## Facts

- MCM Portfolio LLC owned U.S. Patent No. 7,162,549, directed to coupling flash memory cards to a computer through a controller chip, including error correction functions.
- Hewlett-Packard Co. petitioned for inter partes review (IPR) challenging claims 7, 11, 19, and 21 as obvious over prior art.
- The Patent Trial and Appeal Board (PTAB) instituted IPR, finding a reasonable likelihood that at least one challenged claim was unpatentable.
- MCM argued the IPR was time-barred under 35 U.S.C. § 315(b) because a purported privy of HP had been served with a complaint more than one year earlier; the PTAB rejected the asserted privity relationship.
- MCM also argued IPR was unconstitutional under Article III and the Seventh Amendment because it allows an executive-branch tribunal to cancel issued patent claims without an Article III court or a jury.
- After trial, the PTAB issued a final written decision holding claims 7, 11, 19, and 21 unpatentable as obvious.
- MCM appealed, challenging (i) the PTAB’s rejection of the § 315(b) time bar, (ii) IPR’s constitutionality, and (iii) the PTAB’s obviousness determination.

## Issues

1. Whether 35 U.S.C. § 314(d) bars appellate review of the PTAB’s institution-stage determination that an IPR is not time-barred under 35 U.S.C. § 315(b).
2. Whether IPR violates Article III by authorizing the PTAB (an Article I tribunal) to adjudicate patent validity and cancel issued claims.
3. Whether IPR violates the Seventh Amendment by resolving patent validity without a jury.
4. Whether substantial evidence supported the PTAB’s finding that claims 7, 11, 19, and 21 were obvious.

## Decision

- The court held it lacked jurisdiction to review the PTAB’s § 315(b) time-bar determination because it was part of the decision to institute IPR, which § 314(d) makes final and nonappealable.
- The court held IPR does not violate Article III because patent validity is a “public rights” matter that Congress may assign to an administrative agency for adjudication.
- The court held IPR does not violate the Seventh Amendment because administrative adjudication of a public right is not a “suit at common law” requiring a jury trial.
- The court affirmed the PTAB’s obviousness determination, concluding the Board’s findings were supported by substantial evidence.
- Disposition: Affirmed.

## Legal Principles

- Under 35 U.S.C. § 314(d), appellate courts generally may not review institution-related determinations, including whether the petition is barred by § 315(b)’s one-year limit.
- Patents are public franchises created by federal statute; Congress may authorize the PTO to reconsider and cancel claims through administrative proceedings without violating Article III.
- When Congress permissibly assigns adjudication of a public right to a non-Article III tribunal, the Seventh Amendment does not require a jury in that administrative proceeding.
- On appeal from a PTAB final written decision, obviousness conclusions are reviewed with deference to the PTAB’s fact findings under the substantial-evidence standard.

## Conclusion

The Federal Circuit sustained the IPR framework against Article III and Seventh Amendment challenges, treated § 315(b) time-bar disputes as unreviewable institution determinations under § 314(d), and affirmed the PTAB’s cancellation of the challenged claims for obviousness.


MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015)