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Gov't Contractors and the Inter Partes Review Time-Bar

Law360
January 5, 2017

Lavenue, Lionel M., Seastrunk, David C.

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When the United States is sued for patent infringement, a government contractor who provides services related to those patents may find itself wrapped up in patent litigation at the Court of Federal Claims as a third-party defendant supporting the United States. Government contracts often require the contractor to indemnify the United States for damages related to a patent infringement suit. In response to a threat of patent infringement, a popular option is to challenge the patent’s validity at the USPTO’s Patent Trial and Appeal Board (PTAB) in an Inter Partes Review (IPR) proceeding. Normally, an accused party has one-year to file an IPR petition after being sued for patent infringement. After this one year time period, the accused party is statutorily barred from filing an IPR—a rule that has been strictly enforced. In a recent decision, however, the judges at the PTAB held that this one-year time bar does not apply to any third-party defendant (i.e., government contractor) at the Court of Federal Claims. The PTAB reasoned that because it is the United States being sued (and not the government contractor), it would be unfair to bar the government contractor from filing an IPR proceeding. Therefore, for any government contractor subject to a claim of indemnity for patent infringement, this new, and surprising, development in the law provides a powerful new defensive tool against claims of patent infringement before the PTAB at the USPTO. In this article, Finnegan attorneys Lionel M. Lavenue and David C. Seastrunk discuss this new development.