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IP Alert: PTAB Designates Two AIA Decisions as Precedential, Bringing Total to Three

January 19, 2016

On Tuesday, January 12, 2016, the Patent Trial and Appeal Board (PTAB) designated two of its decisions pertaining to the America Invents Act (AIA) as precedential, meaning they will be binding in all future PTAB cases. The PTAB’s designation brings the total number of AIA-related precedential opinions to three. Each of the three precedential opinions clarifies certain aspects of the AIA: the one-year period to file an inter partes review after a lawsuit commences (LG Electronics, Inc. v. Mondis Technology Ltd.); the scope of estoppel (Westlake Services, LLC v. Credit Acceptance Corp.); and the ban on filing a covered business method review when the petitioner previously instituted a civil action (Securebuy, LLC v. CardinalCommerce Corp.).

LG Electronics, Inc. v. Mondis Technology Ltd., IPR 2015-00937
In its September 17, 2015 decision in LG Electronics, Inc. v. Mondis Technology Ltd., the PTAB clarified the wording of 35 U.S.C. § 315(b) regarding the time period in which a petitioner can file an inter partes review once it “is served with a complaint alleging infringement of the patent.”

LG was served with two complaints relating to the same patent, the first in 2008 and the second in 2014. The petitioner requested an inter partes review in March 2015. The PTAB held that because the petition “was filed more than one year after the service of the 2008 Complaint, it falls outside the one-year time bar for pursuing an inter partes review set forth in § 315(b).”

LG asserted “that § 315(b) is ambiguous because it does not require explicitly that the complaint be the ‘first’ complaint.” The PTAB declined LG’s invitation to amend § 315(b) by inserting either “latest” or “second” in the statute. Rather, the PTAB defined “a complaint,” in the context of § 315(b), as “includ[ing] ‘a complaint’ as explicitly stated.” Accordingly, the PTAB held that the statute “prohibits institution of an inter partes review if the petition is filed more than one year after the date a petitioner is served with ‘a’ complaint.”

Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176
In its May 14, 2015 decision in Westlake Services, LLC v. Credit Acceptance Corp., the PTAB held that estoppel is to be applied on a claim-by-claim basis.

In its first petition, Credit Appliance sought review of claims 1–42 of the asserted patent. The PTAB instituted a trial as to claims 1–9, 13, and 34–42. After the PTAB instituted review on this subset of claims, the U.S. Supreme Court issued its decision in Alice Corp. Pty. Ltd. v. CLS Bank International. The petitioner then requested permission to file a request for a rehearing in light of the Alice decision. The PTAB denied petitioner’s request for a rehearing but allowed petitioner to file another petition. Subsequent to the filing of the second petition, the PTAB determined that claims 1–9, 13, and 34–42 were invalid. The patent owner then filed a motion to terminate the second petition based on estoppel.

Section 328(a) of the Patent Act provides if “a post-grant review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” Westlake, the patent owner, argued that according to Section 328(a), estoppel applies to all claims challenged by a petitioner—even to claims for which review was not instituted. Westlake proffered that “because of Section 328(a)’s requirement that a final written decision resolve all challenged claims, it necessarily incorporates the underlying decision on institution for those claims for which institution is denied.” The PTAB disagreed. Relying on the U.S. Patent and Trademark Office’s responses to the public comments prior to the promulgation of 37 C.F.R. § 42.208(b), it held that “estoppel is applied on a claim-by-claim basis. By its terms, estoppel is invoked under Section 325(e)(1) as to ‘a claim in a patent’ that ‘results in a final written decision under’ 35 U.S.C. § 328(a).”

Securebuy, LLC v. CardinalCommerce Corp.
, CBM2014-00035
In August 2014, the PTAB designated Securebuy, LLC v. CardinalCommerce Corp. as its first precedential AIA-related decision. The PTAB held in this case that a covered business method patent review cannot proceed if a petitioner already filed a civil action regarding the validity of the patent.

On November 1, 2013, the petitioner, Securebuy, filed two separate civil actions seeking declaratory judgments that the patent claims were invalid. Approximately two weeks later, Securebuy filed a petition for covered business method review. The PTAB held that because it “may not institute a covered business method patent review of a challenged patent when the petitioner filed a civil action challenging the validity of a claim of the patent before the date on which the petition for review is filed, we deny the Corrected Petition in all respects.”

For more information about these decisions, please contact Fitch Even partner Eric L. Broxterman, the author of this alert.

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