PTAB Applies “Issue Joinder” Analysis to Deny Microsoft’s IPR Joinder Requests

Posted on October 2, 2014 by Tim Bianchi

October 1, 2014

The reader may recall that last week an expanded PTAB panel announced an interpretation of 35 U.S.C. § 315(c) that essentially ruled out a joinder request for a subsequent IPR petition made by an existing party to the instituted proceeding.  Target Corp. v. Destination Maternity Corp. (IPR2014-00508 and -00509.)  In Target, the Board adopted a “party joinder” interpretation of the § 315(c) IPR joinder statute that provided for new persons to join an instituted IPR, but not for joinder of new issues raised by the same petitioner.

This interpretation was a departure from an earlier interpretation of § 315(c) that allowed a party to the instituted IPR the ability to request joinder of a later-filed petition based on new issues (“issue joinder”).  As noted by the Board in Target:

In other decisions, the Board has granted joinder of an additional petition or proceeding (as opposed to an additional person) to an instituted inter partes review. See Ariosa Diagnostics v. Isis Innovation Ltd., Case IPR2012-00022 (PTAB Sept. 2, 2014) (Paper 66) (“Ariosa”); Samsung Elecs. Co. v. Virgina Innovation Scis., Inc., Case IPR2014-00557 (PTAB June 13, 2014) (Paper 10) (“Samsung”); Microsoft Corp. v. Proxyconn, Inc., Case IPR2013-00109 (PTAB Feb. 25, 2013) (Paper 15); ABB Inc. v. Roy-G-Biv Corp., Case IPR2013-00286 (PTAB Aug. 9, 2013) (Paper 14); Sony Corp. v. Yissum Research Dev. Co. of the Hebrew Univ. of Jerusalem, Case IPR2013-00327 (PTAB Sept. 24, 2013) (Paper 15).

Decision Denying Motion for Joinder for IPR2014-00508 at p. 3.

The issue joinder interpretation provided a petitioner a mechanism to attempt to “cure” a partial institution based on new grounds of unpatentability or to challenge claims newly added to the litigation since the filing of the original IPR petition.  And this could be done even if the later-filed IPR petition was filed after the § 315(b) one-year bar date.

This week, the Board rejected four IPR petitions with joinder requests based on the earlier ‘issued joinder” interpretation of  § 315(c).  In Microsoft Corp. v. Enfish LLC (IPRs 2014-00574, -00575, -00576, and -00577), the Board denied joinder, but only after it made a full analysis of Microsoft’s joinder request based on the issues raised by Microsoft.  Since Microsoft was the Petitioner in the underlying instituted proceedings, these later-filed IPR petitions and their respective joinder requests were made by the same party (Microsoft), yet the Board did not apply the “party joinder” interpretation announced in Target.  Had the Board used the party joinder interpretation the decisions would have been much shorter.

Microsoft had filed these four IPRs and their respective joinder requests after the one-year IPR bar, so failure to obtain joinder resulted in each later-filed petition being denied based on the § 315(b) one-year bar.

The Target and Microsoft decisions were only four days apart.  It may take more time to determine whether the Board intends to use the issue joinder or party joinder approach to decide future IPR joinder motions.

 

Posted in 315(b) One Year Bar, America Invents Act, Future of PTAB Trial Practice, inter partes review, IPR Joinder, Joinder of AIA Proceedings, PTAB, PTAB Patent Trials | Tagged , , , , , , | Leave a comment

PTAB Joinder Practice Update: Board Interprets 35 U.S.C. § 315(c) to Require Party Joinder

Posted on September 30, 2014 by Tim Bianchi

Sep. 30, 2014

In at least two decisions last week, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to preclude a joinder request by an existing party to the proceeding.  The Board had allowed this practice in the past, for example, when a party timely filed its request for joinder with a petition that asserted new grounds of challenging one or more claims of the patent under IPR.  In these most recent decisions, the Board seems to have decided that § 315(c) requires “party joinder.”

In two IPRs styled Target Corp. v. Destination Maternity Corp. (IPR2014-00508 and -00509) the Board provided its rationale for why subsequent IPR petitions by Target could not be joined to the instituted IPR proceedings (IPR2013-00531 and -00533, respectively).  The Decision Denying Motion for Joinder for the -00508 IPR provides this reason (which is referenced by the parallel Decision Denying Motion for Joinder in the -00509 IPR):

The statute does not refer to the joining of a petition. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition . . .”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joined to IPR2013-00531.

The -00508 IPR Decision included a dissent which summarized prior cases allowing such joinder:

The majority opinion chooses not to address the issues as presented by the parties. Instead, the majority bases its decision to deny the motion entirely on a construction of 35 U.S.C. § 315(c), concluding that the statute enabling joinder does not apply here because it allows only joinder of parties, not joinder of issues. According to the majority, the language in § 315(c) addresses only joinder of a “party” to a proceeding, and does not permit joinder in the situation present in this case, where Petitioner seeks the “joinder” of additional grounds by the same party. The majority opinion acknowledges, however, the Board has consistently allowed joinder of additional grounds by the same party See, e.g., Ariosa Diagnostics v. Isis Innovation Ltd., Case IPR2012-00022 (PTAB Sept. 2, 2014) (Paper 66)(“Ariosa”); Samsung Elecs. Co. v. Virginia Innovation Scis., Inc., Case IPR2014-00557, (PTAB June 13, 2014) (Paper 10); Microsoft Corp. v. Proxyconn, Inc., Case IPR2013-00109 (PTAB Feb. 25, 2013) (Paper 15); ABB Inc. v. Roy-G-Biv Corp.,Case IPR2013-00282 (PTAB Aug. 9, 2013) (Paper 15).

As the majority opinion observes, the Board in Ariosa concluded that the language in § 315(c) that allows joinder of “any person who properly joins a petition under section 311” should be construed as not prohibiting the joinder of inter partes review proceedings involving the same party. Here, however, the majority opinion concludes that “the relief described in § 315(c) is something an existing party already has, namely, party status in the instituted inter partes review.” The majority opinion states further in a footnote that

solely focusing upon “any person” does not give full effect to the other words in the statute that limit who “any person” may be. Other language in § 315(c) excludes from “any person” at least two persons from among those who may be joined to a proceeding. More specifically, the phrase “who properly files a petition under section 311” excludes the patent owner, and “as a party,” excludes persons who are already a party.

We note initially that as this issue of statutory construction was not addressed, and thus not briefed, by the parties, the majority should not have denied joinder solely on statutory construction grounds. Apart from and independent of this failure to address the issues presented by the parties, however, we disagree with the majority’s construction of § 315(c), for the reasons discussed below.

Joinder is of particular importance to PTAB practitioners because the AIA imposes strict rules on the timing and content of IPR petition filings to challenge patentability.  It is especially important in IPRs, because a petitioner is barred from filing another petition over a year after service of a complaint alleging infringement under 35 U.S.C. § 315(b).  Before the decisions of the past week, a petitioner had one more chance to argue a different ground of challenge in an IPR using § 315(c) joinder.  Although not guaranteed, on occasion the Board had allowed joinder of a later-filed petition by the same petitioner to an instituted proceeding when the later-filed petition met certain conditions of timeliness and where the later-filed petition will not pose an undue delay or burden on the existing proceeding.  This afforded the petitioner one more opportunity to “tune” challenges when the Board granted partial institution of the claims challenged in the instituted IPR after the one-year bar.  It also afforded the petitioner another chance to challenge claims newly added in a parallel litigation after the one-year IPR bar.  Essentially, the former practice gave the petitioner one more opportunity to consolidate challenges in one proceeding.

If the Board follows the recent decisions precluding joinder requests by a party to the proceeding, petitioners will have to be more diligent to challenge every claim that could be possibly asserted in the parallel litigation.  Petitioners will have to continue to be thorough in exploring the best prior art challenges in the original petition and to assert robust grounds of unpatentability that will withstand the Board’s institution decision.  Accordingly, time will tell if last week’s ruling will be the rule for joinder and whether it will result in more IPR petitions to meet these challenges.  After all, in post-grant practice, that which you do not successfully challenge is likely to be harder to challenge later.

Posted in 315(b) One Year Bar, claim challenges, Future of PTAB Trial Practice, inter partes review, Litigation, prior art, PTAB, PTAB Patent Trials | Tagged , , , , , , , , , | 1 Comment

U.S. Bancorp CBM Results in Cancellation of Retirement Capital Access Management Co.’s Patent Claims

Posted on August 29, 2014 by Tim Bianchi

In 2011, U.S. Patent 6,625,582, entitled Method And System For Converting A Designated Portion of Future Social Security And Other Retirement Payments To Current Benefits, was assigned to Retirement Capital Access Management Company LLC.  Benefit Funding Systems LLC asserted the ‘582 patent against U.S. Bancorp in June of 2012.  Benefit Funding Systems LLC v. U.S. Bancorp, Case No. 1:12-cv-803-LPS (D. Del. filed June 22, 2012).  In response, U.S. Bancorp filed a CBM petition requesting review of claims 1, 13, 14, 18, 30, and 31 of the ‘582 patent on March 29, 2013.  U.S. Bancorp asserted that the ‘582 patent qualified for CBM review under 35 U.S.C. § 324 and Sec. 18(a) of the Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat. 284, 329 (2011), and that these claims were invalid under 35 U.S.C. § 101.

Continue reading →

Posted in America Invents Act, claim challenges, covered business methods, Post Grant Review, statutory subject matter | Tagged , , , , , , , | Leave a comment

Judge Rader to Retire from the Federal Circuit

Posted on June 16, 2014 by Tim Bianchi

Judge Rader announced his plans to retire from the Federal Circuit at the end of this month. Different sources are reporting that he has indicated an interest in teaching intellectual property to students in various countries. This will also allow him to continue to lecture and travel in the next phase of his career.  We wish him the best of luck in his new pursuits.

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Chief Judge Rader Stepping Down from Chief Judge Position, but Still Serving as CAFC Judge

Posted on May 23, 2014 by Tim Bianchi

From the U.S. Court of Appeals for the Federal Circuit Web Page:

CHIEF JUDGE RANDALL R. RADER TO STEP DOWN AS CHIEF JUDGE ON MAY 30, 2014

Chief Judge Randall R. Rader today announced his intention to step down as chief judge on May 30, 2014. Judge Rader will continue in active service on the court. He will also undertake additional teaching, lecturing and travel. Consistent with statutory succession provisions, Judge Sharon Prost will succeed Judge Rader as the chief judge.

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Lex Machina’s 2013 Patent Litigation Report Shows Disparity Between Litigated Patents and those under PTAB Review

Posted on May 14, 2014 by Tim Bianchi

Litigation and post-grant proceedings often go hand-in-hand. A new litigation report published by Lex Machina summarizes patent litigation data for 2013 and prior years.  It is an interesting report and very easy to digest.  Two findings caught my eye.  The first one relates to the overall number of patent litigation cases filed in 2013:

Plaintiffs filed 6,092 new patent cases in U.S. District Courts in 2013 . . .

The second finding is the number of U.S. Patents at issue in those filings:

4,917 patents were at issue in all cases filed during 2013.

That second number is surprising, because if understood correctly, the findings indicate that about 5 out of every 6 lawsuits filed in 2013 relate to different patents.  That ratio seems high — especially in view of the AIA litigation joinder provisions.  However, if we assume these numbers are roughly correct, they show a large difference between the number of patents asserted and the petitions filed in the PTAB.

For example, compare Lex Machina’s reported 4,917 patents at issue in 2013 suits with the 1,312 total IPR and CBM petitions on file in the PTAB from September 16, 2012 to May 8, 2014.  These numbers indicate that  at most about 1 out of 3 patents in litigation are the subject of a PTAB petition.  If true, that means several patents in litigation have not been submitted for review by the PTAB.

Of course, bear in mind that this is just a rough, unscientific approximation because:

  • not every petition in the PTAB relates to a new patent,
  • not every patent being challenged in the PTAB is in litigation, and
  • this crude approach does not attempt to correlate the petitions before the PTAB with a certain year of patent assertion.

Not every patent in suit is eligible for a post-issuance proceeding in the PTAB, so there is no reason to expect that every patent in suit will be the subject of a petition.  But, this data seems to indicate that there is still a large number of litigated patents that could be subject to future post-grant challenges. Readers are invited to contact me with better data than this admittedly rough approximation.  Please send me that information and I will try to post it to give a more accurate representation of patents in litigation versus those challenged in the PTAB.

 

Posted in America Invents Act, covered business methods, Future of PTAB Trial Practice, inter partes review, Joinder Post AIA, Litigation, Patent Reform, Post Grant Review, PTAB, PTAB Patent Trials | Tagged , , , , , , , , , , , , | Leave a comment

See You at the AIPLA 2014 Spring Meeting!

Posted on April 30, 2014 by Tim Bianchi

I am presenting at the AIPLA Spring Meeting on May 15, 2014 in Philadelphia and hope to see you there.  My task is to provide strategies for filing inter partes reviews, covered business method reviews and post-grant reviews.  I hope to see you there!

I just got back from the PLI Post-Grant Conference held in San Francisco.  The new world of patent litigation has only just begun and we are seeing many interesting ways that the AIA post-grant provisions are changing the way we view and value patents.  This year already has brought a lot of patent-related decisions from the PTAB, Federal Circuit, and Supreme Court.  There will be a lot to process in the months to come.  Stay tuned.

Posted in America Invents Act, covered business methods, inter partes review, Patent Reform, Post Grant Review | Tagged , , , , , , , , , , , | Leave a comment

Federal Circuit Dismisses Appeals by Petitioners Who Were Denied Inter Partes Reviews

Posted on April 25, 2014 by Tim Bianchi

The Federal Circuit issued two orders on April 24, 2014 dismissing appeals by petitioners in proceedings where the Patent Trial and Appeal Board (PTAB) denied institution of inter partes review (IPR).  Each appeal is summarized as follows:

St. Jude Medical, Cardiology Div. v. Volcano Corp. & Michelle K. Lee (as Deputy Director) – Appeal of Denial of IPR Petition

St. Jude brought suit against Volcano for patent infringement of five patents in 2010.  St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., No. 10-cv- 631 (D. Del. filed July 27, 2010).  Volcano counterclaimed alleging patent infringement of its U.S. Pat. 7,134,994 in September of 2010.  More than two years later, the district court dismissed all claims relating to the ‘994 patent (based on stipulations by the parties).

About a half year after the district court dismissal, St. Jude filed a petition for IPR of the ‘994 patent.  IPR2013-00109.  But that petition was dismissed by the Board (acting as a delegee of the Director) based on the one-year bar for IPR petitions.  35 U.S.C. § 315(b).  In a case of first impression, the Board determined that a counterclaim alleging infringement of a patent asserted over a year before the filing of the IPR petition triggered the 315(b) bar.  St. Jude appealed the Board’s decision not to institute IPR to the Federal Circuit.  Volcano and the PTO Director moved to dismiss St. Jude’s Federal Circuit appeal.

The Federal Circuit dismissed St. Jude’s appeal, holding that it may not hear appeals from the Director’s denial of petition for inter partes review.  In making its decision, the Court applied 35 U.S.C. § 314(d) and explained that an appeal to the Federal Circuit of a decision on IPR lacks jurisdiction unless the Board institutes trial:

Chapter 31 authorizes appeals to this court only from “the final written decision of the [Board] under section 318(a).” Id. § 319. Likewise, section 141(c) in relevant part authorizes appeal only by “a party to an inter partes review . . . who is dissatisfied with the final written decision of the [Board] under section 318(a).” Id. § 141(c). What St. Jude now challenges, however, is the Director’s non-institution decision under section 314(a) & (b). That is not a “final written decision” of the Board under section 318(a), and the statutory provisions addressing inter partes review contain no authorization to appeal a noninstitution decision to this court.  . . .

The statute thus establishes a two-step procedure for inter partes review: the Director’s decision whether to institute a proceeding, followed (if the proceeding is instituted) by the Board’s conduct of the proceeding and decision with respect to patentability.  . . . The statute provides for an appeal to this court only of the Board’s decision at the second step, not the Director’s decision at the first step.

The Federal Circuit’s position on direct appeals from the Director’s decision whether to institute an inter partes review is summarized in the next paragraph:

In fact, the statute goes beyond merely omitting, and underscoring through its structure the omission of, a right to appeal the non-institution decision. It contains a broadly worded bar on appeal. Under the title, “No Appeal,” Section 314(d) declares that “[t]he determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” Id. § 314(d). That declaration may well preclude all review by any route, which we need not decide. It certainly bars an appeal of the non-institution decision here.

The Court’s holding in St. Jude Medical was also used to dismiss the next appeal which requested mandamus relief:

In re Dominion Dealer Solutions, LLC. – Petition for Writ of Mandamus to the USPTO

Dominion Dealer Solutions filed several IPR petitions to challenge the patentability of several patents owned by AutoAlert, Inc.  IPR2013-00220, -00222, -00223, -00224 and -00225.  The Board denied institution of trial for five of the IPR petitions.  Dominion filed requests for rehearing, but they were also denied by the Board.  Dominion then filed an action in the Eastern District of Virginia to challenge the Board’s decision under the Administrative Procedures Act (see my earlier post).  Dominion also filed a “Petition for Writ of Mandamus to the Director” with the Federal Circuit.

The Federal Circuit denied the petition for mandamus.  In denying Dominion’s appeal, the Federal Circuit referenced the St. Jude Medical decision made that same day:

In another Order issued today, we dismiss an appeal by a patent challenger seeking review of the Director’s decision not to institute an inter partes review. See Order Dismissing Appeal, St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., No. 2014-1183 (Fed. Cir. Apr. 24, 2014). We explain that such a challenger may not appeal the non-institution decision to this court. We conclude that such an appeal is precluded by the statutory provisions addressing inter partes review, including section 314(d)’s broad declaration that the Director’s decision “whether to institute an inter partes review under this section shall be final and nonappealable,” and by our jurisdictional statute. See St. Jude, slip op. at 5-6.

Those conclusions require denial of Dominion’s petition for mandamus relief. At a minimum, given our conclusions about the statutory scheme, Dominion has no “clear and indisputable” right to challenge a noninstitution decision directly in this court, including by way of mandamus. That is all we need to decide.

The Court noted Dominion’s appeal in the Eastern District of Virginia, and its dismissal on April 18, 2014, but concluded “[w]e need not decide that issue here.”

_______

These decisions remind petitioners that they should take every reasonable measure to obtain institution of trial, because appeals of Board decisions denying institution of trial will not easily survive a motion for dismissal in light of the holding in St. Jude Medical. It will be interesting to see whether Dominion will decide to appeal the district court’s dismissal of its APA challenge now that the Federal Circuit has rejected mandamus relief under the St. Jude Medical holding.

Posted in 315(b) One Year Bar, America Invents Act, claim challenges, Federal Circuit, inter partes review, Litigation, Mandamus Actions in the Federal Circuit, Patent Reform, PTAB, PTAB Patent Trials, PTO Sued Under the APA, Uncategorized | Tagged , , , , , , , , , | Leave a comment

Eastern District of Texas Denies SAP’s Motion to Vacate the Judgment in the Versata Patent Infringement Case

Posted on April 24, 2014 by Tim Bianchi

SAP recently learned that the Eastern District of Texas denied its motion to set aside or stay a district court judgment in favor of Versata for infringement of its U.S. Pat. 6,553,350 (Versata Software, Inc v. SAP America, Inc., No. 2:07-cv-00153 (E.D. Tex)).  On April 20, 2014, Judge Roy S. Payne dismissed SAP’s motion despite its successful patentability challenge of Versata’s ‘350 patent last year in the PTAB.  Could SAP’s win in the first covered business method patent review be too late to rid itself of the judgment?

History of the Patent Infringement Suit and PTAB CBM Proceeding

The patent infringement suit by Versata started when it sued SAP for alleged infringement of its U.S. Patent Nos. 6,553,350 and 5,878,400 in 2007 (Versata Software, Inc v. SAP America, Inc., No. 2:07-cv-00153 (E.D. Tex)).

A first jury trial was held in 2009, and a second jury trial was held in 2011.  In the first trial, the jury found both patents directly infringed and inducement of infringement of one claim of the ’350 patent.  Shortly after the first trial, the Court granted JMOL of noninfringement of the ’400 patent.  A second trial was held on the ’350 patent and a jury found the ’350 patent infringed, resulting in a $392 million judgment and an injunction dated September 9, 2011 (stayed pending appeal).

SAP filed its petition for covered business method patent review on the first day it was available via the AIA:  September 16, 2012.  The petition included grounds for challenging the ’350 patent under 35 USC §§ 101, 112, and 102.  This was the the first covered business method patent review under the America Invents Act (CBM2012-000001).

About a month later, SAP filed a notice of appeal of the district court decision in the Federal Circuit (filed on October 11, 2011).  Briefing was completed some months later, and oral arguments were held on February 4, 2013.  About a month before the oral arguments (January 9, 2013), the PTAB instituted trial on the challenges under 35 USC §§ 101 and 102, but declined review on the challenges under 35 USC § 112.  So as of January, 2013, the dispute was being pursued both in the Federal Circuit and in the PTAB.

Based on a series of communications between the parties and the PTAB, SAP agreed to drop its challenge under 35 USC § 102 in exchange for an expedited trial on its challenges under 35 USC § 101.  The PTAB trial was held on April 17, 2013, where both parties presented their arguments concerning 35 USC § 101.

On May 1, 2013, the Federal Circuit affirmed the lower court jury decision on infringement and damages awards and vacated part of the trial court’s permanent injunction and remanded for further proceedings based on the opinion.

In June of 2013, the Patent Trial and Appeal Board (PTAB) decided that Versata’s U.S. Pat. 6,553,350 was unpatentable under 35 U.S.C. § 101.

After the Patent Office decided that the claims challenged in the related covered business method patent review were unpatentable, SAP motioned for a stay of proceedings in the Federal Circuit.  In a simple, one page document, the Federal Circuit denied that motion for stay on July 5, 2013 without providing further comment or opinion.  The Supreme Court denied certiorari of SAP’s petition on January 21, 2014.

Current Stay Motion

A “Motion of SAP America, Inc. and SAP AG For Relief From Judgment Under Fed. R. Civ. P. 59(e) or 60(b) Or For A Stay” was filed on January 21, 2014, and renewed on March 27, 2014 in the E.D. Tex. action.  Judge Payne’s denial of the stay observed:

The Court finds that all four of these [stay] factors counsel against a stay in this case. There are no remaining issues in this case to simplify. The trial has been held and the appeal is completed. A stay would clearly unduly prejudice the nonmoving party and provide a clear tactical advantage for the moving party. Moreover, a stay would not reduce the burden of litigation on the parties or the Court. Finally, the fact that the Federal Circuit has already denied Defendants’ request for a stay pending completion of the PTAB proceedings weighs heavily against Defendants’ request. Accordingly, the request for a stay is DENIED.

Judge Payne also denied the request to vacate under Rule 60(b):

Defendants have taken advantage of a full and fair opportunity to litigate the validity of the patent before this Court, before the jury, and before the Federal Circuit, even pursuing a writ to the United States Supreme Court. To hold that later proceedings before the PTAB can render nugatory that entire process, and the time and effort of all of the judges and jurors who have evaluated the evidence and arguments would do a great disservice to the Seventh Amendment and the entire procedure put in place under Article III of the Constitution. The proceedings before the PTAB are not even final at this time, but this Court does not believe that later finality will change this calculus. Indeed, it is the finality of the judgments issued by the Federal Courts that is at stake here. Unlike the situation before the Court in Fresenius USA, Inc. v. Baxter Intern., Inc., 721 F.3d 1330 (Fed. Cir. 2013), the judgment in this case is final and there are no further issues to be resolved. That fact also clearly distinguishes this case from that before the Fifth Circuit in Bros. Inc. v. W. E. Grace Mfg. Co., 320 F.2d 594 (5th Cir. 1963).

Thus, Judge Payne distinguished the present matter from the Baxter case at least in part because the Baxter judgment was not final.  Apparently, the court is of the opinion that once certiorari was denied by the Supreme Court the district court judgement became final.  It will be interesting to see SAP’s response to this decision in the upcoming months.

Posted in America Invents Act, claim challenges, covered business methods, Federal Circuit, patent-eligible subject matter, PTAB, PTAB Patent Trials, PTO Sued Under the APA, Stay in Federal Circuit, Uncategorized | Tagged , , , , , , , , , | Leave a comment

Eastern District of Virginia Decides PTAB Decision to not institute IPR is Not Appealable

Posted on April 21, 2014 by Tim Bianchi

A patent owner insists that your company infringes a patent and makes a claim of patent infringement.  You have settled patent infringement assertions before, but this patent seems invalid over known prior art.  You consult with your patent counsel and a decision is made to file a petition for inter partes review (IPR) under the new post-grant challenges afforded by the America Invents Act.

A lot of hard work goes into preparing the IPR petition.  You include a declaration by an expert and multiple prior art grounds of invalidity.  You file your petition, knowing that in six months you will get a decision on whether the Patent Trial and Appeal Board (PTAB) will institute trial.  You get notice that a decision has been made and you read it, only to learn that your petition for IPR has been denied in total.  You believe the decision not to institute is a mistake.  What do you do?

To know your options you consult the statute:

§ 314. Institution of inter partes review

. . .

(d) NO APPEAL.—The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

Final and nonappealable?  That does not sound good.  After all, you recall hearing something about requests for reconsideration.  So you consult the CFR:

§ 42.71 Decision on petitions or motions.

. . .

(c) Petition decisions. A decision by the Board on whether to institute a trial is final and nonappealable. A party may request rehearing on a decision by the Board on whether to institute a trial pursuant to paragraph (d) of this section. When rehearing a decision on petition, a panel will review the decision for an abuse of discretion.

(d) Rehearing. A party dissatisfied with a decision may file a request for rehearing, without prior authorization from the Board. The burden of showing a decision should be modified lies with the party challenging the decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was previously addressed in a motion, an opposition, or a reply. A request for rehearing does not toll times for taking action. Any request must be filed: . . .  (2) Within 30 days of the entry of a final decision or a decision not to institute a trial.

You prepare and file a request for rehearing according to the rules, but the PTAB affirms its earlier decision.  What can you do now?

Petitioners are starting to explore different avenues to attempt to challenge a decision not to institute trial.  Some have filed for relief in the Eastern District of Virginia, some have appealed to the Court of Appeals for the Federal Circuit, and some have made claims in both courts.  A recent decision by the Eastern District of Virginia relies on § 314(d) to hold that appeals of PTAB decisions to not institute trial are  final and nonappealable.

In Dominion Dealer Solutions, LLC, v. Michele K. Lee, 3:13CV699, ____ (E.D. Va. 2014), Judge Robert E. Payne denied  Dominon’s challenge of the PTAB’s decision not to institute trial in five IPR petitions filed by Dominion against patents owned by AutoAlert, Inc.  The court instead granted the PTO’s motion to dismiss based on its interpretation that the PTAB’s decision not to institute trial is final an nonappealable under 35 U.S.C. § 314(d).

As it turns out, the Federal Circuit already has a petition for mandamus from Dominion requesting relief from the PTAB decision to not institute IPR.  It will be interesting to see how the Federal Circuit decides that petition, because that may be an indicator of the Federal Circuit’s approach to other persons that are also seeking a writ of mandamus — some of which we will be discussing in future posts.

 

 

 

Posted in America Invents Act, inter partes review, Mandamus Actions in the Federal Circuit, Patent Reform, PTO Sued Under the APA, Uncategorized | Tagged , , , , , , , , , , | 1 Comment