United States: PTAB Equitable Analysis Extends Beyond Follow-On Petitions

Close Trial Date to Doom Parallel IPR Petitions?

Last September, the Patent Trial & Appeal Board (PTAB) found the advanced stage of a parallel district court proceeding weighed in favor of denying a follow-on, IPR petition. NHK Spring Co. Ltd. v. Intri-Plex Technologies Inc. That is, when weighing the equities of a follow-on petition under General Plastic, the competing litigation's scheduled conclusion before the end of any potentially instituted IPR favored a discretionary denial of the petition under 35 U.S.C. § 314(a).

Since that time, the existence of late stage litigation proceedings has been raised in the context of first-filed petitions, and is beginning to gain traction there as well.

As previously discussed, at least some panels post-NHK have taken the position that the 314(a) considerations discussed there are limited to follow on petitions. More recently however, other panels have held otherwise.

Most recently, in ZTE (USA), Inc., v. Fractus, S.A., the Board explained (here):

Here, Patent Owner argues that the Texas District Court Case is nearing its final stages and will likely go to trial before a final decision is reached in this proceeding. Patent Owner argues that Petitioner delayed filing its Petition in this proceeding until the Texas District Court Case was nearing its final stages, only a few days before the statutory deadline for filing the Petition. Patent Owner also argues the prior art, arguments, and expert testimony are the same in both proceedings, and any inter partes review will apply the same analysis and will likely take a longer time to do so . . .

It is also worthwhile to note that a claim construction Memorandum Opinion and Order has been issued in the Texas District Court Case, which covers many of the claim terms for which Petitioner has proposed constructions in this proceeding. Patent Owner argues that institution of inter partes review under these circumstances would be contrary to the goal of the AIA to provide an efficient alternative to district court litigation.

We are persuaded that granting institution would have the Board consider the same prior art and essentially identical evidence and arguments already under consideration in the Texas District Court Case. Given these circumstances, our discretion under 35 U.S.C. § 314(a) falls in favor of denying institution.

(Internal citations omitted)

A few weeks earlier, in Thermo Fisher Scientific, Inc. v. The Regents of the University of California, the Board explained (here):

Patent Owner explains that the district court has scheduled trial to begin on May 14, 2019. According to Patent Owner, based upon the filing timing of the Petition and Preliminary Response in this proceeding, if the Board institutes an inter partes review, the final written decision would be due 6–8 months after the district court had already resolved the litigation between the parties on this patent, and well before the briefings in the IPR are complete. Patent Owner contends that Petitioner delayed filing its Petition until the eve of the statutory deadline though fully aware that the district court had already scheduled the May 14, 2019 trial date.

Patent Owner also notes that the district court has issued a claim construction order and that Petitioner proposes that we apply those same constructions in this proceeding. Patent Owner asserts also that the district court litigation includes Petitioner's allegations of invalidity of the '673 patent based upon the same references asserted in the Petition. Thus, Patent Owner asserts that the Board should exercise its discretion under 35 U.S.C. § 314(a) to deny institution because an inter partes review would evaluate the same references under the same claim construction as the district court, and is clearly just an attempt by Petitioner to have a second bite at the apple in the event they lose at the district court. According to Patent Owner, instituting an inter partes review would be an inefficient use of the Board's resources and require the parties to expend significant resources in an essentially redundant proceeding.

Based on the circumstances involved, we agree with Patent Owner that instituting a trial would be an inefficient use of Board resources . . .the court has scheduled trial for May 14, 2019. An inter partes review on the same asserted prior art would not conclude until long after that time, with a Final Written Decision due in February 2020. Thus, under these circumstances, we consider that an inter partes review would not be consistent with an objective of the AIA to provide an effective and efficient alternative to district court litigation.

(internal quotes and citations omitted)

It is noteworthy that neither of these filings were follow-on petitions.

In both cases above, the potential PTAB result coming after the district court trial, and allowing a second-bite was significant — as was the commonality in claim construction/art, and close-to-the-deadline filings. With petitioners more likely to delay PTAB filings to refine their Phillips claim construction positions alongside district court events, these fact patterns will become more commonplace.

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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