In its decision in Thryv Inc. v. Click-To-Call Technologies LP, the U.S. Supreme Court confirmed broad discretionary power for the Patent Trial and Appeal Board (PTAB) in instituting inter partes reviews (IPRs).
Despite this discretion, however, the PTAB remains reluctant to exercise its discretionary powers. In one area, joinder under 35 U.S.C. § 315(c), the PTAB exercises its discretionary power less frequently—even when instituting may minimize burdensome overlap between the PTAB and district court. Thryv may lead to increases in discretionary institutions for at least joinder petitions with potential Section 315 statutory bars.
The Supreme Court held that PTAB decisions exercising discretionary power to institute IPRs under Section 314(d) are nonappealable, despite time bars under Section 315.
The court found that “Congress prioritized patentability” over the Section 315 timeliness requirements, and that bars under Section 315 do not preclude the PTAB from reviewing challenged claims on the merits. The court further noted that the purpose of Section 315 is to “minimize burdensome overlap between inter partes review and patent infringement litigation.”
The PTAB likewise acknowledges this goal of minimizing undue burden in at least the March 2019 precedential opinion panel (POP) decision in Proppant Express. Proppant Express Invs. LLC v. Oren Techs. LLC, No. IPR2018-00914, paper 38 (P.T.A.B. March 13, 2019).
There, the panel ultimately declined to exercise its discretion under Section 315(c); however, it found that a board may exercise its discretionary power to join parties under Section 315(c) in circumstances where “fairness requires it and to avoid undue prejudice to a party.”
While the Proppant Express decision focuses on whether boards may exercise discretionary power under Section 315(c), in light of Section 315(b) time bars, the POP did not directly address whether such discretion is permitted in view of Section 315(a)(1) declaratory judgment bars.
There are two potential ways in which a board may view this issue—whether the existence of a bar under Section 315(a)(1) precludes—or does not preclude—the board from exercising institution discretion under Section 315(c).
Section 315(a)(1) Bar Perspective
The first perspective suggests that Section 315(a)(1) bars any IPR regardless of the board's discretionary power under Sections 315(c) and 314. A reading of Section 315(a)(1) suggests that joinder is not permissible after filing declaratory judgments—“an inter partes review may not be instituted.” This language may create an absolute bar to joinder petitions.
This approach, however, runs counter to the purpose of Section 315, as recently addressed in Thryv—to “minimize burdensome overlap between inter partes review and patent-infringement litigation.” And if Section 315(a)(1) acts as an absolute bar to an IPR, even for joinder under Section 315(c), then the bar fails to minimize the resource overlap.
The PTAB still spends resources on the underlying petition, and a separate district court also litigates the patentability merits in parallel—effectively increasing the patentability merit burden.
Section 315(c) Joinder Perspective
The second perspective suggests that the plain reading of Section 315(c) permits joinder regardless of a Section 315(a)(1) bar, and that the board has discretionary power to institute under Section 314.
First, through statutory language interpretation of Section 315(c), it is clear that Congress explicitly lists sections (i.e. Sections 311, 313, and 314) acting as bars to the discretionary power under Section 315(c)—but it fails to list Section 315(a). Thus, it stands that Congress intentionally knows how to bar specific sections, or how not to.
It is reasonable to conclude that Congress intended for Section 315(c) to be subject only to Sections 311, 313, and 314, and if Congress wanted it to be subject to the Section 315(a) bar, then it would have added such limitation to Section 315(c).
Alternatively, if Congress wanted to clarify and cross-reference sections then it would have as it did for the Section 315(b) timing clause. No such clause limits or clarifies Section 315(c) with respect to Section 315(a), suggesting that it is not an absolute bar to joinder.
Second, the statute permits joinder by “any person who properly files a petition under section 311.” In the context of the joinder statute, an expanded panel concluded that “when ‘any person' is read in light of § 311(a), the only person excluded by the language is the owner of the patent at issue.” Target Corp. v. Destination Maternity Corp., No. IPR2014-00508, paper 28, 7 (P.T.A.B. Feb. 12, 2015) (expanded panel); see also Facebook Inc. v. Windy City Innovations LLC, 953 F.3d 1313, 1324-25 (March18, 2020) (the same petitioner is excluded as well).
As such, there are only two requirements under Section 311: (1) that the filer “is not the owner of a patent;” and (2) that the IPR be filed nine months after a patent issues or PGR is terminated. Thus, the board may join any person that meets these requirements.
Third, the Supreme Court underscored that the statutory bars should not be used to frustrate the patentability goals of Section 315. And, as the POP alluded in its decision in Proppant Express, policy considerations may be important factors as well.
Permitting discretion allows the board to make decisions on a case by case basis according to the facts of the specific case. This approach may be the “most fair” to the parties and may best serve the goal of minimizing burdensome overlap between the PTAB and litigation in deciding patentability merits.
Ongoing Changing Landscape
As a petitioner, one has arguments to join within the time limits of Section 315 (i.e. within one month of institution), even if first filing a declaratory judgment. Conversely, as patent owner, one has arguments to oppose joinder, and the cases suggest the patent owner will win.
As this area of the law continues to evolve, however, the final word has yet to be written, and both practitioners should be aware of the landscape and keep these considerations in mind when arguing before PTAB.
Originally published by Bloomberg Law, 12 Agusut 2020
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