By Kevin E. Noonan –

The preclusive scope of 35 U.S.C. § 314(d) regarding decisions on instituting post grant review proceedings (specifically, inter partes review or IPR) has been decided several times by the Supreme Court since enactment of the Leahy-Smith America Invents Act in 2013 to be very preclusive (see Cuozzo Speed Technologies, LLC v. Lee, 579 U. S. 261 (2016); Thryv, Inc. v. Click-to-Call Techs., LP, 590 U.S. 45 (2020)).  Indeed, the only exception to the statutory mandate that institution cannot be subject to judicial review are in circumstances where there may be “appeals that implicate constitutional questions.”  Nevertheless the temptation to seek judicial review (and reversal) of institution decisions by the Patent Trial and Appeal Board (PTAB) has persisted (albeit unsuccessfully) as shown in the Federal Circuit’s decision last month in Ethanol Boosting Systems, LLC v. Ford Motor Co.

This case arose in inter partes review proceedings of certain claims in three related patents owned by Ethanol Boosting Systems (EBS): U.S. Patent Nos. 10,619,580; 10,791,760; and 9,708,965, all held to be invalid for obviousness by the PTAB.  Claim 1 of the ‘581 patent is cited in the opinion as representative:

1.  A fuel management system for a spark ignition engine, comprising:
a first fueling system that uses direct injection;
a second fueling system that uses port fuel injection; and
a three-way catalyst configured to reduce emissions from the spark ignition engine,
wherein the fuel management system is configured to provide fueling in a first torque range, the first torque range being a first range of torque values at which both the first fueling system and the second fueling system are operable throughout the first range of torque values,
wherein the fuel management system is further configured such that a fraction of fueling provided by the first fueling system is higher at a highest value of torque in the first torque range than in a lowest value of torque in the first torque range,
wherein the fuel management system is further configured to provide fueling in a second torque range, the second torque range being a second range of torque values at which the second fueling system is operable throughout the second range of torque values and the first fueling system is not operable throughout the second range of torque values,
wherein the fuel management system is further configured such that when the system provides fueling at a torque value that exceeds the second range of torque values, the spark ignition engine is operated in the first torque range, and
wherein the spark ignition engine is configured to operate at a stoichiometric air/fuel ratio in at least part of the first torque range and in at least part of the second torque range.

As noted in the opinion, the case between the parties has been before the Court before, wherein a claim construction decision by a district court was vacated (and the details including the timing of those proceedings are relevant to the decision here; see Ethanol Boosting Sys., LLC v. Ford Motor Co., No. 21-1949, 2022 WL 2798395 (Fed. Cir. July 18, 2022) (nonprecedential)).  In that case, at issue were claim limitations for embodiments comprising direct fuel injection mechanisms, specifically the words “fuel” in the phrase “directly inject[ed] fuel” and “fueling system that uses direct injection”; these terms were generically called “DI Fuel terms” in the opinion.  Before the District Court, EBS asserted construction of these terms under the “plain and ordinary” meaning rubric, whereas Ford argued that the term encompassed fuel that was different from what was used in an alternative, port injection system and contained an antiknock agent other than gasoline itself.  When Ford filed its petitions for instituting the IPRs, it argued that the DI Fuel terms be construed under the plain and ordinary meaning; the Board stayed its institution decision while awaiting the District Court’s claim construction.

The District Court handed down its claim construction decision before the PTAB instituted these IPRs, construing the DI Fuel terms (as Ford argued) to mean “(1) different fuel for direct injection and port injection and (2) an anti-knock agent other than gasoline.”  Pursuant to the parties’ stipulation, the District Court entered judgment of non-infringement based on this construction.  Several months later the PTAB denied institution of the IPRs, holding that the DI Fuel terms required different fuel than was used in the port injector as claimed.  This construction defeated Ford’s prior art-based invalidity arguments in its petitions.  This construction apparently did not take into account the District Court’s construction nor the EBS appeal to the Federal Circuit, because shortly after the Court vacated the District Court’s construction, the PTAB granted Ford’s petitions to institute based on that decision’s claim construction.

In the earlier opinion, the Federal Circuit had vacated the distinction drawn by the District Court between the fuel used in the direct injection and the port injection embodiments of the claimed fuel management system, finding no basis for requiring such differences.  Moreover, the Court considered the disclosure in the specification of fuel comprising 100% ethanol to be excluded from claims construed to require differing fuels in the two alternative embodiments.  The opinion notes that EBS only appealed the first portion of the District Court’s construction, i.e., that there was different fuel used for direct injection and port injection, thereby leaving unchallenged the second portion, that gasoline cannot provide the antiknock component of directly injected fuel.  Accordingly, the Federal Circuit did not consider in that opinion this second portion of the District Court’s claim construction.

Having instituted the IPRs, the PTAB construed the DI Fuel terms according to their plain and ordinary meaning and rejected EBS’s argument that gasoline cannot be the [sole] antiknock agent because the Court’s earlier construction was “controlling law,” on the grounds that the Court had not considered the second portion of the definition of the DI Fuel term.  Having come to these claim construction determinations, the PTAB recognized there was a motivation to combine the asserted prior art references and that the combinations disclosed the claim limitations in dispute.  On those grounds the Board issued a Final Written Opinion invalidating all challenged claims as being obvious, and this appeal followed.

The Federal Circuit affirmed in an opinion by Judge Chen joined by Judges Clevenger and Hughes.  The first of three arguments made to the Court by EBS was that the Board had exceeded its authority (acted ultra vires) by staying its institution decision while awaiting the District Court’s claim construction.  The panel considered this argument as a request for the Court to effectively “de-institute” the IPRs, and that this request was in direct conflict with 35 U.S.C. § 314(d), which precludes courts from reviewing IPR institution determinations.  The opinion supports this interpretation and its consequences by citing Thryv, Inc v. Click-To-Call Techs., LP, 590 U.S. 45, 52–53 (2020); IGT v. Zynga Inc., 144 F.4th 1357, 1365 (Fed. Cir. 2025); and ESIP Series 2, LLC v. Puzhen Life USA, LLC, 958 F.3d 1378, 1386 (Fed. Cir. 2020).  EBS crafted its challenge less specifically against institution, directing that challenge to the question of whether the Board was entitled to stay its institution decision (i.e., thereby not directly targeting the institution per se).  The opinion rejects this characterization of there having been a stay, which is not how the Court has previously considered the time taken by an agency to issue a reconsideration decision, citing CyWee Grp. Ltd. v. Google LLC, 59 F.4th 1263, 1267 (Fed. Cir. 2023).  At least one basis for this position is that there is no law or regulation cited by EBS nor known to the Court that requires a definite amount of time for a reconsideration request to be deliberated.  Even though EBS’s argument was focused on the propriety of the “stay,” the panel considered the argument to be a challenge of the propriety of the PTAB’s institution decision, barred under § 314(d).  And the Court found such grounds for challenge to have been distinguished and rejected by prior precedent, including Thryv, IGT, and ESIP Series 2.  The Court also rejected the “special dispatch” requirements enunciated in Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988), based on procedural (that case involved reexamination proceedings) and factual (the IPR in this case had not been instituted) differences.  The Court recognized that the Supreme Court has only held “narrow exceptions” to the statutory bar under § 314(d), including “‘appeals that implicate constitutional questions, that depend on other less closely related statutes, or . . . present other questions of interpretation that reach, in terms of scope and impact, well beyond’ § 314,” citing Cuozzo Speed Techs. v. Com. for Intell. Prop., 579 U.S. 261, 275 (2016).  EBS analogized the Board’s delaying its institution decision to “shenanigans” identified as being outside the reach of the § 314 preclusion, which the panel rejected under Cuozzo in view of their earlier decision in SIPCO, LLC v. Emerson Electric Co. (which concerned the Board exceeding its authority to institute a Covered Business Method (CBM) review on a purportedly non-CBM patent (980 F.3d 865, 869 (Fed. Cir. 2020)).  This decision was directly applicable to EBS’s argument here, according to the opinion because in that case as here the argument was that the Board exceeded its statutory authority, which the Court held was not outside the § 314 preclusion.  In addition, the Court found that the Board had “sound reasons” for delaying its institution decision because the Court’s earlier decision “would address the very claim term that the Board hinged its initial denial of institution upon.”

(In this context, the recent proclamations by incoming U.S. PTO Director John Squires may take on more significance (see “New Director Overturns PTAB Procedural Precedents: Parts I and II“).  Under the recently promulgated interpretation of the statute, Congress has conferred decisions regarding IPR institution exclusively to the Director.  While Directors can delegate (and have delegated) institution decisions to the PTAB and three- or five-judge panels thereof, such delegation is discretionary with the Director.  In view of Cuozzo, Thryv, and this decision, current practice will now give the Director unfettered authority to render such decisions, with consequences that may (and likely will) have IPR institution occur at the whim of the policy (and political) whims of particular Directors.  Under current jurisprudence, only modification of the statute by Congress can prevent such an outcome; the likelihood thereof will undoubtedly depend on how prudently Directors exercise such plenary powers.)

EBS’s second grounds for appeal were directed at the Board’s claim construction regarding the “fuel” term.  In those arguments EBS maintained that the Board was compelled to adopt the portion of the unchallenged portion of the District Court’s construction (regarding the antiknock properties of the DI fuel), that the Board did not perform its own “substantive analysis” of its construction, and additional arguments directly on the merits.  Regarding the unchallenged and previously unconsidered (by the Federal Circuit) second portion of the DI fuel term, EBS relied on the Court’s mandate and waiver doctrines to argue that the Board was limited by the Court’s earlier decision as “controlling law.”  However, the panel rejected this argument on the basis that these doctrines did not apply “across different litigations and proceedings” and in particular “for a non-appealed district court construction” (emphasis in opinion), citing Musacchio v. United States, 577 U.S. 237, 244–45 (2016), Hyatt v. Stewart, 148 F.4th 1376, 1382 (Fed. Cir. 2025), and TecSec, Inc. v. Int’l Bus. Machs. Corp., 731 F.3d 1336, 1344 (Fed. Cir. 2013), as relating (“closely related,” according to the opinion) to the “law of the case” doctrine.  The opinion did not deign to address EBS’s judicial estoppel argument which is had “briefly allude[d to]” and for failure to identify any unfair advantage to Ford as well as having been forfeited thereby.

With regard to EBS’s argument that the Board failed to “engage in any meaningful claim construction analysis” or “fail[ed] to adequately explain why it substantively reached a different outcome than the non-appealed portion of the district court’s construction,” thereby violating the provisions of 37 C.F.R. § 42.100, the panel identified these arguments to involve “unraised issues” which the opinion asserts the Court did not typically find fault in instances where the Board did not consider them, for example under Apple Inc. v. Gesture Tech. Partners, LLC, 127 F.4th 364, 370 n.2 (Fed. Cir. 2025).  The Court found no evidence that EBS had asked the Board to construe the DI fuel terms (and strongly stated that in the panel’s view EBS had asked the Board to “expressly forego any construction of its own” in favor of the non-appealed portion of the construction by the district court (emphasisin opinion), which it had characterized as “controlling law” (see above).  (Indeed, neither party had made a claim construction request to the Board, according to the opinion).  The Board thus did not abuse its discretion according to the panel.

Turning to the substance of claim construction of the term “DI fuel,” the Court first held that EBS had forfeited the issue by its already-noted failure to request that the Board construe the claims.  Further, “on the merits,” the opinion states that there is no evidence on the record that the DI fuel term disavows the use of gasoline as an antiknock agent, citing examples of embodiments where gasoline can be so used when other antiknock agents, such as ethanol, have been exhausted.  The opinion also rejects any arguments that such embodiments have been disclaimed, and cites instances in the earlier appeal where EBS “explained” that the specification disclosed embodiments where gasoline was an acceptable antiknock agent.

Regarding the Board’s obviousness determinations, the opinion identifies two prior art combinations that are relevant to the appeal:
1.  U.S. Patent No. 6,505,603 (Schray) and Japanese Patent Application Publication No. JP2003013785 (Miura); or

2.  German Patent Application No. DE19853799, Japanese Patent Application Publication No. JPH10252512 and Bosch Auto. Handbook (3d ed.). 

According to the assessment presented in the opinion, in the references cited in Ford’s first obviousness challenge the ‘603 patent discloses “an internal combustion engine to reduce engine knocking” comprising “directly injecting the fuel twice during each cycle, with the first occurring in the induction phase and the second occurring in the compression phase.”  The ‘785 Japanese patent application discloses suppressing engine knocking using a port injector.  In Ford’s second challenge for obviousness, German patent application ‘799 teaches a “method for creating fuel mixtures in an internal combustion engine” and “drawing a greater percentage of the fuel from the direct injector at greater loads.”  The ‘512 Japanese patent application teaches “an engine that contains both a port injector as well as a direct injector” and a “fuel map” wherein is disclosed “which of those two injectors operate (as a function of torque).”  The Bosch reference is a “general-purpose automotive handbook.”

The panel rejected EBS’s contention that the Board erred in its motivation-to-combine determination regarding the first combination, homogeneity and heterogeneity of fuel/air mixing, the Court maintaining that Ford’s arguments did not rely on any such distinctions.  The Board had agreed with Ford’s actual arguments according to the opinion, that “a skilled artisan would swap Schray’s first injector with Miura’s port injector because Miura’s port injector would ‘provide the engine of Schray with additional benefits related to mixing and stable combustion at low loads.’”  Moreover the panel did not consider EBS to have challenged that argument in this appeal.  Additionally, the panel appreciated the Board’s rationale regarding motivation to combine that these two references provided different approaches to solving the engine knocking problem and that a skilled worker would be motivated to combine them.  Accordingly, the panel held that there was substantial evidence supporting the Board’s determination that there was sufficient motivation to combine in reaching its obviousness determination.

The Court also rejected EBS’s challenges to particular claim limitations in ground 1 of the IPR, which asserted the first combination of references, on the grounds that the Board had “strayed from” the unpatentability theories asserted in Ford’s petitions regarding the “three way catalyst” limitation.  The panel disagreed with EBS on the grounds that the Board would properly consider the “proposed combination” of the references (emphasis in opinion) in reaching the obviousness determination that was the basis for ground 1 in its petition.

The panel also rejected EBS’s arguments regarding Ford’s second ground, under the second combination of references, because “[u]nder the circumstances here, where the Board also provided a full explanation for why it rejected EBS’s multiple counter-arguments, the Board’s reasoning is readily discernible, and therefore, it satisfied its obligation to adequately explain its motivation finding.”

Finally, the Court rejected EBS’s arguments regarding the Board’s rejection of rebuttal arguments they had made, because “on this record, the Board found that Ford satisfied its burden” to assert adequate invalidity grounds for obviousness.

Ethanol Boosting Systems, LLC v. Ford Motor Co. (Fed. Cir. 2025)

Panel: Circuit Judges Chen, Clevenger, and Hughes
Opinion By Circuit Judge Chen