Source: https://www.patentchallenges.com/2015/05/ptab-decides-that-district-court-ruling-favorable-to-patent-owner-does-not-justify-stay-of-cbm-proceedings/
Timestamp: 2019-04-18 19:23:44+00:00

Document:
We have previously written about stays of litigation before the PTAB has acted on a petition for IPR or CBM review. A recent Board decision addresses a contrasting circumstance: staying a CBM proceeding in light of activity in litigation. In Samsung Elecs. Am., Inc. v. Smartflash LLC, (and related CBM review proceedings), the Board denied a Patent Owner’s request for authorization to file a motion to stay the CBM proceeding based on the Board’s statutory mandate to complete the CBM proceeding within one year of institution. CBM2014-00190, Paper 13 (May 6, 2015).
Smartflash sued multiple entities in the Eastern District of Texas alleging infringement of several patents. Defendants moved for summary judgment of invalidity pursuant to 35 U.S.C. § 101, but the district court denied their motion. Meanwhile, the Board instituted CBM review of several Smartflash patents on § 101 grounds.
In light of the favorable outcome at the district court, Smartflash requested that the Board provide authorization to file a motion to stay the CBM proceedings. Smartflash argued that it would be “an improper use of Board resources to re-litigate issues that have been resolved in district court” and further that the “rules direct [the PTAB] to conduct these proceedings in a speedy, efficient, and inexpensive manner.” The Board found these arguments unpersuasive.
Under 35 U.S.C. § 326(a)(11), the Board is required to issue its final determination in a CBM proceeding “not later than 1 year after the date on which the Director notices the institution of a proceeding . . . . except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months.” See also AIA § 18(a)(1). In light of this statutory mandate, as well as the fact that the “parties cannot control the timing of the district court trial and/or possible subsequent appeal to the Federal Circuit, even if [the PTAB] were to extend the deadlines in these cases by up to six months,” the Board concluded that there was no justification to stay the CBM proceedings.
Hence, in this circumstance a favorable outcome concerning validity for a Patent Owner at the district court did not outweigh the PTAB’s mandate to expeditiously determine a question of invalidity in a CBM proceeding. This outcome is not inconsistent with Federal Circuit case law. See, e.g., Envtl. Designs, Ltd. v. Union Oil Co. of Cal., 713 F.2d 693, 700 n.9 (Fed. Cir. 1983) (stating courts do not hold a patent valid, only the “patent challenger did not carry the burden of establishing invalidity in the particular case before the court”); Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1429 n.3 (Fed. Cir. 1988) (“[A] court’s decision upholding a patent’s validity is not ordinarily binding on another challenge to the patent’s validity in either the courts or the PTO.”) (internal citations omitted).

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