A&O Shearman
The United States Court of Appeals, Federal Circuit, on January 27, 2025, affirmed in part and reversed in part a decision of the Patent Trial and Appeal Board (PTAB) regarding certain claims of Gesture Technology Partners, LLC (“Gesture”) U.S. Patent No. 8,878,949 (the ‘949 patent) and, in so doing, held that the PTAB had jurisdiction to conduct inter partes review (“IPR”) on expired patents.
Apple Inc. (“Apple”) filed IPRs challenging the patentability of Claims 1-18 of the ‘949 Patent in June 2021, over one year after the ‘949 Patent expired in May 2020. Gesture argued the PTAB lacked the jurisdiction to institute review based upon the Supreme Court’s Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC,584 U.S.325 (2018) decision. Gesture asserted that a decision to grant a Patent is the grant of a Public Franchise, and that once a Patent expires, this public franchise ceases and the patent owner has no longer the right to exclude others. Gesture argued that once a patent has expired, a patent owner can only collect damages through an Article III lawsuit and that jurisdiction over an expired Patent is limited to Article III courts. The Federal Circuit cited the Oil States case to highlight that the decision stated that the grant a patent is a public franchise and therefore involves public rights. The Federal Circuit noted that an IPR was essentially a second look at the administrative grant of a prior patent, which involved the public’s interests in ensuring that the patent monopolies were kept within their legal scope. The public franchise can also be qualified by the agency’s ability to cancel it without an Article III court. The Court noted that a review of a previous grant of a Patent inherently involves adjudication of public rights, regardless of whether or not the patent has expired. The Court stressed that even after expiration a patent still confers a limited set rights to the patentee. For example, the right to recover damages for past infringement. The Court concluded that these rights create a live case that can be adjudicated in an IPR or by the Federal Circuit on appeal. Apple had demonstrated that the PTAB had ignored Apple’s expert witness testimony. With this testimony, the Court concluded that claim 4 was obvious. The Court did not address the PTAB’s IPR decision regarding claims 8-18 because those claims had been found unpatentable in ex parte reexamination, a determination that the Court upheld in a separate decision.
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