Source: https://www.ptabwatch.com/2018/10/successful-ipr-petition-time-barred-under-35-u-s-c-%C2%A7315b-by-involuntarily-dismissed-complaint/
Timestamp: 2018-11-21 17:00:26
Document Index: 504058155

Matched Legal Cases: ['§315', '§315', '§315', '§ 315', '§ 315', '§ 315']

Successful IPR Petition Time Barred Under 35 U.S.C. §315(b) by Involuntarily Dismissed Complaint | PTABWatch
Home Inter Partes Review Successful IPR Petition Time Barred Under 35 U.S.C. §315(b) by Involuntarily Dismissed Complaint
In Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co., Appeal Nos. 2017-1555, 217-1626 (Fed. Cir. Sept. 28, 2018), the Federal Circuit vacated the Patent Trial and Appeal Board’s final written decision in an IPR because institution of the IPR should have been time barred under 35 U.S.C. §315(b). Additionally, the Federal Circuit declined to consider a challenge to a sanctions order by the Board because the amount of sanctions had not yet been quantified and thus the court lacked jurisdiction to review the order. The court’s disposition of these issues remind practitioners that procedural timing is just as important as substantive argument in obtaining a desired legal outcome.
The petitioner filed the IPR petition more than two and a half years after the patent assignee served the petitioner with a complaint alleging infringement. The district court dismissed the complaint without prejudice more than a year and a half before the petitioner filed the IPR petition. The patent owner argued that the complaint barred the Board from instituting review pursuant to 35 U.S.C. § 315(b), which prohibits institution based on a petition “filed more than 1 year after the date on which the petitioner…is served with a complaint alleging infringement.” However, the Board held that the district court’s without-prejudice dismissal of the complaint nullified service and the Board therefore opted to institute review. In its final written decision, the Board held every claim unpatentable.
Late in the IPR but before the Board’s final written decision, the petitioner’s parent company merged with another company and changed its name. Although the petitioner had listed the parent company as a real party in interest in its petition, the petitioner did not notify the Board of the merger or name change. After receiving the final written decision, the patent owner notified the Board of the changed corporate parentage and sought sanctions for the petitioner’s nondisclosure, including termination of the IPR and monetary sanctions. The Board declined to terminate the IPR but authorized the patent assignee to move for the costs it had incurred between the date of the final written decision and the Board’s grant of sanctions. At the time of appeal, the Board had not yet determined the exact amount of sanctions.
The court determined that the Board exceeded its authority when it instituted the IPR over a year after service of the complaint, despite the fact that the complaint had been dismissed without prejudice. The court noted that § 315(b) endorses no exceptions for dismissed complaints. The court further pointed to its recent decision in Click-to-Call Techs., LP v. Ingenion, Inc., 899 F.3d 1321, 1329-32 (Fed. Cir. 2018) (discussed here), in which the court held that serving a complaint alleging infringement implicates § 315(b)’s time bar regardless of the subsequent success or failure of the complaint. The court explained that the present situation varied from that in Click-to-Call only in that the complaint was involuntarily dismissed rather than voluntarily dismissed.
The court determined that it lacked jurisdiction to review the Board’s sanctions order because the Board had not quantified the sanction amount. The sanction award was therefore nonfinal and unappealable. The court declined to exercise pendent jurisdiction to decide an issue not otherwise subject to review but intertwined with issues already before the court. The court found that pendent jurisdiction was not appropriate because different legal analyses were required to resolve the time-bar issue and the sanctions issue.
The decision shows how procedure can trump substance. The petitioner here had a winning argument because the Board concluded that all of the challenged claims were unpatentable. However, the delayed filing of the petition meant that the winning argument was useless because the IPR was time barred, an instance of legal action being taken too late. In even worse news for the petitioner, the court noted that the sanctions against the petitioner could stand even if the Board lacked the authority to institute the IPR. Of course, that issue was not reached because the time for appealing the sanctions order had not yet arrived, an instance of legal action being taken too early. When it comes to achieving legal success, the Goldilocks principle applies – legal action cannot be taken too soon or too late, but must be at just the right time.