# United States Court of Appeals **for the Federal Circuit**

______________________
BENNETT REGULATOR GU ARDS, INC., Appellant

v.

ATLANTA GAS LIGHT CO ., Cross

- Appellant

______________________

2017

- 1555, 2017

- 1626

______________________ Appeals from the United States Patent and Trad emark Office, Paten t Trial and Appeal Board in No. IPR2015

- 00826.

______________________
Decided: September 28, 2018

______________________
W AYNE D. P ORTER , J R ., Law Offices of Wayne D. Porter, Jr., Independence, OH, argued for appellant.

D ARYL L. J OSEFFER , King & Spalding, LLP, Washin gton, DC

, argued for cross

- appellant. R epresented by R USSELL E. B LYTHE , H OLMES J. H AWKINS , III

, Atlanta, GA

.

______________________

Before L OURIE , C LEVENGER , and S TOLL , Circuit Judges

. S TOLL , Circuit Judge

.BENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 2

Years after Bennett Regulator Guards, Inc. first sued Atlanta Gas Light Co. for infringing its U.S. Patent No. 5,810,029 , the Patent Trial and Appeal Board inst ituted Atlanta Gas’s inter partes review (IPR)

, held all challenged claims of Bennett’s ’029 patent unpatentable, and then sanctioned Atlanta Gas . Bennett appeals, arguing that 35 U.S.C. § 315(b) barred institution , that its claims should have survived, and that the Board should have imposed greater sancti ons. Atlanta Gas cross

appeals, seeking to overturn the sanctions.

Because the Board exceeded its authority and contr avened § 315(b)’s time bar when it institute d Atlanta Gas’s petition, we vacate its final written decision. And because the Board has not yet quantified its sanction, we decline to consider the nonfinal sanctions order and instead remand to the Board.

B ACKGROUND
Bennett , the assignee of the ’029 p atent , served Atla nta Gas with a complaint alleging infringement on July 18, 2012. Atlanta Gas moved to dis miss

. U ltimately, t he district court granted that motion and dismissed Be nnett’s complaint without prejudice

. See Bennett Regulator Guards, Inc. v. MRC Glob

. Inc ., No. 4:12

- cv

- 1040, 2013 WL 3365193, at *5 (N.D. Ohio July 3, 2013)

. On February 27, 2015, Atlanta Gas filed the IPR that underlies this appeal . B ennett protested, arguing that § 315(b) , which prohibit s institution “if the petition r equesting the proceeding is filed more than 1 year after the date on which the petitioner

. . . is served with a co mplaint alleging infringement of the patent,” barred the Board from instituting review. The Board disagreed

. It acknowledged that Bennett had served a complaint alleging infringement on Atlanta Gas, but it held t hat t he district court’s without

- prejudice dismissal of that co mplaint nullified service. Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. , IPR2015

- 00826, 2015 WLBENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 3

5159438, at * 5 , *7 –8 (P.T.A.B. Sept. 1, 2015). Having found that § 315(b) permitted it to proceed, the Board instituted review of all claims. Id. at *15

– 16. B ennett defended the ’029 patent, but in its final written decision the Board confirmed that § 315(b) did not bar the petition and held every claim of the ’029 patent unpatent able

. Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc.

, IPR2015

- 00826, 2016 WL 8969209, at *1 , *6 (P.T.A.B. Aug. 19, 2016) (“ Final Written Decision ”) ; see J .A. 85

– 86 (denying subsequent motion for reconsideration)

.
In an unusual turn of events , an additional issue emerged after the Board issued its decision. The A merica I nvents A ct requires petitioners to identify all real parties in inter est in their peti tions, see 35 U.S.C. § 312(a)(2), and Board regulations require petitioners to update that informatio n within 21 days of any change, see 37 C.F.R. § 42.8( a )(3). Late in the IPR, but before the Board’s final written decision, Atlanta Gas’s parent company, AGL Resources Inc. , merged with another company a nd then changed its name. See J.A. 86–88

. Though Atlanta Gas had listed AGL Resources as a real party in interest in its petition, Atlanta Gas did not notify the Board of the merger or the name change, and the Board did not know of the changes when it issued its final decision. See J.A. 88

– 94. Shortly after receiving the final written decision, Bennett noti fied the Board of Atlanta Gas’s changed corporate parentage and sought sanctions for Atlanta Gas’s nondisclosure. See J.A. 81

– 83, 88

– 94. The merger created new Board conflicts, and one member of the three

- judge panel recuse d himself after learning of it

. See J.A. 85 n.1 , 93. A reconstituted panel then considered Bennett’s sanction s motion. Though it declined to terminate the IPR as Bennett requested, the Board authorized Ben nett to move for the “costs and fees” it had incurred between the date of the final written decision and the Board’s grant of sanctions

. See J.A. 88

– 93. The Board has not ruled on Bennett’s motion for costsBENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 4

and fees, and the parties continue to dispute the exact
amount Atlanta Gas owes

. Bennett appeals. It contends that § 315(b) bar red this IPR, and that even if the Board possessed the power to consider Atlanta Gas’s petition, the Board substantively erred in its claim construction and unpatentability fin dings. Bennett also argues that the Board abused its discretion by awarding only monetary sanctions for Atla nta Gas’s failure to update its real

- party

- in

- interest info rmation. In its cross

- appeal, Atlanta Gas counters that the Board erred by awarding any sanction at all.

D ISCUSSION A party dissatisfied with the Board’s final written d ecision may appeal to this court. See 35 U.S.C. § 319; see also 28 U.S.C. § 1295(a)(4)(A). Though statute immunizes the Board’s preliminary decision to institute IPR from review, see 35 U.S.C. § 314(d), we review the Board’s jurisdiction, and we have authority to review its compl iance with § 315(b). See Wi

- Fi One, LLC v. Broadcom Corp. , 878 F.3d 1364, 137 4 (Fed. Cir. 2018) (en banc) (“[Section] 315

. . . is not subject to § 314(d)’s bar on judicial review.”)

. We review the Board’s legal conclusions de novo and its fact findings for substantial evidence. See , e.g. , PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC

, 815 F.3d 734, 739 (Fed. Cir. 2016). We review the Board’s award of sanctions for abuse of discretion. Cf. Midwestern Pet Foods, Inc. v. Societe des Produits Nestle S.A.

, 685 F.3d 1046, 105 1 (Fed. Cir. 2012) (applying abuse of discretion standard to Trademark Trial and Appeal Board’s sanctions ); Woods v. Tsuchiya , 754 F.2d 1571, 1582 (Fed. Cir. 1985) ( noting that award of sanctions falls within Board of Interference’s discretion ).BENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 5

I

Bennett launches a multi

- front attack on the Board’s final written decision. It challenges the Board’s jurisdi ction to institute review

, at l east ten of the Board’s claim constructions, the Board’s findings regarding the teac hings of the prior art and Atlanta Gas’s anticipation ground, and the Board’s consideration of the Graham factors in its obviousness determination. Because we agree that 3 5 U.S.C. § 315(b) barred the Board’s review in this case, we vacate the Board’s final written decision and remand with instructions to dismiss this IPR without reaching Bennett’s additional arguments.

Section 315(b) prohibits the Board from instituting a n IPR based on a petition “filed more than 1 year after the date on which the petitioner

. . . is served with a co mplaint alleging infringement.” § 315(b). We recently held that serving a complaint alleging infringement —a n act unchange d by the complaint’s subsequent success or failure

— unambiguously implicates § 315(b)’s time bar

. See Click -to- Call Techs., LP v. Ingenio, Inc.

, 899 F.3d 1321, 13 29 –32 (Fed. Cir. 2018)

. The statute endorses no exceptions for dismissed complaints , and we th erefore held that the Board exceeded its authority when it inst ituted IPR over a year after service of a complaint later voluntarily dismissed without prejudice. Id. at 1328 n.3 (en banc)

. This case differs from Click -to- Call only in that Be nnett’s complaint was involuntarily dismissed without prejudice. W e identify no reason to distinguish Click -toCall on that basis. 1 The statutory language clearly e x-

1 Indeed, the Board relied on its now

- overturned decision in Click -to- Call to decide Bennett’s time

- bar challenge. See Final Written Decision

, 2016 WL 8969209, at *5.BENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 6

presses that service of a complaint starts § 315(b)’s clock. See id. at 1330

– 31, 1336 . Just as the statute includes no exception for a voluntarily dismissed complaint , it i ncludes no exception for an involuntarily dismissed co mplaint.

Bennett undisputedly served Atlanta Gas with a co mplaint asserting the ’029 patent on July 18, 2012. See Appellan t’s Br. 57

– 58; Cross

- Appellant’s Br. 9 . Se ction 315 permits a petitioner to seek IPR for a year after such service, but Atlanta Gas filed its IPR petition on February 27, 2015, J.A. 118, more than eighteen months after the statutory time limit. The Board lacked author ity to institute review. Accordingly, we vacate the Board’s final written decision , and we remand for the Board to dismiss the IPR

. II

We next address the parties’ challenges to the Board’s sanction s order

. Bennett asserts that the Board properly awarded monetary sanctions but erred by failing to te rminate the IPR, see Appel lant’s Br. 27 –35 , while Atlanta Gas urges that the Board erred by awarding sanctions at all, see Cross

- Appellant’s Br. 70

– 86. Although the Board lacked authority to i nstitute the IPR, its sanction award

m ight nevertheless stand

. Cf. Willy v. Coastal Corp

., 503 U.S. 131, 132 (1992) (holding federal district courts may impose Rule 11 sanctions even “in a case in which the district court is later determined to be without su bject

- matter jurisdiction”). We do not resolve that que stion , however, because we lack jurisdiction to review the Board’s unquantified, and thus non

- final, order. We have exclusive jurisdiction to review the Board’s final decisions. See 28 U.S.C. § 12 95(a)(4)(A). But our jurisdiction extends only to final decisions. See In re Arunachalam , 824 F.3d 987, 988 (Fed. Cir. 2016) (reading § 1295(a)(4) “to incorporate a finality requirement” (quo ting Loughlin v. Ling , 684 F.3d 1 289, 1292 (Fed. Cir.BENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 7

2012))). Because the Board has no t yet quantified its sanctions award

, the award remains nonfinal and una ppealable. See Special Devices, Inc. v. OEA, Inc

., 269 F.3d 1340 , 1343 (Fed. Cir. 2001) (holding unquantified award of attorney fees is not a final decision) ; View Eng’g, Inc. v. Robotic Vision Sys., Inc ., 115 F.3d 962, 964 (Fed. Cir. 1997) (“[A] district court decision imposing Rule 11 san ctions is not final, and hence not appealable, until the amount of the sanction has been decided

. . . .”)

. In rare cases, we exercise pendent jurisdiction to d ecide an issue not otherwise subject to review. We extend pendent jurisdiction only reluctant ly , and only to issues “inextricably intertwined” with or necessary to resolution of issues already before the court. See Swint v. Chambers Cty. Comm’n , 514 U.S. 35, 51 (1995) (providing standard for exercise of pendent jurisdiction). “ [T] he circuits, including this one, are in general agreement that an unquantified award

. . . does not usually warrant the

e xercise of pendent jurisdiction, ” and we hold the exercise of pendent jurisdiction is not warranted here. Orenshteyn v. Citrix Sys., Inc. , 691 F.3d 1356 , 1360 (Fed. Cir. 2012). The parties’ time

- bar and merits disputes ask whether § 315(b) prohibits this IPR and whether t he art identified by Atlanta Gas anticipates or renders obvious Bennett’s properly construed claims. In contrast, the parties’ cha llenges to the Board’s sanctions order implicate the Board’s power to issue sanctions and to accept late filings, 37 C.F.R. § § 42.5, 42.12 , and ask us to examine whether the Board erred by identifying Atlanta Gas’s parent
company as a real party in interest under 35 U.S.C. § 312(a) (2) and 37 C.F.R. § 42.8 (b)(1) . As in Orenshteyn

, “the finding of invalidity and the sanctions in the present case have different legal bases requiring different legal analyses

. ” 691 F.3d at 1360. Atlanta Gas suggested at oral argument that the Board’s denial of Bennett’s requested remedy

— termination

— was a final decision subject to appeal, andBENNETT REGULATOR GU ARDS , INC

. v. ATLANTA GAS LIGHT CO

. 8

that we should exercise pendent jurisdiction over the Board’s related decision to award a monetary sanction, even though the amount of that sanction remains un determined. See Oral Arg. at 15:20

– 16:55
, http://oralarguments.cafc.uscourts.gov/default.aspx?fl=20 17

- 1555.mp3 . We disagree. Atlanta Gas’s formulation requires us to arbitrarily divide the Board’s sanction s order into two decisions —one relat ing to termination and

one relat ing to a monetary award. We instead treat the Board’s order as a single decision addressing Bennett’s entire motion for sanctions, which requested both term ination and compensatory sanctions

. S ee J.A. 318. This comports with the Board’s discussion

, see J.A. 92

– 93 , and preserves judicial resources by confining all sanctions issues to a single appeal. Accordingly, we decline to exercise pendent jurisdi ction over the Board’s sanction s order , and w e remand to the Board . On remand, the Board may, at its discretion, f

urther consider its order given the outcome of this a ppeal. B ut until the Board quantifies any sanctions , we will not review its decision granting them

. C ONCLUSION For the foregoing reasons, we vacate the Board’s final written decision, and we remand for the Board to quantify any sanctions and dismiss this IPR.

VACATED AND REMANDED

C OSTS
No costs.