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Biodelivery Sciences International, Inc. v. Aquestive Therapeutics, Inc.

United States Court of Appeals, Federal Circuit

August 29, 2019

BIODELIVERY SCIENCES INTERNATIONAL, INC., Appellant
v.
AQUESTIVE THERAPEUTICS, INC., FKA MONOSOL RX, LLC, Appellee

          Appeals from the United States Patent and Trademark Office, Patent Trial and Appeal Board in Nos. IPR2015-00165, IPR2015-00168, and IPR2015-00169.

          Kia Lynn Freeman, McCarter & English, LLP, Boston, MA, for appellant. Also represented by Thomas F. Foley, Wyley Sayre Proctor.

          John Lloyd Abramic, Steptoe & Johnson, LLP, Chicago, IL, for appellee. Also represented by Jamie Lucia, San Francisco, CA; Katherine Dorothy Cappaert, Washington, DC.

          Before Newman, Lourie, and Reyna, Circuit Judges.

         ON MOTION

          ORDER

          Reyna Circuit Judge.

         Aquestive Therapeutics, Inc. moves to dismiss these appeals on the basis that our review is barred by 35 U.S.C. § 314(d). BioDelivery Sciences International, Inc. opposes the motion. Having considered the parties' arguments, we grant the motion and dismiss these appeals.

         Background

         In October 2014, BioDelivery filed three petitions for inter partes review ("IPR") of U.S. Patent No. 8, 765, 167. The petitions contained a combined total of seventeen grounds. The petition in IPR2015-00165 included seven grounds, the petition in IPR2015-00168 included five grounds, and the petition in IPR2015-00169 included five grounds.

         The Patent Trial and Appeal Board ("Board" or "PTAB") instituted review on a single ground in each petition. For the fourteen other non-instituted grounds, the Board found that BioDelivery failed to establish a reasonable likelihood of prevailing on the merits. In the final written decisions, the Board sustained the patentability of all claims subject to the instituted challenges in each proceeding. BioDelivery appealed.

         After oral argument in the appeals, the Supreme Court issued its decision in SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018). BioDelivery subsequently moved to remand the appeals based on SAS's requirement that IPR proceedings must proceed "'in accordance with' or 'in conformance to' the petition," id. at 1356 (quoting Pursuant, Oxford English Dictionary, http://www.oed.com/view/Entry/155073), including "'each claim challenged' and 'the grounds on which the challenge to each claim is based, '" id. at 1355 (quoting 35 U.S.C. § 312(a)(3)).

         We granted BioDelivery's motion without deciding the merits of any of the appealed issues and vacated the Board's final written decisions in the three IPR proceedings. BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc., 898 F.3d 1205, 1210 (Fed. Cir. 2018) ("Remand Order"). Specifically, we ordered that "BioDelivery's request for remand to implement the Court's decision in SAS is granted in [the three appeals]" and "[t]he PTAB's decisions in PTAB Nos. IPR2015-00165, IPR2015-00168, and IPR2015-00169, are vacated." Id.

         On remand, the Board requested briefing on whether it would be appropriate to vacate its prior institution decisions and deny the petitions in their entirety. See BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc. f/k/a MonoSol RX, LLC, No. IPR2015-00165, Paper No. 91 (P.T.A.B. Feb. 7, 2019) ("PTAB Remand Dec. IPR2015-00165"), at 3; BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc. f/k/a MonoSol RX, LLC, No. IPR2015-00168, Paper No. 88 (P.T.A.B. Feb. 7, 2019) ("PTAB Remand Dec. IPR2015-00168"), at 3; BioDelivery Scis. Int'l, Inc. v. Aquestive Therapeutics, Inc. f/k/a Mono-Sol RX, LLC, No. IPR2015-00169, Paper No. 89 (P.T.A.B. Feb. 7, 2019) ("PTAB Remand Dec. IPR 2015-00169"), at 3. After considering the parties' arguments and whether petitioner had shown a reasonable likelihood of prevailing on all grounds, including those which were not previously instituted, the Board modified the institution decisions, denied the petitions, and terminated the proceedings. E.g., PTAB Remand Dec. IPR2015-00165 at 3.

         The Board emphasized its discretion to institute IPR under 35 U.S.C. § 314(a) even upon a showing of a reasonable likelihood of prevailing on at least one challenged claim. Id. at 5 (citing SAS, 128 S.Ct. at 1356). The Board also emphasized its statutory directive to prescribe regulations for conducting IPR and the Director's obligation to "consider the effect of any such regulation on . . . the efficient administration of the Office." Id. (quoting 35 U.S.C. § 316(b)); see also 37 C.F.R. § 42.1(b) ("This part shall be construed to secure the just, speedy, and inexpensive resolution of every proceeding.").

         The Board considered the merits of the previously non-instituted grounds and found that BioDelivery had not "es-tablish[ed] a reasonable likelihood of success in relation to those claims and grounds." Id. at 7. "Because the overwhelming majority of unpatentability grounds presented by Petitioner fail to meet the standard for institution of inter partes review, [the Board found] that instituting trial as to those grounds at this time is neither in the interest of the efficient administration of the Office, nor in the interest of securing an inexpensive resolution of this proceeding." Id.

         Although BioDelivery argued that the finality requirement of § 314(d) prohibited the Board from reconsidering its decisions to institute, the Board rejected that argument and noted that it has previously reconsidered institution decisions and terminated IPR proceedings without issuing a final decision. Id. at 8-10 (citing Medtronic, Inc. v. Robert Bosch Healthcare Sys., Inc., 839 F.3d 1382, 1386 (Fed. Cir. 2016); GTNX, Inc. v. INTTRA, Inc., 789 F.3d 1309, 1313 (Fed. Cir. 2015)). In applying SAS and making the "binary choice" to ...


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