulation, lacks statutory backing and was therefore invalid.
• The structure and context of the statute indicate that the petitioner defines the scope of the IPR process, not the Director.

The Court also rejected policy arguments favoring partial institution, stating that such considerations are the purview of Congress, not the judiciary. Furthermore, it held that Chevron deference was inapplicable here because the statute was clear and unambiguous regarding the requirement to address all challenged claims.

Impact

This ruling has significant implications for the administration of patent law:

• Streamlined Patent Challenges: Petitioners in IPR proceedings can be assured that all of their challenged claims will be addressed, preventing partial reviews that could lead to inconsistent outcomes.
• Enhanced Predictability: Patent owners gain clearer visibility into which claims may be subject to review, allowing for more strategic patent prosecution and defense.
• Administrative Accountability: The USPTO is constrained to adhere strictly to statutory mandates, limiting discretionary powers that were previously exercised through unwritten regulations.
• Legal Precedence: The decision reinforces the principle that agencies must operate within the bounds of their statutory authority, especially concerning mandatory and comprehensive directives.

Future IPRs will no longer benefit from partial reviews, ensuring that all claims challenged in a petition are subject to evaluation, thereby fostering greater consistency and fairness in patent adjudication.

Complex Concepts Simplified

Inter Partes Review (IPR)

An administrative proceeding conducted by the USPTO’s Patent Trial and Appeal Board where a third party can challenge the validity of a patent's claims based on prior art or other factors. It serves as an alternative to litigation in federal courts.

Partial Institution

The practice of initiating review on only some of the claims a petitioner challenges, rather than addressing all of them collectively. This was previously permitted under certain regulations but was found unconstitutional in this case.

Chevron Deference

A legal principle from Chevron U.S.A. Inc. v. NRDC that courts should defer to an agency’s reasonable interpretation of an ambiguous statute that it administers. However, this deference is only applicable when the statute is indeed ambiguous.

Statutory Interpretation

The process by which courts interpret and apply legislation. This case exemplifies textualism, where the Court focuses on the plain language of the statute to determine legislative intent.

Administrative Law

The body of law that governs the activities of administrative agencies of government, including rulemaking, adjudication, and enforcement of regulatory agendas.

Conclusion

SAS Institute Inc. v. Iancu stands as a landmark decision reinforcing the necessity for administrative bodies to adhere strictly to statutory mandates. By mandating that the Patent Trial and Appeal Board resolve every claim challenged in an IPR petition, the Supreme Court has ensured greater transparency and fairness in the patent review process. This decision curtails previously exercised discretionary powers not grounded in statute, thereby upholding the principle of legislative supremacy. Additionally, it streamlines the IPR process, reducing fragmentation and potential inconsistencies in patent adjudications. Overall, the judgment underscores the judiciary's role in maintaining the integrity of statutory frameworks against overreaching administrative interpretations.