OCTOBER TERM 2017 · DECIDED APRIL 24, 2018 · 5–4

584 U. S. ___ · No. 16-969 · Argued November 27, 2017

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SAS Institute Inc. v. Iancu

Reversed and remandedFinal ruling
patent lawadministrative agenciesChevron deferencepatent challengesPTAB

Opinion of the Court by Justice Gorsuch, joined by Justices Roberts, Kennedy, Thomas, and Alito

The Supreme Court ruled that once the Patent Office agrees to review a patent through inter partes review, it must decide the validity of every single claim the challenger raised — not just the ones it thinks are promising.

The decision strikes down the Patent Office's longstanding practice of 'partial institution,' meaning patent challengers can no longer be forced to fight some claims before the agency and others in federal court.

The agency cannot curate the claims at issue but must decide them all.
Justice Gorsuch

The majority's core holding that the Patent Office must rule on every challenged claim.

How it got here: The Patent Office partially granted SAS's review petition; the Federal Circuit upheld that partial approach; SAS asked the Supreme Court to review the ruling.

The Case in Depth

What happened

SAS Institute, a software company, asked the Patent Office to review and cancel all 16 claims of a software patent owned by ComplementSoft, arguing the claims were not new inventions and therefore should not have been patented. The Patent Office agreed to review only some of the claims and later issued a decision addressing just those, leaving the rest of SAS's challenges unresolved.

The question before the Court

When the Patent Office agrees to reexamine a company's patent, must it rule on every claim the challenger attacked, or can it pick and choose?

The Court's answer

No — the Patent Office cannot pick and choose which claims to rule on once it agrees to review a patent. The Court held that the review statute's language is both mandatory ("shall") and all-encompassing ("any"), meaning that once the agency institutes review, it must issue a final decision addressing every claim the challenger raised in the petition, not just the ones it considers promising.

The Court rejected the Patent Office's "partial institution" regulation, finding nothing in the statute's text or structure gave the agency discretion to trim the challenger's petition down to fewer claims. It also declined to defer to the agency's reading under Chevron, since it found the statutory text unambiguous, and rejected the argument that a separate provision barred courts from reviewing this practice.

Curious how the Court got there? See the step-by-step legal reasoning →

Why it matters

Companies that challenge patents through the Patent Office's review process will now get a single, complete ruling on every claim they attacked, instead of having their fight split between the agency and federal courts. This simplifies patent litigation strategy and could affect thousands of pending and future patent challenges before the agency.

What changes now

The case goes back to the lower appeals court, and the Patent Office must now issue decisions covering every claim a challenger raises in future reviews it agrees to hear, ending the practice of resolving only a subset of claims. This is a final decision on the legal question, though it does not resolve SAS's own patent dispute, which continues on remand.

What this does not decide

The Court expressly did not decide whether the Patent Office could achieve a similar result by simply refusing to review broad petitions while inviting narrower, more tailored ones instead — it left that potential workaround for another day.

Concurrences and dissents

Dissent — Justice Ginsburg

Why should the statute be read to preclude the Board’s more rational way to weed out insubstantial challenges?Ginsburg questioning why the agency can't screen out weak claims before review begins.

Justice Ginsburg argued the Patent Office could sidestep the majority's ruling by simply denying petitions it considers too broad while inviting narrower ones covering only the claims worth reviewing. She saw no reason to force the agency into a rigid all-or-nothing structure, and pointed to Justice Breyer's dissent for a fuller explanation.

Dissent — Justice Breyer

Justice Breyer argued the statute's phrase 'any patent claim challenged by the petitioner' is genuinely ambiguous about whether it means claims raised in the original petition or only those that survived into the actual review, and that Chevron deference should let the Patent Office fill that gap. He found the agency's practice of focusing only on claims with a reasonable chance of success sensible and consistent with avoiding wasted effort on frivolous challenges, and would have upheld the agency's approach.

How the Court got there

The legal reasoning, step by step

  1. The Court read the text of the review statute, which says that once the agency starts a review, it 'shall' issue a final decision on 'any patent claim challenged by the petitioner' — language the Court called both mandatory and all-encompassing.
  2. The Court explained that the word 'shall' creates a firm legal duty, not a choice, and the word 'any' in this context means 'every,' so the agency's final decision must cover every claim the challenger raised, not a hand-picked subset.
  3. The Court looked at how the statute structures the review process as a whole, noting that the challenger's petition — not the agency's own judgment — is meant to define and drive the scope of the case from start to finish, much like a lawsuit filed by a private party.
  4. Comparing this statute to an older, different patent-review law that explicitly let the agency investigate on its own and limit review to specific questions, the Court found Congress deliberately chose not to give the agency that same claim-by-claim discretion here.
  5. The Court declined to give the agency deference under Chevron (the doctrine that lets courts defer to a reasonable agency reading of an unclear law), because it found the statute's text left no genuine ambiguity for the agency to fill.
  6. The Court also rejected the argument that a provision making the agency's decision to start a review 'final and nonappealable' blocked judicial review here, explaining that courts can still step in when the agency's practice exceeds what the statute actually allows.

Doctrinal impact

Laws and provisions at issue

35 U.S.C. § 318(a)

Requires the Patent Office to issue a final written decision on every patent claim a challenger raised.

35 U.S.C. § 314

Governs the Patent Office's decision on whether to start a patent review in the first place.

Administrative Procedure Act

Lets courts strike down agency actions that go beyond what a law actually allows.

Cases affected by this decision

Distinguishes Cuozzo Speed Technologies, LLC v. Lee (579 U. S. ___)

The Court said Cuozzo only barred review of the threshold decision to institute review, not this separate legal question.

Supreme Court Opinion

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SAS Institute Inc. v. Iancu | SCOTUS Reporter