United States: PTAB Issues Two New Precedential Opinions On Discretion To Deny Review – Implications For Generics

The PTAB designated two decisions as precedential this week (in addition to several in previous weeks), both relevant to the Board's discretion to deny review. These cases illustrate that the PTO is in the process of designating precedential opinions on a number of issues, in line with revised Standard Operating Procedure 2 for designating precedential and informative decisions. See my previous posts on other recent precedential decisions here and here.

Valve Corp. v. Electronic Scripting Prods., Inc. addresses follow-on petitions. Follow-on or serial petitions are regularly criticized by patent owners as harassment, requiring them to defend their patent repeatedly. In 2017, the PTAB made the General Plastic case precedential, where the Board enumerated seven non-exhaustive factors it would consider when deciding whether to allow follow-on petitions. In short, the factors are:

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 or should have known of the prior art asserted in the second petition;

3.    Whether at the time of filing of the second petition the petitioner had already received the patent owner's preliminary response to the first petition or institution decision 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;

6.    The finite resources of the Board; and

7.    The one year requirement to issue a final determination under 35 U.S.C. § 316(a)(11).

Although the first General Plastic factor is whether or not the same petitioner previously challenged the same claims, the Board expanded this factor in Valve Corp., holding that relationships between petitioners must now be considered when weighing the General Plastic factors. Here, the Board found there was a significant relationship between Valve and HTC, as the companies had previously been co-defendants in district court litigation involving the patent. HTC filed IPRs against the patent that were denied. The Board concluded that Valve waited until after the institution decision and then filed not one but three additional petitions. According to the panel, which included Director Andrei Iancu, "[t]hese serial and repetitive attacks implicate the efficiency concerns underpinning General Plastic." Accordingly, Valve's petitions were denied based on the Board's discretion under 35 U.S.C. § 314(a) as "unfair" follow-on petitions. IPR2019-00062, 00063, 00084, Paper 11 (PTAB April 2, 2019). 

The Board in NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc. used its discretion to deny institution under 35 U.S.C. § 314(a) and 35 U.S.C. § 325(d) for two reasons, noting that the grounds in the petition were redundant with the arguments considered during prosecution, and the co-pending district court litigation was scheduled to go to trial in a few months—and NHK had used the same arguments and evidence in the court case. IPR2018-00752, Paper 8 (PTAB Sept. 12, 2018).

These cases are particularly relevant to generic companies. Several generic companies often challenge the same patents independently via IPR, and in order to be successful, they should carefully consider whether General Plastic and Valve Corp. might bar their petitions. If the generics had any preexisting relationship that could weigh against them, care should be taken to file before any information can be gleaned from the patent owner preliminary response or institution decision in the earlier-filed petitions. And, generic petitioners are often involved in co-pending litigation. In those situations, petitioners should not wait too long to file their IPR, because even if timely, NHK suggests the Board can deny it if the co-pending litigation has progressed significantly. 

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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