October 30, 2015
Law360
By Thomas L. Irving; Samhitha Muralidhar Medatia; *Stacy D. Lewis
While much invective has been thrown around concerning inter partes review proceedings in the past few years, the institution rate of IPRs continues to fall, whether due to parties becoming savvy to proceedings, an improvement in the quality of patents being challenged, or due to developing statutory interpretations before the Patent Trial and Appeal Board and the Federal Circuit. It is still early days, and there are many aspects of IPRs that do not have judicial guidance yet. For example, the Federal Circuit just issued the first decision remanding a case back to the PTAB.1 But remand is not addressed in the statute or rules, so this is uncharted territory for the PTAB.
One thing is certain: All parties can benefit from analyzing the denials and understanding which arguments work and which do not. Thus, we continue our review of trends in the bases of IPR petition denials, following up on two articles published last spring.
The PTAB's rate of institution of IPR petitions remains above 50 percent, but the rate over about the last two years is definitely dropping, as the data shows:
The data shows that patent owners have increasingly filed optional patent owner preliminary responses since IPRs were introduced.
While any decline in petition grant rate has many causes, one contributing factor may be the increase in POPR filings, which most practitioners consider patent owner's best opportunity to obtain a denial of an IPR petition. The growing perception among the bar is that patent owners with vested interests and a good-faith belief in the patentability of their patents will generally enter a POPR, absent the rare cases where it is not cost-effective or strategic to do so.
Our comparison of IPR institution decisions in bio/pharma-related petitions shows markedly greater success for patent owners when a POPR is filed. In 94 percent of the petitions denied, a POPR was filed, compared to a POPR being filed in 75 percent of the petitions granted or partially granted.
The popularity of IPRs continues, with filings of IPR petitions for 2015 so far averaging about 140 per month and indicating a slight upward trend.
Using the U.S. Patent and Trademark Office's fiscal year data, the monthly average of petitions filed has increased in each of the past two years, and shows no obvious signs of slowing or leveling off, though it is very early in the life of the proceedings and the data to date is far from statistically significant.
For instituted IPRs, the claim cancellation rate of instituted claims remains high, so any patent owner's first goal should be to prevent IPR institution, if possible. While this involves some expense on the patent owner's behalf, POPRs give the PTAB the opportunity to make a decision based on arguments from both parties early in the process.
Our first two IPR denial articles analyzed some of the bases that the PTAB uses for denying IPR petitions. In particular, the first discussed the importance of forward-looking specification and claim drafting and prosecution in light of the significance of claim construction in the PTAB institution decision. Both articles compared the rates of institution in bio/pharma-related cases when the patent owner filed a patent owner preliminary response compared to when no POPR was filed. The second article also examined denial rates under 35 U.S.C. §325(d) (same or substantially the same art/arguments previously raised before the office) and attacks on the priority date and therefore prior art status of the asserted reference.
This article will examine other bases for IPR petition denial and patent owners' success rates so far.
Real-Party-in-Interest and Privity Issues Under 35 U.S.C. §312(a)(2) and 37 C.F.R. §42.8(b)(1)
Under the America Invents Act, 35 U.S.C. §312(a)(2) states that an IPR petition is considered if "the petition identifies all real parties in interest[.]" And by regulation, 37 C.F.R. §42.8(b)(1) specifies that the petition must include notice of "each real party-in-interest for the party." The USPTO's proposed rules released in August 2015 (80 Fed. Reg. 50,720 (Aug. 20, 2015)), include commentary on real-party-in-interest and indicate that the Office Trial Practice Guide will be revised soon to reflect the commentary. In particular, the commentary notes that "[t]o balance efficiency with fairness, the Office, in general, will permit a patent owner to raise a challenge regarding a real party-in-interest or privity at any time during a trial proceeding," id. at 50,729. This conforms to current PTAB practice. Although it is advantageous to dispose of such issues as early in a proceeding as practicable, late consideration is particularly important where new evidence comes to light after institution or if the petitioner is particularly reticent to share information concerning any perceived real parties-in-interest problems.
According to the PTAB, the question of whether any particular entity is a real party-in-interest is a "highly fact-dependent question" assessed "case-by-case."9 And while many factors are relevant, one "common consideration is whether the nonparty exercised or could have exercised control over a party's participation in a proceeding."10
The PTAB has provided some guidance in a handful of decisions so far on the topic, although we note that institution decisions are preliminary and even final written decisions are not precedential to other PTAB panels unless designated as such. For example, in Chimei Innolux Corp. v. Semiconductor Energy Laboratory Co. Ltd., IPR2013-00038, the panel indicated that in the context of real party-in-interest, "a primary consideration includes whether a nonparty exercises control over a petitioner's participation in a proceeding. . . . Other considerations may include whether a nonparty, in conjunction with control, funds the proceeding and directs the proceeding."11 Later cases have made clear that the funding or control cannot be perceived or general, but should be related to the specific case at hand.
While the legal test for compliance with §312(a) in IPRs is still evolving, a leading case on the topic is the In re Guan reexamination case, In re Guan Inter Partes Re-Examination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date (Aug. 25, 2008)). In Guan, evidence demonstrated that unnamed parties had selected the patents to be challenged and provided funding for specific reexaminations.
A suggestion that parties have failed to name real-parties-in-interest is an issue on which early additional briefing and/or additional discovery has been permitted by the PTAB in light of "[t]he gravity of that contention, and its potential ramifications."12 It is not something to be taken lightly for either petitioners or patent owners, and involves considering indemnity agreements, parent/subsidiary relationships, and other contractual relationships The case of Amazon.com, Inc. v. Appistry, Inc., IPR2015-00480, is an example of the PTAB ordering the petitioner to brief a real party-in-interest challenge raised by the patent owner in its POPR.13 The current proposed rules state that "the Office will continue to consider the need for additional discovery on a case-by-case basis, taking into account the specific facts in the proceeding to determine whether additional discovery is necessary in the interest of justice, in an inter partes review, or supported by a good cause showing, in a post-grant review."14
In the institution decision in Unified Patents Inc. v. Dragon Intellectual Property LLC, IPR2014-01252, for instance, the PTAB, after pre-institution additional discovery including depositions and production, concluded that the patent owner had failed to demonstrate that there was a failure to name real parties in interest to the proceeding.15
Decisions about real parties-in-interest are important because if there is not compliance with §312(a)(2), a petition is not complete, and thus a filing date may not be accorded if the error is not rectified, generally within one month. A new filing date may arguably run into the one-year time bar of 35 U.S.C. §315(b) if a corrected petition, if filed, would not have fallen within the one-year period specified by 35 U.S.C. §315(b) for the parties now included in the petition16 Some panels have considered whether parties were unnamed due to inadvertence versus intentional concealment and/or deliberately trying to avoid the §315(b) time bar.
Real parties-in-interest are also important because of the estoppel that runs against the petitioner (and privies thereof) from a final written decision of the PTAB.17 In Paramount Home Entertainment Inc. v. Nissim Corp., IPR2014-00961, the petitioner argued that failure to name a party could not be grounds for rejection under §312(a)(2) when that unnamed party was, importantly, "already estopped from filing further petitions for inter partes review under 35 U.S.C. §315(a)(1)."18 The PTAB rejected that argument, noting that "Section 315(a)(1) cannot relieve a petitioner of its obligation under 35 U.S.C. §312(a)(2) to identify all real parties-in-interest . . . [A]ssuring proper application of the statutory estoppel provision is not the only goal of the "real party-in-interest" requirement; another core function is to assist members of the Board in identifying potential conflicts."19
In Zerto Inc. v. EMC Corp., IPR2014-01295, the PTAB explained that while it usually accepts petitioner's identification of real parties-in-interest, that acceptance is a rebuttable presumption that may be removed if patent owner provides sufficient evidence to question the identification.20 The patent owner would generally raise the argument in the POPR challenging the petitioner's named real parties-in-interest.21 Then, when the "patent owner provides sufficient rebuttal evidence that reasonably brings into question the accuracy of a petitioner's identification of real parties-in-interest, the burden remains with the petitioner to establish that it has complied with the statutory requirement to identify all real parties-in-interest."22
The issue often arises in relation to codefendants in a related litigation, and membership in a joint defense group in a related litigation is a relevant, but certainly not dispositive, consideration before the PTAB. "Being a codefendant in a related case does not, without more, establish control or the ability to control a proceeding."23 Even where "the codefendants agree to be bound by the decision of th[e] inter partes review insofar as the co-pending litigation is concerned does not dictate that the codefendants are real parties-in-interest in this proceeding."24 This makes sense: Defendants should not be punished for working together to streamline the proceedings and agreeing to broader estoppel than that required by statute. Sharing counsel likewise does not establish control.25 Shared corporate leadership, however, may provide sufficient evidence of control, particularly where there are written agreements in place giving one corporation authority or responsibility over the IPR filing or requiring them to directly fund the proceeding.26
Research shows that patent owners have had limited success raising failure to comply with §312(a)(2): In 29 percent of 104 cases in which the issue was analyzed, the PTAB agreed with the patent owner that the petitioner did not comply with §312(a)(2).
The issue of real parties-in-interest in IPRs has garnered media attention lately in the context of the IPR petitions filed by hedge funds. Of the 37 IPRs filed so far by hedge funds,28 POPRs have (so far) been filed in 19. In 79 percent of those (15 out of 19), patent owners have included failure to comply with §312(a)(2) in their POPR arguments.29 There have been eight institution decisions so far, with three petitions granted30 and five denied.31 None of the denials has been based on failure to name real-parties-in-interest. This gives the impression that, in the present environment where there is no statutory standing requirement for filing a petition, a failure to name real parties-in-interest argument does not so far have much traction in the hedge fund IPR context. In addition, no arguments relating to abuse of process or requests for sanctions have been successful to date.32
We also note that patent owners are also required to list the real parties-in-interest under 37 C.F.R. 42.8, such that if a legal entity owns a patent in name only, they are required to list the actual persons or corporations who are controlling the defense of a patent, and if they fail or refuse to do so, their actions could be considered an abandonment of the contest.33
By statute, an IPR may not be instituted if the petitioner (or real party-in-interest) has already filed an action requesting a declaratory judgment of invalidity in a court.34 This statutory provision has no grace period — if a declaratory judgment of invalidity was filed any time before the date of filing the IPR petition, the PTAB cannot institute an IPR. According to 35 U.S.C. §315(a)(3), a counterclaim of invalidity in an infringement action does not meet §315(a)(1).35 Similarly, an action for non-infringement does not fall within the prohibition of §315(a)(1).36
35 U.S.C. §315(a)(2) describes what happens if a civil action requesting a declaratory judgment of invalidity is filed on or after the IPR petition is filed. There is no statutory prohibition of institution of the IPR in that case.37 C.F.R. §42.101 mirrors the language of 35 U.S.C. §315(a)(1).
The PTAB has found that a declaratory judgment action dismissed without prejudice does not trigger the statutory bar under 35 U.S.C. §315(a).[37] A declaratory judgment action dismissed with prejudice, however, likely does trigger §315(a).38
According to two institution decisions, the filing of a Paragraph IV certification under Hatch-Waxman does not qualify under §315(a) or present a bar to an IPR.39 Arguably, this resulted from an oversight in the drafting of the AIA, where no parties thought through the potential use of IPR during ongoing Hatch-Waxman dispute litigation. Notably, Congress is currently considering potential legislative and administrative remedies to the oversight, and nothing binding prevents future panels or administrations from recognizing the statutory conflict.
Section 315(a) is not raised often, and there has only been one case where the PTAB held §315(a) applied, and it was where a declaratory judgment action was dismissed with prejudice: Anova Food, LLC v. Sandau, IPR2013-00114.40
35 U.S.C. §315(b) bars IPRs if a petition is filed more than one year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The one-year time limitation does not apply to a request for joinder under subsection §315(c).
37 C.F.R. §42.101(b) mirrors the statutory language. This effectively gives a defendant in an infringement action one year in which to file an IPR petition. If a petition is filed within the year, there is a possibility that the litigation may be stayed. However, such a stay of the litigation must be requested (it is not automatic) and the decision whether to stay the litigation is discretionary on the part of the district court judge. The rate at which such requests are granted varies significantly between district courts, ranging from 100 percent in the District of Utah to 11.1 percent in the Eastern District of Wisconsin, although data sets are still small so far.42
Where a petitioner waives service of a summons, the PTAB has said that the one-year time period begins on the date on which waiver is filed.43
An amended complaint does not reset the one-year clock of §315(b).44 Similarly a second complaint does not reset one-year clock of §315(b).45 In Universal Remote Control Inc. v. Universal Electronics Inc., IPR2013-00168, a petition was filed within one year of a second complaint, but more than one year after the first complaint. The PTAB found that §315(b) applied to bar institution:
We disagree, however, that the one-year grace period applies only to the last of a chain of multiple lawsuits or that the filing of a later lawsuit renders the service of a complaint in an earlier lawsuit to be a nullity as Petitioner argues. The plain language of the statute does not include such a restriction. . . . [and Petitioner has not pointed to any particular legislative history associated with 35 U.S.C. § 315(b) which clearly expresses that the filing of a later lawsuit renders the service of a complaint in an earlier lawsuit to be a nullity.46
A counterclaim of infringement is equivalent to "complaint" for the purposes of 35 U.S.C. §315(b).47 However, U.S. International Trade Commission actions, actions not involving assertions of infringement, and Hatch-Waxman notice letters, do not trigger the §315(b) bar.48 Notably, as with §315(a), for §315(b), dismissal without prejudice nullifies the effect of the service of the complaint, and therefore the §315(b) is not triggered.49 A complaint dismissed with prejudice however, does trigger the oneyear clock.50
Section 315(b) is one of the threshold provisions that has been before the Federal Circuit. In Achates Reference Publishing Inc. v. Apple Inc., __F.3d__ (Fed. Cir. Sept. 30, 2015), Achates objected to the PTAB's institution decision that Apple's IPR petitions were not time-barred under 35 U.S.C. § 315(b). Since Achates continued to raise the time bar during the trial, the PTAB reaffirmed its institution decisions that the IPR proceedings were not time-barred in its final written decision holding all the instituted claims unpatentable.
The Federal Circuit held that the PTAB's decision to institute was not appealable under 35 U.S.C. § 314(d), even if parts of the institution decision are reconsidered during the merits phase of proceedings and restated in the final written decision.
35 U.S.C. §315(e) is the estoppel provision that applies against petitioners (and privies) to future USPTO, district court and ITC proceedings if the PTAB issues a final written decision. Petitioners are estopped as to any grounds they "raised or reasonably could have raised." As noted above, this provision highlights why it is so important for the real parties-in-interest to be named under §312(a) — estoppel applies only to the real party-in-interest petitioner (or privy thereof).52
So far, there are not many PTAB decisions applying §315(e) to deny petitions. This should of course change as more final written decisions issue. When §315(e) applies, it is on a claim-by-claim basis. For example, in Alcohol Monitoring Systems Inc. v. Soberlink Inc., IPR2015-00556, the petition challenged claims 122 of U.S. Pat. No. 8,381,573. The PTAB granted the petition as to claims 68, 1214, and 1820, but held that §315(e) estoppel applied to prevent IPR on claims 15, 911, 1517, 21 and 22, because of a final written decision of unpatentability issued in IPR2015-00577.53
Apotex Inc. v. Wyeth LLC, IPR2015-00873, provides a teaser discussion on the §315(e) language everyone has been waiting for: "reasonably could have raised."54 The PTAB issued a final written decision of unpatentability in IPR2014-00115 of claims 1–23 of U.S. Pat. No. 7,879,828. Patent owner raised §315(e) in its POPR because the art relied upon in the IPR2015-00873 petition was the same as that relied upon in IPR2014-00115.
The PTAB concluded that the "preconditions for applying §315(e)(1) estoppel are in place here because the Petitioner here and in the '115 IPR are the same, and the '115 IPR resulted in a final written decision."55 The panel cited the legislative history of the AIA to interpret "could have raised" as "prior art which a skilled searcher conducting a diligent search reasonably could have been expected to discover."56 Further investigation was not required though, since the record showed that petitioner was aware of the prior art references at issue when it filed the '115 IPR.57
Petitioner argued against the estoppel by proposing that it could not have raised "Ground 2" in the '115 IPR because the institution decision rejected it as a redundant ground. The PTAB dismissed this argument and held petitioner was estopped from asserting Ground 2:
It is unclear, however, how the Board's determination that several grounds in the '115 IPR Petition were redundant to the ground upon which trial was instituted in the '115 IPR is relevant to determining whether Petitioner could have raised Ground 2 in the '115 IPR Petition. Petitioner did not know, at the time it filed the '115 IPR Petition, that the Board would find the grounds proposed therein to be redundant. Petitioner cannot argue that it could not have raised Ground 2 in the '115 IPR Petition because the Board found different grounds to be redundant to each other, after Petitioner had already made the decision not to raise Ground 2 in its prior petition.58
The PTAB rejected patent owner's other estoppel argument with respect to Ground 1 in the '873 petition (corresponding to Ground 6 in the '115 IPR). The PTAB did not apply §315(e)(1) estoppel to Ground 1 because "the Board did not reach the merits of the challenge presented in Ground 1 when deciding whether to institute a trial in the '115 IPR[.]"59
According to the PTAB, an IPR begins only upon institution. Therefore, Ground 1 was never raised "during" an IPR:
Ground 1 in the instant Petition was never raised during the '115 IPR, because the Board denied institution of Ground 6 as redundant, and Petitioner could not have raised Ground 6 again once institution was denied as to that ground. Estoppel under 35 U.S.C. § 315(e)(1), therefore, does not bar Petitioner from maintaining a proceeding before the Office on Ground 1.60
The decision Apotex Inc. v. Wyeth LLC, IPR2015-00873, gives some guidance on the question many have wondered about since IPRs were introduced by the AIA: What is the estoppel effect on non-instituted grounds? At least according to this PTAB panel, there is no estoppel effect against non-instituted grounds.
So far, the estoppel in district court has mostly arisen in the context of conditions in a grant of a stay request. For example, as Judge Marvin J. Garbis explained: "a Defendant seeking to obtain the benefit of the stay should agree to be bound by the estoppel effect of 35 U.S.C. §315(e)."61 There are also examples of district court judges granting stays if litigation parties not involved in the IPR agree to be bound by the outcome of the IPR.62 The only Federal Circuit decision relating to §315(e) reversed a district court order denying a stay of trial court proceedings pending the outcome of a covered business method post-grant review, Versata Software Inc. v. Callidus Software Inc., 771 F.3d 1368 (Fed. Cir. 2014). However, this opinion was vacated by Versata Software Inc. v. Callidus Software Inc., 780 F.3d 1134 (Fed. Cir. 2015), because the parties jointly requested dismissal, mooting the appeal.
This article has examined some threshold bases for IPR petition denial and current patent owners' success rates. We have provided updates to our earlier articles discussing PTAB denials, the best outcome possible for a patent owner. No one threshold issue appears to be a slam dunk for patent owners, but there is a downward trend in the petition grant rate and an upward trend in the POPR filing rate.
Endnotes
1 Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015).
2 Source: http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf Current to Sept. 30, 2015. Denominator is number of petitions decided (petitions granted + petitions denied + decisions granting joinder).
3 Source: http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf. Current to Sept. 30, 2015. The denominator is POPRs filed + POPRs waived/not filed.
4 Source: Finnegan research; 234 institution decisions as of Sept. 30, 2015.
5 Excerpt from http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf. Current to Sept. 30, 2015.
6 Source: http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf. Current to Sept. 30, 2015.
7 Source: Finnegan AIA blog. Current to Sept. 1, 2015. Special thanks to Finnegan colleague Daniel Klodowski for his hard work compiling and managing this data over the years.
8 Source: Finnegan AIA blog. Current to Sept. 1, 2015.
9 Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012) (citing Taylor v. Sturgell, 553 U.S. 880, 893–95 (2008)).
10 Id.
11 Chimei Innolux Corp. v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-00038, Paper 9, at 7 (P.T.A.B. March 21, 2013).
12 Metrics, Inc. v. Senju Pharmaceutical Co., IPR2014-01041, Paper 19, at 5 (P.T.A.B. Feb. 19, 2015). See, e.g., Medtronic, Inc. v. Robert Bosch Healthcare Systems, Inc., IPR2014-00488 and IPR2014-00607, Paper 25 (P.T.A.B. Nov. 5, 2014); Zerto Inc. v. EMC Corp., IPR2014-01254, 01295, 01329, 01332, Paper 15 (P.T.A.B. Nov. 25, 2014).
13 Amazon.Com, Inc. v. Appistry, Inc., IPR2015-00480, Paper 17 (P.T.A.B. June 27, 2015).
14 80 Fed. Reg. at 50,729.
15 Unified Patents Inc. v. Dragon Intellectual Property, LLC, IPR2014-01252, Paper 37 (P.T.A.B. Feb. 12, 2015).
16 Galderma S.A. v. Allergan Industrie, IPR2014-01417, Paper 15, at 4 (P.T.A.B. March 5, 2015).
17 35 U.S.C. §315(e) ("petitioner …or the real party in interest or privy of the petitioner").
18 Paramount Home Entertainment Inc. v. Nissim Corp., IPR2014-00961, Paper 9, at 7 (P.T.A.B. Dec. 1, 2014).
19 Paramount, IPR2014-00961, Paper 11, at 1011.
20 Zerto Inc. v. EMC Corp., IPR2014-01295, Paper 34, at 67 (P.T.A.B. March 3, 2015).
21 See, e.g., Huawei Device USA, Inc. v. SPH America, LLC, IPR2015-00203, Paper 13, at 8 (P.T.A.B. May 28, 2015) ("For all of these reasons, we determine that Patent Owner has not shown that Petitioner has failed to name all real parties-in-interest.").
22 Id. at 7. See also, Reflectix, Inc. v. Promethean Insulation Technology LLC, IPR2015-00039, 00042, 00044, 00045, 00047, Paper 18, at 8 (P.T.A.B. April 24, 2015) ("determination of whether a Petition identifies all RPIs may be a 'threshold issue,' on which Petitioner bears the burden of persuasion[,]" citing Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc., IPR2013-00453, Paper 88, at 7–8 (P.T.A.B. Jan. 6, 2015)).
23 Huawei Device USA, Inc. v. SPH America, LLC, IPR2015-00221, Paper 13, at 8 (P.T.A.B. May 28, 2015); Denso Corp. v. Beacon Navigation GmbH, IPR2013-00026, Paper 34, at 11 (P.T.A.B. March 14, 2014).
24 Chimei Innolux Corp. v. Semiconductor Energy Laboratory Co., Ltd., IPR2013-00038, Paper 9, at 8 (P.T.A.B. March 21, 2013).
25 See Petroleum GeoServices Inc. v. Westerngeco LLC, IPR2014-00687, Paper 33, at 15 (P.T.A.B. Dec. 13, 2014).
26 See, e.g., Galderma S.A. v. Allergan Industrie, SAS, IPR2014-01422, Paper 14 (P.T.A.B. Mar. 5, 2015); Zerto, Inc. v. EMC Corp., IPR2014-01329, Paper 33 (P.T.A.B. Mar. 3, 2015); and Zerto, Inc. v. EMC Corp., IPR2014-01332, Paper 34 (P.T.A.B. Mar. 3, 2015).
27 LexMachina query, "§312(a)(2)," PTAB Institution Decisions/Decisions Denying Institution/Decisions Granting Institution, Sept. 16, 2012 Oct. 15, 2015.
28 As of Oct. 15, 2015.
29 The PTAB has also granted motions requesting additional discovery on the issue of real-parties-in-interest prior to an institution decision. See Coalition For Affordable Drugs II LLC v. NPS Pharmaceuticals, Inc., IPR2015-00990 and IPR2015-01093, Paper 13 (P.T.A.B. July 2, 2015).
30 Coalition For Affordable Drugs, II, LLC v. Shire, Inc., IPR2015-00988; Mangrove Partners Master Fund, Ltd. v. Virnetx, Inc., IPR2015-01046, 01047 (P.T.A.B. Oct. 7, 2015).
31 Coalition For Affordable Drugs, LLC v. Acorda Therapeutics, Inc., IPR2015-00720, 00817 (P.T.A.B. Aug. 24, 2015); Coalition For Affordable Drugs, V, LLC v. Biogen MA, Inc., IPR2015-01136 (P.T.A.B. Sept. 2, 2015); Ferrum Ferro Capital LLC v. Allergan Sales, LLC, IPR2015-00858 (P.T.A.B. Sept. 21, 2015); Coalition For Affordable Drugs III LLC v. Jazz Pharms., Inc., IPR2015-01018 (P.T.A.B. Oct. 15, 2015).
32 See, e.g., Coalition For Affordable Drugs III LLC v. Jazz Pharms., Inc., IPR2015-01018, Paper 17, at 1012 (P.T.A.B. Oct. 15, 2015); Coalition For Affordable Drugs VI, LLC v. Celgene Corp., IPR2015-01092, IPR2015-01096, IPR20150-1102, IPR2015-01103, and IPR2015-01169, Paper 19 (P.T.A.B. Sept. 25, 2015)(expanded panel).
33 37 C.F.R. § 42.73(b)(4).
34 35 U.S.C. §315(a).
35 TRW Automotive U.S. LLC v. Magna Electronics Inc., IPR2014-00869, Paper 8 (P.T.A.B. Dec. 1, 2014).
36 LG Electronics, Inc. v. Straight Path IP Group, Inc., IPR2015-00196, Paper 20, at 6 (P.T.A.B. May 15, 2015)("Hulu's Complaint only alleges a cause of action for non-infringement, not invalidity, and, therefore, is not considered a filing of a civil action for invalidity under 35 U.S.C. § 315(a)(1).").
37Invue Security Products, Inc. v. Merchandising Technologies, Inc., IPR2013-00122, Paper 17, at 10 (P.T.A.B. June 27, 2013); Microsoft Corp. v. Parallel Networks Licensing, LLC, IPR2015-00483, Paper 10 (P.T.A.B. July 15, 2015).
38 Anova Food, LLC v. Sandau, IPR2013-00114, Paper 17, at 1112 (P.T.A.B. Sept. 13, 2013).
39 Metrics, Inc. v. Senju Pharm. Co. Ltd., IPR2014-01041, Paper 19, at 89 (P.T.A.B. Feb. 19, 2015); Noven Pharms., Inc. v. Novartis AG, IPR2014-00549 and IPR2014-00550, Paper 10, at 7 (P.T.A.B. Oct. 14, 2014).
40 Anova Food, LLC v. Sandau, IPR2013-00114, Paper 17, at 1112 (P.T.A.B. Sept. 13, 2013).
41 Source: LexMachina query, "315(a)" PTAB Institution Decisions/Decisions Denying Institution/Decisions Granting Institution, Sept. 16, 2012 Oct. 15, 2015.
42 According to LegalMetric Nationwide Report Stay Pending Inter Partes Review, August 2012 May 2015.
43 The Scotts Co. LLC v. Encap LLC, IPR2013-00110, Paper 12, at 2 (P.T.A.B. July 3, 2013).
44 Loral Space & Communications, Inc. v. Viasat, Inc., IPR2014-00240, Paper 7, at 7 (P.T.A.B. April 21, 2014).
45 Universal Remote Control, Inc. v. Universal Electronics, Inc., IPR2013-00168, Paper 9, at 4 (P.T.A.B. Aug. 23, 2013).
46 Id. at 45.
47 See St. Jude Medical, Cardiology Division, Inc. v. Volcano Corp., IPR2013-00258, Paper 29, at 3 (P.T.A.B. Oct. 16, 2013)("a counterclaim alleging infringement of a patent is 'a complaint alleging infringement of the patent' within the meaning of 35 U.S.C. §315(b). We determine that it is.").
48 See, Fidelity National Information Services, Inc. v. Datatreasury Corp., IPR2014-00491, Paper 9 (P.T.A.B. Aug. 13, 2014)(breach of contract and declaratory judgment as to indemnity, warranty against infringement, and common law indemnity; "Because these causes of action are not an allegation of infringement of the '988 patent, we conclude that the Petition is not barred under § 315(b)."). LG Electronics, Inc. v. Straight Path IP Group, Inc., IPR2015-00196, Paper 20, at 89 (P.T.A.B. May 15, 2015)("35 U.S.C. § 315(b) applies only to civil actions for patent infringement, and not to an administrative proceeding, including an ITC investigation."). See also Brinkman Corp. v. A&J Mfg., LLC, IPR2015-00056, Paper 10 (P.T.A.B. Mar. 23, 2015); Alcon Research Ltd. v. Dr. Joseph Neev, IPR2014-00217, Paper 21 (P.T.A.B. May 9, 2014).
49 See Macauto U.S.A. v. BOS GmBH & KG, IPR2012-00004, Paper 18, at 1516 (P.T.A.B. Jan. 24, 2013); Shaw Indus. Group, Inc. v. Automated Creel Sys., Inc., IPR2013-00584, Paper 16 (P.T.A.B. Dec. 31, 2013); Ariosa Diagnostics v. Isis Ltd., IPR2013-00250, Paper 25, at 34 (P.T.A.B. Sept. 3, 2013).
50 See ButamaxTM Advanced Biofuels LLC v. Gevo, Inc., IPR2013-00539, Paper 9 (P.T.A.B. March 4, 2014); St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., IPR2013-00258, Paper 29 (P.T.A.B. Oct. 16, 2013).
51 Source: LexMachina query, "315(b)" PTAB Institution Decisions/Decisions Denying Institution/Decisions Granting Institution, 130 cases from between Sept. 16, 2012 Oct. 15, 2015 analyzed. Note: if the motion for joinder is denied, §315(b) may bar the petition. These are counted in the "petition denied" category in the chart. If a motion for joinder is granted, the time bar does not apply. These are counted in the "petition not denied" category in the chart. If the infringement complaint in question is served on a party PTAB decides is not in privity with the Petitioner, the §315(b) time bar does not apply. These are counted in the "petition not denied" category in the chart. If yes, the decision is counted in the "petition denied" category in the chart.
52 Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012)("The core functions of the 'real party-in-interest' and 'privies' requirement to assist members of the Board in identifying potential conflicts, and to assure proper application of the statutory estoppel provisions.").
53 Alcohol Monitoring Systems, Inc. v. Soberlink, Inc., IPR2015-00556, Paper 7 (P.T.A.B. July 15, 2015).
54 Apotex Inc. v. Wyeth LLC, IPR2015-00873, Paper 8 (P.T.A.B. Sept. 16, 2015).
55 Id. at 6.
56 Id.
57 Id.
58 Id. at 7.
59 Id. at 8.
60 Id. at 8.
61 In re CTP Innovations, LLC, Patent Litigation, 2015 WL 317149 (D. Md. Jan. 23, 2015) ("Under the circumstances, the Court will stay proceedings regarding Claims 4–9 in any case in which a stay is issued based upon the claims at issue in the pending PTAB proceedings. In a case in which a Defendant does not agree to be bound by the estoppel effect of 35 U.S.C. § 315(e), or in which CTP asserts infringement only as to Claims 4–9, there will be no stay.").
62 See, e.g., Evolutionary Intelligence, LLC v. Sprint Nextel Corp., 2014 WL 819277, at *4 (N.D.Cal. Feb. 28, 2014)("Although Sprint would not be subject to statutory estoppel because it is not one of the IPR petitioners, as explained the below, the court will condition the stay upon Sprint's agreement to be bound by estoppel."). Note some courts have tailored the condition so the nonIPR party is only bound by grounds actually raised by the petitioner, not including "reasonably could have raised" in the agreement (see, e.g., Pi–Net Int'l, Inc. v. Focus Bus. Bank, 2013 WL 5513333, at *2 (N.D.Cal. Oct. 3, 2013), or a stipulation for estoppel precluding only assertion of any invalidity arguments based on prior art publication(s) on which the PTAB bases its Final Written Decision (see, e.g., eWatch Inc. v. Avigilon Corp., 2013 WL 6633936, at *2 (S.D.Tex. Dec. 17, 2013).
63 Source: LexMachina query, "315(e)" PTAB Institution Decisions/Decisions Denying Institution/Decisions Granting Institution, Sept. 16, 2012 Oct. 15, 2015.
*Stacy Lewis is a law clerk at Finnegan.
Originally printed in Law360 (www.law360.com). Reprinted with permission. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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