Petition for Writ of Certiorari — Intel Corporation, et al., Petitioners v. Katherine K. Vidal, Under Secretary of Commerce for Intellectual Property and Director, United States Patent and Trademark Office

APPENDICES

APPENDIX

TABLE OF CONTENTS

Page

APPENDIX A: Opinion of the United States

Court of Appeals for the Federal Circuit,

dated March 13, 2023 ................................................. 1a

APPENDIX B: Memorandum Order of the

United States District Court for the

Northern District of California, dated

November 10, 2021 ................................................... 27a

1a

APPENDIX A

UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

2022-1249

APPLE INC., CISCO SYSTEMS, INC., GOOGLE LLC,

INTEL CORPORATION, EDWARDS LIFESCIENCES

CORPORATION, EDWARDS LIFESCIENCES LLC,

Plaintiffs-Appellants,

v.

KATHERINE K. VIDAL, UNDER SECRETARY OF

COMMERCE FOR INTELLECTUAL PROPERTY AND

DIRECTOR OF THE UNITED STATES PATENT AND

TRADEMARK OFFICE,

Defendant-Appellee.

Appeal from the United States District Court

for the Northern District of California in

No. 5:20-cv-06128-EJD, Judge Edward J. Davila.

Decided: March 13, 2023

*

*

*

Before LOURIE, TARANTO, and STOLL, Circuit

Judges.

TARANTO, Circuit Judge.

Plaintiffs are Apple Inc. and four other companies

that have repeatedly been sued for patent infringement

and thereafter petitioned the Director of the Patent and

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Trademark Office (PTO) to institute inter partes reviews (IPRs), under 35 U.S.C. §§ 311-319, so that the

PTO’s Patent Trial and Appeal Board could adjudicate

the petitions’ unpatentability challenges to patent claims

that had been asserted against them in court. In the present action, brought against the Director in district court

under the Administrative Procedure Act (APA), 5

U.S.C. §§ 701-706, plaintiffs challenge instructions the

Director issued to the Board to inform it how to exercise,

under delegation by the Director, the Director’s discretion whether to institute a requested IPR. Plaintiffs assert that the instructions are likely to produce too many

denials of institution requests. The district court dismissed the APA action on the ground that the Director’s

instructions were made unreviewable by the IPR provisions of the patent statute.

We affirm in part and reverse in part. We affirm the

unreviewability dismissal of plaintiffs’ challenges to the

instructions as being contrary to statute and arbitrary

and capricious. No constitutional challenges are presented. But we reverse the unreviewability dismissal of

plaintiffs’ challenge to the instructions as having been

improperly issued because they had to be, but were not,

promulgated through notice-and-comment rulemaking

under 5 U.S.C. § 553. That challenge, we also hold, at

least Apple had standing to present. We remand for further proceedings on the lone surviving challenge. Like

the district court, we do not reach the merits of that challenge.

I

A

In the America Invents Act (AIA), Pub. L. No. 11229, 125 Stat. 284 (2011), Congress authorized the filing of

a petition asking the PTO to conduct an IPR of whether

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identified claims in an issued patent comply with certain

patentability requirements of novelty or obviousness

over prior art. 35 U.S.C. § 311(a)-(b). The Board is the

PTO component assigned to perform the IPR adjudication if a review is instituted, id. §§ 6(b)(4), 316-318, with

the Board’s “final written decision” in the IPR subject to

appeal to this court, id. § 319; see id. § 141. But it is the

PTO’s Director to whom Congress assigned the task of

determining whether to institute a review in the first

place. Id. § 314(b); see Thryv, Inc. v. Click-To-Call Technologies, LP, 140 S. Ct. 1367, 1370-71 (2020).

For the Director to institute, certain preconditions

must be met. One prerequisite, for all petitions, is the

crossing of a merits “threshold”: “The Director may not

authorize an [IPR] to be instituted unless the Director

determines that the information presented in the petition ... and any response ... shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” 35 U.S.C. § 314(a). Another prerequisite, applicable in the predictably common situation where the patent owner has already sued the petitioner (or a real

party in interest or privy) for infringement of the patent,

is compliance with a timing limit: The petition must be

filed within one year after service of the infringement

complaint. Id. § 315(b).

Even when such requirements are met, however,

the statute uses no language commanding institution.

“The Director is permitted, but never compelled, to institute an IPR[, a]nd no petitioner has a right to such institution.” Mylan Laboratories Ltd. v. Janssen Pharmaceutica, N.V., 989 F.3d 1375, 1382 (Fed. Cir. 2021).

The Supreme Court explained in SAS Institute, Inc. v.

Iancu: Ҥ 314(a) invests the Director with discretion on

the question whether to institute review.” 138 S. Ct.

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1348, 1356 (2018); see also Cuozzo Speed Technologies,

LLC v. Lee, 579 U.S. 261, 273 (2016) (citing § 314(a) and

stating: “no mandate to institute review”).

Congress not only left the discretion to the Director

but also protected its exercise from judicial review, even

regarding the mandatory threshold conditions for institution, at least where, as here, the court challenge is not

on a constitutional ground. See Cuozzo, 579 U.S. at 275

(noting that it was not addressing challenges that implicate constitutional questions, which present distinct issues regarding congressional preclusion of judicial review).1 Thus, Congress declared: “The determination

by the Director whether to institute an inter partes review under [§ 314] shall be final and nonappealable.”

35 U.S.C. § 314(d). Based on that provision, whose terms

apply whether the determination is negative or positive,

the Supreme Court has held that the institution decision

is unreviewable, even in a proper appeal of a final written decision reached by the Board after a positive institution determination: “Congress has committed the decision to institute inter partes review to the Director’s

unreviewable discretion.” United States v. Arthrex,

Inc., 141 S. Ct. 1970, 1977 (2021); see Thryv, 140 S. Ct. at

1372-73 (relied on by Arthrex for above statement);

Cuozzo, 579 U.S. at 271-75.2

1

Because the present case does not involve a constitutional

challenge, we hereafter generally refrain from noting that the unreviewability principle at issue has not been extended to constitutional challenges.

2

In SAS, the Supreme Court held that § 318, whose subject is

not institution but the scope of a required final written decision, requires the Board, in its final written decision, to decide the patentability of all patent claims challenged in the petition. 138 S. Ct. at

1354-57. It follows, as a corollary, that the institution determination

must be an all-or-nothing one, a “binary” one, id. at 1355, regarding

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From the outset of the IPR program, the Director

delegated the institution authority to the Board. 37

C.F.R. § 42.4(a); see Arthrex, 141 S. Ct. at 1977; Thryv,

140 S. Ct. at 1371. We have upheld that delegation, recognizing “the longstanding rule that agency heads have

implied authority to delegate to officials within the

agency,” that “Congress regularly gives heads of agencies more tasks than a single person could ever accomplish, necessarily assuming that the head of the agency

will delegate the task to a subordinate officer,” and that,

in particular, “Congress assigned the Director the decision to institute, necessarily assuming that the popularity of inter partes review and the short time frame to

decide whether to institute inter partes review would

mean that the Director could not herself review every

petition.” Ethicon Endo-Surgery, Inc. v. Covidien LP,

812 F.3d 1023, 1031-32 (Fed. Cir. 2016) (footnote omitted). We have also made clear that any institution decision made by the Board as delegatee of the Director is

subject to reversal by the Director. In re Palo Alto Networks, Inc., 44 F.4th 1369, 1375 & n.3 (Fed. Cir. 2022)

(stating that “the Director plainly has the authority to

revoke the delegation or to exercise her review authority in individual cases despite the delegation”); see Arthrex, 141 S. Ct. at 1980 (“The Director ... controls the

decision whether to institute inter partes review ... .”).

B

The one-year time limit of § 315(b), already mentioned, makes clear that Congress recognized the likelihood of parallel pending proceedings in the PTO and in

the courts. Being sued for infringement provides a

the claims to be reviewed. It is that institution determination which

is the subject of the unreviewability principle of Arthrex, Thryv, and

Cuozzo.

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defendant a distinct motivation to seek cancellation,

through an IPR, of patent claims asserted against it in

court.3 The existence of such overlapping proceedings

raises self-evident issues of efficiency and interbranch

relations. But Congress generally left the two branches

to exercise their available discretion to address such issues. Congress enacted no provision for this scenario

that directs the court to stay its case in light of a pending

request for IPR or an instituted IPR. Nor did Congress

enact a provision prescribing how the Director is to address such an overlapping pending court case in exercising the discretion whether to institute an IPR.

1

The Director addressed this topic in 2019 and 2020

by exercising the authority to “designate[] past PTAB

decisions as ‘precedential’ for future panels.” Arthrex,

141 S. Ct. at 1980 (citing § 316(a)(4), quoted supra n.2,

and § 3(a)(2)(A), which states that “[t]he Director shall

be responsible for providing policy direction and management supervision for the Office”); see Trial and Appeal Board, Standard Operating Procedure 2 (Revision

10) at 1-2 (Standard Procedure 2). Specifically, the Director designated as precedential, and hence binding on

Board panels (Standard Procedure 2 at 11), two Board

decisions that had denied IPR petitions: NHK Spring

Co. v. Intri-Plex Technologies, Inc., IPR2018-00752,

3

Other provisions also reflect Congress’s expectation that the

same patent claims might well be at issue in both an IPR proceeding

and a court case. See, e.g., 35 U.S.C. § 315(e)(2) (estoppel bar); id. §

315(a)(2) (addressing situation of petitioner initiation of both court

and agency proceeding); id. § 316(a)(4) (providing that “[t]he Director shall prescribe regulations— ... establishing and governing inter

partes review under this chapter and the relationship of such review

to other proceedings under this title,” the latter including actions in

court, see id. § 281).

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2018 WL 4373643 (P.T.A.B. Sept. 12, 2018) (designated

precedential on May 7, 2019), and Apple Inc. v. Fintiv,

Inc., IPR2020-00019, 2020 WL 2126495 (P.T.A.B. Mar.

20, 2020) (designated precedential on May 5, 2020). Both

decisions address the role, in the decision whether to institute an IPR, of the pendency of district-court infringement litigation involving the same patents. The decisions, designated as precedential, constitute instructions

from the Director regarding how the Board is to exercise

the Director’s institution discretion.

The decisions articulate “a discretionary standard

for denying IPR petitions based on pending parallel litigation.” Plaintiffs’ Notice of Motion and Motion for Summary Judgment at 5, Apple Inc. v. Iancu, No. 20-cv06128, 2021 WL 5232241, (N.D. Cal. Nov. 10, 2021), ECF

No. 65, 2020 WL 8339428 (heading, capitalization removed except for “IPR”). In NHK, the Board relied on

“the advanced state of the district court proceeding” involving the same patent to deny institution, reasoning

that, given the projected trial date in the parallel court

case, conducting an IPR would be an inefficient use of

agency resources. 2018 WL 4373643, at *7. In Fintiv,

the Board elaborated on NHK, enumerating six factors—the last one open-ended—to be assessed in deciding whether to institute an IPR in parallel with an overlapping court case:

1. whether the court granted a stay or evidence

exists that one may be granted if a proceeding is

instituted;

2. proximity of the court’s trial date to the

Board’s projected statutory deadline for a final

written decision;

3. investment in the parallel proceeding by the

court and the parties;

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4. overlap between issues raised in the petition

and in the parallel proceeding;

5. whether the petitioner and the defendant in

the parallel proceeding are the same party; and

6. other circumstances that impact the Board’s

exercise of discretion, including the merits.

2020 WL 2126495, at *2. The Board explained how certain facts on the enumerated topics tend to weigh for or

against institution, id. at *3-7, and how the “concerns of

inefficiency and the possibility of conflicting decisions

were particularly strong” in NHK, id. at *5. The Board

stated generally that the factors “relate to whether efficiency, fairness, and the merits support the exercise of

authority to deny institution in view of an earlier trial

date in the parallel proceeding,” id. at *3. The Board

summarized: “[I]n evaluating the factors, the Board

takes a holistic view of whether efficiency and integrity

of the system are best served by denying or instituting

review.” Id.

2

The above instructions (the Fintiv instructions)

were the subject of this case when it was filed in district

court, when it was decided by the district court, and

when plaintiffs filed their brief as appellants in this

court. Thereafter, on June 21, 2022, the Director updated the instructions. On that day, having issued a request for comments, see Request for Comments on Discretion to Institution Trials Before the Patent Trial and

Appeal Board, 85 Fed. Reg. 66,502 (Oct. 20, 2020), and

having received hundreds of comments, the Director announced (without publication in the Federal Register)

“several clarifications” to the Fintiv instructions “under

the Director’s authority to issue binding agency

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guidance to govern the PTAB’s implementation of various statutory provisions.” Memorandum from PTO Director to PTAB, Interim Procedure for Discretionary

Denials in AIA Post-Grant Proceedings with Parallel

District Court Litigation at 2-3 (June 21, 2022) (June

2022 Memo).

The Director described Congress’s aim “to establish

a more efficient and streamlined patent system that will

improve patent quality and limit unnecessary and counterproductive litigation costs,” June 2022 Memo at 1

(quoting H.R. Rep. No. 112-98, pt. 1, at 40 (2011)), and its

own experience with cost-increasing inefficiency and

gamesmanship when parallel PTO proceedings and

court cases exist, id. The Director now instructed the

Board that it should not “rely on the Fintiv factors to

discretionarily deny institution in view of parallel district court litigation where a petition presents compelling evidence of unpatentability.” Id. at 2. The Director

further stated that the Fintiv analysis does not apply

when the parallel proceeding is not a district-court case

but a proceeding within the International Trade Commission. Id. at 2-3. The Director added that no Fintivbased institution denial would occur “where a petitioner

presents a stipulation not to pursue in a parallel proceeding the same grounds or any grounds that could have

reasonably been raised before the [Board].” Id. at 3. Finally, the Director announced that, in the application of

the Fintiv instructions, “when other relevant factors

weigh against exercising discretion to deny institution

or are neutral, the proximity to trial should not alone

outweigh all of those other factors,” id. at 8, and that,

even as to that factor, a particular “scheduled trial date”

was not a reliable indicator of proximity, which instead

should be assessed based “the most recent statistics on

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median time-to-trial for civil actions in the district court”

hearing the parallel case, id.

The Director stated that the new instructions would

apply to all pending proceedings in the PTO and “remain

in place until further notice.” Id. at 9. But the Director

added that “[t]he Office expects to replace this interim

guidance with rules after it has completed formal rulemaking.” Id.

The current challenge seeks prospective relief only,

and the June 2022 instructions are part of the current

operative instruction set regarding institution decisions

by the Board as delegatee of the Director.4 It would

seem proper, therefore, were it important, to consider

the updated instructions rather than the Fintiv instructions alone. See National Treasury Employees Union v.

Von Raab, 489 U.S. 656, 661 n.1 (1989) (deciding case

based on agency program as altered after court of appeals decision). But none of our conclusions in this appeal depend on whether we consider the Fintiv instructions or the updated instructions.

C

On August 31, 2020, Apple and three other companies filed suit in the Northern District of California,

seeking to challenge the Fintiv instructions on three

grounds under the APA: (1) that the Director acted contrary to the IPR provisions of the patent statute, see 5

U.S.C. § 706(2)(C); (2) that the Fintiv instructions are

arbitrary and capricious, see 5 U.S.C. § 706(2)(A); and (3)

4

For subsequent clarifications from the Director, see OpenSky

Industries, LLC v. VLSI Tech. LLC, IPR2021-01064, 2022 WL

4963049, at *20 (P.T.A.B. Oct. 4, 2022) (precedential) (Director’s Decision on Determining Abuse of Process), and CommScope Technologies LLC v. Dali Wireless, Inc., IPR2022-01242, 2023 WL 2237986,

at *2 (P.T.A.B. Feb. 27, 2023) (Director’s Decision on Rehearing).

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that the Fintiv instructions were issued without compliance with the notice-and-comment rulemaking requirements of 5 U.S.C. § 553, as assertedly required by that

APA provision and by 35 U.S.C. § 316. Apple, 2021 WL

5232241, at *3. An amended complaint added a fifth

plaintiff but asserted the same challenges. The government moved to dismiss the case, arguing that plaintiffs

lacked standing and, in the alternative, that APA review

was unavailable both because (1) “statutes preclude judicial review” of the matters presented and (2) the challenges are to “agency action [that] is committed to

agency discretion by law,” 5 U.S.C. § 701(a)(1)-(2). Briefing on that motion followed—on the same schedule as

briefing on plaintiffs’ own motion for summary judgment, which the court ruled, at plaintiffs’ urging, was

sufficiently “intertwined” with the dismissal motion to

warrant parallel briefing. Order on Defendants’ Motion

for Administrative Relief Requesting a Stay of Briefing

on Plaintiffs’ Motion for Summary Judgment at 1, Apple,

No. 20-cv-06128, 2021 WL 5232241, ECF No. 70; Plaintiffs’ Opposition to Defendant’s Motion for Administrative Relief Requesting a Stay of Briefing on Plaintiffs’

Motion for Summary Judgment at 2, Apple, No. 20-cv06128, 2021 WL 5232241, ECF No. 69.

On November 10, 2021, the district court granted

the government’s motion to dismiss. Apple, 2021 WL

5232241, at *1-6. The district court first concluded that

plaintiffs had standing. Id. at *4-5. The court then concluded that their challenges were to Director actions

that were not reviewable. Id. at *5–6. The court reasoned that 35 U.S.C. § 314(d), together with Cuozzo and

Thryv, precluded review because, to rule on the challenges, the court “would have to analyze questions that

are closely tied to the application and interpretation of

statutes” governing institution decisions. Id. at *6

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(internal quotation marks, for quote from Cuozzo and

Thryv, omitted). The court therefore dismissed the case

and “terminate[d] [p]laintiffs’ motion for summary judgment.” Id. Like the parties before us, we treat this dismissal as invoking the exclusion from the APA applicable where “statutes preclude judicial review.” 5 U.S.C.

§ 701(a)(1).

Plaintiffs appealed on December 8, 2021, and that

appeal ripened when the district court entered final

judgment on December 13, 2021. We have jurisdiction

over the timely appeal under 28 U.S.C. § 1295(a)(1) because plaintiffs’ claims, at least in part, are based on the

patent statute.

II

Plaintiffs argue on appeal that the district court

erred when it held that the IPR provisions of the patent

statute “preclude judicial review” of the challenged

agency actions, bringing the case within the APA exclusion stated in 5 U.S.C. § 701(a)(1). The government, in

response, defends the district court’s § 701(a)(1) ruling

and argues, in the alternative, that affirmance is separately required because the challenged agency action is

“committed to agency discretion by law,” § 701(a)(2), and

because plaintiffs lack standing. We may consider the §

701(a)(1) unreviewability issue first and need not consider § 701(a)(2) and standing unless we find a challenge

to lie outside the § 701(a)(1) exclusion from APA review.

See Block v. Community Nutrition Institute, 467 U.S.

340, 353 n.4 (1984). We decide the issues presented,

which are entirely legal, de novo. See Alarm.com Inc. v.

Hirshfeld, 26 F.4th 1348, 1354 (Fed. Cir. 2022); Digitalis

Education Solutions, Inc. v. United States, 664 F.3d

1380, 1384 (Fed. Cir. 2012).

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We begin with plaintiffs’ first two challenges (urging

that the Director’s instructions violate the IPR statute

and are arbitrary and capricious), which we consider together. We affirm the § 701(a)(1) dismissal of those challenges and so need not consider § 701(a)(2) or standing.

We then address the remaining challenge (concerning

the absence of notice-and-comment rulemaking). We

hold that neither § 701(a)(1) nor § 701(a)(2) bars review

of the third challenge and that at least Apple has standing to press it. We therefore reverse the dismissal as to

the third challenge and remand.

A

Plaintiffs’ first two counts in their amended complaint challenge the content of the Director’s institution

instructions. The statutory challenge is that the instructions allow, and encourage or even require, denial of institution contrary to proscriptions plaintiffs draw from

the IPR statute. Most concretely, plaintiffs assert that

§ 315(b)’s setting of an outer time limit on filing a petition, where the petitioner or its privy or the real party

in interest has been sued on the patent in court, implies

that the Director is forbidden, when determining

whether to institute, to consider the timing of the petition within that limit and the stage of development of the

court case. The arbitrary-and-capriciousness challenge

is that the Fintiv instructions are not “reasonable and

reasonably explained.” Federal Communications Commission v. Prometheus Radio Project, 141 S. Ct. 1150,

1158 (2021) (“The APA’s arbitrary-and-capricious standard requires that agency action be reasonable and reasonably explained.”); Snyder v. McDonough, 1 F. 4th 996,

1005 (Fed. Cir. 2021). Plaintiffs assert that the Fintiv

instructions’ directive to consider the time to trial in the

parallel court case disregards the unreliability of courtset trial dates, which are frequently moved forward. For

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both challenges, plaintiffs invoke some of the policies articulated in the legislative process leading to the creation of the IPR program in the 2011 AIA.

These two challenges have institution as their direct, immediate, express subject. In this respect, the

challenges are critically different from the challenge the

Supreme Court agreed with in SAS, a decision on which

plaintiffs rely. There, the subject of the challenge was

the interpretation of § 318, which prescribes the scope of

the final written decision required of the Board in an

IPR. The Court held that § 318 requires the final written decision to “resolve all of the claims in the case.” 138

S. Ct. at 1353. That holding was not precluded by the

unreviewability of institution decisions already articulated in Cuozzo, even though the § 318 holding had, as a

corollary, the effect of requiring the Director’s decision

whether to institute a requested review to be essentially

an all-or-nothing one. Id. at 1358-60. As the Court explained in Thryv, the merely collateral effect of a provision concerning “the manner in which the agency’s review ‘proceeds’ once instituted” did not bring SAS

within the principle of unreviewability of “whether the

agency should have instituted review at all.” 140 S. Ct.

at 1376.

SAS thus does not alter the principle of unreviewability governing “application and interpretation of statutes related to the [PTO’s] decision to initiate inter

partes review.’” Id. at 1373 (internal quotation marks

omitted) (quoting Cuozzo, 579 U.S. at 275); see id. at 1376

n.8. Plaintiffs’ statutory and arbitrary-and-capriciousness challenges in this case focus directly and expressly

on institution standards, nothing else. The Supreme

Court in Cuozzo and Thryv did not exclude any challenge

from the reviewability bar where the invoked provisions

of law directly govern institution—as the Court

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understood was the case for the pleading provision that

was at issue in Cuozzo (§ 312(a)(3) (a petition “may be

considered only if ...”)) and the timing provision that was

at issue in Thryv (§ 315(b) (an IPR “may not be instituted if ...”)). See Thryv, 140 S. Ct. at 1373, 1376 n.8.5

In Arthrex, the Supreme Court confirmed the principle of unreviewability of the Director’s decision

whether to institute. 141 S. Ct. at 1977. The Court relied

indirectly on Cuozzo’s holding that the IPR statute’s

text, legislative history, and structure supplied the clear

and convincing evidence required to overcome the

strong presumption in favor of reviewability generally,

579 U.S. at 273, and on Cuozzo’s application of the unreviewability principle even in a case in which a review

was instituted and completed and a proper appeal was

taken to this court of the Board’s final written decision,

id. at 271-75. The Court in Arthrex directly relied on

Thryv, in which the Court, as in Cuozzo, applied the

5

The Court in Cuozzo recognized, as SAS was soon to illustrate, that some statutory provisions addressed to other matters

might have an indirect bearing on institution, and for that reason

the Cuozzo Court said that it was not deciding “the precise effect of

§ 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other

questions of interpretation that reach, in terms of scope and impact,

well beyond” § 314. 579 U.S. at 275. The Court in Cuozzo further

stated that its holding did not “enable the agency to act outside its

statutory limits by, for example, canceling a patent claim for ‘indefiniteness under § 112’ in an inter partes review.” Id. The example

given is the PTO’s “canceling a patent claim” in an IPR (after institution, see § 318(b)), not an aspect of the institution determination.

Id. The Court in Thryv subsequently noted, without elaboration,

that it was not “decid[ing] whether mandamus might be available in

an extraordinary case.” 140 S. Ct. at 1374 n.6. The case before us is

not a mandamus case. See also Mylan, 989 F.3d at 1382 (holding

mandamus standard not met for challenge to denial based on Fintiv

instructions).

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unreviewability principle in a proper appeal and made

clear that the principle bars judicial resolution of even

run-of-the-mill statutory interpretation issues inherent

in an institution determination by the Director as long as

the statutory provision is one sufficiently focused on institution itself, as the Court held was true of § 315(b),

Thryv, 140 S. Ct. at 1372-73. Nothing in the unreviewability principle repeatedly affirmed by the Supreme

Court in this setting, moreover, turns on whether the Director has provided an explanation (as the Board, as delegatee, typically does). That is hardly surprising, as the

Supreme Court has rejected the notion that “if the

agency gives a ‘reviewable’ reason for otherwise unreviewable action, the action becomes reviewable.” Interstate Commerce Commission v. Brotherhood of Locomotive Engineers, 482 U.S. 270, 283 (1987).

The present case, unlike Thryv and Cuozzo, does not

involve a petition-specific challenge, i.e., a challenge to a

Director determination whether to institute a review requested in an individual petition. Rather, it involves a

challenge to the Director’s instructions to the Board, as

delegatee, regarding how to exercise the Director’s institution discretion. But we conclude that the IPR statute’s preclusion of review, as now settled by the Supreme Court based on statutory text, legislative history,

and structure, must encompass preclusion of review of

the content-focused challenges to the instructions at issue here.

This conclusion rests on what we already confirmed

in Ethicon, namely, the inevitability and congressional

expectation of the Director’s delegation of the institution

decision, given the large number of institution decisions

the Director would otherwise have to make personally,

in highly technical matters involving significant records,

while fulfilling many other responsibilities. See Ethicon,

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812 F.3d at 1031-32. Given the need for delegation, and

the Director’s “political responsibility of determining

which cases should proceed,” Saint Regis Mohawk Tribe

v. Mylan Pharmaceuticals Inc., 896 F.3d 1322, 1327-28

(Fed. Cir. 2018), the Director must be able to give guidance in the form of instructions to her delegatee(s)—the

Board (or Board panels)—about how to make the institution determinations on her behalf. Such guidance is

crucial for ensuring that such determinations will overwhelmingly be made in accordance with the policy

choices about institution she would follow if she were

making the determinations herself and, relatedly, for

minimizing the number of occasions on which she has to

reverse such determinations, as she may do, see Palo

Alto Networks, 44 F.4th at 1375. If the congressional

preclusion of review of the decision to institute is to be

respected in the inevitable system of delegation, it must

extend to the substance of such instructions.

If the Director personally made an institution decision accompanied by an explanation containing the same

reasoning as appears in the instructions here at issue,

then the decision would be unreviewable for being contrary to statute or arbitrary and capricious. For the IPR

system to function with the delegations that are inevitable and congressionally expected, the same conclusion

must follow for the instructions given by the Director to

the Board as delegatee. We therefore affirm the district

court’s dismissal of plaintiffs’ first two challenges under

5 U.S.C. § 701(a)(1).6

6

In the first two challenges, plaintiffs assert that the instructions, because of their content, will likely lead to non-institution determinations that will harm them. Non-institution determinations

are a species of non-enforcement decisions, which are among the few

recognized categories of agency action that are generally

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B

Plaintiffs’ third challenge is that the Director was

required, by 35 U.S.C. § 316 together with 5 U.S.C. § 553,

to promulgate the institution instructions through notice-and-comment rulemaking procedures. This challenge, we conclude, may be pressed under the APA. We

also hold that at least Apple has standing to press it.

1

Whether notice-and-comment rulemaking procedures had to be employed for an agency action presents

a matter “quite apart from the matter of substantive reviewability” of the action for being contrary to statute or

arbitrary and capricious. Lincoln v. Vigil, 508 U.S. 182,

195 (1993); see American Medical Association v. Reno,

57 F.3d 1129, 1134 (D.C. Cir. 1995) (“[U]nder the APA

the ultimate availability of substantive judicial review is

distinct from the question of whether the basic rulemaking strictures of notice and comment and reasoned

“committed to agency discretion by law,” 5 U.S.C. § 701(a)(2). See

Cuozzo, 579 U.S. at 273 (“[T]he agency’s decision to deny a petition

is a matter committed to the Patent Office’s discretion.” (citing

§ 701(a)(2))); Department of Homeland Security v. Regents of University of California, 140 S. Ct. 1891, 1905-06 (2020); Department of

Commerce v. New York, 139 S. Ct. 2551, 2565 (2019); Lincoln v.

Vigil, 508 U.S. 182, 191 (1993); Heckler v. Chaney, 470 U.S. 821, 83132 (1985). Some court decisions from outside the Supreme Court

suggest that certain agency announcements of non-enforcement

policy may fall outside the § 701(a)(2) exclusion from APA review.

See, e.g., Crowley Caribbean Transport, Inc. v. Pena, 37 F.3d 671,

676 (D.C. Cir. 1994). The Supreme Court in Regents, when presented with an argument along those lines, did not reach the argument, because it held that the policy at issue was not a mere nonenforcement policy. 140 S. Ct. at 1906-07. We do not reach it either,

as we affirm dismissal of plaintiffs’ first two challenges based on

§ 701(a)(1) and so need not decide whether § 701(a)(2) would independently support dismissal.

19a

explanation apply. ... The APA’s procedural requirements are enforceable apart from the reviewability of

the underlying action, and, indeed, support several important functions wholly distinct from judicial review.”

(omission of internal Lincoln citation and quote)); Story

v. Marsh, 732 F.2d 1375, 1381, 1384 (8th Cir. 1984); Natural Resources Defense Council v. U.S. Department of

Energy, 362 F. Supp. 3d 126, 147 (S.D.N.Y. 2019); Batalla Vidal v. Duke, 295 F. Supp. 3d 127, 148 (E.D.N.Y.

2017). Given this recognized distinction, we reject a conclusion of unreviewability, under § 701(a)(1) or (2), for

plaintiffs’ third challenge.

Here, as discussed above, the Supreme Court has

held that clear and convincing evidence establishes a

congressional protection from judicial review of the substance of the Director’s institution discretion. That holding does not cover, and we see no basis for extending it

to protect as well, the Director’s choice of whether to use

notice-and-comment rulemaking to announce instructions for the institution decision. The government here

has not shown that anything in § 314(d) or elsewhere in

the IPR statute supplies clear and convincing evidence

that there was to be no judicial review of the choice of

announcement procedure, a matter for which generally

applicable standards exist. See, e.g., Lincoln, 508 U.S. at

196; Xi’an Metals & Minerals Import & Export Co. v.

United States, 50 F.4th 98, 105-06 (Fed. Cir. 2022). In

these circumstances, we have been shown no sufficient

justification for a conclusion that the high standard of

§ 701(a)(1) for inferring a preclusion of review is met for

this distinct issue.

Nor have we been presented a persuasive justification for concluding that the use or non-use of notice-andcomment rulemaking procedures is a matter “committed

to agency discretion by law,” 5 U.S.C. § 701(a)(2). The

20a

general rule that non-enforcement choices are committed to agency discretion by law, see supra n.5, does not

mean that the choice of announcement procedure for issuing instructions for the making of choices is also committed to agency discretion by law. And at least because

of the developed standards under 5 U.S.C. § 553, this is

not a case where there is “no meaningful standard” by

which to judge the process choice. Department of Commerce v. New York, 139 S. Ct. 2551, 2568 (2019) (considering whether matter was “one of those areas traditionally committed to agency discretion” and, then, whether

there was “no meaningful standard” to use the judge the

agency action).

The Supreme Court’s decision in Lincoln supports

our conclusion about reviewability regarding plaintiffs’

third challenge. The Court there held that § 701(a)(2)

barred review of the substance of an agency’s choice of

how to allocate a lump-sum appropriation, because allocation under a lump-sum appropriation was a recognized

category of action committed to the agency’s discretion.

Lincoln, 508 U.S. at 191-95. But the Court was not asked

to and did not hold unreviewable, for compliance with 5

U.S.C. § 553, the agency’s choice not to use notice-andcomment rulemaking; instead, it decided, on the merits,

that § 553 did not require notice-and-comment rulemaking for the agency decision at issue. Id. at 195-99. The

government in Lincoln explained this distinction, stating: “The rulemaking provision of the APA, 5 U.S.C.

553, may itself provide ‘law to apply’ for reviewing

agency procedures, even if there is otherwise no jurisdiction to review the substance of an agency decision.”

Brief for Petitioners, Lincoln, 508 U.S. 182 (No. 911833), 1992 WL 547219, at *10 n.8 (citing Story, 732 F.2d

at 1381, 1384). We conclude that the distinction applies

here.

21a

2

We also conclude that at least Apple has standing to

press the challenge to the Director’s instructions as invalid for want of notice-and-comment rulemaking. We

so conclude without aggregating the plaintiffs’ asserted

threatened harms, an approach taken by plaintiffs without arguing for its propriety. See, e.g., Summers v.

Earth Island Institute, 555 U.S. 488, 494-97 (2009) (analyzing individual plaintiffs separately); ASARCO Inc. v.

Kadish, 490 U.S. 605, 615 (1989) (“[T]he doctrine of

standing to sue is not a kind of gaming device that can be

surmounted merely by aggregating the allegations of

different kinds of plaintiffs, each of whom may have

claims that are remote or speculative taken by themselves.”); Valley Forge Christian College v. Americans

United for Separation of Church & State, Inc., 454 U.S.

464, 489 (1982) (“The law of averages is not a substitute

for standing.”). We will focus on Apple alone, and our

conclusion that it has standing to press the remaining

challenge permits us to reverse the dismissal and remand for the merits of that challenge to be addressed

(along with any question about standing of other plaintiffs available for decision on remand if necessary). See,

e.g., Little Sisters of the Poor Saints Peter & Paul Home

v. Pennsylvania, 140 S. Ct. 2367, 2379 n.6 (2020);

Rumsfeld v. Forum for Academic & Institutional

Rights, Inc., 547 U.S. 47, 52 n.2 (2006).

In reviewing a standing determination made on a

motion to dismiss a complaint, like the standing determination before us in this appeal, we assess standing de

novo. Ford Motor Co. v. United States, 688 F.3d 1319,

1323 (Fed. Cir. 2012). We ask if the standard at the complaint stage, requiring allegations of fact plausibly indicating satisfaction of the legal requirement, is met. See

TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2208

22a

(2021); Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–

61 (1992); James v. J2 Cloud Services, LLC, 887 F.3d

1368, 1372 (Fed. Cir. 2018). We focus on the allegations

of the complaint, but, under the regional circuit’s law we

apply, we may also consider, at least, matters of which

we may properly take judicial notice. See Lee v. City of

Los Angeles, 250 F.3d 668, 689–90 (9th Cir. 2001).

For a plaintiff to have standing, the plaintiff must

show (1) an “injury in fact,” (2) “a causal connection between the injury and the conduct complained of,” and (3)

a likelihood that “the injury will be redressed by a favorable decision.” Lujan, 504 U.S. at 560–61 (internal quotation marks omitted). An injury in fact is “a legally protected interest which is (a) concrete and particularized”

and “(b) actual or imminent, not conjectural or hypothetical.” Id. at 560 (internal quotation marks omitted). The

Court has found an assertion of future injury insufficient

where it “involve[d] a significant degree of guesswork.”

Trump v. New York, 141 S. Ct. 530, 536 (2020). On the

other hand, “[a]n allegation of future injury may suffice

if the threatened injury is certainly impending, or there

is a substantial risk that the harm will occur.” Susan B.

Anthony List v. Driehaus, 573 U.S. 149, 159 (2014) (internal quotation marks omitted) (quoting Clapper v.

Amnesty International USA, 568 U.S. 398, 414 n.5

(2013)); Department of Commerce, 139 S. Ct. at 2566. Of

particular significance for this case, when a plaintiff asserts an entitlement to a rulemaking, the redressability

requirement for standing is relaxed: It is enough for

that element to be met that “there is some possibility

that the requested relief,” namely, notice-and-comment

rulemaking, would “prompt the [agency] to reconsider

the decision that allegedly harmed” the plaintiff. Massachusetts v. Environmental Protection Agency, 549

U.S. 497, 518 (2007); see Summers, 555 U.S. at 496-97;

23a

Lujan, 504 U.S. at 572 n.7; Iowa League of Cities v. Environmental Protection Agency, 711 F.3d 844, 871 (8th

Cir. 2013); Sierra Club v. Environmental Protection

Agency, 699 F.3d 530, 533 (D.C. Cir. 2012).

Apple is non-speculatively threatened with harm to

a legally protected interest from the challenged instructions. The complaint asserts harm with only brief elaboration. See Amended Complaint, ¶¶ 23, 28, Apple, No.

20-cv-06128, 2021 WL 5232241, ECF No. 54; J.A. 1134;

J.A. 1136. But that is enough in this case. We may take

judicial notice that Apple is a repeat player, in the relevant respect, on a very large scale. On a regular basis,

for many years, it has been sued for infringement (giving

it a concrete stake) and then petitioned for an IPR of patent claims at issue in that suit. Some of the petitions

have been denied—for Apple, at least in Fintiv itself—

based on the institution instructions at issue.

Given that history, it is far from speculative that this

sequence will be repeated in the future, considering Apple’s size and use of a wide variety of technologies and

the realistically perceived advantages of the IPR process, including the applicability of a lighter burden of

persuasion to prevail in challenging a patent claim than

the burden applicable in district court. See Jibril v.

Mayorkas, 20 F.4th 804, 815 (D.C. Cir. 2021) (concluding

that “extensive” history supporting “future plans” can

establish injury in fact); N.B. ex rel. Peacock v. District

of Columbia, 682 F.3d 77, 84 (D.C. Cir. 2012)

(“[A]lthough ‘past ... conduct does not in itself show a

present case or controversy regarding injunctive relief,’

‘past wrongs’ may serve as ‘evidence bearing on whether

there is a real and immediate threat of repeated injury.’”

(cleaned up) (quoting City of Los Angeles v. Lyons, 461

U.S. 95, 102 (1983))). It is not unduly conjectural, but

“the predictable effect” of the instructions, Department

24a

of Commerce, 139 S. Ct. at 2566, that the challenged instructions, which are plausibly alleged to cause more denials of institution than might otherwise occur, will continue causing harm in the form of denial of the benefits

of IPRs linked to the concrete interest possessed by an

infringement defendant—even though Apple cannot

specify in advance individual IPR requests (filed with an

infringement suit pending) that will be denied. These

facts, we conclude, mean that “there is a substantial risk

that the harm will occur” in the future because of the instructions. Susan B. Anthony List, 573 U.S. at 159 (internal quotation marks omitted) (quoting Clapper, 568

U.S. at 414 n.5). The injury is concrete and legally protected, because of the infringement suit, so the injury

and causation requirements for standing are met.

The applicable standard for redressability here is

also met. There is a genuine possibility that the instructions would be changed in a way favorable to Apple in a

notice-and-comment rulemaking. That possibility is confirmed by the fact that the Director, in response to comments, announced favorable clarifications in the June

2020 Memo.

For those reasons, we conclude that Apple has

standing to press the claim that the challenged instructions were improperly put in place without notice-andcomment rulemaking.7

7

Neither side has suggested mootness of this challenged based

on the June 2022 Memo or subsequent clarifications, see supra n.4,

which, like their predecessors, were not put in place through noticeand-comment rulemaking (including publication in the Federal Register). A challenge might not be mooted by a change in challenged

conduct if the alteration is itself subject to the same asserted deficiency as its predecessor. See, e.g., Davenport v. Washington Education Association, 551 U.S. 177, 182 n.1 (2007); Northeastern Florida Chapter of Associated General Contractors of America v. City

25a

III

For the foregoing reasons, we affirm the district

court’s judgment dismissing plaintiffs’ challenges to the

Director’s instructions as substantively contrary to statute and as arbitrary and capricious. We reverse the district court’s dismissal for unreviewability of plaintiffs’

challenge to the Director’s instructions as having improperly been issued without notice-and-comment rulemaking, a challenge that we also conclude at least Apple

has standing to press. We remand for consideration of

this one challenge on the merits.

The parties shall bear their own costs.

AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED

of Jacksonville, 508 U.S. 656, 661–63 (1993); 13C Charles A. Wright

& Arthur R. Miller, Federal Practice and Procedure § 3533.6 at n.63

(3d ed. 2022). The post-Fintiv clarifications do not appear to moot

plaintiffs’ third challenge, the only one remaining after our unreviewability holding regarding the first two challenges. Any further

exploration of the effect of the post-Fintiv clarifications is left to the

district court on remand.

27a

APPENDIX B

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

Case No. 5:20-cv-06128-EJD

Re: Dkt. Nos. 64, 65

Filed November 11, 2021

APPLE INC., et al.,

Plaintiffs,

v.

ANDREI IANCU,

Defendant.

ORDER GRANTING MOTION TO DISMISS;

TERMINATING MOTION FOR

SUMMARY JUDGMENT

Under the Leahy-Smith America Invents Act

(“AIA”), 35 U.S.C. § 100 et seq., a party may ask the U.S.

Patent and Trademark Office (“the PTO”) to review and

potentially cancel claims in an already-issued patent that

the PTO finds to be unpatentable in light of prior art.

See 35 U.S.C. §§ 102, 103. This process, called “inter

partes review” (“IPR”), is widely used to determine the

patentability of patent claims that are the subject of

pending patent infringement litigation. Plaintiffs challenge two PTO decisions that establish non-exclusive

factors to aid in the PTO’s determination of whether to

institute IPR and argue that these decisions violate the

Administrative Procedure Act (“APA”) because they

are arbitrary, capricious, and unlawful under the AIA.

28a

Defendant contends that the Court cannot reach Plaintiffs’ challenge, both because Plaintiffs lack standing and

because the issue is not justiciable. The Court must

agree with Defendant—while Plaintiffs have standing to

pursue their claims, the Court is bound by Cuozzo Speed

Technlogies, LLC v. Lee, 579 U.S. 261 (2016) and Thryv,

Inc. v. Click-To-Call Tehcnologies, 140 S. Ct. 1367

(2020), which require the Court to dismiss this action for

lack of jurisdiction.

I.

BACKGROUND

A. The Inter Partes Review Process

The Constitution grants Congress the power “[t]o

promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” U.S. Const. art. I, § 8, cl. 8. Pursuant to this power,

Congress created a patent system that grants inventors

rights over the manufacture, sale, and use of their inventions. See 35 U.S.C. § 100 et seq. Inventors can secure a

patent by filing an application with the PTO that includes “claims” that describe the invention. A patent examiner then reviews the patent claims, considers the

prior art, and determines whether each claim meets the

applicable patent law requirements. See id. §§ 101, 102,

103, 112. The examiner then accepts the claim or rejects

it and explains why. See id. § 132(a).

“Sometimes, though, bad patents slip through.”

SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1353 (2018). To

remedy this problem, Congress allows parties to challenge the validity of patent claims in federal court. See

35 U.S.C. § 282(b)(2)-(3). Congress also has created an

administrative process that allows a patent challenger to

ask the PTO to reconsider the validity of an earlier

granted patent claim. Specifically, in 2011, Congress

29a

enacted the AIA, which modified the “inter partes reexamination” system in favor of “inter partes review.” See

H.R. Rep. No. 112-98, pt. 1, pp. 46-47 (2011) (H.R. Rep.),

codified at 35 U.S.C. §§ 311-19.

The IPR regime functions like civil litigation. A

party must first file “a petition to institute an inter

partes review of [a] patent. 35 U.S.C. § 311(a). The petition “may request to cancel as unpatentable 1 or more

claims of [the] patent” on the ground that the claims are

obvious or not novel. Id. § 311(b). The petition must

identify “each claim challenged,” the grounds for the

challenge, and the evidence supporting the challenge.

Id. § 312(a)(3). After a petition is filed, the patent owner

may respond with “a preliminary response to the petition” to explain “why no inter partes review should be

instituted.” Id. § 313. With the parties’ submissions, the

Director of the PTO (“the Director”) then decides

“whether to institute an inter partes review … pursuant

to [the] petition.” Id. § 314(b). Before instituting review,

the Director must determine “that there is a reasonable

likelihood that the petitioner would prevail with respect

to at least 1 of the claims challenged in the petition.” 35

U.S.C. § 314(a).

The Director has delegated this authority to the Patent Trial and Appeal Board (“the PTAB”) to exercise

on his behalf. 37 C.F.R. § 42.4(a) (2017). The PTAB-patent judges are appointed by the Secretary of Commerce

and must be “persons of competent legal knowledge and

scientific ability.” 35 U.S.C. § 6(a), (c). Once the Director

institutes IPR, the case proceeds before the PTAB “with

many of the usual trappings of litigation.” SAS Inst., 138

S. Ct. at 1354. For example, the parties conduct discovery, issue briefing, and appear before the PTAB for an

oral hearing. 35 U.S.C. § 316(a)(5), (6), (8), (10), (13). The

parties also may settle the action and end IPR. Id. § 317.

30a

If, however, IPR is instituted and the action is not settled, the PTAB must “issue a final written decision with

respect to the patentability of any patent claim challenged by the petitioner.” Id. § 318(a).

35 U.S.C. §§ 315 and 316(a)(11) establish time limits

for the institution and completion of IPR. For instance,

IPR may not be instituted if the “petition requesting the

proceeding is filed more than 1 year after the date on

which the petitioner, real party in interest, or privy of

the petitioner is served with a complaint alleging infringement of the patent.” 35 U.S.C. § 315(b). As a result, the “life-span” of an IPR from the filing of a petition

to a final written decision is typically only 18 months.

See 35 U.S.C. § 316(a)(11); C.F.R. § 42.107(b); Amended

Complaint for Declaratory and Injunctive Relief

(“Compl.”), Dkt. No. 54.

Finally, while the AIA authorizes judicial review of

a “final written decision” canceling a patent claim, it does

not allow for review of the Director’s initial decision

whether to institute IPR. Compare 35 U.S.C. § 319 (allowing a party dissatisfied with the PTAB’s final written

decision to appeal the decision), with id. § 314(d) (“The

determination by the Director whether to institute inter

partes review under this section shall be final and appealable.”).

B. The NHK/Fintiv Decisions

By default, the PTAB’s decisions in IPR proceedings have no precedential force in future cases. Patent

Trial and Appeal Board, Standard Operating Procedure

2 (Rev. 10) (“SOP-2”), at 3, 8-9 (Sept. 20, 2018). However, the PTO has established a procedure for designating select PTAB decisions as “precedential.” SOP-2 at

1-2, 8-12. Specifically, the Director decides whether to

designate a Board decision as precedential. SOP-2 at 11.

31a

This procedure does not allow for public notice of or public comment on the PTAB’s decision to designate an IPR

decision as precedential. SOP-2 at 8-11. Decisions designated as precedential are “binding” on the PTAB “in

subsequent matters involving similar factors or issues.”

SOP-2 at 11.

Two recent, precedential PTAB decisions are at issue: NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc., No.

IPR2018-00752, 2018 WL 4373643 (P.T.A.B. Sept. 12,

2018) (“NHK”) and Apple Inc. v. Fintiv, Inc., No.

IPR2020-00019, 2020 WL 2126495 (P.T.A.B Mar. 20,

2020) (“Fintiv”).

In NHK, the PTAB exercised its discretion under

both 35 U.S.C. §§ 314(a) and 325(d)(6) to deny institution

of IPR, in part due to a parallel district court trial that

was scheduled six months away. After Intri-Plex Technologies, Inc. sued NHK International and its parent

company, NHK Spring, for infringement of U.S. Patent

No. 6,183,841 in the Northern District of California, NHK

Spring petitioned for IPR. Intri-Plex Techs., Inc. v.

NHK Int’l Corp., No. 3-17-cv-1097 (N.D. Cal. 2017). The

PTAB denied institution because of the parallel district

court proceedings. . The PTAB found that “the advance

state of the district court proceeding[s] … weigh[ed] in

favor of denying [IPR] under § 314(a)” because the petitioner asserted the arguments in both its petition for IPR

and before the district court proceeding. Id.

In Fintiv, the PTAB clarified how it would consider

parallel litigation when deciding whether to institute

IPR. 2020 WL 2126495. There, Apple sought IPR of patent claims that had been asserted against the company

in an infringement suit in federal court. Apple filed the

petition less than ten months after the parallel infringement suit began. Building on NHK, the PTAB stated

32a

that in the interests of “system efficiency, fairness, and

patent quality,” it would “weigh” six factors under 35

U.S.C. § 314(a) when deciding whether to institute IPR.

Id. at *3 (hereinafter “the NHK-Fintiv rule”). Those

factors are:

1.

Whether the district court granted a stay or evidence exists that a stay may be granted if IPR

proceedings are instituted;

2.

The proximity of the court’s trial date to the

PTAB’s projected statutory deadline for a final

written decision;

3.

The investment by the parties and district court

in the parallel proceeding;

4.

The overlap between the issues raised in the petition and the parallel proceeding;

5.

Whether the IPR petitioner and the defendant

in the parallel proceeding are the same party;

and

6.

Other circumstances that impact the Board’s exercise of discretion, including the merits of the

challenge to patentability.

C. Plaintiffs’ Lawsuit

Plaintiffs allege that the PTAB has applied NHKFintiv rule to unlawfully deny numerous IPR petitions,

including petitions filed by Plaintiffs. Compl. ¶ 54. Plaintiffs filed this action to challenge the Director’s authority

to reject petitions for IPR using the NHK-Fintiv rule.

Compl. ¶¶ 65-71. Plaintiffs assert three claims, each arising under the Administrative Procedure Act (“APA”).

First, Plaintiffs argue that pursuant to 5 U.S.C.

§ 706(2)(C), this Court must “hold unlawful and set

aside” the Director’s use of the NHK-Fintiv rule

33a

because the Director exceeded his statutory authority in

adopting it. Compl. ¶¶ 82-86 (Count I). Second, Plaintiffs

argue that pursuant to 5 U.S.C. § 706(2)(A), this Court

must “hold unlawful and set aside” the NHK-Fintiv rule

because it is is arbitrary, capricious, and violates the

AIA. Compl. ¶¶ 87-91 (Count II). Finally, Plaintiffs argue that pursuant to 5 U.S.C. § 706(2)(D), this Court

must “hold unlawful and set aside” the NHK-Fintiv rule

because it is a final, binding rule that was issued without

notice and comment. Compl. ¶¶ 92-95 (Count III).

Defendant has moved to dismiss the Amended Complaint under Federal Rule of Civil Procedure 12(b)(1) on

the grounds that Plaintiffs lack standing or, in the alternative, that Plaintiffs claims are not justiciable under the

APA. Plaintiffs have moved for summary judgment.

The Court only reaches Defendant’s motion to dismiss.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 12(b)(1) requires

dismissal when the plaintiff fails to meet his or her burden of establishing subject-matter jurisdiction. St. Clair

v. City of Chico, 880 F.2d 199, 201 (9th Cir. 1989). Dismissal on this basis is appropriate when a plaintiff fails

to establish standing, Oregon v. Legal Servs. Corp., 552

F.3d 965, 969 (9th Cir. 2009), abrogated on other grounds

by Bonds v. United States, 564 U.S. 211 (2011), or brings

a non-cognizable claim under the APA, Fairbanks North

Star Borough v. U.S. Army Corps of Engineers, 543 F.3d

586, 591 (9th Cir. 2008).

A defendant may either challenge jurisdiction “facially” by arguing the complaint “on its face” lacks jurisdiction or “factually” by presenting extrinsic evidence

that demonstrates the lack of jurisdiction. Wolfe v.

Strankman, 392 F.3d 358, 362 (9th Cir. 2004); Safe Air for

Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004).

34a

“In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face

to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations

that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone, 373 F.3d at 1039.

III. DISCUSSION

A. Article III Standing

To satisfy Article III’s standing requirements, “a

plaintiff must show (1) it has suffered an ‘injury in fact’

that is (a) concrete and particularized and (b) actual or

imminent, not conjectural or hypothetical; (2) the injury

is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed to merely speculative,

that the injury will be redressed by a favorable decision.” Friends of the Earth, Inc. v. Laidlaw Envtl. Servs.

(TOC), Inc., 528 U.S. 167, 180-81 (2000). As the party

invoking federal jurisdiction, the plaintiff bears the burden of establishing that all three requirements are met.

Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). “At

the pleading stage, general factual allegations of injury

resulting from the defendant’s conduct may suffice.” Id.

Because Plaintiffs seek prospective relief, they must

show that “the threatened injury is ‘certainly impending,’ or there is a ‘substantial risk’ that the harm will occur.” Susan B. Anthony List v. Driehaus, 573 U.S. 149,

158 (2014) (quoting Clapper v. Amnesty Int’l USA, 568

U.S. 398, 414 n.5 (2013)).

1. Injury-in-Fact

To demonstrate an “injury in fact,” a plaintiff must

allege that it has sustained “an invasion of a legal protected interest” that is “concrete and particularized” and

“actual or imminent.” Lujan, 504 U.S. at 560 (citations

35a

omitted). When, as in this case, a suit challenges the legality of government action or inaction, the nature and

extent of facts that must be averred at the pleading

stage to establish standing depends upon whether the

plaintiff is “himself an object of the action (or foregone

action) at issue.” Id. at 561. If he is, “there is ordinarily

little question that the action or inaction has caused him

injury, and that a judgment preventing or requiring the

action will redress it.” Id. 561-62.

Defendant argues that Plaintiffs cannot establish an

injury-in-fact because under the AIA they have no protected right to IPR. See Motion to Dismiss Plaintiffs’

Complaint (“MTD”) at 9, Dkt. No. 64. In the Defendant’s

view, because the Director possesses unreviewable discretion over the initiation decision, Plaintiffs cannot allege that they are harmed by the NHK-Fintiv rule. But

Plaintiffs do not argue that they are harmed by the denial of IPR. Instead, Plaintiffs identify harms that result from the Director’s allegedly unlawful use of the

NHK-Fintiv rule. Specifically, Plaintiffs allege that (1)

because the AIA prescribes the factors that the Director

can consider during the initiation decision process and

allows for IPR during parallel litigation, the NHK-Fintiv rule violates the APA as it requires the PTAB to consider factors outside the considerations prescribed in the

AIA; (2) the use of the NHK-Fintiv rule imposes an unlawful obstacle to IPR because it increases the risk that

an IPR petition (including ones submitted by Plaintiffs)

will be denied; (3) which deprives Plaintiffs of the benefits of IPR. See Compl. ¶¶ 80-95. Thus, contrary to Defendant’s position, Plaintiffs’ alleged injury is not that

they were denied IPR, but that the Director is using unlawful considerations that increase the risk of denial,

thereby depriving them of the benefits of IPR. See

Compl. ¶¶ 31-32, 54-61 (naming benefits of IPR).

36a

Plaintiffs have established that the NHK-Fintiv

rule have harmed or present a “substantial risk” of

harming them. This is a sufficient injury-in-fact. See Susan B. Anthony, 573 U.S. at 158; see also E. Bay Sanctuary Covenant v. Biden, 993 F.3d 640, 665 (9th Cir.

2021) (“An injury-in-fact is ‘an invasion of a legally protected interest,’ but this means an interest that is only

concrete and particularized and actual or imminent—not

an interest protected by statute. This distinction prevents Article III standing requirements from collapsing

into the merits of a plaintiff’s claim … .”). Indeed, as

courts have previously found, the denial of an opportunity to obtain a benefit is itself an injury-in-fact. See,

e.g., Abboud v. I.N.S., 140 F.3d 843, 847 (9th Cir. 1998)

(holding that a “lost opportunity represents a concrete

injury”), superseded by statute as stated in Hsiao v.

Scalia, 821 F. App’x 680, 683-84 (9th Cir. 2020); Settles v.

U.S. Parole Comm’n, 429 F.3d 1098, 1101-03 (D.C. Cir.

2005) (holding that the plaintiff had standing to challenge a regulation that made it more difficult for him to

gain the benefit of parole); Robertson v. Allied Sols.,

LLC, 902 F.3d 690, 697 (7th Cir. 2018) (“Article III’s

strictures are met not only when a plaintiff complains of

being deprived of some benefit, but also when a plaintiff

complains that she was deprived of a chance to obtain a

benefit.”).

2. Causation

There must be a causal connection between the injury and the conduct complained of—“the injury has to

be ‘fairly … trace[able] to the challenged action of the

defendant, and not … th[e] result [of] the independent

action of some third party not before the court.” Lujan,

504 U.S. at 560 (alterations in original) (quoting Simon

v. E. Ky. Welfare Rights Org., 426 U.S. 26, 41-42 (1976)).

37a

Plaintiffs have met the causation requirement.

Their Amended Complaint demonstrates that the NHKFintiv rule (the conduct complained of) diminishes their

opportunity to experience the benefits of IPR (the injury asserted). Compl. ¶¶ 52–62.

3. Redressability

It must be “likely,” as opposed to merely “speculative,” that the injury will be “redressed by a favorable

decision.” Lujan, 504 U.S. at 561. Plaintiffs ask the

Court to enjoin the Director from applying the NHKFintiv rule. See Compl. at 20. If Plaintiffs prevail, this

Court could enjoin the use of the NHK-Fintiv rule,

which would redress the Plaintiffs’ injuries. See Nat’l

Wildlife Fed’n v. Espy, 45 F.3d 1337, 1343 (9th Cir. 1995).

Plaintiffs have thus established redressability and have

met their obligation to establish standing.

B. Justiciability

Before reaching the question of whether the use of

the NHK-Fintiv rule violates the APA, this Court must

first ensure that this issue is reviewable considering the

Supreme Court’s analysis of 35 U.S.C. § 314(d) in Cuozzo

Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016).

Under 35 U.S.C. 314(d), “[t]he determination by the Director whether to institute an inter partes review under

this section shall be final and nonappealable.”

In Cuozzo, the Supreme Court analyzed this “no appeal” provision in the context of a challenge to the Director’s decision to institute IPR of two claims. 136 S. Ct.

at 2138. There, the Director agreed to reexamine three

claims, even though the petition for IPR only expressly

challenged one of the claims. Id. As in this case, Cuozzo

argued that the Directors acted outside his legal authority and violated the APA by instituting IPR with respect

38a

to the two unchallenged claims because 35 U.S.C.

§ 312(a)(3) requires the petition for IPR to identify “in

writing and with particularity, each claim challenged.”

In finding the Director’s institution decision unreviewable, the Court determined that § 314(d) applies where

the grounds for challenging the Director’s institution decision “consist of questions that are closely tied to the

application and interpretation of statutes related to [the

Director’s] decision to initiate inter partes review.”

Cuozzo, 136 S. Ct. at 2141. However, the Court emphasized that its holding did not decide “the precise effect of

§ 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes,

or that present other questions of interpretation that

reach, in terms of scope and impact, well beyond

[§ 314(d)].” Id. The Court explained that institution decisions that implicate due process concerns or jurisdictional violations are not “categorically precluded” from

judicial review under § 314(d). Id. at 2141-42.

More recently, in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367, 1373 (2020), the Supreme

Court held that the Director’s application of 35 U.S.C.

§ 315(b)’s time bar is “final and nonappealable” under 35

U.S.C. § 314(d). Relying on Cuozzo, the Court determined that the Director’s application of the time bar is

“closely related to its decision whether to institute inter

partes review and is therefore rendered nonappealable

by § 314(d).” Thryv, 140 S. Ct. at 1370. The Court explained that § 315(b)’s “time limitation is integral to, indeed a condition on, institution” and concluded that “[a]

challenge to a petition’s timeliness under § 315(b) thus

raises an ‘ordinary dispute about the application of’ an

institution-related statute.” Id. at 1373 (quoting Cuozzo,

136 S. Ct. at 2139).

39a

Much like Thryv, the NHK-Fintiv rule establishes

factors that are “closely related to [the Director’s decision] whether to institute inter partes review.” Thryv,

140 S. Ct. at 1370. Plaintiffs’ challenge does not fit within

the categories of non-precluded review. See Cuozzo, S.

Ct. at 2141-42 (stating that constitutional challenges or

jurisdictional violations are not “categorically precluded”). Thus, in view of Cuozzo and Thryv, this Court

cannot deduce a principled reason why preclusion of judicial review under § 314(d) would not extend to the Director’s determination that parallel litigation is a factor

in denying IPR. See Saint Regis Mohawk Tribe v.

Mylan Pharms. Inc., 896 F.3d 1322, 1327 (Fed. Cir. 2018)

(“If the Director decides not to institute [IPR], for whatever reason, there is no review.”) (emphasis added)). To

inquire into the lawfulness of the NHK-Fintiv rule, the

Court would have to analyze “questions that are closely

tied to the application and interpretation of statutes related to the [Director’s] decision to initiate inter partes

review.” Cuozzo, 136 S. Ct. at 2141-42. Cuozzo forbids

this and so the Court must conclude that Plaintiffs’ challenge to the NHK-Fintiv rule is barred by § 314(d).

IV. CONCLUSION

The Court GRANTS Defendant’s motion to dismiss

for lack of subject-matter jurisdiction. The Court TERMINATES Plaintiffs’ motion for summary judgment.

The Clerk shall close the file.

IT IS SO ORDERED.

Dated: November 10, 2021

(signature)

EDWARD J. DAVILA

United States District Judge