It is well known that an Inter Partes Review (IPR) may not be instituted if the petitioner was served with a complaint alleging infringement more than 1 year prior to the filing of the petition. 35 U.S.C. § 315(b). Recent Patent Trial and Appeal Board (PTAB) precedent is proof that this seemingly straight-forward rule can be complicated when applied to the facts of a district court litigation.
The PTAB in Lannett Company, Inc. v. AstraZeneca AB, IPR2015-01629 (P.T.A.B., Jan. 27, 2016) denied institution of an IPR because the petition was filed one day late, despite arguments that service was not effective at the district court. The Patent Owner filed two separate district court infringement suits against Petitioner within the span of 5 days. Both suits asserted the same patent, but the second suit included a new plaintiff that may have owned certain rights in the patent. The petition for IPR was filed 1 year plus one business day after service of the Complaint in the first suit, but within 1 year from service of the second suit. The timeliness of the petition turned on 1) whether service was effective in the first suit, and 2) whether the district court had subject matter jurisdiction over the first suit.
As to the first issue, Petitioner acknowledged that service in the first suit was made upon its registered agent more than 1 year prior to the filing of the Petition. However, Petitioner argued that service was not effective because it was not delivered "personally to any manager" of the registered agent, as Petitioner claimed was required by state law. The Proof of Service showed that the registered agent, not an individual, accepted service. The PTAB was not persuaded by Petitioner's argument. The PTAB found that the state statute relied on by Petitioner was not controlling because on its face it applied to "limited liability companies"; Petitioner was incorporated.
As to the second issue, Petitioner argued that the district court did not have jurisdiction over the first suit because the Complaint in second suit was an admission that at least one co-owner of the asserted patent was not a party to the first suit. The PTAB again was not persuaded by Petitioner's argument. The PTAB acknowledged that jurisdictionally-deficient actions generally will not trigger the § 315(b) time bar, and that the failure to name the co-owner of a patent constitutes a jurisdictional deficiency in an infringement action. But the PTAB noted that the Patent Office assignment record of the relevant patent listed Patent Owner as the assignee. The PTAB also noted that the district court consolidated the two suits, such that the first suit was effectively still pending and had not been dismissed.
This case highlights the importance for petitioners in making a conservative calculation of when a complaint in a district court litigation could first be interpreted as being properly served. Conversely, patent owners would be wise to use this case to challenge, when possible, the timeliness of a filed petition.
This article is presented for informational purposes only and is not intended to constitute legal advice.
