SIPCO, LLC v. EMERSON ELECTRIC CO.

Before O’Malley, Reyna, and Chen. Appeal from the Patent Trial and Appeal Board.

Summary: The Board’s determination that a patent qualifies for CBM review is non-appealable under 35 U.S.C. § 324(e).

Emerson petitioned the Patent Trial and Appeal Board (Board) for covered business method (CBM) review of SIPCO’s patent. The Board determined the patent qualifies for CBM review, instituted review, and issued a final written decision finding the challenged claims patent-ineligible under § 101 and obvious under § 103. The Federal Circuit vacated the Board’s decision, including its determination that the patent qualified for CBM review.

Emerson petitioned for a writ of certiorari to the U.S. Supreme Court based on 35 U.S.C. § 324(e), which prohibits appeals of the decision to institute CBM review. Emerson asserted that § 324(e) extends to prohibit appeals of the Board’s determination that a patent qualifies for CBM review. The Supreme Court granted Emerson’s petition, vacated the Federal Circuit’s opinion, and remanded for further consideration in light of the Supreme Court’s decision in Thryv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367 (2020).

On remand in light of Thryv, the Federal Circuit agreed that § 324(e) extends to prohibit appeals of the Board’s determination that a patent qualifies for CBM review. In Thryv, the Supreme Court held that a no-appeal provision for inter partes review (IPR) prohibits appeals of the Board’s determination regarding whether an IPR petition is time barred. The Federal Circuit noted that, as set forth in Thryv and other precedent, judicial review is not available “where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” Applying that rationale to the CBM context, the Federal Circuit reasoned that a patent’s qualification for CBM review is expressly and exclusively tied to the decision to institute the proceeding. The Federal Circuit therefore held that it was precluded from reviewing the Board’s determination that SIPCO’s patent qualifies for CBM review. The Federal Circuit affirmed the Board’s determination that the challenged claims would have been obvious, and did not reach the Board’s patentability decision under § 101.

Editor: Paul Stewart