Harmonic, Inc. v. Avid Technology, Inc.

United States Court of Appeals
for the Federal Circuit
______________________
HARMONIC INC.,
Appellant
v.
AVID TECHNOLOGY, INC.,
Appellee
______________________
2015-1072
______________________
Appeal from the United States Patent and Trademark
Office, Patent Trial and Appeal Board in No. IPR2013-
00252.
______________________
Decided: March 1, 2016
______________________
BORIS FELDMAN, Wilson, Sonsini, Goodrich & Rosati,
PC, Palo Alto, CA, argued for appellant. Also represented
by JAMES C. YOON; MICHAEL T. ROSATO, Seattle, WA;
ROBIN L. BREWER, San Francisco, CA; GIDEON A. SCHOR,
New York, NY; RICHARD TORCZON, Washington, DC.
GREGORY A. CASTANIAS, Jones Day, Washington, DC,
argued for appellee. Also represented by DAVID B.
COCHRAN, JOSEPH M. SAUER, Cleveland, OH; MATTHEW
JOHNSON, Pittsburgh, PA.
2 HARMONIC INC. v. AVID TECHNOLOGY, INC.
SCOTT WEIDENFELLER, Office of the Solicitor, United
States Patent and Trademark Office, Alexandria, VA,
argued for intervenor Michelle K. Lee. Also represented
by NATHAN K. KELLEY, STACY BETH MARGOLIES.
______________________
Before CHEN, MAYER, and STOLL, Circuit Judges.
STOLL, Circuit Judge.
Harmonic Inc. filed an inter partes review (“IPR”) pe-
tition with the Patent Trial and Appeal Board (“Board”) to
review the patentability of Avid Technology, Inc.’s (“Av-
id”) U.S. Patent No. 5,495,291 (“the ’291 patent”). The
Board instituted an IPR proceeding on a subset of the
grounds in the petition and ultimately determined that
the instituted ground did not render claims 11–16 of the
’291 patent unpatentable. Harmonic appeals the Board’s
final written decision, challenging both the Board’s pa-
tentability determination and its refusal to revisit
grounds of unpatentability that it declined to institute as
redundant to the instituted ground. For the reasons
below, we affirm the Board’s confirmation of claims 11–16
over the instituted ground and conclude that we do not
have jurisdiction to review the Board’s institution deci-
sion.
BACKGROUND
I.
Avid is the assignee of the ’291 patent, issued Febru-
ary 27, 1996, and directed to a “system for decompressing
consecutive streams of compressed video data to provide a
continuous, uninterrupted decompressed video data
output stream.” ’291 patent abstract. Many computers
store video in a compressed form. One well-known com-
pression format is MPEG. Instead of storing every video
frame in full, MPEG stores only changes in one frame to
the next. Before these compressed video files can be
HARMONIC INC. v. AVID TECHNOLOGY, INC. 3
played, they must first be decompressed to restore the
video’s full content. Systems and methods to compress
and decompress videos were well known in art at the time
of the ’291 patent application’s filing.
The ’291 patent discloses that these prior art systems
and methods often generated several blank frames be-
tween first and second videos when playing multiple
compressed videos back to back due to system latency.
The patent explains that this latency resulted from hav-
ing to wait for a decompression buffer to fill with enough
frames of the second video file before decompression could
begin. The ’291 patent purports to teach a decompression
system and method that allows play of compressed video
streams one after the other without creating blank frames
or a video-less gap when switching between the different
streams. This result is achieved by using multiple de-
compression buffers. Figure 3 of the ’291 patent illus-
trates the preferred architecture.
In this embodiment, input switch 105 accepts multiple
compressed video streams. Under command of microcon-
troller 110, video data flows through input switch 105 to
4 HARMONIC INC. v. AVID TECHNOLOGY, INC.
either decompression circuit 120 or 130, 1 which decom-
press the input video streams and place them within a
buffer 125 or 135 from which output switch 115 reads to
play video to a user. Microcontroller 110 instructs input
switch 105 to alternate directing input video streams to
decompression circuits 120 and 130. First, microcontrol-
ler 110 instructs input switch 105 to send video streams
to decompression circuit 120. At a time before the circuit
120 is predicted to finish decompressing, microcontroller
110 directs input switch 105 to send a second input video
stream to decompression circuit 130 so that decompres-
sion may begin there. Because decompression of the
second video stream begins before decompression of the
first stream completes, there is decompressed video data
in buffer 135 from the second video stream awaiting
output immediately upon output completion of the first
decompressed video stream. As a result, a user experi-
ences no blank frames due to system latency.
The claims at issue in this appeal are dependent
claims 11–16. Claim 9, from which claims 11–16 depend,
and claim 11 recite:
9. A video decompression system comprising:
a first switch coupled to at least two video da-
ta input lines, the first switch controlling the di-
rection and rate of video data flow from the video
data input lines;
at least two video data decompression arrays
coupled to the first switch, the video data decom-
pression arrays storing compressed video data,
1 Decompression circuit 130 is erroneously labeled
“30” in Figure 3.
HARMONIC INC. v. AVID TECHNOLOGY, INC. 5
decompressing the stored compressed video data,
and storing the decompressed video data;
a second switch coupled to the video data de-
compression arrays and to an output bus, the sec-
ond switch directing output from the at least two
video data decompression arrays to the output
bus; and
a controller coupled to the first switch, the
video data decompression arrays, and to the sec-
ond switch for controlling the flow of video data
through the system.
11. The system of claim 9 wherein the controller
commands the first switch to provide video data to
the first video data decompression array at a first
rate and to provide video data to the remaining
video data decompression arrays at a second rate
a predefined period of time after the first video da-
ta array begins receiving the video data at the
first rate.
’291 patent col. 7 ll. 4–32 (emphasis added). Pertinent to
this appeal, claim 11 requires switching to provide video
data to a second decompression array at a “predefined
period of time” after the first video compression array
receives data. Id. col. 7 ll. 27–32.
II.
Harmonic petitioned for IPR of the ’291 patent, alleg-
ing that, in view of seven different prior art grounds, all
twenty of the patent’s claims were unpatentable as antic-
ipated under 35 U.S.C. § 102 or as obvious under
6 HARMONIC INC. v. AVID TECHNOLOGY, INC.
35 U.S.C. § 103. 2 The Board instituted IPR on claims 1–
16 based on the obviousness ground of U.S. Patent No.
5,159,447 (“Haskell”) combined with U.S. Patent No.
5,508,940 (“Rossmere”). The Board did not institute
based on four other grounds in Harmonic’s petition di-
rected at claims 1–16, calling them “redundant” of the
instituted ground. In addition, the Board did not institute
IPR on claims 17–20, disposing of the remaining two
grounds.
The Haskell patent discloses a system for avoiding
overflow and underflow of buffers during video encoding
and decoding. As illustrated in Figures 2 and 3 below,
Haskell’s device includes encoder system 100 and decoder
system 200, which are connected by a channel that runs
from the encoder’s multiplexer to the decoder’s demulti-
plexer.
2 The versions of 35 U.S.C. §§ 102 and 103 that ap-
ply here are those in force preceding the changes made by
the America Invents Act (“AIA”), given the effective filing
dates of the claims of the ’291 patent. See Leahy–Smith
America Invents Act, Pub. L. No. 112–29, 125 Stat. 284,
293 (2011).
HARMONIC INC. v. AVID TECHNOLOGY, INC. 7
8 HARMONIC INC. v. AVID TECHNOLOGY, INC.
Encoder system 100 includes multiple encoder buffers
106, and decoder system 200 includes multiple decoder
buffers 205. Haskell’s encoder controls two aspects of the
system to avoid buffer overflow and underflow: (1) the
number of bits employed to encode each video frame; and
(2) the bitrate of the channel connecting the encoder and
decoder.
The Board’s final written decision concluded that
claims 1–10 of the ’291 patent were unpatentable in view
of Haskell combined with Rossmere. At the same time,
the Board found claim 11—along with claims 12–16,
which depend from claim 11—patentable over the insti-
tuted prior art ground. Particularly, the Board found that
Haskell combined with Rossmere did not satisfy the
“predefined period of time” limitation in claim 11, which it
construed to mean “a prior defined period of time.” Har-
monic, Inc. v. Avid Tech., Inc., IPR2013-00252, 2014
WL 3422011, at *5, *13–14 (P.T.A.B. July 10, 2014) (Final
Written Decision).
Harmonic timely appealed to this court, and we have
jurisdiction under 28 U.S.C. § 1295(a)(4)(A) and
HARMONIC INC. v. AVID TECHNOLOGY, INC. 9
35 U.S.C. § 141(c) to review the Board’s final written
decision.
DISCUSSION
On appeal, Harmonic argues that the Board erred in
concluding that claim 11 (and claims 12–16, which depend
from it) is patentable in light of the instituted prior art
ground. Harmonic also argues that the Board should
have considered all prior art grounds in its petition,
especially after finding claim 11 patentable in view of the
instituted ground. We address each argument in turn.
I.
We first consider Harmonic’s argument that the
Board erred in determining that claims 11–16 are patent-
able in light of Haskell combined with Rossmere.
A patent claim is unpatentable as obvious “if the dif-
ferences between the subject matter sought to be patented
and the prior art are such that the subject matter as a
whole would have been obvious at the time the invention
was made to a person having ordinary skill in the art.”
35 U.S.C. § 103. Obviousness under § 103 is a mixed
question of law and fact. The Board’s ultimate determi-
nation on obviousness is a legal conclusion, which we
review de novo. In re Cuozzo Speed Techs., LLC, 793 F.3d
1268, 1280 (Fed. Cir. 2015) (citing In re Baxter Int’l, Inc.,
678 F.3d 1357, 1361 (Fed. Cir. 2012)), cert. granted sub
nom., Cuozzo Speed Techs., LLC v. Lee, No. 15-446, 2016
WL 205946 (U.S. January 15, 2016). We review the
Board’s underlying factual findings, including what a
reference teaches and differences between the prior art
and the claims, for substantial evidence. Id. (citing
Graham v. John Deere Co., 383 U.S. 1, 17–18 (1966)).
In an IPR, the petitioner has the burden from the on-
set to show with particularity why the patent it challeng-
es is unpatentable. See 35 U.S.C. § 312(a)(3) (requiring
10 HARMONIC INC. v. AVID TECHNOLOGY, INC.
IPR petitions to identify “with particularity . . . the evi-
dence that supports the grounds for the challenge to each
claim”). Thus, it was Harmonic’s burden to explain to the
Board how Haskell combined with Rossmere rendered the
challenged claims unpatentable. With respect to claim 11
of the ’291 patent, Harmonic did not do so.
Claim 11 requires that the system’s controller com-
mand the input switch to begin providing data to a second
decompression array at a “predefined period of time” after
a first decompression array begins receiving data. Har-
monic argues that Haskell teaches this claim limitation,
but puts forth very little evidence to support this conten-
tion. With no express teaching of this limitation in
Haskell, Harmonic relies on several unsupported and
inferential theories based on what Haskell does teach.
First, Harmonic relies on the presence of a demulti-
plexer in Haskell together with the ability of its encoders
to control the bit rate of bit-streams destined to its decod-
ers. But Harmonic’s discussion of these features of
Haskell is conclusory. Harmonic does not relate what
appears to be generic multiplexing and bit rate adjust-
ment to what is recited in claim 11. Specifically, Harmon-
ic does not explain how Haskell’s control of bit rate
teaches the specific claim limitation of commanding the
input switch to provide video data to a second decompres-
sion array a prior defined period of time after a first
decompression array begins receiving data. Harmonic’s
expert testimony in support of this theory is equally
unavailing, adding nothing beyond the conclusory state-
ments in Harmonic’s petition.
Harmonic also emphasizes Haskell’s disclosure of a
“predetermined system timing” in an attempt to satisfy
HARMONIC INC. v. AVID TECHNOLOGY, INC. 11
the “predefined period of time” limitation. 3 But this
disclosure relates to how Haskell passes video frames to a
multiplexer bit-stream in groups, with time variables also
periodically inserted into the bit-stream. Simply stating
that Haskell discloses “predetermined system timing”
does not satisfy Harmonic’s burden. Harmonic fails to
explain how Haskell’s predetermined system timing
discloses or suggests the specific timing required by claim
11. Indeed, Harmonic’s expert offered no testimony on
Haskell’s “predetermined system timing.” And Harmonic
mentioned the feature to the Board only once in a single
sentence without any elaboration. Harmonic Reply Br.,
Harmonic, Inc. v. Avid Tech., Inc., No. IPR2013-00252, at
*13 (P.T.A.B. Sept. 25, 2013) (“Haskell explicitly discloses
the use of predetermined system timing with regard to
providing video data to decode buffers (205-1, 205-2, 205-
N).” (citing Haskell col. 13 ll. 7–54)). On appeal, Harmon-
ic still has not sufficiently explained how Haskell’s prede-
termined system timing corresponds to the “predefined
period of time” limitation in claim 11.
On this record, we conclude that there is substantial
evidence to support the Board’s finding that Haskell
neither teaches nor suggests the “predefined period of
time” limitation in claim 11. Therefore, we affirm the
3 The parties devote much of their appeal briefs to
addressing whether the Board erred by stating that
Harmonic waived its argument based on Haskell’s “prede-
termined system timing” feature because it cited it for the
first time in its Reply brief. Because the Board did actu-
ally address the “predetermined system timing” feature in
its final written decision, however, we do not reach this
waiver argument. See Final Written Decision, 2014 WL
3422011, at *13.
12 HARMONIC INC. v. AVID TECHNOLOGY, INC.
Board’s confirmation of claim 11, and dependent claims
12–16, as patentable over Haskell and Rossmere.
II.
We now turn to Harmonic’s second argument, which
asserts that the Board, after concluding that the institut-
ed ground did not render claims 11–16 unpatentable,
erred by failing to consider the other prior art grounds in
Harmonic’s IPR petition that were not instituted.
In addition to the obviousness ground based on
Haskell and Rossmere, Harmonic’s IPR petition included
four other distinct grounds for unpatentability of claims
1–16 of the ’291 patent. The Board denied institution on
these remaining four grounds as “redundant”:
Those grounds of unpatentability are redundant
to the grounds of unpatentability on which we ini-
tiate an inter partes review. Accordingly, we do
not authorize an inter partes review on the re-
maining grounds of unpatentability asserted by
Harmonic against claims 1–16 of the ’291 patent.
Harmonic, Inc. v. Avid Tech., Inc., No. IPR2013-00252,
2013 WL 8595955, at *19 (P.T.A.B. Sept. 25, 2013) (citing
37 C.F.R. § 42.108(a)). Harmonic argues that in light of
the Board’s conclusion in its final written decision that
Haskell and Rossmere do not render claim 11 unpatenta-
ble, the Board was compelled to revisit the grounds it
previously deemed redundant.
Before we address the merits of Harmonic’s argu-
ment, we first must determine whether we have jurisdic-
tion to review this question. See Arlington Indus., Inc. v.
Bridgeport Fittings, Inc., 759 F.3d 1333, 1336 (Fed. Cir.
2014) (“It is axiomatic that the initial inquiry in any
appeal is whether the court to which appeal is taken has
jurisdiction to hear the appeal.” (quoting Woodard v. Sage
Prods., Inc., 818 F.2d 841, 844 (Fed. Cir. 1987) (en banc))).
HARMONIC INC. v. AVID TECHNOLOGY, INC. 13
A.
Congress established IPR proceedings as a means for
challenging patentability before the United States Patent
and Trademark Office (“PTO”). IPR proceedings involve
two distinct phases: (1) the institution phase, beginning
with the filing of an IPR petition and culminating in the
decision of whether to institute an IPR proceeding (“insti-
tution decision”); and, if instituted, (2) the merits phase,
beginning after the Board’s institution decision and
culminating in the Board’s determination of patentability
in light of the instituted ground(s) (“final written deci-
sion”). See Achates Reference Publ’g, Inc. v. Apple Inc.,
803 F.3d 652, 654–55 (Fed. Cir. 2015); St. Jude Med.,
Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373,
1375–76 (Fed. Cir. 2014).
We have jurisdiction to hear appeals from parties
“dissatisfied with the final written decision” from the
merits phase. 35 U.S.C. § 141(c). We do not, however,
have jurisdiction to review an institution decision. Under
the title “No appeal,” 35 U.S.C. § 314(d) prescribes that a
“determination by the Director whether to institute an
inter partes review under this section shall be final and
nonappealable.”
Our cases have strictly applied the § 314(d) re-
striction. First, in St. Jude, we addressed whether we
could review the Board’s decision to not institute an IPR
proceeding. 749 F.3d at 1374. The Board had denied the
underlying IPR petition on the ground that the petition
was time-barred under 35 U.S.C. § 315(b). Id. at 1375.
Recognizing that § 141(c) only authorizes our review of
final written decisions and that § 314(d) constitutes a
“broadly worded bar on appeal,” we held that we lack
jurisdiction to review a decision to not institute an IPR
proceeding. Id. at 1376; see also In re Dominion Dealer
Sols., LLC., 749 F.3d 1379, 1381 (Fed. Cir. 2014) (denying
14 HARMONIC INC. v. AVID TECHNOLOGY, INC.
mandamus petition seeking review of Board decision not
to institute IPR).
In Cuozzo, we considered whether we could review the
PTO’s decision to institute an IPR proceeding. 793 F.3d
at 1274. The patent owner in Cuozzo, appealing after a
final written decision had issued, argued that the PTO
improperly instituted an IPR on certain claims because it
relied on prior art that was not identified in the petition.
Id. The patent owner argued that we had jurisdiction to
review the institution decision because § 314(d), it assert-
ed, does not completely preclude review of the institution
decision, but instead merely postpones review of the
PTO’s authority until after issuance of the final written
decision. We disagreed, holding that § 314(d) precludes
our review of institution decisions, even when the chal-
lenge comes after a final written decision issues. Id.
In Versata Development Group Inc. v. SAP America
Inc., 793 F.3d 1306 (Fed. Cir. 2015), we addressed
§ 314(d)’s counterpart in the post-grant review scheme,
§ 324(e). Like § 314(d), § 324(e) states that the determi-
nation of whether to institute a post-grant review is final
and non-appealable, and also applies in the context of
covered business method (“CBM”) review. Leahy–Smith
America Invents Act, Pub. L. No. 112–29, 125 Stat. 284,
329–31 (2011) (“AIA § 18”). The patentee in Versata
argued that the Board’s unpatentability decision should
not stand because the patent was not a CBM patent as
defined in AIA § 18(d)(1). The PTO responded that the
Board’s determination as to whether a patent qualifies as
a CBM patent is an institution decision that we are
barred from reviewing under § 324(e). We disagreed with
the PTO. We held that § 324(e) did not preclude our
review of the Board’s decision that the challenged patent
was a “covered business method patent” because that
question involved the Board’s “ultimate authority” to
deem a patent unpatentable under the CBM review
HARMONIC INC. v. AVID TECHNOLOGY, INC. 15
proceedings. Versata, 793 F.3d 1319. We clarified that
§ 324(e) does not preclude review of questions that go to
whether the Board has violated a limit on its under § 18
to deem a patent unpatentable. Id. at 1320.
In Achates, we examined whether we could review the
PTO’s institution decision premised on IPR petitions that
the patent owner argued contravened the timing require-
ments for filing a petition under 35 U.S.C. § 315(b).
803 F.3d at 653. We held that § 314(d) prohibited our
review because the § 315(b) time bar “does not impact the
Board’s authority” to deem a patent claim unpatentable,
but, rather, “only bars particular petitioners from chal-
lenging the claim.” Id. at 657. Because the time bar is
simply a procedural rule governing the proceedings, and
does not itself give the Board the power to deem a patent
unpatentable, it is not a “defining characteristic” of the
Board’s authority to deem a patent unpatentable that we
are able to review. Id. at 657–68.
Most recently, in Synopsys Inc. v. Mentor Graphics
Corp., __ F.3d __, 2016 WL 520236 (Fed. Cir. 2016), we
considered a challenge under 35 U.S.C. § 318(a) to a final
written decision that did not address every claim raised in
an IPR petition following the Board’s decision to institute
review for some, but not all, of the claims challenged in
the petition. While we declined to review the merits of
the Board’s partial institution decision, we did review the
question of whether the Board is nevertheless required to
address all claims raised in an IPR petition in its final
written decision under § 318(a), which directs the Board
to issue a final written decision with respect to “any
patent claim challenged by the petitioner.” Synopsys,
2016 WL 520236, at *3–4. We concluded that it is not,
finding no statutory requirement that the Board address
every claim raised in an IPR petition. Id. at *6.
16 HARMONIC INC. v. AVID TECHNOLOGY, INC.
B.
With this background in mind, we address whether
we have jurisdiction here. Harmonic argues that the
Board’s decision to not institute on certain prior art
grounds it classified as “redundant” is not an institution
decision. In support of its position, Harmonic points out
that this case introduces facts not present in the cases
discussed above. Here, acting on a single IPR petition,
the Board instituted an IPR proceeding on one ground,
but denied institution on others. According to Harmonic,
the non-binary nature of the Board’s decision—i.e., insti-
tuting on some grounds, but not others—takes it out of
the realm of an institution decision and into that of a case
management decision, which Harmonic asserts we have
jurisdiction to review for an abuse of discretion.
We disagree. Our prior decisions hold that § 314(d)
prohibits review of the decision to institute an IPR, Cuoz-
zo, 778 F.3d at 1276, as well as the decision to deny
institution of an IPR, St. Jude, 749 F.3d at 1375–76. A
decision to institute on only a subset of the grounds identi-
fied in the petition is simply a combination of the two.
Although Harmonic labors to categorize the Board’s
institution decision in this case as a different type of “case
management decision,” it is no different than the circum-
stances squarely addressed in our prior decisions. The
Board’s decision to institute on one prior art ground or
another does not raise fundamental questions about the
scope of its statutory authority to deem patents unpatent-
able; it is simply the Board’s exercise of its institution
authority in a given case. Section 314(d) prohibits our
review of such a decision.
Contrary to Harmonic’s suggestion, the Board’s refer-
ence to the non-instituted grounds as “redundant” also
does not alter this conclusion. In its use of the term
redundant, the Board suggested nothing more than that
the claims addressed by the non-instituted grounds were
HARMONIC INC. v. AVID TECHNOLOGY, INC. 17
already addressed by the instituted ground. Indeed, the
Board’s institution decision in this case first concluded
that the Haskell and Rossmere combination provided
Harmonic with a reasonable likelihood of success in
showing that claims 1–16 of the ’291 patent are unpatent-
able. Only after reaching this conclusion did the institu-
tion decision label the other grounds targeting claims 1–
16 “redundant.” As the PTO correctly indicates in its
intervenor’s brief, the Board did not determine that the
prior art relied on in the non-instituted grounds was
duplicative of that relied on in the instituted grounds. See
PTO Br. 28. Rather, the most the Board implied was that
the non-instituted grounds were redundant simply in the
sense that they were directed to the same claims as the
instituted grounds. For us to hold that by providing the
public with a basis for its institution decision—
redundancy—rather than remaining silent, the Board
somehow triggered our appellate jurisdiction would
violate both § 314(d) and our governing case law.
Nor does the fact that the Board ultimately found
claim 11 patentable over the instituted ground alter our
conclusion that we may not review the Board’s institution
decision, including its decision to not institute for redun-
dancy reasons. As we explained before, IPR proceedings
occur in two distinct phases: (1) an institution phase; and
(2) a merits phase. See Achates, 803 F.3d at 654; St. Jude,
749 F.3d at 1375–76. During the institution phase, the
Board establishes parameters that confine the proceeding
during the merits phase. See AIA Regulation Comments,
77 Fed. Reg. 48,680 at 48,689 (“Any claim or issue not
included in the authorization for review is not part of the
review.”). The PTAB’s institution decision included
within the merits phase Haskell combined with Rossmere,
but nothing more. The IPR proceeding was thus limited
and did not include the non-instituted grounds.
18 HARMONIC INC. v. AVID TECHNOLOGY, INC.
Finally, our conclusion here is consistent with Synop-
sys because, in that case, the petitioner challenged the
Board’s final written decision, not its decision to institute.
Synopsys, 2016 WL 520236, at *3–4. As here, we recog-
nized in Synopsys that “[t]he decision of the Board to
institute inter partes review cannot be appealed.” Id.
at *3. We determined, however, that we could review the
question of whether the Board was required to address all
claims raised in an IPR petition in its final written deci-
sion under § 318(a), which directs the Board to issue a
final written decision with respect to “any patent claim
challenged by the petitioner.” Id. at *4–6.
Under the IPR framework, Congress did not require
that once the PTO institutes a proceeding, all grounds in
the underlying petition must be considered. First of all,
the PTO is permitted, but never compelled, to institute an
IPR proceeding. See 35 U.S.C. § 314(a) (stating that
“[t]he Director may not authorize an inter partes review
to be instituted unless the Director determines . . . there is
a reasonable likelihood that the petitioner would prevail
. . .” (emphases added)). Moreover, statute directs that
the PTO “shall prescribe regulations” for both “setting
forth the standards for the showing of sufficient grounds
to institute a review under section 314(a)” and “establish-
ing and governing inter partes review under this chapter
. . . .” 35 U.S.C. § 316(a)(2), (4). The AIA also requires the
PTO to “consider the effect of any such regulation on the
economy, the integrity of the patent system, the efficient
administration of the Office, and the ability of the Office
to timely complete proceedings . . . .” 35 U.S.C. § 316(b).
The PTO adopted such regulations in 37 C.F.R.
§ 42.108. Subsection (a) states that “[w]hen instituting
inter partes review, the Board may authorize the review
to proceed on . . . all or some of the grounds of unpatenta-
bility asserted for each claim.” (emphasis added). Sub-
section (b) further provides that “[a]t any time prior to
HARMONIC INC. v. AVID TECHNOLOGY, INC. 19
institution of inter partes review, the Board may deny
some or all grounds for unpatentability for some or all of
the challenged claims.” 37 C.F.R. § 42.108(b) (emphasis
added). Under the PTO’s regulations, grounds not insti-
tuted never become part of the merits phase of the IPR
proceeding. See Changes to Implement Inter Partes
Review Proceedings, Post-Grant Review Proceedings, and
Transitional Program for Covered Business Method
Patents, 77 Fed. Reg. 48,680, 48,689 (Aug. 14, 2012) (AIA
Regulation Comments) (“Any claim or issue not included
in the authorization for review is not part of the review.”).
In light of 35 U.S.C. § 316, we have already satisfied
ourselves that the PTO possessed authority to promulgate
37 C.F.R. § 42.108. Applying Chevron deference, we also
consider whether the agency, in exercising its rulemaking
authority to enact §42.108, reasonably interpreted § 316
and the statutory provision for instituting IPR proceed-
ings, § 314. Chevron, U.S.A., Inc. v. Nat. Res. Def. Coun-
cil, Inc., 467 U.S. 837, 844 (1984). We conclude that it
did. As noted, § 316 directs the PTO to promulgate regu-
lations that, in part, consider “the efficient administration
of the Office, and the ability of the Office to timely com-
plete proceedings.” 35 U.S.C. § 316(b). The PTO’s ra-
tionale for promulgating § 42.108 aligns with Congress’s
guidance in § 316. In Synopsys, we held that the related
and analogous § 42.108 provision permitting the Board to
institute on a subset of claims challenged in a petition is
“plainly an exercise” of the PTO’s rulemaking authority
and “is a reasonable interpretation of the statutory provi-
sion governing the institution of inter partes review.”
2016 WL 520236, at *5 (Fed. Cir. Feb. 10, 2016). The
PTO explained that the regulation’s “convergence of
issues for review streamlines the proceeding and aids in
the efficient operation of the Office and the ability of the
Office to complete the proceeding within the one-year
timeframe.” AIA Regulation Comments, 77 Fed. Reg.
48,680 at 48,703. Our previous holding and the PTO’s
20 HARMONIC INC. v. AVID TECHNOLOGY, INC.
rationale applies equally to the subset-of-grounds provi-
sion and reasonably effectuates the statute’s efficiency
imperative. And, as we also noted, § 314 does not compel
PTO to institute an IPR proceeding in any instance.
Thus, we find the § 42.108 subset-of-grounds regulation to
be reasonable and conclude that it is valid. And under
that section, it is clear that the Board may choose to
institute some grounds and not institute others as part of
its comprehensive institution decision.
CONCLUSION
For the foregoing reasons, we affirm the Board’s de-
termination that claims 11–16 of the ’291 patent are
patentable in light of the instituted prior art ground and
do not review the Board’s institution decision because we
lack jurisdiction.
AFFIRMED
COSTS
No costs.