Sometimes Better Never Than Late

This post discusses three cases that suggest a reversal of the old adage “better late than never.”

Case 1

Polaris Innovations Ltd. V. Brent, No. 2019-1483, -1484 (Fed. Cir. Sept. 15, 2022), in which the Court of Appeals for the Federal Circuit (“the Federal Circuit”) affirmed the Patent Trial and Appeal Board’s (“the Board’s”) Final Written Decisions of unpatentability for IPR2017-01500 and IPR2017-00901.

Background

The case involved two IPR petitions filed by NVIDIA against two Polaris patents. The Board issued final written decisions holding all challenged claims unpatentable. After appealing both decisions, the parties settled, and the USPTO intervened in the appeals to defend the Board’s decisions. The Federal Circuit vacated and remanded the decisions in light of Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019) (Arthrex I). On remand, the Board administratively suspended the IPRs pending potential Supreme Court action, and while suspended, the parties filed a joint motion to terminate the proceedings. While the IPRs were on remand, the Supreme Court decided United States v. Arthrex, Inc., 141 S. Ct. 1970 (Arthrex II), vacating the Federal Circuit’s decision in Arthrex I. As a result, the Board’s final written decisions in the two IPR proceedings were reinstated and led to a dispute regarding the joint motion to terminate that was filed during remand. Polaris argued that the Federal Circuit should vacate and remand for the Board to grant termination, but the USPTO opposed and suggested a limited remand for Director review, which the court granted. On remand, the Chief Administrative Judge determined termination was not appropriate, and the Acting Director denied rehearing.

Federal Circuit

On appeal, the Federal Circuit affirmed the Board’s exercise of discretion to continue the IPRs. “[B]ecause the Board decided the merits of the IPR before Polaris filed its motion to terminate, Polaris’s motion was untimely.” Id. at *12. See 35 U.S.C. § 317(a). The Federal Circuit noted that there is no entitlement to termination of the proceeding itself, and “the statute grants discretion to the Board to ‘proceed to a final written decision under section 318(a)’ even if ‘no petitioner remains’ in the proceeding.” Id. at *12-13.  Thus, the plain language of the statute gives the Board discretion to carry on to a final written decision, even without any petitioner.

Case 2

NXP USA, Inc. v Impinj, Inc. IPR2021-01556, Paper 13 (P.T.A.B. Sept. 7, 2022), in which the Director of the USPTO sua sponte granted Director Review and affirmed the decision of the Patent Trial and Appeal Board (“the Board”) denying rehearing.

Background

NXP filed an IPR petition challenging claims 1-20 of Impinj’s patent, 10,776,198 (“the ’198 patent”). That petition was denied under 35 U.S.C. § 314(a) based on the factors set forth in Apple Inc. v. Fintiv, Inc., IPR2020-00019 (P.T.A.B. Mar. 20, 2020). IPR2021-01556, Paper 10 (P.T.A.B. April 21, 2022). The IPR petition challenged the same claims asserted in a parallel district court proceeding, asserted the same prior art combinations as in the district court proceeding, the same parties were involved, and the scheduled trial date pre-dated the deadline for an IPR final written decision. Notably, Patent Owner argued in its Preliminary Response that the Fintiv factors weighed in favor of denying institution, while Petitioner did not address Fintiv in its petition.

Board

The Board denied Petitioner’s request for rehearing. IPR2021-01556, Paper 12 (P.T.A.B. Aug. 25, 2022). Petitioner did not request leave to file a reply brief to address Patent Owner’s Fintiv arguments. Instead, Petitioner submitted documents with its Request for Rehearing, including a “Sotera” stipulation, but did not show good cause why this new evidence should be admitted. Id. at *4-5. Furthermore, the Board considered Petitioner too late:

The problem with Petitioner’s argument, however, is that these documents both predate the Decision denying institution of inter partes review. If Petitioner believed that it was important for the Board to consider these documents in rendering its Decision, Petitioner could have requested leave to file a reply brief in order to submit these documents to the Board and also respond to Patent Owner’s arguments in the Preliminary Response. Petitioner, however, made no such request. . . . It was not until after the Decision denying institution of inter partes review issued that Petitioner decided to address the issue of Fintiv, our discretionary authority, and to submit documents for the record as new evidence.

Id. at *5-6.

Director

The Director initiated a sua sponte Director review of the denial of Petitioner’s rehearing request. IPR2021-01556, Paper 13, at *3 (P.T.A.B. Sept. 7, 2022). The Director found “that the Board correctly determined that a stipulation, offered by a petitioner for the first time after a decision denying institution, is not a proper basis for granting rehearing of the decision on institution.” Id. at *3-4. According to the Director, “[p]ermitting a petitioner to wait and see if the Board denies institution under Fintiv, and then offer such a stipulation for the first time on rehearing, frustrates these goals [of avoiding conflicting decisions] and would open the door to gamesmanship.” Id. at *4. “[T]he only appropriate time for a petitioner to offer a stipulation related to the Fintiv factor 4 analysis is prior to the Board’s decision of whether to institute review.” Id.

Case 3

In Best Medical Int’l, Inc. v. Elekta Inc., Nos. 2021-2099, 2021-2100 (Fed. Cir. Aug. 29, 2022), the Federal Circuit dismissed-in-part the appeal of the Board’s Final Written Decisions of unpatentability in IPR2020-00071, IPR2020-00072, IPR2020-00970, and IPR2020-00971.

Background

Several claims of U.S. Patent No. 6,393,096 were challenged. After the Final Written Decisions issued but before filing the appeal to the Federal Circuit, Best Medical (“BMI”) canceled claim 1 during an ex parte reexamination.

Federal Circuit

With claim 1 canceled, the Federal Circuit concluded that there was no longer a case or controversy regarding its patentability and dismissed BMI’s appeal for lack of jurisdiction. With respect to the remaining claims, the Federal Circuit found, on the merits, that substantial evidence supported the Board’s Final Written Decisions of unpatentability.

Take-aways

These cases provide examples of a party essentially trying to put the toothpaste back in the tube. It obviously doesn’t work in all circumstances. To have the best chance of a desired outcome before the Board, terminations should be requested prior to a decision on the merits and any stipulations should be made prior to the institution decision. Also, care must be taken when managing related proceedings to avoid an action in one proceeding sabotaging another proceeding.