AIA Post-Issuance Procedures – Estoppel Provisions Raised by Patent Owner In Attempt to Defeat “Synchronized” Decisions

The America Invents Act (AIA) of 2011 introduced a number of new inter partes procedures for post-issuance challenges of patents, including inter partes review (IPR) and a transitional program for covered business method patents (CBM). According to U.S. Patent & Trademark Office (PTO) statistics, nearly 1,200 petitions for IPR and CBM been have filed since September 16, 2012.

One factor supporting the popularity of these procedures is their timeliness. Statutorily, a final decision on instituted IPR or CBM proceedings must be rendered within 12 months, except that this deadline may be extended by up to 6 months with a showing of good cause. In view of the short deadlines, IPR and CBM petitions are frequently filed by patent infringement defendants to district court litigations with the tactical objective of providing a basis for staying district court proceedings until patent validity is determined by the PTO.

The PTO has implemented a number of associated procedural rules to assist in meeting the short deadlines. In particular, IPR petitions are limited to 60 pages and CBM petitions are limited to 80 pages. In addition, the PTO has substantial discretion to “streamline” proceedings by granting a petition on less than all grounds of unpatentability and less than all claims asserted by the petitionerOne Patent Trial & Appeal Board (PTAB) panel of the PTO the exercise of its discretion by pointing out that, “[given] the competing demands for speedy and inexpensive resolution and providing dispositive determinations of the patentability of claims, we are not persuaded that any injustice has been done … in instituting on [only] the specified grounds.”

In a number of cases, petitioners have compensated for these limitations of the procedural rules by filing multiple proceedings for a single patent, each directed to a different subset of the claims and/or different grounds for invalidation. For example and quite recently on April 9, 2014, petitioners filed five IPR petitions (IPR2014-00594, IPR2014-00600, IPR2014-00601, IPR2014-00602 and IPR2014-00603) against a single U.S. patent (U.S. 7,145,442). If instituted, the PTAB has discretion to consolidate these proceedings as provided by 37 C.F.R. §§ 42.122, 42.222. Alternatively, the PTAB may choose against formal consolidation but streamline by “synchronizing” the trial schedules. The latter approach may provide additional time to the parties and PTAB as compared to a consolidated procedure, and simplify motion practice and other procedural elements. One patent owner (Progressive Casualty Insurance Co.) recently attempted to exploit a potential pitfall with the PTAB’s synchronization approach based on the estoppel provisions of 35 U.S.C. §§ 315(e)(1), 325(e)(1).

Progressive’s energies were directed to two CBM proceedings instituted by the PTAB (CBM2013-00003 and CBM2013-00009) to review U.S 8,140,358 (“the ‘358 patent”). Both procedures were subject to a synchronized schedule, and written decisions for each procedure were decided and electronically posted by the PTAB on the same day (February 11, 2014). The Final Decision for CBM2013-00003, which appears to have been posted at 10:50:25 AM EST, canceled claims 2 – 18 of the ‘358 patent . The Final Decision for CBM2013-00009, which appears to have been posted at 12:04:12 PM EST, more broadly canceled claims 1 – 20.

Under 35 U.S.C. § 325(e)(1), a petitioner who obtains a final written decision in a CBM review may not request or maintain a proceeding before the PTAB on any claim that the petitioner raised or reasonably could have raised during the CBM review. In a Request for Rehearing filed on March 12, 2014, Progressive asserted that the PTAB had “misapprehended” the requirements of 35 U.S.C. § 325(e)(1) by failing to dismiss CBM2013-00009 without decision upon the earlier entry of the Final Decision for CBM2013-00003. In a Decision on Rehearing rendered April 1, 2014, the PTAB rebutted Progressive’s argument by finding that the two decisions were in effect rendered concurrently on the same day (February 11, 2014), without either invoking the estoppel provisions of 35 U.S.C. § 325(e)(1) against the other. Moreover, the PTAB asserted that the estoppel provisions of 35 U.S.C. § 325(e)(1) that apply to petitioners provide no basis in any event for precluding the PTAB from exercising its discretion to proceed to render a final written decision under 35 U.S.C. § 328(a), even if the petitioner is no longer engaged in the case.

This Decision on Rehearing aside, it would seem that a prudent petitioner filing multiple IPR or CBM petitions in reference to a single patent would be well-served to move to consolidate the instituted proceedings and/or alternatively agree to coordinated proceedings with the PTAB’s clear assurances that all final decisions on instituted proceedings will be rendered on the same date.

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