As we previously reported, last week in Facebook, Inc. v. Windy City Innovations, LLC the Federal Circuit granted panel rehearing, issued a modified panel opinion, and denied en banc rehearing. Facebook sought rehearing to challenge the panel’s decisions concerning joinder in inter partes review proceedings, as well as the broader question of whether the Federal Circuit owes deference to interpretations of statutory provisions made by the U.S. Patent and Trademark Office’s Precedential Opinions Panel. Here we summarize the modified panel opinion.
In the modified panel opinion, Chief Judge Prost and Judges Plager and O’Malley maintained their original position, holding that the Patent Trial and Appeal Board erred in its joinder decision but that the Board’s “obviousness determinations . . . [were] supported by substantial evidence.” While the modified panel opinion did not change the holding of the court, it did state that because joinder was improper, the court would vacate the Board’s final written decisions as to claims only challenged in the later-joined proceedings and remand to the Board for further consideration.
The procedural posture of the case is of particular relevance. The court described that posture as follows:
Windy City . . . filed a complaint accusing Facebook . . . of infringing [the ’245 patent, the ’657 patent, and the ’552 patent]. In June 2016, exactly one year after being served with Windy City’s complaint, Facebook timely petitioned for inter partes review (‘IPR’) of several claims of each patent. At that time, Windy City had not yet identified the specific claims it was asserting in the district court proceeding. The . . . Board instituted IPR of each patent. In January 2017, after Windy City had identified the claims it was asserting in the district court litigation, Facebook filed two additional petitions for IPR of additional claims of the ’245 and ’657 patents, along with motions for joinder to the already instituted IPRs on those patents. By the time of that filing, the one-year time bar of § 315(b) had passed. The Board nonetheless instituted Facebook’s two new IPRs, and granted Facebook’s motions for joinder. In the final written decisions, the Board delivered a mixed result, holding that Facebook had shown by a preponderance of the evidence that some of the challenged claims are unpatentable as obvious but had failed to show that others were unpatentable as obvious. Importantly, many of the claims the Board found unpatentable were claims only challenged in the later-joined proceedings. Facebook appealed, and Windy City cross-appealed on the Board’s obviousness findings. In its cross-appeal, Windy City also challenges the Board’s joinder decisions allowing Facebook to join its new IPRs to its existing IPRs and to include new claims in the joined proceedings.
The description of the relevant facts remains mostly the same in both the original and modified opinions:
The patents are generally related to methods for communicating over a computer-based net-work. . . . Two features described in the specification are relevant to this appeal: (1) the ability to handle ‘out-of-band’ multi-media information, i.e., information that a receiving computer may be unable to present on its own; and (2) the ability to control the dissemination of information among participator computers, which is referred to in the patents as “censorship” of content.
In its original opinion, the court agreed with Windy City that 35 U.S.C. § 315(c) (the joinder provision) did not authorize same-party joinder, nor did it authorize joinder of “new issues material to patentability, such as new claims or new grounds.” The court based these decisions on the plain language of the statute. In the modified opinion, the original reasoning remains.
The modified opinion, however, first addressed the threshold issue of whether the court had jurisdiction to review the Board’s joinder decisions. In this regard the court evaluated the language of 35 U.S.C. §§ 314–15, as well as Supreme Court precedent in SAS Institute, Inc. v. Iancu and Thyrv, Inc. v. Click-to-Call Technologies, LP. Given that Windy City’s appeal concerned whether the Board exceeded its statutory authority, the court found SAS Institute more analogous, and accordingly found jurisdiction to review the Board’s joinder decisions.
In both the original and modified opinions, all three judges provided a separate opinion with additional analysis concerning Facebook’s argument that the Federal Circuit owes deference to the Board’s Precedential Opinion Panel (“POP”). In particular, Facebook pointed to the POP decision in Proppant Express Investments, LLC v. Oren Technologies, LLC, which analyzed the same issues regarding joinder and came to a different conclusion. According to Facebook, that decision deserved Chevron deference. The court noted that “Facebook cited no authority that would support giving a nonprecedential Board decision Chevron deference.” Additionally, the court did not find any congressional authorization for either the Director or the Board to undertake statutory interpretation through POP opinions.
As noted, following issuance of the modified panel opinion, the full court denied the petition for en banc rehearing. Notably, none of the court’s judges issued any opinion dissenting from the denial of en banc rehearing.