Can Inter Partes Review be refused because a patent is part of a lawsuit? BIG TECH v. IANCU

The Leahy–Smith America Invents Act (“AIA”) is a United States federal statute that was signed into law on September 16, 2011. The America Invents Act introduced several new quasi-adjudicatory proceedings before the United States Patent and Trademark Office for determining the patentability of issued patent claims. These proceedings include inter partes review (“IPR”), post-grant review (“PGR”), and review of Covered Business Method patents (“CBM review”). Prior to this someone who wanted to challenge the validity of a patent had more limited options.

Inter partes review is intended to fight bad patents. Inter partes review is a way to ask the USPTO to rescind a patent which was granted in error. Before inter partes review a patent which had been granted could only be challenged in federal court, a long and expensive process. Inter partes review created a parallel track to challenge the validity of a patent which was much faster and less expensive than litigation in a federal court.

Inter partes review is a trial proceeding conducted at the Patent Trial and Appeal Board (“PTAB”) to review the patentability of one or more claims in a patent only on a ground that could be raised under §§ 102 or 103, and only on the basis of prior art consisting of patents or printed publications. If a member of the public discovers a piece of prior art which anticipates, or renders obvious, a patent which has been granted they may request an inter partes review of the patent. An inter partes review can result in invalidation of some or all of the claims of a patent.

Inter partes review can be filed both before and during litigation. The AIA permits a party accused of patent infringement to file a petition for IPR with regard to the same patent claims that are being asserted in the pending infringement suit, within 1 year of the date that the defendant is served with a complaint alleging patent infringement. 35 U.S.C. § 315(b). If a defendant has challenged the patent in district court in the past, IPR is not available. However, § 315(a)(3) of the AIA expressly permits a defendant to raise invalidity arguments in a counterclaim without giving up the option to file an IPR.

The question then becomes can the United States Patent and Trademark Office decline to institute inter partes review merely because the patent is already subject to a lawsuit? In two recent decisions, the PTAB declined to institute IPR of patents involved in a lawsuit, even though even if the petition for IPR was timely filed within the deadline set by 35 U.S.C. § 315(b).

In NHK Spring Co. v. Intri-Plex Technologies, Inc., the PTAB denied the IPR petition because the district court was going to trial within 6 months and the IPR proceeding would not be concluded in that time.

In Apple Inc. v. Fintiv, Inc., the PTAB articulated 6 factors it would consider when deciding whether to institute an IPR of a patent was the subject of a parallel case in district court.

The PTAB’s opinion is, a district court case is a factor in granting an IPR petition. However, there are people that disagree with this opinion.

APPLE INC., CISCO SYSTEMS, INC., GOOGLE LLC, and INTEL CORPORATION, v. ANDREI IANCU, 5:20-cv-6128 (N.D.CA 2020) is a case which challenges the precedent set by NHK and FINTIV.

Plaintiffs in this case are large technology companies that are frequently being sued for patent infringement. Defendant in this case is head of the United States Patent and Trademark Office.

Plaintiffs filed suit under the Administrative Procedure Act (“APA”) to challenge the rules created by NHK and FINTIV. Plaintiffs’ position is, apart from the one-year deadline in § 315(b), and the prohibition in § 315(a)(1) on filing an IPR petition after filing a suit challenging patent validity, no provision in the AIA expressly requires or permits the PTAB to deny IPR petitions based on pending litigation involving the same patent claims. Plaintiffs seek to have the rule created by NHK and FINTIV invalidated because it is contrary to the AIA and even if the rule is valid, it was not adopted using the procedure required by the Administrative Procedure Act.

This is an important case to watch because the outcome will affect a Defendant’s ability to petition for Inter Partes Review.

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