United States: Even PTAB Rules Are Made To Be Broken

Last Updated: March 9 2016
Article by Scott E. Kamholz

Like any good set of rules, the PTAB trial rules provide for their modification or waiver in appropriate situations. That's right — there's a rule to break the rules. Three of them, in fact: 37 C.F.R. §§ 42.5(b), 5(c)(1), and 5(c)(3).

  • Rule 5(b) authorizes the PTAB to waive or suspend any requirement of parts 1, 41, and 42 of 37 C.F.R.
  • Rule 5(c)(1) authorizes the PTAB to modify rule-based deadlines by order
  • Rule 5(c)(3) allows the PTAB to excuse missed deadlines upon a showing of good cause or a determination that consideration on the merits would be in the interests of justice.

Parties seldom seek to invoke these rules, and the high standards—good cause, interests of justice—mean that the PTAB even more rarely exercises its rule-breaking authority.  (One general exception: when the PTAB informally adopts a rule change prior to codification in 37 C.F.R., interim orders may cite rule 5(b).  Such has been the case, for example, in orders enlarging Motions to Amend to 25 pages.)

A recent IPR illustrates a situation in which that standard probably would have been satisfied, if only the losing party had sought it.  In Teva Pharm. USA, Inc. v. ViiV Healthcare Co., IPR2015-00550 (Paper 11), Petitioner Teva sought joinder to an earlier-instituted proceeding ( Apotex Corp. v. ViiV Healthcare Co., IPR2014-00876).  Teva properly filed its joinder petition within one month of institution of the Apotex IPR, but by the time the PTAB acted on Teva's petition six months later, the Apotex trial was far underway and had completed the main briefing.  The PTAB, via the same panel handling the Apotex trial, denied Teva's motion for joinder (and thus its IPR as barred under 35 U.S.C. § 315(b)) on the ground that the PTAB was "less likely" to allow settlement at such an advanced stage (IPR2015-00550, Paper 11 at 6).

You can guess what happened next: the PTAB permitted the Apotex IPR to settle, despite its late stage, and despite what it had said in denying Teva's petition (IPR2014-00876, Paper 62), seemingly leaving Teva high and dry. Teva took no subsequent action in its IPR.

I submit that, had Teva wanted to proceed with its own IPR against ViiV, it could have filed a request for rehearing in its case.  39 days had elapsed from the Teva denial at the point the PTAB terminated the Apotex trial.  Now, that's longer than the 30 days the rules allow for requesting rehearing from an institution denial (37 C.F.R. § 42.71(d)(2)).  But when the PTAB does exactly what it says it's unlikely to do, to a party's irrevocable detriment, I think that party has a good chance to persuade the PTAB that the interests of justice favor late action.  A rehearing request in Teva might have rectified what seems like an anomalous outcome.

So when an unusual situation threatens an unfair or inappropriate result under the PTAB's trial rules, consider asking the PTAB to modify them.  You can't get what you don't ask for.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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