Shearman & Sterling LLP | IP Blog | <em >En Banc </em >Federal Circuit Holds That Dismissal Without Prejudice Of District Court Action Does Not Reset IPR Time-Bar Clock<br >  
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  • En Banc Federal Circuit Holds That Dismissal Without Prejudice Of District Court Action Does Not Reset IPR Time-Bar Clock
     
    08/21/2018
    On Thursday, August 16, 2018, the Court of Appeals for the Federal Circuit (CAFC), sitting en banc, issued an opinion reversing the Patent and Trial Board’s determination that a dismissal without prejudice of a district-court complaint resets the statutory clock for filing inter partes reviews (IPR), and vacating the Patent and Trial Board’s final written decision.  Oracle Corp. v. Click-to-Call Techs. LP, —F.3d—, (Fed. Cir. August 16, 2018).  The CAFC held that service of an infringement complaint triggers the one-year bar regardless of whether that complaint is later dismissed without prejudice.

    The America Invents Act, which created inter partes review, provides that “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  35 U.S.C. § 315(b). 

    In this case, it was undisputed that a petitioner’s predecessor had been served with a patent-infringement complaint in 2001.  However, that case was dismissed without prejudice and the instant action was filed in 2012.  Within one year of service of the 2012 lawsuit, the petitioner filed its IPR challenging the validity of the asserted patent claims.  The patent owner argued that petition was time barred based on the 2001 complaint, and therefore should be dismissed.  The Patent and Trial Board (PTAB) disagreed, holding that, because the complaint was dismissed without prejudice, the provision of 35 U.S.C. § 315(b) was not triggered, and the petition was not time barred.  According to the PTAB, “[t]he Federal Circuit consistently has interpreted the effect of such dismissals as leaving the parties as though the action had never been brought,” citing the CAFC’s decisions in Graves v. Principi, 294 F.3d 1350 (Fed. Cir. 2002), and Bonneville Associates, Ltd. Partner, 165 F.3d 1360 (Fed. Cir. 1999).

    After a long procedural road and the CAFC’s decision in Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d 1329 (Fed. Cir. 2016), opening the door to appeals of the PTAB’s time-bar determinations, the CAFC agreed to hear en banc the patent owner’s time-bar appeal.  The CAFC focused on the plain language of the statute, finding that it is unambiguous and does not provide any exceptions or exemptions for complaints in civil actions that are dismissed, with or without prejudice.  “Simply put, § 315(b)’s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events.” 
     
    The practical effects of this decision are already being seen.  Not only did the CAFC vacate the final written decision in this case, but it did the same in another pending case, Luminara Worldwide, LLC v. Iancu, —F.3d— (Fed. Cir. August 16, 2018). 
     

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