MaxPower can't block IPR; O'Malley dissents
The US Court of Appeals for the Federal Circuit has denied a bid from MaxPower Semiconductor to challenge a US Patent Trial and Appeal Board (PTAB) decision to conduct an inter partes review (IPR) of four of its transistor patents.
In an order handed down on Wednesday, September 8, Federal Circuit judges ordered the dismissal of the four appeals and denied MaxPower’s mandamus petition.
An arbitration agreement between MaxPower and Rohm Semiconductor does not make a “final” PTAB decision to institute inter partes reviews appealable, the court ruled.
The agreement was struck when MaxPower licensed the four patents to the Japan-based Rohm in 2007. The agreement stated that the two companies should arbitrate “[a]ny dispute, controversy, or claim arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof ”.
In 2019 and 2020, the two companies disputed whether the patents covered Rohm’s silicon carbide products. MaxPower then notified Rohm that it would begin arbitration. In response, Rohm decided to challenge the validity of the patents at the PTAB.
The PTAB granted IPR of the patents on April 15, 2021, leading MaxPower to appeal to the Federal Circuit.
MaxPower’s appeal was denied in a two to one vote by circuit judges Raymond Chen and Jimmie Reyna, upholding that the non-appealability of the institution of an IPR.
O’Malley’s dissent
O’Malley offered a lengthy dissenting opinion on the ruling, claiming that the majority’s denial of the writ of mandamus goes against Congress’ rule that patent validity should be “valid, irrevocable, and enforceable, except for any grounds that exist at law or in equity for the revocation of a contract.”
O’Malley argued that the denial makes IPR an exception to the “valid, irrevocable, and enforceable” rule.
She said: “There is no support for this new exception in the text of the statute itself. Indeed, the board and the majority ignore the statutory text of § 294 and the strong policy favouring arbitration repeatedly confirmed by the Supreme Court.”
O’Malley argued that making MaxPower defend the validity of its patents through multiple IPR proceedings denies it the benefit of any agreement to arbitrate validity.
“If the board finds that any of MaxPower’s claims are invalid, the harm to MaxPower is compounded,” she added.
The majority decision goes against many prior decisions at the Supreme Court and “casts a shadow” over all prior agreements to arbitrate patent validity, added O’Malley.
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