Inter Partes Review Petitions, Even More Lessons Learned on Barring
Last month’s issue focused on the appealability of the Patent Trial and Appeal Board’s institution decisions, especially those related to 35 USC §315(b)’s time bar. Section 315(b) requires that “[a]n 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.” (emphasis given). After Wi-Fi One v. Broadcom (Jan. 2018)(en banc) the Court of Appeals has been quite busy with deciding cases and educating the public on the parameters of appellate review of time bar decisions. This past September was no different.
Two more precedential decisions recently emerged further defining the contours of appellate review of PTAB institution decisions related to §315(b). Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co., Case Nos: 2017-1555 & -1626 (Fed. Cir. Sept. 28, 2018)(on service of a later involuntarily dismissed complaint tolling the statute) and Worlds, Inc. v. Bungie, Inc., Case Nos: 2017-1481, -1546 & -1583 (Fed. Cir. Sept. 7, 2018)(on burden-shifting in evaluating the “real party in interest”).
Bennett Regulator Guards involves a petition for inter partes review that was filed 18 months after the one-year time window under §315(b). The patent owner served the petitioner with a complaint in July of 2012. The complaint was ultimately dismissed without prejudice upon grant of a motion. Unlike Click-to-Call, which was discussed in last month’s issue, the complaint was involuntarily dismissed in Bennett Regulator Guards. Case No.: 2015-1242 (Fed. Cir. Aug. 16, 2018)(en banc). The petition for IPR was not filed until February of 2015. The Board panel found all the challenged claims unpatentable.
The Court of Appeals panel vacated the final written decision reasoning that the petition was time barred under §315(b) citing Click-to-Call.
This case differs from Click-to-Call only in that Bennet’s complaint was involuntarily dismissed without prejudice. We identify no reason to distinguish Click-to-Call on that basis. [ftn] The statutory language clearly expresses that service of a complaint starts § 315(b)’s clock. [] Just as the statute includes no exception for a voluntarily dismissed complaint, it includes no exception for an involuntarily dismissed complaint.
Accordingly, practitioners are reminded that a complaint’s subsequent success or failure likely will not change the fact that “service” under §315 occurred and tolled the statute.
Worlds Inc. addressed a different but related issue under §315(b): how to assess whether the petitioner is sufficiently closely affiliated with an entity, i.e., a real party in interest or privy, that has been served with a complaint more than a year before filing.
Worlds asserted its patents against Activision publishing in 2012. Bungie was not a party to that litigation but did develop products that are distributed by Activision. Under their distribution agreement Bungie was responsible for IP clearances on its products, the clearances were subject to Activision’s approval. Though Bungie’s products were not originally included in the lawsuit, in 2014, notice was given to add Bungie’s products to the infringement claim; six months later Bungie petitioned for inter partes review. Bungie did not name Activision as a real party in interest to the petition. Worlds objected in its pre-institution Preliminary Response. The PTAB, however, invalidated the patents, found that Activision was not a real party in interest without reference to any burden of persuasion and granted a rebuttable presumption to the petitioner’s assertion of real party under the Board’s own precedent.
The Court of Appeals panel vacated the final written decision of unpatentability reasoning that the Board panel had likely not placed the appropriate burdens of proof and production on the parties in analyzing real party in interest.
[T]he IPR petitioner bears the burden of persuasion to demonstrate that its petitions are not time-barred under § 315(b) based on a complaint served on a real party in interest more than a year earlier. We also agree that an IPR petitioner’s initial identification of the real parties in interest should be accepted unless and until disputed by a patent owner. And although we disagree with treating this initial acceptance as a “rebuttable presumption” that formally shifts a burden of production [sic] to the patent owner, we agree that a patent owner must produce some evidence to support its argument that a particular third party should be named a real party in interest.
So, the initial burden of production is on the IPR petitioner to indicate the real party in interest under §312(a)(2). If seeking to challenge the assertion, the patent owner then has a pseudo burden of producing some evidence in support of the challenge. The IPR petitioner still, however, bears the ultimate burden of persuasion on RPII as the movant or petitioner for IPR under the Administrative Procedure Act. 5 USC §556(d)(“[e]xcept as otherwise provided by statute, the proponent of a rule or order has the burden of proof.”). The panel reasoned that this burden-shifting structure is not only consisted with §556 but also commonsensical because the petitioner, not the patent owner, is in a better position to access evidence relevant to the real-party-in-interest inquiry. The case was remanded to the PTAB to reevaluate the evidence considering this burden-shifting structure.
Bennett Regulator Guards and Worlds thus provide more of what are apparently infinite learnable lessons on barring IPR institutions.
