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29 May 2020PatentsEvan Day and Olivia Nguyen

Fewer bites at the IPR apple now possible

Recent guidance and decisions show that the US Patent Trial and Appeal Board (PTAB) intends to take a tougher stance on multiple inter partes review (IPR) petitions filed against any single patent.

The hardened position applies not only when a single petitioner files “serial” petitions against the same patent but also when different petitioners challenge the same patent, as well as when a single petitioner files multiple, “parallel” petitions regarding the same patent at the same time.

Parties considering IPR challenges must consider not just whether they intend to file more than one, but whether others have already done so.

Discretionary denial

When Congress passed the America Invents Act (AIA) in 2011, it gave the board discretion (in 35 USC section 314) to institute IPRs in certain circumstances, but never required the board to do so.

Therefore, the PTAB may deny a petition even if the petition shows a reasonable likelihood that at least one claim is unpatentable, or even if the board has not substantively analysed the petition at all. In either case, such discretionary denials are non-appealable.

The board has used this discretion to deny institution of petitions against patents that have already been challenged.

In a 2017 decision, General Plastic v Canon Kabushiki Kaisha (IPR2016-01357), the PTAB identified several factors that it may consider in deciding whether to invoke its discretion to deny institution, including:

(1) whether the same petitioner previously challenged the same patent;

(2) whether the petitioner knew or should have known of the prior art asserted in the second petition when the first was filed;

(3) whether the petitioner already had the patent owner’s preliminary response or board institution decision from the first petition before filing the second;

(4) time elapsed between petitions;

(5) explanation for the delay;

(6) the board’s resources; and

(7) the board’s statutory obligation to issue final determinations no later than one year after institution.

The PTAB warned that there must be restrictions on follow-on petitions to prevent petitioners “strategically staging their prior art and arguments in multiple petitions, using the board’s decisions as a roadmap, until a ground is found that results in the grant of review”.

Applying General Plastic

Some early PTAB decisions after General Plastic either found the factors irrelevant to petitions filed by a different petitioner (IPR2018-01538), or weighed the first factor in favour of institution in such situations (IPR2017-01195).

However, in Shenzhen Silver Star Intelligent Technology v iRobot (IPR2018-00761), the board denied institution of later petitions filed by a different petitioner from the initial petition.

“The board has insisted that its approach does not always mean that an earlier-sued defendant’s IPR petition precludes later petitions by other defendants.”

The later petitioner was a co-defendant and International Trade Commission (ITC) co-respondent with an earlier petitioner whose petition was denied. The PTAB reasoned that the later petitioner likely knew of the prior art asserted in the earlier petitions based on invalidity contentions filed in the ITC, could have taken advantage of the “opportunity to strategically stage its prior art and arguments”, and failed to explain its delay in filing after the first petition.

In 2019, the PTAB took the Silver Star reasoning a step further by denying an IPR petition filed by a former co-defendant.

In Valve Corp v Electronic Scripting Products (IPR2019-00062), the later petitioner (Valve) had been dismissed from the underlying litigation because of venue issues before its co-defendant (HTC America) filed petitions for IPR against two patents, one of which was instituted and the other denied.

Valve nevertheless filed IPR petitions against both patents after the US Court of Appeals for the Federal Circuit decided that the one year time-bar of 35 USC section 315(b) applied even to defendants who had been sued and dismissed.

However, even though Valve was not a co-defendant at the time HTC America filed its petitions, the board denied Valve’s petitions based on General Plastic. It reasoned that the two petitioners were “similarly situated … with respect to patent owner’s assertion” of the asserted patent because the same product was accused and that Valve addressed a narrower claim construction adopted by the board in the earlier proceeding.

Gamesmanship

The board’s cases about multiple petitions may create an inequity for later-sued defendants, because patent-owner plaintiffs can, and often do, stagger the filing of their complaints for patent infringement in district courts. But the board has insisted that its approach does not always mean that an earlier-sued defendant’s IPR petition precludes later petitions by other defendants.

For example, the board has stated that it will “decline to wield the patent owner’s own litigation activities as a shield in an IPR” (IPR2018-01554), and has found complaints about serial petitions unpersuasive “when the volume of petitions appears to be a direct result of the patent owner’s own litigation activity” (IPR2017-01797).

Since the PTAB designated the Valve decision precedential in April 2019, many decisions citing that opinion have distinguished the case on its facts. For example, the board has found no “significant relationship” between competitors (IPR2019-00652) or petitioners who are defendants in “separate lawsuits in separate federal courts” (IPR2019-00358).

By contrast, the PTAB has found a significant relationship between an indemnitor and indemnitee (IPR2019-00901); a supplier and a buyer (IPR2019-00887); and co-defendants in consolidated cases (id). Additionally, the existence of a significant relationship cannot be negated by arguments that the petition was filed without contribution or cooperation from the prior petitioner (id.).

The board has also closely scrutinised patent owner arguments concerning gamesmanship. It has found no unfair advantage from a petitioner seeing a prior filing or proceeding where the preliminary response “did not include substantive arguments” (IPR2019-00123); or was “extremely reference-specific” and not relevant to the prior art in the petition (IPR2019-01037).

Nor has the board found an unfair advantage where the petitioner filed a substantively identical petition with a motion for joinder (ie, a “copycat” or “me too” petition) (IPR2019-00901). In sum, the board requires a patent owner to provide clear evidence of gamesmanship.

Multiple parallel petitions

In the new Consolidated Trial Practice Guide, the PTAB discourages multiple petitions filed against the same patent simultaneously by the same petitioner, noting that one petition is usually sufficient and that multiple petitions may place an undue burden on the board and the patent owner.

If a petitioner files more than one petition against the same patent, the petitioner must rank the petitions in the order it wishes the board to consider them and explain the differences between petitions, why they are material, and why the board should institute more than one.

The guide gives examples of a patent owner asserting numerous claims in litigation and disputes about priority dates requiring arguments about multiple prior art references.

The PTAB has also instituted multiple petitions that provide “different unpatentability arguments to account for different claim interpretations” (IPR2019-00516); where multiple defendants in district court proceedings filed only two consolidated petitions (IPR2019-01165); where a petitioner “faced with word count limitations and a large number of challenged claims” chose to “distribute its analysis of those claims among a number of petitions” (IPR2019-00813); and in situations with various combinations of these factors.

Merely filing petitions based on different prior art references is insufficient, however.

In response, the patent owner may explain why differences identified by the petitioner are “directed to an issue that is not material or not in dispute”.

The patent owner may strengthen its position by stipulating, for example, that claim limitations are not disputed or that certain references qualify as prior art. Conversely, the board has considered a patent owner’s unwillingness to narrow issues identified by the petitioner as a factor favouring institution of multiple petitions (IPR2019-00813).

Practical impact

The board appears willing to wield its broad discretion to address criticisms alleging “harassment” of patent owners and “unfair” follow-on petitions that purportedly make inefficient use of the board’s limited resources.

Prospective petitioners should anticipate such arguments from patent owners and the board and plan their own strategies accordingly. Apparent gamesmanship (such as using a previous decision as a roadmap or test case) may be an aggravating factor, but it will not be presumed if the delay is due to the patent owner’s own litigation activities.

For patent owners, the board’s guidance on multiple IPR petitions, whether serial or parallel, provides a useful tool to defeat IPR petitions. However, patent owners should be prepared to explain in their preliminary responses why the multiple petitions represent gamesmanship or would otherwise give the petitioner an unfair advantage.

Patent owners should also ensure that their own litigation strategies do not increase the chance that the board will consider multiple IPR challenges, such as when litigation is staggered against multiple defendants.

Additionally, patent owners facing multiple parallel petitions may face a strategic choice whether to stipulate on certain issues or face an increased likelihood of defending against multiple instituted IPRs.

Evan Day is senior counsel in Perkins Coie’s patent litigation practice. He can be contacted at:  eday@perkinscoie.com

Olivia Nguyen is an associate at Perkins Coie. She can be contacted at:  onguyen@perkinscoie.com

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