United States: PTAB Holds That It May Decline Institution Of An IPR Request Regardless Of The Merits Of The Request; Designates Decision As Precedential

On October 18, 2017, the PTAB, which had previously declined to institute the IPR requested by the petitioner in General Plastic Industrial Co. v. Canon Kabushiki Kaisha, denied the Petitioner's request for rehearing of the non-institution decision.1

General Plastic had previously filed a first set of petitions seeking inter partes review of two patents. For each of these petitions, institution of trial was denied on the merits. Nine months after filing the first set of petitions, General Plastic filed multiple follow-on petitions against each of the same patents that were the subject of its first set of denied petitions. For each of those follow-on petitions, the Board denied institution, citing 35 U.S.C. § 314(a) and 37 C.F.R. § 42.108(a) for the proposition that the decision of whether to institute was entirely within its discretion.2

General Plastic then requested rehearing, arguing that trials on the follow-on petitions should have been instituted, and that neither Section 314(a) nor Section 325(d) limits a petitioner to only one petition per challenged patent. General Plastic also argued that the Board misapplied the factors set forth in its decision in NVIDIA Corp. v. Samsung Electronics Co.,3 which are set out below:

  1. Whether the same petitioner previously filed a petition directed to the same claims of the same patent;
  2. Whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
  3. Whether at the time of filing of the second petition the petitioner already received the patent owner's preliminary response to the first petition or received the Board's decision on whether to institute review in the first petition;
  4. The length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
  5. Whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;
  6. The requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.4

An expanded Board panel (seven judges) heard General Plastic's rehearing request.5

General Plastic argued that the original panel abused its discretion under factor two because it applied a standard based on whether the new prior art discovered by a petitioner "should have been known" earlier. General Plastic argued that such an interpretation of factor two "would be self-defining to be adverse to Petitioners in every instance" since any prior art citable in a second petition "necessarily could have been found by a reasonable prior art search performed prior to filing the first petition."6 General Plastic also argued that Section 314(a) should not be applied because its application "improperly conflicts with 35 U.S.C. § 325(d)."7

The Board rejected General Plastic's arguments and reaffirmed its position that the NVIDIA factors balance the goals of the AIA—namely, to improve patent quality and make the patent system more efficient—with the potential for abuse of the review process by repeated attacks on patents. The Board noted that "[m]ultiple, staggered petitions challenging the same patent and the same claims raise the potential for abuse."8 The Board also rejected General Plastic's argument that the Board's discretion under Section 314(a) is "subordinate to or encompassed by § 325(d)," which by its own words focuses entirely on the similarity of the presented prior art and arguments to earlier petitions. Rather, the Board held that the factor outlined in Section 325(d) was one of several that the Board could consider when exercising its discretion under Section 314(a).9

Although the Board recognized that "there may be circumstances where multiple petitions by the same petitioner against the same claims of a patent should be permitted,"10 as a practical matter, the Board's decision all but forecloses follow-on petitions by a petitioner after a patent owner files its preliminary response. As General Plastic argued, there are few imaginable situations where a petitioner files a second set of petitions using prior art that could not have been identified earlier. Unless the petitioner has a believable excuse as to why it waited to file the second round of petitions (unrelated to addressing the patent owner's positions or the Board's determinations), it is likely that the Board will simply deny institution per its "discretion" under Section 314(a).

Footnotes

1 Case No. IPR2016-01357, Paper 19 (P.T.A.B. Sept. 6, 2017) ("Rehearing Decision").

2 Id. at 8–11. Section 314(a) provides: "The Director may not authorize an inter partes review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition." The PTO has read this permissive language to confer near-absolute discretion on whether to institute IPR, provided the threshold is met.

3 Case No. IPR2016-00134, Paper 9 (P.T.A.B. May 4, 2016).

4 Rehearing Decision at 16.

5 The Board's opinion asserts that the Chief Judge has discretion to expand a panel to include more than three judges upon a "suggestion" from a judge, panel, or party. In this case, General Plastic had made the request.

6 Rehearing Decision at 13–14.

7 Id. 35 U.S.C. § 325(d) states in relevant part: "In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office."

8 Rehearing Decision at 17.

9 See id. at 18–19.

10 Id. at 18 (emphasis added).

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