PTAB Panel Allows Joinder of Multiple IPR Proceedings Filed by Same Petitioner, Sharpens Disparity Between Panels Interpreting 35 U.S.C. § 315(c)

Monday, October 19, 2015

An expanded panel of the USPTO Patent Trial and Appeal Board (“PTAB” or “Board”) recently exercised its discretion under 35 U.S.C. § 315(c) to grant a motion to join an inter partes review proceeding with an already-initiated proceeding filed by the same petitioner. This latest decision underscores the divide among PTAB panels concerning the procedural maneuver of joining serial IPR petitions. Zhongshan Broad Ocean Motor Co. v. Nidec Motor Corp., Case No. IPR2015-00762 (PTAB Oct. 5, 2015) (Paper 16).

Practice Points:

• Expanded PTAB panel overrules earlier three-judge panel, rules that 35 U.S.C. § 315(c) permits joinder of multiple IPR proceedings brought by the same petitioner.
• If allowed, joinder may permit a petitioner to challenge patent validity on grounds not otherwise available due to expiration of the one-year time bar in 35 U.S.C. § 315(b).
• Latest decision adds to split between panels, creating uncertainty pending further action by Congress or the U.S. Court of Appeals for the Federal Circuit.

Background:

The decision arises from inter partes review (“IPR”) proceedings involving U.S. Patent No. 7,626,349, covering low-noise HVAC motor systems. The patent owner, Nidec Motor Corp, filed a patent infringement action against Broad Ocean Motor Corp. in the U.S. District Court for the Eastern District of Missouri and served the complaint on September 25, 2013. Broad Ocean then filed an IPR petition challenging the validity of the ‘349 patent on July 3, 2014. The PTAB instituted IPR review as to some grounds alleged in the petition, but denied to institute review based on one foreign-language reference (the Hedeji reference) because the petition did not include an attested English translation as required by 37 C.F.R. § 42.63(b).

On February 20, 2015, Broad Ocean filed a second IPR petition challenging the ‘349 patent based on the Hedeji reference, this time including the required attested translation, and moved to join the petition with the previously-instituted proceeding. Nidec opposed the petition on the grounds, inter alia, that it was time-barred under § 315(b) because it was filed more than one year after the date Nidec served a complaint alleging infringement of the patent. In addition, Nidec argued that joinder was not available because the PTAB may only join petitions filed by different parties, not serial petitions filed by the same petitioner.

A three-judge panel denied Broad Ocean’s petition on July 20, 2015. In a 2-1 decision, the panel ruled that Broad Ocean had demonstrated a reasonable likelihood that the Hedeji reference anticipated the challenged ‘349 patent claims, but ruled that the petition was time-barred under § 315(b) because it was filed more than one year after Nidec’s infringement action against Broad Ocean. Furthermore, the panel denied the joinder motion under § 315(c). That provision states that:

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). A majority of the panel ruled that the phrase “join as a party” meant that joinder is only available to add a petitioner that was not already a party in a prior-initiated proceeding.

Expanded Panel Decision:

The Acting Chief Judge of the PTAB appointed an expanded five-judge panel to consider Broad Ocean’s request for rehearing. In a 3-2 decision, that panel reversed the decision of the three-judge panel, granted the petition to institute, and allowed the petitioner’s joinder motion. Administrative Patent Judge James A. Tartal, who dissented from the three-judge panel decision, wrote the majority opinion for the five-judge panel, incorporating much of his earlier dissent as the new majority opinion.

The decision observes that the application of § 315(c) has been the subject of significant uncertainty, with some panels allowing joinder of multiple petitions filed by the same petitioner, and some panels only joining proceedings raising similar issues, but brought by different petitioners. See, e.g., See Target Corp. v. Destination Maternity Corp., Case IPR2014-00508 (PTAB Feb. 12, 2015) (Paper 28) (granting joinder motion); Medtronic Inc. v. Troy R. Norred, M.D., Case IPR2014-00823 (PTAB Dec. 8, 2014) (Paper 12) (same); SkyHawke Techs., LLC v. L&H Concepts, LLC, Case No. IPR2014-01485 (PTAB Mar. 20, 2015) (Paper 13) (denying motion for joinder). The panel majority based its decision on three main points.

First, the panel concluded that § 315(c) on its face “encompasses both party joinder and issue joinder, and, as such, permits joinder of issues, including new grounds of unpatentability[.]” Thus, the PTAB has discretion to join serial proceedings “on a case-by-case basis taking into account the particular facts of each case, substantive and procedural issues, and other considerations.” Slip op. at 6.

Second, the majority noted that broad application of § 315(c) is consistent with the policy underlying the AIA post grant proceeding system. “The public interest in securing the just, speedy, and inexpensive resolution of every proceeding would be served in this case more fully by considering the merits of the asserted ground of unpatentability based on Hideji rather than by denying consideration for reasons tied to Petitioner's previous failure to submit the requisite attesting affidavit.” Slip op. at 8.

Third, the panel noted that joinder under the facts presented would not prejudice Nidec. It had prior notice of the petitioner’s contention that Hideij anticipated the challenged claims due to the original petition filed in July 2014. In addition, the petitioner stipulated that it would agree to reasonable pre-trial requests by Nidec to prevent any potential delays resulting from joinder.

In addition, the majority noted that the USPTO recently filed a brief in an unrelated Federal Circuit appeal asserting that the Board was applying § 315(c) broadly to join petitions “even if the petitions are filed by the same party.” Slip op. at 4 (quoting Brief for Intervenor – USPTO in Yissum Research Dev. Corp. v. Sony Corp., Case No. 2015-1342 (Fed. Cir.)).

Administrative Patent Judges Boucher and Wood, who formed the majority of the three-judge panel, wrote a dissent characterizing the reversal as result that “arrogate[s] power beyond that granted by Congress.” The dissent argued that the text of § 315(c) limits joinder to petition by different parties, because it only authorizes joinder to add a party. In addition, the dissent noted that the failure to provide an attested translation was a substantial defect in Broad Ocean’s original petition, and the use of joinder to overcome that lapse and to avoid the effect of the one-year time bar would “directly frustrate[ the] Congressional objective of curtailing avenues for harassment by sanctioning repeated administrative attacks.” Dissent at 2.

Practical Significance:

Broad Ocean illuminates the sharp division between PTAB panels on availability of joinder under § 315(c). Because petitions subject to joinder are expressly exempt from the one-year time bar of § 315(b), some petitioners have used joinder to add additional grounds to an already-filed IPR, even when a later petition is filed more than one year after the petitioner was sued for infringement. In light of Broad Ocean, this tactic may be available in some situations, but practitioners should exercise caution. First, since different PTAB have interpreted § 315(c) differently, a petitioner’s success in a joinder motion may depend on the composition of the PTAB panel deciding the motion for joinder. In addition, availability of joinder may depend on the particular circumstances. For example, the Broad Ocean majority highlighted the absence of any prejudice to the patent owner, since it had ample notice of petitioner’s grounds for challenge. Joinder may not be available where the patent owner can point to resulting unfairness or disadvantage.

For more information on post-grant proceedings, visit www.bkpostgrant.com.