One of the advantages of patent reviews under the America Invents Act is that the parties may settle before completion of the proceedings and file a joint motion to terminate these proceedings. The Patent Trial and Appeal Board (PTAB or Board) may consider the joint motion and terminate the entire proceeding. It has done so in several instances.
But the Board has made it clear that when settlement results in a joint motion to terminate, it has the power to terminate the proceedings with respect to the Petitioner and maintain the proceedings with respect to the Patent Owner. The statute governing settlement in inter partes reviews is 35 U.S.C. § 317 (a parallel one for post-grant reviews is found in 35 U.S.C. § 327):
§ 317. Settlement
(a) IN GENERAL.—An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the inter partes review is terminated with respect to a petitioner under this section, no estoppel under section 315(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that inter partes review. If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).
(b) AGREEMENTS IN WRITING.—Any agreement or understanding between the patent owner and a petitioner, including any collateral agreements referred to in such agreement or understanding, made in connection with, or in contemplation of, the termination of an inter partes review under this section shall be in writing and a true copy of such agreement or understanding shall be filed in the Office before the termination of the inter partes review as between the parties. At the request of a party to the proceeding, the agreement or understanding shall be treated as business confidential information, shall be kept separate from the file of the involved patents, and shall be made available only to Federal Government agencies on written request, or to any person on a showing of good cause.
The emphasized language of the statute refers to termination with respect to a petitioner, and contemplates a situation where no petitioner remains in an inter partes review. The corresponding PTAB rule governing settlement is 37 C.F.R. § 42.74:
§ 42.74 Settlement.
- (a) Board role. The parties may agree to settle any issue in a proceeding, but the Board is not a party to the settlement and may independently determine any question of jurisdiction, patentability, or Office practice.
- (b) Agreements in writing. Any agreement or understanding between the parties made in connection with, or in contemplation of, the termination of a proceeding shall be in writing and a true copy shall be filed with the Board before the termination of the trial.
- (c) Request to keep separate. A party to a settlement may request that the settlement be treated as business confidential information and be kept separate from the files of an involved patent or application. The request must be filed with the settlement. If a timely request is filed, the settlement shall only be available: (1) To a Government agency on written request to the Board; or (2) To any other person upon written request to the Board to make the settlement agreement available, along with the fee specified in § 42.15(d) and on a showing of good cause.
The emphasized language of the rule is often cited in decisions to terminate where the Board maintains the proceedings with the Patent Owner.
Two recent decisions provide examples where the Board has terminated the proceedings with respect to the Petitioner, but not with the Patent Owner:
- In CBM2012-00007 the Board decided to maintain the proceedings with the Patent Owner despite terminating the Petitioner’s involvement. Interthinx, Inc. v. Corelogic Solutions, LLC, CBM2012-00007, Paper 47 (November 12, 2013). In this CBM, the matter was “fully briefed” and ready for oral hearing when the parties informed the Board of impending settlement. The Patent Owner also identified ongoing litigation.
- In IPR2013-00016 the Board terminated the Petitioner’s involvement, but maintained the proceeding with the Patent Owner. Blackberry Corp. and Blackberry Limited v. MobileMedia Ideas, LLC, IPR2013-00016, Paper 31 (December 11, 2013). In this IPR, the Patent Owner did not file a Patent Owner’s Response, but instead filed a motion to amend the challenged patent with claim amendments. The Board found that “the trial issues had been fully briefed at the time the parties moved to terminate the proceeding.”
This aspect of PTAB practice is entirely different than reexamination practice, and can be used to the advantage of both Petitioner and Patent Owner, depending on the circumstances of each case.