United States: Federal Circuit Clarifies IPR Procedures In Trio Of Cases

On August 16, 2018, the U.S. Court of Appeals for the Federal Circuit issued a spate of precedential decisions, including three clarifying procedures in inter partes review proceedings before the USPTO's Patent Trial and Appeal Board. In two rulings, the Federal Circuit ruled that the one-year time bar for IPRs applies if a petitioner was served with an infringement action more than one year before the petition filing date, even if the complaint was voluntarily dismissed without prejudice. In a third decision, the Federal Circuit ruled that writs of mandamus are not available to challenge PTAB decisions on the merits by arguing that the Board's decision violates the Administrative Procedures Act.

IPR Time-Bar Under 35 U.S.C. § 315(b)

In the first case, Click-to-Call Technologies, LP v. Ingenio, Inc., No. 2015-1242 (Fed. Cir. Aug. 16, 2018), the Federal Circuit interpreted the one-year "time bar" provision in 35 U.S.C. § 315(b). The appeals court ruled, in an issue decided by an en banc panel, that the time-bar applies when an infringement complaint is served more than one year before the petition filing date, but later voluntarily dismissed without prejudice.

The petitioner, Ingenio, Inc., filed an IPR petition on May 28, 2013 challenging claims in a patent owned by Click-to-Call Technologies, LP ("CTC"). CTC opposed the petition on the grounds that Ingenio was subject to the time bar, which applies when a complaint for infringement is served more than one year before an IPR petition was filed.

CTC proved that in 2001, a predecessor to Ingenio was served with a complaint for infringement of the patent by CTC's own predecessor in interest. However, the Board concluded that the time-bar did not apply because the complaint had been dismissed without prejudice. The Board reasoned that, "[t]he Federal Circuit consistently has interpreted the effect of such dismissals as leaving the parties as though the action had never been brought[,]" citing Graves v. Principi, 294 F.3d 1350 (Fed. Cir. 2002), and Bonneville Associates, Ltd. Partnership v. Barram, 165 F.3d 1360 (Fed. Cir. 1999). Thus, the Board instituted trial and ultimately ruled that several claims of the CTC patent were unpatentable. CTC appealed the final written decision to the Federal Circuit.

On appeal, the Federal Circuit reversed, holding that Ingenio's petition was time-barred. Section 315(b) states that, "An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent." Applying Chevron review to the Board's interpretation of section 315(b), Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the court ruled under Chevron "Step One" the Board's interpretation was erroneous.

The statute does not contain any exceptions or exemptions for complaints served in civil actions that are subsequently dismissed, with or without prejudice. Nor does it contain any indication that the application of § 315(b) is subject to any subsequent act or ruling. Instead, the provision unambiguously precludes the Director from instituting an IPR if the petition seeking institution is filed more than one year after the petitioner, real party in interest, or privy of the petitioner "is served with a complaint" alleging patent infringement. Simply put, § 315(b)'s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events.

Slip op. at 13. The court held that the plain language of the provision and the legislative history both were at odds with the Board's interpretation. "Here, the text of § 315(b) clearly and unmistakably considers only the date on which the petitioner, its privy, or a real party in interest was properly served with a complaint. Because the statutory language is unambiguous and the statutory scheme is coherent and consistent, our inquiry ceases and we need not proceed to Chevron's second step." Slip op. at 17.

In a footnote, the Federal Circuit stated that the holding was one of the entire court, acting en banc:

The en banc court formed of PROST, Chief Judge, NEWMAN, LOURIE, DYK, MOORE, O'MALLEY, REYNA, WALLACH, TARANTO, CHEN, HUGHES, and STOLL, Circuit Judges, considered whether 35 U.S.C. § 315(b)'s time bar applies to bar institution when an IPR petitioner was served with a complaint for patent infringement more than one year before filing its petition, but the district court action in which the petitioner was so served was voluntarily dismissed without prejudice. The en banc court holds that § 315(b)'s time bar applies in such a scenario.

Slip op. at 10 n.3. Thus, the Federal Circuit reversed the final written decision of unpatentability.

In a second precedential case decided with Click-to-Call, Luminara Worldwide, LLC v. Iancu, No. 2017-1629 (Fed. Cir. Aug. 16, 2018), the court applied Click-to-Call and ruled that an IPR petition was time-barred when the petitioner was served with an infringement complaint more than one year before the petition filing date, even though the complaint was dismissed without prejudice. "[B]ecause the section 315(b) time-bar applies when the underlying complaint alleging infringement has been voluntarily dismissed without prejudice, the Board erred in instituting the IPR challenging the '319 patent." Slip op. at 5. The court vacated the Board's final written decision and remanded for the Board to dismiss the IPR.

Right to Mandamus Review of Institution Decision

In the third case, In re Power Integrations, Inc., No. 2018-144 (Fed. Cir. Aug. 16, 2018), the court ruled that a petitioner in an IPR proceeding may not challenge a PTAB decision not to institute by way of a petition for a writ of mandamus alleging the Board's failure to comply with the Administrative Procedures Act.

Power Integrations filed multiple IPR petitions based on various documents it alleged were printed publications that had the status of prior art. The PTAB declined to institute trial because the petitioner failed to establish that the documents were "printed publications" under 35 U.S.C. § 102. Power Integrations filed petitions for mandamus with the Federal Circuit alleging that the Board's ruling did not provide an adequate explanation for the decision under Section 6(d) of the A.P.A., 5 U.S.C. § 555(e).

The Federal Circuit denied the requests for mandamus as an improper attempt to circumvent 35 U.S.C. § 314(d), which states that a "determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable." In addition, the Supreme Court has held that the provision bars appellate review of an institution decision except in rare instances when the appeal implicates constitutional questions or presents "other questions of interpretation that reach, in terms of scope and impact, well beyond" section 314(d). Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131, 2141 (2016).

The Federal Circuit noted that mandamus is a remedy available only in exceptional circumstances. "To obtain the remedy of mandamus, a party must show that its right to issuance of the writ is 'clear and indisputable,' and that there are no adequate alternative legal channels through which it may obtain that relief." Slip op. at 6. Power Integrations failed to demonstrate a clear and indisputable right to relief from the Board's institution decision. First, the court noted, "the statutory prohibition on appeals from decisions not to institute inter partes review cannot be sidestepped simply by styling the request for review as a petition for mandamus." Slip op. at 6, citing In re Dominion Dealer Sols., LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014).

Second, the appeals court concluded that Power Integration's mandamus petition was a gambit to challenge the non-institution decision on the merits, under the guise of a procedural challenge under the APA. On the merits. the Board's decision provided the explanation required under the APA. "The notice required of an agency under the APA is modest. All that is required is that the agency explain why it decided to act as it did. Here, we cannot say that the Board clearly and indisputably failed to fulfill that obligation." Slip op. at 7 (quotations and citation omitted). Moreover, the court noted that:

A disappointed petitioner cannot by-pass the statutory bar on appellate review simply by directing its challenge to asserted procedural irregularities rather than to the substance of the non-institution ruling. Nothing in section 314(d) suggests that the prohibition on review applies only to the merits of the Board's non-institution decisions and leaves this court free to review the Board's decisions for perceived flaws in the way the Board analyzed the evidence before it. To draw such a distinction would inevitably lead to this court's examination of the correctness of the Board's legal and factual conclusions; i.e., it would result in this court's review of the legal and factual bases of the Board's non-institution decisions, which is just what Congress sought to prohibit.

Slip op. at 9-10.

Thus, the Federal Circuit denied Power Integration's mandamus petitions.

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