PTAB Precedential Decisions - Buchanan PTAB Report

The first petition for inter partes review (IPR) was filed on September 16, 2012. Garmin Int’l, Inc. v. Cuozzo Speed Techs., IPR2012-00001, Paper 1 (PTAB Sept. 16, 2012).  Since then, the Patent Trial and Appeal Board (PTAB) has evaluated several thousand petitions for IPR, covered business method (CBM) review, and post-grant review (PGR) under the America Invents Act (AIA).  The PTAB and litigants before the PTAB have encountered several issues of first impression since the passage of the AIA, sometimes resulting in inconsistent decisions by PTAB panels.

To guard against inconsistent decisions, the PTAB has, to date, designated eight (8) opinions as precedential.  According to the PTAB’s Standard Operating Procedure ("SOP"), "[a] precedential opinion is binding authority in subsequent matters involving similar facts or issues…unless overcome by subsequent binding authority."  SOP No. 2 at p. 3 (Rev. 9, Sept 22, 2014).   A brief description of the PTAB’s precedential decisions is provided below.

Discovery

Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, IPR2012-00001, Paper No. 26 (PTAB Mar. 5, 2013) (precedential).  For IPRs, the PTAB indicated that the following five factors are considered in determining whether a discovery request meets the required "in the interest of justice" standard. 37 C.F.R. § 42.51(b)(2)(i). (1) The mere possibility of finding something useful, and mere allegation that something useful will be found, are insufficient to demonstrate that the requested discovery is necessary in the interest of justice. (2) Asking for the other party’s litigation positions and the underlying basis for those positions is not necessary in the interest of justice.  (3) Information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice to have produced by the other party.  (4) The questions should be easily understandable.  (5) The requests must not be overly burdensome to answer, given the expedited nature of IPR.

Bloomberg Inc. et al. v. Markets-Alert Pty Ltd., CBM2013-00005, Paper 32 (PTAB May 29, 2013) (precedential).  A good cause standard is applied for additional discovery in PGRs and CBMs, in contrast to the interest of justice standard in IPRs. 37 C.F.R. § 42.224(a). The interest of justice standard is slightly higher than the good cause standard.  In this order, the PTAB adopted the Garmin discovery factors (1)-(5) for PGR and CBM proceedings, noting that the PTAB slightly modifies each of the five factors to determine whether requested discovery is necessary for good cause.

Time Bar

An IPR may not be instituted if the IPR petition is filed more than one year after the date on which the petitioner, its real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. 35 U.S.C. § 315(b).

Oracle Corp. v. Click-to-Call Techs. LP, IPR2013-00312, Paper 26 (PTAB Oct. 30, 2013) (precedential only as to Section III.A).  A complaint for infringement that was voluntarily dismissed without prejudice is not a "complaint alleging infringement of the patent" within the meaning of 35 U.S.C. § 315(b), because the dismissal of an action without prejudice leaves the parties as though the action had never been brought.  The dismissal of the complaint nullified the effect of service of the complaint, and therefore, petitioner was not time-barred.

LG Electronics, Inc. v. Mondis Technology Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015) (precedential).  Petitioner was served with a first complaint for infringement in 2008 and a second complaint for infringement in 2014 relating to the challenged patent.  The 2008 complaint was dismissed with both prejudice and without prejudice.  The PTAB rejected petitioner’s argument that the time bar of 35 U.S.C. § 315(b) should be measured from the second complaint.  Since the 2008 complaint was dismissed with both prejudice and without prejudice, the dismissal of the first complaint did not leave both parties as though the action had never been brought.

Motion to Amend

A patent owner may file a conditional motion to amend one or more claims challenged in the proceeding. 35 U.S.C. § 316(d)(1). In Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027, Paper 26 (PTAB June 11, 2013) (informative), the PTAB indicated that a patent owner has the burden of proof to demonstrate patentability of the proposed substitute claims over (1) the prior art of record, and (2) prior art known to patent owner.

Masterimage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 42 (PTAB July 15, 2015) (precedential).  The PTAB clarified the meaning of (1) "the prior art of record" and (2) "prior art known to the patent owner" as used in Idle Free.  The PTAB indicated that (1) "the prior art of record" includes a) any material art in the prosecution history of the patent, b) any material art of record in the current proceeding, including art asserted in grounds not instituted by the PTAB, and c) any material art of record in any other proceeding before the PTO involving the patent.  In addition, the PTAB indicated that (2) "prior art known to the patent owner" includes "no more than the material prior art that Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office under 37 C.F.R. § 42.11, in light of a Motion to Amend."  In a motion to amend, the patent owner has the burden of demonstrating that proposed substitute claims are patentable over the prior art of record.   Once the patent owner has set forth a prima facie case of patentability of its proposed substitute claims, the burden of production shifts to the petitioner.

Real Parties in Interest

35 U.S.C. § 312(a)(2) requires that a petitioner must identify all of its real parties in interest as part of the petition.

Lumentum Holdings, Inc. v. Capella Photonics, Inc., IPR2015-00731, Paper 39 (PTAB Mar. 2, 2016) (precedential).  The PTAB denied patent owner’s motion to terminate the proceeding for failure to name all real parties in interest.  In doing so, the PTAB rejected patent owner’s argument that the panel lacked jurisdiction to consider the petition.  § 312(a) does not define the PTAB’s jurisdiction to consider a petition.  Rather, § 312(a) sets forth requirements that must be satisfied for the PTAB to give consideration to a petition, but a lapse in compliance with those requirements does not deprive the PTAB of jurisdiction over the proceeding, or preclude the PTAB from permitting such lapse to be rectified.

Estoppel

Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (PTAB May 14, 2015) (precedential).  Estoppel under 35 U.S.C. § 325(e)(1) is applied on a claim-by-claim basis only if a final written decision has been issued for that claim.  Petitioner filed a first petition challenging all the claims of the patent, but the PTAB denied institution for several claims.  Petitioner then filed a second petition for the claims that were denied review.  The PTAB instituted a second trial for the claims that were denied review in the first trial.  After institution of the second trial, the PTAB issued a final written decision in the first trial.  Patent owner argued that petitioner was estopped from maintaining the challenge to the claims in the second trial because petitioner had challenged those claims in the first petition. The PTAB determined that the final decision in the first trial did not trigger estoppel for the claims challenged in the second trial, because the final decision did not address the non-instituted claims.

Civil Action Bar

35 U.S.C. § 325(a)(1) provides that "[a] post-grant review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent."

SecureBuy LLC v. Cardinal Commerce Corp., CBM2014-00035, Paper 12 (Apr. 25, 2014) (precedential).  The PTAB held that the civil action bar provisions of 35 U.S.C. § 325(a)(1) apply to CBM reviews.

Going Forward

As the PTAB continues to adjudicate more AIA trials, it is expected that the PTAB will designate more opinions as precedential. There are several practice areas in which precedential guidance from the PTAB may promote just, speedy, and inexpensive trial practice. For example, it may be beneficial to provide practitioners with further precedential guidance from the PTAB concerning the procedure on remands from the Federal Circuit, and whether similar claim-by-claim estoppel provisions apply to IPR proceedings.