United States: Federal Circuit Rules That Same-Party Joinder, Joinder Of New Issues, Not Permitted In IPRs

In a precedential opinion, the U.S. Court of Appeals for the Federal Circuit ruled en banc that "the clear and unambiguous language" of 35 U.S.C. § 315(c) does not permit  joinder of a person to an inter partes review (IPR) proceeding in which that person is already a party (same-party joinder) or joinder of new issues, including those issues which may be time-barred. In Facebook, Inc. v. Windy City Innovations, LLC, Nos.2018-1400, 2018-1401, 2018-1402, 2018-1403, 2018-1537, 2018-1540, 2018-1541, the Court held that the decisions of the Patent Trial and Appeal Board allowing Facebook to join itself to an IPR proceeding in which it was already a party, and to add otherwise time-barred issues to the IPRs, were improper under § 315(c). The Court vacated-in-part the Board's final written decisions with respect to the improperly added claims and remanded to the Board to consider whether the termination of the instituted proceedings related to the late-filed petitions finally resolves those proceedings.¹

By way of background, Windy City commenced patent infringement litigation against Facebook in the U.S. District Court for the Western District of North Carolina. Windy City accused Facebook of infringing four of its patents relating generally to methods for communicating over a computer-based network. Windy City's complaint did not specify which claims of the four asserted patents (collectively having a total of 830 claims) Facebook allegedly infringed. Following transfer of the case to the Northern District of California, on the last day permitted for filing a petition for inter partes review under 35 U.S.C. § 315(b), Facebook filed IPR petitions on each of the asserted patents, challenging some, but not all, of the claims of each patent. The Board instituted review of all of the challenged claims and grounds in the petitions, except for two claims of one patent.

More than four months after the one-year deadline to file IPRs, Windy City identified the claims of each patent that it was asserting in the district court case. For two of the patents, this included claims that Facebook had not challenged in its IPR petitions for those patents. Facebook then prepared two additional petitions for IPR challenging the additional asserted claims. Because the petitions would otherwise have been time-barred under § 315(b), Facebook filed the petitions along with motions seeking

to join each new proceeding to the already-instituted IPR on the same patent under § 315(c). The Board instituted Facebook's late-filed petitions and granted Facebook's joinder motions, allowing the newly challenged claims to be added to the proceedings. Inter alia, the Board found that Facebook could not have reasonably determined which claims were asserted against it within the one-year time bar. Once Windy City identified the asserted claims after the one-year time bar, the Board found that Facebook did not delay in challenging the newly asserted claims by filing the second petitions with the joinder motions.

Notably, two Administrative Patent Judges ("APJs") on the panels joined concurring opinions, raising "concerns with permitting a party to, essentially, join to itself." Per the two APJs, "§ 315(c), when properly interpreted, does not authorize same-party joinder because a party cannot be joined to a proceeding 'as a party' if it already is a party to that proceeding." This view was expressed in a concurring opinion because, "the Director repeatedly has taken the position . . . that such same-party joinder is permitted by § 315(c)" and the concurring APJs agreed to follow that position in this case, "[d]espite [their] disagreement with the Director's interpretation."

On appeal, the Court first rejected Facebook's argument, as well as that of the USPTO, that the Court lacked jurisdiction to review the Board's joinder decisions in this case. Discussing relevant Supreme Court precedent, including Cuozzo Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018) and Thyrv, Inc. v. Click-to-Call Technologies, LP, 140 S. Ct. 1367 (2020), the en banc Federal Circuit court agreed with Windy City that the Board's joinder decisions in this case are "a separate procedural process with separate requirements and a different purpose than institution," that its appeal of the Board's joinder decisions challenges whether the Board "exceeded the scope of its statutory authority under § 315(c) by granting Facebook's motions for joinder"  and that its appeal does not "challenge a conclusion by the Board that the requirements of initiating review under § 314 were satisfied," but challenges the Board's joinder decisions in "already-instituted IPRs."

The Court noted that joinder of a party to an instituted IPR, under the "plain language" of § 315(c), requires: (i) that the Director (or the Board) determine whether the joinder applicant's petition for IPR "warrants" institution under § 314, and (ii) the Director to exercise his discretion to decide whether to "join as a party" the joinder applicant. Although the Court may not review the first decision, the second decision, made after a determination that a petition warrants institution, "is a separate and subsequent decision to the intuition decision" and that "[n]othing in § 314(d), nor any other statute, overcomes the strong presumption that we have jurisdiction to review that [ ] decision."

Turning to the merits of Windy City's cross-appeal, the Court agreed that "[t]he clear and unambiguous text of" § 315(c) does not authorize same-party joinder and also does not authorize joinder of new issues material to patentability, such as new claims or new grounds.

With respect to same-party joinder, i.e., the joinder of a person as a party to a proceeding in which it is already a party, the Court noted that " the plain language of § 315(c)" allows the Director "to join as a party [to an already-instituted IPR] any person" who meets certain requirements. However, per the Court, when the Board instituted Facebook's later petitions and granted its joinder motions, however, it did not purport to be joining anyone as a party. Rather, the Board understood Facebook to be requesting that its later proceedings be joined to its earlier proceedings.

The Court found that the Board's understanding that § 315(c) authorizes two proceedings to be joined was contrary to the plain language of the provision. Per the Court, nothing in § 315(c) authorizes the Director or the Board to put two proceedings together. That is the subject of § 315(d), which provides for "consolidation," among other options, when "[m]ultiple proceedings" involving the patent are before the PTO.

The Court also found that, assuming the Board joined Facebook "as a party" to its existing IPRs, the "clear and unambiguous" language of § 315(c) does not authorize a person to be joined as a party to a proceeding in which it is already a party. Per the Court, "It would be an extraordinary usage of the term 'join as a party' to refer to persons who were already parties"

The Court further held that the previous decision of the Board's Precedential Opinion Panel ("POP"), allowing same-party joinder, was incorrect under the unambiguous meaning of the statute. Per the Court, "A party cannot logically be 'join[ed] as a party' in a proceeding if it is already a party to that proceeding."

The Court also held that § 315(c), which merely, authorizes the Director to join a person as a party to an already instituted IPR, does not authorize the joined party to bring new issues from its new proceeding into the existing proceeding. The Court said that the lack of an express prohibition against the introduction of new issues, did not make the statute ambiguous. Per the Court, "[t]he already-instituted IPR to which a person may join as a party is governed by its own petition and is confined to the claims and grounds challenged in that petition."

Addressing Facebook's policy arguments, the Court said, "Petitioners...faced with an enormous number of asserted claims on the eve of the IPR filing deadline, are not without options. [F]iling petitions challenging hundreds of claims remains an available option for accused infringers who want to ensure that their IPRs will challenge each of the eventually asserted claims. [Further,] [a]ccused infringers...retain the ability to challenge the validity of the claims that are ultimately asserted in the district court."

Finally, the Court held that, because the "clear and unambiguous language" of § 315(c) does not authorize same-party joinder or joinder of new issues, it need not defer to the PTO's interpretation of the statute.

Writing separately, Chief Judge Prost, joined by Circuit Judges Plager and O'Malley, concluded that deference would not be owed to the PTO's interpretation of § 315(c) in its POP opinion even if the statute were deemed ambiguous, and that the most reasonable reading of § 315(c) was that of the majority opinion.

Footnote 

1 The Court also held that substantial evidence supported the Board's obviousness determinations in the IPRs and affirmed those determinations. That portion of the Court's decision is not discussed in this article.

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