PTAB Final Written Decision Not Binding in Federal Circuit Review of Preliminary Injunction Award - Buchanan PTAB Report

The interplay between infringement actions brought in district court and parallel USPTO post-grant proceedings can lead to interesting outcomes. One example is the Federal Circuit's decision in Tinnus Enterprises, LLC v. Telebrands Corp., Case No. 2016-1410 (Fed. Cir. Jan. 24, 2017).

In Tinnus, the alleged infringer appealed a district court decision granting the patent owner's motion for preliminary injunction.  The accused infringer had challenged the patentability of the patent-in-suit in a parallel post-grant review (PGR) proceeding.  The Patent Trial and Appeal Board (PTAB) issued a final written decision in the PGR determining that the asserted claims are unpatentable.  The district court granted the motion for preliminary injunction before the PTAB issued its final written decision.  Despite the PTAB's intervening decision indicating that the underlying patent-in-suit was unpatentable, the Federal Circuit affirmed the district court's decision to grant the preliminary injunction.

An accused infringer can defeat a motion for preliminary injunction "by demonstrating a substantial question of validity or infringement." Id., slip op. at 15, citing Trebro Mfg., Inc. v. Firefly Equip., LLC, 748 F.3d 1159, 1165 (Fed. Cir. 2014). For the Federal Circuit, the PTAB's intervening final written decision finding the patent-in-suit unpatentable did not raise a "substantial question of validity."

Interestingly, the Federal Circuit stated that "the same evidence and arguments" were considered by the PTAB and district court. Id., slip op. at 12.  That is, the Federal Circuit did not point to any difference in the evidence or arguments as the basis for explaining the different outcome on the issues of indefiniteness and obviousness.  The Federal Circuit considered the PTAB's decision in light of (1) the abuse of discretion standard applied in reviewing preliminary injunction awards, and (2) the fact that the district court had not considered the PTAB's final written decision:

We are aware that the PTAB issued a Final Written Decision on December 30, 2016, concluding that the claims of the '066 patent are indefinite. The PTAB's decision is not binding on this court, and based on the record before us and the applicable standard of review, it does not persuade us that the district court abused its discretion in granting the preliminary injunction.  The parties are, of course, free to ask the district court to reconsider its preliminary injunction in light of the PTAB's Decision.

 Id., slip op. at 13, n. 7. Applying the relevant standard of review, the Federal Circuit determined that the district court's conclusion "does not suffer from a ‘clear or obvious' error." Id., slip op. at 21.  The Federal Circuit invited the parties to ask the district court to reconsider its decision in light of the PTAB's final written decision.

It is uncertain whether the district court would have granted the preliminary injunction motion had it considered the PTAB's final written decision. It is also unclear whether the Federal Circuit would have affirmed the district court under such circumstances.  In any event, the Tinnus decision is an example of the interplay that can occur between parallel federal court litigations and USPTO proceedings.  Oftentimes, outcomes can turn on the applicable standards of review and the timing of the decisions, as was the case in Tinnus.