By Ashvi Patel and Matt Johnson

Patent Owner, IP Bridge, filed a patent infringement suit against Petitioner, Ericsson, for infringement of seven of its patents directed at radio communication between a base station and a mobile station and related apparatuses and methods.  As a result, Petitioner filed several inter partes review (IPR) petitions, including those directed at U.S. Patent Nos. 8,077,594 (“the ‘594 Patent”), 8,385,239 (“the ‘239 Patent”), and  9,137,000 (“the ‘000 Patent”) (collectively, “the Patents”) as being obvious in view of prior art.  Patent Owner argued that PTAB should exercise its discretion and deny institution of all three IPRs as the parallel proceeding in district court would address patentability prior to the PTAB’s deadline to write a final decision.

The PTAB denied institution of inter partes review for all three petitions under 35 U.S.C. §314(a) based on the parallel proceedings.  This is especially of note as denials under this basis have been rare since Director Vidal released an interim procedure for discretionary denials in AIA Post-Grant Proceedings with parallel district court litigation.  That procedure states that “The PTAB will not rely on the Fintiv factors to discretionarily deny institution in view of parallel district court litigation where a petition presents compelling evidence of unpatentability.”

The non-exhaustive factors to determine whether denial of inter partes review is proper based on Fintiv are:

  1. Whether the court granted a stay or evidence exists that one may be granted if the proceeding is instituted

A district court stay pending Board resolution of an inter partes review weighs strongly against discretionary denial, but a denial of a stay request can weigh in favor of discretionary denial.  Here, neither party had asked for a stay, which the PTAB deemed to be neutral.

  1. Proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision

This factor asks the PTAB to take into account the trial date of the parallel litigation in comparison with the deadline for its written decision.  If the trial date is before the deadline for a final written decision by the PTAB addressing the same arguments, denial is likely favored.  However, if the trial date is at or around the final written decision deadline or even after, the other factors should be balanced.  Here, the parallel litigation had a trial date that precedes the date of the PTAB’s final decision.  While the Petitioner argued that the case may be delayed and that there were discussions of settlement, the PTAB found that there were no facts indicating that trial would be delayed.  Therefore, this factor weighed heavily in favor of denying the petitions.

  1. Investment in the parallel proceeding by the court and the parties

If a district court has issued substantive orders related to the challenged patent, such as a claim construction order, it will likely constitute a large investment and weigh in favor of denial of a petition.  Here, Patent Owner argued that all substantive motions and all discover and pre-trial submissions were complete, but the Petitioner argues that discovery was still ongoing at the time of filing the petitions.  Petitioner argued that it was reasonable to filed the petition after learning which claims were being asserted in the parallel litigation.  Patent Owner countered by stating that it served its Preliminary Infringement Contentions in the parallel proceeding more than six months before the petition.  Based on these facts and the record illustrating that all the work except the trial itself was complete, the PTAB weighed this factor in favor of denying the petitions.

  1. Overlap between issues raised in the petitions and in the parallel proceedings

If the petition and parallel proceedings include the same or substantially the same claims, grounds, arguments, and evidence, this fact will favor denial of the petition.  In the precedential case Sotera Wireless, Inc v. Masimo, the PTAB found that Petitioners broad stipulation in the parallel district court that it would “not pursue the specific grounds in the instituted inter parties review petition or any other ground … that was raised or could have been reasonably raised in an IPR” ensures that inter partes review is a “true alternative” to district court proceedings.  Here, in the present proceedings, the petitioner stipulated that they would not pursue invalidity against the asserted claims in the district court using the specific combination of prior art references set forth in the grounds presented in these petitions for purposes of establishing obviousness, eliminating any overlap in issues.  The PTAB found that the stipulation was narrower than Sotera. The panel found that this stipulation was unlikely to prevent duplicative work with the parallel proceeding.  Even if viewed in favor of the Petitioner, this factor was found to be neutral in determining whether the petitions should be denied.

  1. Whether the petitioner and the defendant in the parallel proceedings are the same party

If the petitioner is unrelated to the defendant in the parallel proceeding, it would weigh against discretionary denial.  Here, the petitioner and the defendant are the same party, which the PTAB weighed in favor of exercising its discretion to deny the petitions.

  1. Other circumstances that impact the Board’s exercise of discretion, including the merits.

Compelling meritorious challenges are allowed to proceed at the PTAB even where district court litigation is proceeding in parallel.  A compelling meritorious challenge is one that if unrebutted in trial would lead to the conclusion that one or more claims are unpatentable by a preponderance of the evidence.  This is a higher standard than the reasonable likelihood required for the institution of an IPR under 35 U.S.C. § 314(a).  The PTAB analyzed the merits of each obviousness challenge and concluded that this standard was not met.

Weighing all six of the factors, the PTAB decided that the interests of the efficiency and integrity of the system would be best served by denying the institutions under 35 U.S.C. § 314(a).

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Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.