Case: 22-1249 Document: 71 Page: 1 Filed: 03/13/2023
`
`United States Court of Appeals
`for the Federal Circuit
`______________________
`
`APPLE INC., CISCO SYSTEMS, INC., GOOGLE LLC,
`INTEL CORPORATION, EDWARDS
`LIFESCIENCES CORPORATION, EDWARDS
`LIFESCIENCES LLC,
`Plaintiffs-Appellants
`
`v.
`
`KATHERINE K. VIDAL, UNDER SECRETARY OF
`COMMERCE FOR INTELLECTUAL PROPERTY
`AND DIRECTOR OF THE UNITED STATES
`PATENT AND TRADEMARK OFFICE,
`Defendant-Appellee
`______________________
`
`2022-1249
`______________________
`
`Appeal from the United States District Court for the
`Northern District of California in No. 5:20-cv-06128-EJD,
`Judge Edward J. Davila.
`______________________
`
`Decided: March 13, 2023
`______________________
`
` CATHERINE CARROLL, Wilmer Cutler Pickering Hale and
`Dorr LLP, Washington, DC, argued for all plaintiffs-appel-
`lants. Plaintiffs-appellants Apple Inc., Cisco Systems, Inc.,
`Intel Corporation also represented by DAVID LEHN;
`REBECCA M. LEE, San Francisco, CA; MARK D. SELWYN,
`Palo Alto, CA; ALYSON ZUREICK, New York, NY.
`
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`Case: 22-1249 Document: 71 Page: 2 Filed: 03/13/2023
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`APPLE INC. v. VIDAL
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`
` NATHAN K. KELLEY, Perkins Coie LLP, Washington,
`DC, for plaintiff-appellant Google LLC. Also represented
`by ANDREW DUFRESNE, Madison, WI.
`
` CHRISTY G. LEA, Knobbe, Martens, Olson & Bear, LLP,
`Irvine, CA, for plaintiffs-appellants Edwards Lifesciences
`Corporation, Edwards Lifesciences LLC. Also represented
`by JOHN B. SGANGA, JR.
`
` WEILI J. SHAW, Appellate Staff, Civil Division, United
`States Department of Justice, Washington, DC, argued for
`defendant-appellee.
` Also represented by MICHAEL
`GRANSTON, DANIEL TENNY; MICHAEL S. FORMAN, THOMAS
`W. KRAUSE, AMY J. NELSON, FARHEENA YASMEEN RASHEED,
`Office of the Solicitor, United States Patent and Trade-
`mark Office, Alexandria, VA.
`
` MARK S. DAVIES, Orrick, Herrington & Sutcliffe LLP,
`Washington, DC, for amici curiae Acushnet Company, Al-
`liance for Automotive Innovation, Comcast Cable Commu-
`nications, LLC, Computer and Communication Industry
`Association, Dell, Inc., Garmin International, Inc., Juniper
`Networks, Inc., Micron Technology Inc., SAS Institute,
`Inc., Symmetry, LLC, Taiwan Semiconductor Manufactur-
`ing Company, Ltd., Verizon Services Corp., VIZIO, Inc.,
`VMware, Inc. Also represented by ALEXANDRA BURSAK,
`New York, NY.
`
` JAMES OLIVA, American Honda Motor Co., Inc., Tor-
`rance, CA, for amicus curiae American Honda Motor Co.,
`Inc.
`
` ROBERT THOMAS SMITH, Katten Muchin Rosenman
`LLP, Washington, DC, for amicus curiae Mylan Pharma-
`ceuticals Inc.
` Also represented by ERIC THOMAS
`WERLINGER; DEEPRO MUKERJEE, LANCE SODERSTROM, New
`York, NY.
`
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`Case: 22-1249 Document: 71 Page: 3 Filed: 03/13/2023
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`APPLE INC. v. VIDAL
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`3
`
`
` MICHAEL BERTA, Arnold & Porter Kaye Scholer LLP,
`San Francisco, CA, for amicus curiae Tesla, Inc. Also rep-
`resented by JAMES SHERWOOD, Tesla, Inc., Washington,
`DC.
`
`______________________
`
`Before LOURIE, TARANTO, and STOLL, Circuit Judges.
`TARANTO, Circuit Judge.
`
`Plaintiffs are Apple Inc. and four other companies that
`have repeatedly been sued for patent infringement and
`thereafter petitioned the Director of the Patent and
`Trademark Office (PTO) to institute inter partes reviews
`(IPRs), under 35 U.S.C. §§ 311–319, so that the PTO’s
`Patent Trial and Appeal Board could adjudicate the
`petitions’ unpatentability challenges to patent claims that
`had been asserted against them in court. In the present
`action, brought against the Director in district court under
`the Administrative Procedure Act (APA), 5 U.S.C. §§ 701–
`706, plaintiffs challenge instructions the Director issued to
`the Board to inform it how to exercise, under delegation by
`the Director, the Director’s discretion whether to institute
`a requested IPR. Plaintiffs assert that the instructions are
`likely to produce too many denials of institution requests.
`The district court dismissed the APA action on the ground
`that the Director’s instructions were made unreviewable by
`the IPR provisions of the patent statute.
`We affirm in part and reverse in part. We affirm the
`unreviewability dismissal of plaintiffs’ challenges to the
`instructions as being contrary to statute and arbitrary and
`capricious. No constitutional challenges are presented.
`But we reverse the unreviewability dismissal of plaintiffs’
`challenge to the instructions as having been improperly
`issued because they had to be, but were not, promulgated
`through notice-and-comment rulemaking under 5 U.S.C.
`§ 553. That challenge, we also hold, at least Apple had
`standing to present. We remand for further proceedings on
`
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`APPLE INC. v. VIDAL
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`the lone surviving challenge. Like the district court, we do
`not reach the merits of that challenge.
`I
`A
`In the America Invents Act (AIA), Pub. L. No. 112-29,
`125 Stat. 284 (2011), Congress authorized the filing of a
`petition asking the PTO to conduct an IPR of whether iden-
`tified claims in an issued patent comply with certain pa-
`tentability requirements of novelty or obviousness over
`prior art. 35 U.S.C. § 311(a)–(b). The Board is the PTO
`component assigned to perform the IPR adjudication if a
`review is instituted, id. §§ 6(b)(4), 316–318, with the
`Board’s “final written decision” in the IPR subject to appeal
`to this court, id. § 319; see id. § 141. But it is the PTO’s
`Director to whom Congress assigned the task of determin-
`ing whether to institute a review in the first place. Id.
`§ 314(b); see Thryv, Inc. v. Click-To-Call Technologies, LP,
`140 S. Ct. 1367, 1370–71 (2020).
`For the Director to institute, certain preconditions
`must be met. One prerequisite, for all petitions, is the
`crossing of a merits “threshold”: “The Director may not au-
`thorize an [IPR] to be instituted unless the Director deter-
`mines that the information presented in the petition . . .
`and any response . . . shows that there is a reasonable like-
`lihood that the petitioner would prevail with respect to at
`least 1 of the claims challenged in the petition.” 35 U.S.C.
`§ 314(a). Another prerequisite, applicable in the predicta-
`bly common situation where the patent owner has already
`sued the petitioner (or a real party in interest or privy) for
`infringement of the patent, is compliance with a timing
`limit: The petition must be filed within one year after ser-
`vice of the infringement complaint. Id. § 315(b).
`Even when such requirements are met, however, the
`statute uses no language commanding institution. “The
`Director is permitted, but never compelled, to institute an
`IPR[, a]nd no petitioner has a right to such institution.”
`
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`APPLE INC. v. VIDAL
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`5
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`Mylan Laboratories Ltd. v. Janssen Pharmaceutica, N.V.,
`989 F.3d 1375, 1382 (Fed. Cir. 2021). The Supreme Court
`explained in SAS Institute, Inc. v. Iancu: Ҥ 314(a) invests
`the Director with discretion on the question whether to in-
`stitute review.” 138 S. Ct. 1348, 1356 (2018); see also
`Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261, 273
`(2016) (citing § 314(a) and stating: “no mandate to institute
`review”).
`Congress not only left the discretion to the Director but
`also protected its exercise from judicial review, even re-
`garding the mandatory threshold conditions for institution,
`at least where, as here, the court challenge is not on a con-
`stitutional ground. See Cuozzo, 579 U.S. at 275 (noting
`that it was not addressing challenges that implicate consti-
`tutional questions, which present distinct issues regarding
`congressional preclusion of judicial review).1 Thus, Con-
`gress declared: “The determination by the Director
`whether to institute an inter partes review under [§ 314]
`shall be final and nonappealable.” 35 U.S.C. § 314(d).
`Based on that provision, whose terms apply whether the
`determination is negative or positive, the Supreme Court
`has held that the institution decision is unreviewable, even
`in a proper appeal of a final written decision reached by the
`Board after a positive institution determination: “Congress
`has committed the decision to institute inter partes review
`to the Director’s unreviewable discretion.” United States v.
`Arthrex, Inc., 141 S. Ct. 1970, 1977 (2021); see Thryv, 140
`
`
`1 Because the present case does not involve a constitu-
`tional challenge, we hereafter generally refrain from not-
`ing that the unreviewability principle at issue has not been
`extended to constitutional challenges.
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`APPLE INC. v. VIDAL
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`S. Ct. at 1372–73 (relied on by Arthrex for above state-
`ment); Cuozzo, 579 U.S. at 271–75.2
`From the outset of the IPR program, the Director dele-
`gated the institution authority to the Board. 37 C.F.R.
`§ 42.4(a); see Arthrex, 141 S. Ct. at 1977; Thryv, 140 S. Ct.
`at 1371. We have upheld that delegation, recognizing “the
`longstanding rule that agency heads have implied author-
`ity to delegate to officials within the agency,” that “Con-
`gress regularly gives heads of agencies more tasks than a
`single person could ever accomplish, necessarily assuming
`that the head of the agency will delegate the task to a sub-
`ordinate officer,” and that, in particular, “Congress as-
`signed the Director the decision to institute, necessarily
`assuming that the popularity of inter partes review and the
`short time frame to decide whether to institute inter partes
`review would mean that the Director could not herself re-
`view every petition.” Ethicon Endo-Surgery, Inc. v.
`Covidien LP, 812 F.3d 1023, 1031–32 (Fed. Cir. 2016) (foot-
`note omitted). We have also made clear that any institu-
`tion decision made by the Board as delegatee of the
`Director is subject to reversal by the Director. In re Palo
`Alto Networks, Inc., 44 F.4th 1369, 1375 & n.3 (Fed. Cir.
`2022) (stating that “the Director plainly has the authority
`to revoke the delegation or to exercise her review authority
`in individual cases despite the delegation”); see Arthrex,
`
`
`2 In SAS, the Supreme Court held that § 318, whose
`subject is not institution but the scope of a required final
`written decision, requires the Board, in its final written de-
`cision, to decide the patentability of all patent claims chal-
`lenged in the petition. 138 S. Ct. at 1354–57. It follows, as
`a corollary, that the institution determination must be an
`all-or-nothing one, a “binary” one, id. at 1355, regarding
`the claims to be reviewed. It is that institution determina-
`tion which is the subject of the unreviewability principle of
`Arthrex, Thryv, and Cuozzo.
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`7
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`141 S. Ct. at 1980 (“The Director . . . controls the decision
`whether to institute inter partes review . . . .”).
`B
`The one-year time limit of § 315(b), already mentioned,
`makes clear that Congress recognized the likelihood of par-
`allel pending proceedings in the PTO and in the courts. Be-
`ing sued for infringement provides a defendant a distinct
`motivation to seek cancellation, through an IPR, of patent
`claims asserted against it in court.3 The existence of such
`overlapping proceedings raises self-evident issues of effi-
`ciency and interbranch relations. But Congress generally
`left the two branches to exercise their available discretion
`to address such issues. Congress enacted no provision for
`this scenario that directs the court to stay its case in light
`of a pending request for IPR or an instituted IPR. Nor did
`Congress enact a provision prescribing how the Director is
`to address such an overlapping pending court case in exer-
`cising the discretion whether to institute an IPR.
`1
`The Director addressed this topic in 2019 and 2020 by
`exercising the authority to “designate[] past PTAB deci-
`sions as ‘precedential’ for future panels.” Arthrex, 141 S.
`Ct. at 1980 (citing § 316(a)(4), quoted supra n.2, and
`§ 3(a)(2)(A), which states that “[t]he Director shall be
`
`
`3 Other provisions also reflect Congress’s expectation
`that the same patent claims might well be at issue in both
`an IPR proceeding and a court case. See, e.g., 35 U.S.C.
`§ 315(e)(2) (estoppel bar); id. § 315(a)(2) (addressing situa-
`tion of petitioner initiation of both court and agency pro-
`ceeding); id. § 316(a)(4) (providing that “[t]he Director shall
`prescribe regulations— . . . establishing and governing in-
`ter partes review under this chapter and the relationship
`of such review to other proceedings under this title,” the
`latter including actions in court, see id. § 281).
`
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`APPLE INC. v. VIDAL
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`responsible for providing policy direction and management
`supervision for the Office”); see Trial and Appeal Board,
`Standard Operating Procedure 2 (Revision 10) at 1–2
`(Standard Procedure 2). Specifically, the Director desig-
`nated as precedential, and hence binding on Board panels
`(Standard Procedure 2 at 11), two Board decisions that had
`denied IPR petitions: NHK Spring Co. v. Intri-Plex Tech-
`nologies, Inc., IPR2018-00752, 2018 WL 4373643 (P.T.A.B.
`Sept. 12, 2018) (designated precedential on May 7, 2019),
`and Apple Inc. v. Fintiv, Inc., IPR2020-00019, 2020 WL
`2126495 (P.T.A.B. Mar. 20, 2020) (designated precedential
`on May 5, 2020). Both decisions address the role, in the
`decision whether to institute an IPR, of the pendency of
`district-court infringement litigation involving the same
`patents. The decisions, designated as precedential, consti-
`tute instructions from the Director regarding how the
`Board is to exercise the Director’s institution discretion.
`The decisions articulate “a discretionary standard for
`denying IPR petitions based on pending parallel litigation.”
`Plaintiffs’ Notice of Motion and Motion for Summary Judg-
`ment at 5, Apple Inc. v. Iancu, No. 20-cv-06128, 2021 WL
`5232241, (N.D. Cal. Nov. 10, 2021), ECF No. 65, 2020 WL
`8339428 (heading, capitalization removed except for
`“IPR”). In NHK, the Board relied on “the advanced state of
`the district court proceeding” involving the same patent to
`deny institution, reasoning that, given the projected trial
`date in the parallel court case, conducting an IPR would be
`an inefficient use of agency resources. 2018 WL 4373643,
`at *7. In Fintiv, the Board elaborated on NHK, enumerat-
`ing six factors—the last one open-ended—to be assessed in
`deciding whether to institute an IPR in parallel with an
`overlapping court case:
`1. whether the court granted a stay or evi-
`dence exists that one may be granted if a pro-
`ceeding is instituted;
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`2. proximity of the court’s trial date to the
`Board’s projected statutory deadline for a fi-
`nal written decision;
`3. investment in the parallel proceeding by
`the court and the parties;
`4. overlap between issues raised in the peti-
`tion and in the parallel proceeding;
`5. whether the petitioner and the defendant
`in the parallel proceeding are the same party;
`and
`impact the
`6. other circumstances that
`Board’s exercise of discretion, including the
`merits.
`2020 WL 2126495, at *2. The Board explained how certain
`facts on the enumerated topics tend to weigh for or against
`institution, id. at *3–7, and how the “concerns of ineffi-
`ciency and the possibility of conflicting decisions were par-
`ticularly strong” in NHK, id. at *5. The Board stated
`generally that the factors “relate to whether efficiency, fair-
`ness, and the merits support the exercise of authority to
`deny institution in view of an earlier trial date in the par-
`allel proceeding,” id. at *3. The Board summarized: “[I]n
`evaluating the factors, the Board takes a holistic view of
`whether efficiency and integrity of the system are best
`served by denying or instituting review.” Id.
`2
`The above instructions (the Fintiv instructions) were
`
`the subject of this case when it was filed in district court,
`when it was decided by the district court, and when plain-
`tiffs filed their brief as appellants in this court. Thereafter,
`on June 21, 2022, the Director updated the instructions.
`On that day, having issued a request for comments, see Re-
`quest for Comments on Discretion to Institution Trials Be-
`fore the Patent Trial and Appeal Board, 85 Fed. Reg.
`66,502 (Oct. 20, 2020), and having received hundreds of
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`APPLE INC. v. VIDAL
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`comments, the Director announced (without publication in
`the Federal Register) “several clarifications” to the Fintiv
`instructions “under the Director’s authority to issue bind-
`ing agency guidance to govern the PTAB’s implementation
`of various statutory provisions.” Memorandum from PTO
`Director to PTAB, Interim Procedure for Discretionary De-
`nials in AIA Post-Grant Proceedings with Parallel District
`Court Litigation at 2–3 (June 21, 2022) (June 2022 Memo).
`
`The Director described Congress’s aim “to establish a
`more efficient and streamlined patent system that will im-
`prove patent quality and limit unnecessary and counter-
`productive litigation costs,” June 2022 Memo at 1 (quoting
`H.R. Rep. No. 112-98, pt. 1, at 40 (2011)), and its own ex-
`perience with cost-increasing inefficiency and gamesman-
`ship when parallel PTO proceedings and court cases exist,
`id. The Director now instructed the Board that it should
`not “rely on the Fintiv factors to discretionarily deny insti-
`tution in view of parallel district court litigation where a
`petition presents compelling evidence of unpatentability.”
`Id. at 2. The Director further stated that the Fintiv analy-
`sis does not apply when the parallel proceeding is not a dis-
`trict-court case but a proceeding within the International
`Trade Commission. Id. at 2–3. The Director added that no
`Fintiv-based institution denial would occur “where a peti-
`tioner presents a stipulation not to pursue in a parallel pro-
`ceeding the same grounds or any grounds that could have
`reasonably been raised before the [Board].” Id. at 3. Fi-
`nally, the Director announced that, in the application of the
`Fintiv instructions, “when other relevant factors weigh
`against exercising discretion to deny institution or are neu-
`tral, the proximity to trial should not alone outweigh all of
`those other factors,” id. at 8, and that, even as to that fac-
`tor, a particular “scheduled trial date” was not a reliable
`indicator of proximity, which instead should be assessed
`based “the most recent statistics on median time-to-trial
`for civil actions in the district court” hearing the parallel
`case, id.
`
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`APPLE INC. v. VIDAL
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`The Director stated that the new instructions would
`apply to all pending proceedings in the PTO and “remain
`in place until further notice.” Id. at 9. But the Director
`added that “[t]he Office expects to replace this interim
`guidance with rules after it has completed formal rulemak-
`ing.” Id.
`The current challenge seeks prospective relief only,
`and the June 2022 instructions are part of the current op-
`erative instruction set regarding institution decisions by
`the Board as delegatee of the Director.4 It would seem
`proper, therefore, were it important, to consider the up-
`dated instructions rather than the Fintiv instructions
`alone. See National Treasury Employees Union v. Von
`Raab, 489 U.S. 656, 661 n.1 (1989) (deciding case based on
`agency program as altered after court of appeals decision).
`But none of our conclusions in this appeal depend on
`whether we consider the Fintiv instructions or the updated
`instructions.
`
`C
`On August 31, 2020, Apple and three other companies
`filed suit in the Northern District of California, seeking to
`challenge the Fintiv instructions on three grounds under
`the APA: (1) that the Director acted contrary to the IPR
`provisions of the patent statute, see 5 U.S.C. § 706(2)(C);
`(2) that the Fintiv instructions are arbitrary and capri-
`cious, see 5 U.S.C. § 706(2)(A); and (3) that the Fintiv in-
`structions were issued without compliance with the notice-
`and-comment rulemaking requirements of 5 U.S.C. § 553,
`
`4 For subsequent clarifications from the Director, see
`OpenSky Industries, LLC v. VLSI Tech. LLC, IPR2021-
`01064, 2022 WL 4963049, at *20 (P.T.A.B. Oct. 4, 2022)
`(precedential) (Director’s Decision on Determining Abuse
`of Process), and CommScope Technologies LLC v. Dali
`Wireless, Inc., IPR2022-01242, 2023 WL 2237986, at *2
`(P.T.A.B. Feb. 27, 2023) (Director’s Decision on Rehearing).
`
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`APPLE INC. v. VIDAL
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`as assertedly required by that APA provision and by 35
`U.S.C. § 316. Apple, 2021 WL 5232241, at *3. An amended
`complaint added a fifth plaintiff but asserted the same
`challenges. The government moved to dismiss the case, ar-
`guing that plaintiffs lacked standing and, in the alterna-
`tive, that APA review was unavailable both because (1)
`“statutes preclude judicial review” of the matters presented
`and (2) the challenges are to “agency action [that] is com-
`mitted to agency discretion by law,” 5 U.S.C. § 701(a)(1)–
`(2). Briefing on that motion followed—on the same sched-
`ule as briefing on plaintiffs’ own motion for summary judg-
`ment, which the court ruled, at plaintiffs’ urging, was
`sufficiently “intertwined” with the dismissal motion to war-
`rant parallel briefing. Order on Defendants’ Motion for Ad-
`ministrative Relief Requesting a Stay of Briefing on
`Plaintiffs’ Motion for Summary Judgment at 1, Apple, No.
`20-cv-06128, 2021 WL 5232241, ECF No. 70; Plaintiffs’ Op-
`position to Defendant’s Motion for Administrative Relief
`Requesting a Stay of Briefing on Plaintiffs’ Motion for Sum-
`mary Judgment at 2, Apple, No. 20-cv-06128, 2021 WL
`5232241, ECF No. 69.
`On November 10, 2021, the district court granted the
`government’s motion to dismiss. Apple, 2021 WL 5232241,
`at *1–6. The district court first concluded that plaintiffs
`had standing. Id. at *4–5. The court then concluded that
`their challenges were to Director actions that were not re-
`viewable. Id. at *5–6. The court reasoned that 35 U.S.C.
`§ 314(d), together with Cuozzo and Thryv, precluded re-
`view because, to rule on the challenges, the court “would
`have to analyze questions that are closely tied to the appli-
`cation and interpretation of statutes” governing institution
`decisions. Id. at *6 (internal quotation marks, for quote
`from Cuozzo and Thryv, omitted). The court therefore dis-
`missed the case and “terminate[d] [p]laintiffs’ motion for
`summary judgment.” Id. Like the parties before us, we
`treat this dismissal as invoking the exclusion from the APA
`applicable where “statutes preclude judicial review.” 5
`U.S.C. § 701(a)(1).
`
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`APPLE INC. v. VIDAL
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`13
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`Plaintiffs appealed on December 8, 2021, and that ap-
`peal ripened when the district court entered final judgment
`on December 13, 2021. We have jurisdiction over the
`timely appeal under 28 U.S.C. § 1295(a)(1) because plain-
`tiffs’ claims, at least in part, are based on the patent stat-
`ute.
`
`II
`Plaintiffs argue on appeal that the district court erred
`when it held that the IPR provisions of the patent statute
`“preclude judicial review” of the challenged agency actions,
`bringing the case within the APA exclusion stated in 5
`U.S.C. § 701(a)(1). The government, in response, defends
`the district court’s § 701(a)(1) ruling and argues, in the al-
`ternative, that affirmance is separately required because
`the challenged agency action is “committed to agency dis-
`cretion by law,” § 701(a)(2), and because plaintiffs lack
`standing. We may consider the § 701(a)(1) unreviewability
`issue first and need not consider § 701(a)(2) and standing
`unless we find a challenge to lie outside the § 701(a)(1) ex-
`clusion from APA review. See Block v. Community Nutri-
`tion Institute, 467 U.S. 340, 353 n.4 (1984). We decide the
`issues presented, which are entirely legal, de novo. See
`Alarm.com Inc. v. Hirshfeld, 26 F.4th 1348, 1354 (Fed. Cir.
`2022); Digitalis Education Solutions, Inc. v. United States,
`664 F.3d 1380, 1384 (Fed. Cir. 2012).
`We begin with plaintiffs’ first two challenges (urging
`that the Director’s instructions violate the IPR statute and
`are arbitrary and capricious), which we consider together.
`We affirm the § 701(a)(1) dismissal of those challenges and
`so need not consider § 701(a)(2) or standing. We then ad-
`dress the remaining challenge (concerning the absence of
`notice-and-comment rulemaking). We hold that neither
`§ 701(a)(1) nor § 701(a)(2) bars review of the third chal-
`lenge and that at least Apple has standing to press it. We
`therefore reverse the dismissal as to the third challenge
`and remand.
`
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`APPLE INC. v. VIDAL
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`A
`Plaintiffs’ first two counts in their amended complaint
`
`challenge the content of the Director’s institution instruc-
`tions. The statutory challenge is that the instructions al-
`low, and encourage or even require, denial of institution
`contrary to proscriptions plaintiffs draw from the IPR stat-
`ute. Most concretely, plaintiffs assert that § 315(b)’s set-
`ting of an outer time limit on filing a petition, where the
`petitioner or its privy or the real party in interest has been
`sued on the patent in court, implies that the Director is for-
`bidden, when determining whether to institute, to consider
`the timing of the petition within that limit and the stage of
`development of the court case. The arbitrary-and-capri-
`ciousness challenge is that the Fintiv instructions are not
`“reasonable and reasonably explained.” Federal Commu-
`nications Commission v. Prometheus Radio Project, 141 S.
`Ct. 1150, 1158 (2021) (“The APA’s arbitrary-and-capricious
`standard requires that agency action be reasonable and
`reasonably explained.”); Snyder v. McDonough, 1 F. 4th
`996, 1005 (Fed. Cir. 2021). Plaintiffs assert that the Fintiv
`instructions’ directive to consider the time to trial in the
`parallel court case disregards the unreliability of court-set
`trial dates, which are frequently moved forward. For both
`challenges, plaintiffs invoke some of the policies articu-
`lated in the legislative process leading to the creation of the
`IPR program in the 2011 AIA.
`
`These two challenges have institution as their direct,
`immediate, express subject. In this respect, the challenges
`are critically different from the challenge the Supreme
`Court agreed with in SAS, a decision on which plaintiffs
`rely. There, the subject of the challenge was the interpre-
`tation of § 318, which prescribes the scope of the final writ-
`ten decision required of the Board in an IPR. The Court
`held that § 318 requires the final written decision to “re-
`solve all of the claims in the case.” 138 S. Ct. at 1353. That
`holding was not precluded by the unreviewability of insti-
`tution decisions already articulated in Cuozzo, even though
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`APPLE INC. v. VIDAL
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`15
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`the § 318 holding had, as a corollary, the effect of requiring
`the Director’s decision whether to institute a requested re-
`view to be essentially an all-or-nothing one. Id. at 1358–
`60. As the Court explained in Thryv, the merely collateral
`effect of a provision concerning “the manner in which the
`agency’s review ‘proceeds’ once instituted” did not bring
`SAS within the principle of unreviewability of “whether the
`agency should have instituted review at all.” 140 S. Ct. at
`1376.
`SAS thus does not alter the principle of unreviewabil-
`ity governing “application and interpretation of statutes re-
`lated to the [PTO’s] decision to initiate inter partes
`review.’” Id. at 1373 (internal quotation marks omitted)
`(quoting Cuozzo, 579 U.S. at 275); see id. at 1376 n.8.
`Plaintiffs’ statutory and arbitrary-and-capriciousness chal-
`lenges in this case focus directly and expressly on institu-
`tion standards, nothing else. The Supreme Court in
`Cuozzo and Thryv did not exclude any challenge from the
`reviewability bar where the invoked provisions of law di-
`rectly govern institution—as the Court understood was the
`case for the pleading provision that was at issue in Cuozzo
`(§ 312(a)(3) (a petition “may be considered only if . . .”) and
`the timing provision that was at issue in Thryv (§ 315(b)
`(an IPR “may not be instituted if . . .”). See Thryv, 140 S.
`Ct. at 1373, 1376 n.8.5
`
`
`5 The Court in Cuozzo recognized, as SAS was soon to
`illustrate, that some statutory provisions addressed to
`other matters might have an indirect bearing on institu-
`tion, and for that reason the Cuozzo Court said that it was
`not deciding “the precise effect of § 314(d) on appeals that
`implicate constitutional questions, that depend on other
`less closely related statutes, or that present other ques-
`tions of interpretation that reach, in terms of scope and im-
`pact, well beyond” § 314. 579 U.S. at 275. The Court in
`
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`16
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`APPLE INC. v. VIDAL
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`In Arthrex, the Supreme Court confirmed the principle
`
`of unreviewability of the Director’s decision whether to in-
`stitute. 141 S. Ct. at 1977. The Court relied indirectly on
`Cuozzo’s holding that the IPR statute’s text, legislative his-
`tory, and structure supplied the clear and convincing evi-
`dence required to overcome the strong presumption in
`favor of reviewability generally, 579 U.S. at 273, and on
`Cuozzo’s application of the unreviewability principle even
`in a case in which a review was instituted and completed
`and a proper appeal was taken to this court of the Board’s
`final written decision, id. at 271–75. The Court in Arthrex
`directly relied on Thryv, in which the Court, as in Cuozzo,
`applied the unreviewability principle in a proper appeal
`and made clear that the principle bars judicial resolution
`of even run-of-the-mill statutory interpretation issues in-
`herent in an institution determination by the Director as
`long as the statutory provision is one sufficiently focused
`on institution itself, as the Court held was true of § 315(b),
`Thryv, 140 S. Ct. at 1372–73. Nothing in the unreviewa-
`bility principle repeatedly affirmed by the Supreme Court
`in this setting, moreover, turns on whether the Director
`has provided an explanation (as the Board, as delegatee,
`typically does). That is hardly surprising, as the Supreme
`
`
`Cuozzo further stated that its holding did not “enable the
`agency to act outside its statutory limits by, for example,
`canceling a patent claim for ‘indefiniteness under § 112’ in
`an inter partes review.” Id. The example given is the
`PTO’s “canceling a patent claim” in an IPR (after institu-
`tion, see § 318(b)), not an aspect of the institution determi-
`nation. Id. The Court in Thryv subsequently noted,
`without elaboration, that it was not “decid[ing] whether
`mandamus might be available in an extraordinary case.”
`140 S. Ct. at 1374 n.6. The case before us is not a manda-
`mus case. See also Mylan, 989 F.3d at 1382 (holding man-
`damus standard not met for challenge to denial based on
`Fintiv instructions).
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`APPLE INC. v. VIDAL
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`17
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`Court has rejected the notion that “if the agency gives a
`‘reviewable’ reason for otherwise unreviewable action, the
`action becomes reviewable.” Interstate Commerce Commis-
`sion v. Brotherhood of Locomotive Engineers, 482 U.S. 270,
`283 (1987).
`The present case, unlike Thryv and Cuozzo, does not
`involve a petition-specific challenge, i.e., a challenge to a
`Director determination whether to institute a review re-
`quested in an individual petition. Rather, it involves a
`challenge to the Director’s instructions to the Board, as del-
`egatee, regarding how to exercise the Director’s institution
`discretion. But we conclude that the IPR statute’s preclu-
`sion of review, as now settled by the Supreme Court based
`on statutory text, legislative history, and structure, must
`encompass preclusion of review of the content-focused chal-
`lenges to the instructions at