PTAB Grants Petition For Review Despite Overlap With Earlier Filed Petitions And Advanced Stage Of Parallel Litigation
On June 23, 2020, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) instituted a third inter partes review (IPR) of U.S. Patent No. 7,039,435. LG Electronics Inc. v. Bell Northern Research LLC, case numbers IPR2020-00318. In its decision, the PTAB declined to exercise its discretion under 35 U.S.C. § 314(a) to deny review on efficiency and fairness grounds.
The ’435 patent generally describes techniques for reducing the transmit power level of a portable cell phone when located near a human body. In December 2018, the owner of the ’435 patent sued the petitioner, a cell phone manufacturer, for infringement in a related district court litigation. The patent owner previously asserted the same patent against two competitor cell phone manufacturers. These competitors filed petitions for IPR of the ’435 patent.
Petitioner filed its petition for IPR of the ’435 patent after those of its competitors, in December 2019. The patent owner, in its preliminary response, argued that the PTAB should exercise its discretion under 35 U.S.C. § 314(a) and deny review. Specifically, the patent owner argued that the petition should be rejected as cumulative of the previous petitions filed by petitioner’s competitors challenging many of the same claims of the ’435 patent, as reflecting gamesmanship, and as being inefficient due to the late stage of the district court case between petitioner and patent owner.
The PTAB, in considering these arguments, first conducted an analysis of the General Plastic factors. With respect to the first of these factors—whether the same petitioner previously filed a petition directed to the same claim—the PTAB first distinguished its precedential decision in Valve Corp. v. Elec. Scripting Prods., IPR2019-00062, -00063, -00084, Paper 11 at 10 (PTAB Apr. 2, 2019). That decision held that this factor weighs in favor of denial where there is a complete overlap in the challenged claims in separate petitions filed by significantly related petitioners, e.g., by co-defendants in a suit accusing one defendant’s product of infringement based on incorporation of allegedly infringing technology licensed from the other defendant. In contrast, the petitioner in this case, noted the PTAB, has no relation with its competitors who filed the earlier petitions. The PTAB additionally noted that petitioner was challenging an additional claim not previously challenged. Accordingly, the PTAB found this factor weighed against exercising its discretion to deny institution.
The PTAB determined that it lacked evidence to analyze the second General Plastic factor relating to when the petitioner became aware of the prior art in the petition, but concluded that the related fourth factor weighed slightly in favor of invoking its discretion to deny institution, because there was a significant length of time between the filing of the current petition and an earlier petition asserting some of the same prior art.
With respect to the third General Plastic factor—whether the petitioner, before filing its petition, had received the patent owner’s preliminary response in the first petition or the PTAB’s decision on whether to institute review in the first petition—the PTAB acknowledged that the petitioner filed its petition after the patent owner had filed preliminary responses to the preceding petitions, and that the petitioner copied portions of the earlier petitions while adding some new citations and obviousness grounds. But, the PTAB concluded that it was unable to determine if the changes were an unfair attempt to address arguments made in the preliminary responses. Accordingly, the PTAB found this factor weighed only slightly in favor of denying institution.
The PTAB concluded that the fifth General Plastic factor weighed against a discretionary denial, because the petitioner adequately explained that the time elapsed between the filing of its petition and the filing of the earlier petitions was due to the patent owner’s late election of asserted claims in the related district court litigation and the petitioner’s late identification of one of the asserted prior art references.
With respect to the sixth factor—concerning the finite resources of the PTAB—the PTAB acknowledged inefficiency resulting from the fact that the earlier and current petitions challenge substantially similar sets of claims based on overlapping prior art, but also noted that there is a risk that the lone currently instituted proceeding against the ’435 patent will terminate due to settlement, as did the other earlier proceeding, leaving Petitioner without the ability to timely file a petition. Accordingly, the PTAB found this factor weighed only slightly in favor of denying the petition. Because the PTAB could resolve a trial within the one-year statutory time period, the PTAB concluded that the seventh and final factor weighed against a discretionary denial.
Ultimately, though the General Plastics factors weighed in both directions, the PTAB gave heavy weight to the fact that the petitioner was unrelated to earlier petitioners and that the petition presented some new references and non-overlapping claims, and declined to exercise its discretion to deny institution under § 314(a).
The PTAB next analyzed the six factors presented in its precedential decision in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11, 5–6 (Mar. 20, 2020) to determine whether to exercise its discretion to deny institution because of the advanced stage of the related district court litigation. In that litigation, a claim construction order has issued, nearly the same invalidity arguments are presented, and trial is scheduled to conclude months before any final written decision might issue in the petitioner’s requested IPR. The PTAB determined that though the fourth and fifth factors—relating to overlap of issues and parties, respectively—weigh in favor of denying institution, the remaining factors more strongly weighed against a denial. In particular, the PTAB determined that the first and second factors—relating to a district court stay and trial date, respectively—weighed in favor of institution, because it was likely that the district court would stay the litigation pending the outcome of the IPR, as it had done in other proceedings involving other patents belonging to the patent owner.