The Patent Trial and Appeal Board of the U.S. Patent and
Trademark Office has made precedential a January 2019 ruling
holding that companies which challenge the validity of a patent in
district court will be blocked from seeking inter partes
review of that patent, even if the district court case is
voluntarily dismissed.
The America Invents Act prohibits inter partes review from
being instituted if the challenger has previously filed a case in
district court challenging the validity of a claim in the same
patent. See 35 U.S.C. § 315(a)(1). However, in Cisco
Systems Inc. v. Chrimar Systems, Inc., case number
IPR2018-01511, the Board held there is no exception to the rule for
district court validity challenges that are dismissed without
prejudice. In its January 2019 decision, the Board wrote,
"Congress could have included an exception to the [declaratory
judgment rule] for a civil action that was dismissed without
prejudice, but did not." The Board continued, "Further,
the ordinary meanings of the terms 'file' and 'civil
action' show that the phrase 'filed a civil action' in
§ 315(a)(1) applies to a civil action that was dismissed
without prejudice... [Dictionary] definitions indicate that the
§ 315(a)(1) bar is implicated once a party commences a
noncriminal litigation, irrespective of subsequent
events."
In previous decisions, the Board treated a district court
invalidity challenge that was dismissed without prejudice "as
if it had never existed." However, an August 2018 Federal
Circuit decision in Click-To-Call v. Ingenio, 899 F.3d
1321, 1328 n.3 (Fed. Cir. 2018) (en banc), held that the one-year
clock to file a petition for inter partes review starts
when the accused infringer is sued for infringement, even if the
complaint is subsequently voluntarily dismissed. In Cisco
Systems, the Board extended this ruling to district court
cases where the validity of the patent is challenged (e.g.,
declaratory judgment proceedings).
The Board rejected Cisco's argument that the term "civil
action" in § 315(a)(1) requires substantive litigation,
e.g., "a bite at the apple." Per the Board, "As
discussed, the ordinary meaning of the phrase 'filed a civil
action' only requires that a party commenced a noncriminal
litigation, not that the party engaged in any substantive
litigation."
The Board also rejected as non-persuasive Cisco's argument that
voluntary dismissal of a complaint without prejudice nullifies the
initial filing thereof.
Notably, the Board said, "Further, this Decision does not hold
that § 315(a)(1) bars Petitioner from filing another civil
action challenging the validity of a claim of the '760
patent."
In light of the Board's ruling here, the burden is now on those
who decide to challenge a patent in district court, to make sure
their complaints are free and clear of mistakes. Repairing errors
via inter partes review is no longer an option.
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