By Hannah Mehrle and Matt Johnson –
Coke Morgan Stewart, the acting director of the United States Patent and Trademark Office (“USPTO”), exercised discretion under 35 U.S.C. § 314(a) to deny Tessell’s (“Petitioner’s”) petition in favor of Nutanix (“Patent Owner”).
Here, employees of Nutanix invented what eventually became U.S. Patent No. 11,010,336 (the ’336 patent)—the patent at issue in the proceeding. Thereafter, two of the inventors of the ’336 patent left Nutanix to found Tessell. Later, Tessell hired two other inventors of the ’336 patent. When four of the inventors of the ’336 patent worked at Tessell, it asserted in an IPR that the claims of the ’336 patent were unpatentable.
The acting Director of the USPTO stated that although assignor estoppel does not apply to IPRs under 35 U.S.C. § 311(a), the USPTO can still consider unfair dealings when deciding whether to discretionarily deny institution under 35 U.S.C. § 314(a). In this case, Stewart found that it is not an appropriate use of USPTO resources for the inventors who applied for and were granted a patent to now advocate for its unpatentability at a new company. Thus, Director Stewart denied the petition in the exercise of discretion, despite the stay in the parallel district court case weighing against discretionary denial.
Stewart found that Patent Owner’s equity arguments were persuasive without going into her reasoning. Without reasoning, it is hard to say what effect this will have on similar discretionary denial requests in the future. But Petitioners should be wary of challenging a patent when most of the inventors of that patent now work for Petitioner.
Matthew Johnson