United States: PTAB Precedential Decisions On Discretion To Institute Inter Partes Review

Last Updated: July 11 2019
Article by Kwanwoo Lee

In May 2019, the PTAB designated precedential two IPR decisions related to its discretion to institute inter partes review.

In Valve Corp. v. Electronic Scripting Products, Inc., the Board denied institution under 35 U.S.C. § 314(a), applying the precedential General Plastic factors to deny institution of a follow-on petition. See General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 17-18 (PTAB Sept. 6, 2017)(precedential) and our post about this case. The Board determined that all the General Plastic factors weighed against institution.

According to the first General Plastic factor, the Board considers whether the same petitioner previously filed a petition directed to the same claims of the same patent. Valve filed its Petition requesting inter partes review of U.S. Patent No. 9,235,934 (the '934 patent) after HTC Corporation and HTC America (collectively "HTC") filed a petition also requesting review of the '934 patent. While Valve was not "the same petitioner" as HTC, the Board held that the General Plastic factors are "not limited solely to instances when multiple petitions are filed by the same petitioner." The Board declared that "when different petitioners challenge the same patent, we consider any relationship between those petitioners when weighing the General Plastic factors." The Board determined in this case that there was a "significant relationship" between Valve and HTC, because both were co-defendants in district court litigation accused of infringing the '934 patent based on the same HTC product that incorporated technology licensed from Valve.

In addressing other General Plastic factors, the Board determined that Valve knew or should have known of the prior art asserted in the earlier HTC petition at the time it was filed, basing that conclusion on the fact that Valve cited the same prior art in its own filing and clearly found the newly cited prior art references quickly, as it took less than 2 months to prepare and file its Petition. In any event, the Board concluded that Valve could have found the prior art asserted in its Petition through the exercise of reasonable diligence, and that as licensor of the technology to HTC, Valve had interests aligned closely with those of HTC. The Board concluded that Valve's delay of five months after HTC's petition was too long.

The Board was also persuaded by the Patent Owner's arguments grounded in the General Plastic factors that Valve had gained a tactical advantage by waiting to file its Petition, despite the fact that it was otherwise timely. Valve had used the Board's institution decision in HTC's petition as a roadmap to remedy deficiencies the Board had identified in the declaration of HTC's expert (also used by Valve in its Petition). The Board also criticized Valve's tactic of filing not one, but three petitions after instituting review on the HTC petition as a "serial and repetitive attack," "implicat[ing] the efficiency concerns underpinning General Plastic."

In NHK Spring Co. v. Intri-Plex Technologies, Inc., the Board denied institution under 35 U.S.C. § 325(d), exercising its discretion to deny a petition when "the same or substantially the same prior art or arguments previously were presented to the Office." See Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8 at 17-18 (PTAB Dec. 15, 2017) (informative). Declining to institute review of U.S. Patent No. 6,183,841 (the '841 patent), the Board found that the prior art and arguments asserted by Petitioner NHK Spring had been substantively considered by the examiner during prosecution. The Board concluded that NHK had not shown sufficiently how the examiner erred in evaluating the asserted prior art or why the Board should reconsider the examiner's decision.

The Board also found that in a parallel district court proceeding, NHK was asserting the same prior art arguments, and that this litigation was in an advanced state. A jury trial was set to begin nearly 6 months before the trial in any IPR would have concluded. Therefore, the Board held that instituting the IPR would not be consistent with "an objective of the AIA ... to provide an effective and efficient alternative to district court litigation."

In doing so, however, the Board rejected the Patent Owner's arguments that review was precluded because while the petition was timely, NHK had known about the '841 patent for more than 10 years before its petition and failed to provide an explanation for why it waited so long to file. The Board found, however, that the Patent Owner had not identified any tactical advantage NHK gained by waiting to file its petition.

These precedential decisions illustrate that:

  • the Board may deny institution even where a meritorious follow-on petition is timely filed;
  • if the petitioner has a "significant relationship" with another petitioner who has already filed a petition to challenge a patent, filing a follow-on petition as soon as possible is critical;
  • waiting too long to file a follow-on petition may doom a petition, especially where the petitioner has obviously benefitted from the delay, such as where the petitioner is able to react to the Board's decision on the prior petition;
  • asserting the same prior art cited during prosecution in a petition is a losing strategy, unless the petitioner clearly shows how the examiner erred in evaluating the asserted prior art or provides additional evidence and facts that warrant reconsideration of such prior art; and
  • if there is a parallel district court proceeding that will analyze the same issues and will be resolved before trial on the petition concludes, institution of the petition is less likely.

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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