IP Law Daily IPR time-bar triggered by service of civil complaint, even if complaint is dismissed
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Thursday, August 16, 2018

IPR time-bar triggered by service of civil complaint, even if complaint is dismissed

By Thomas Long, J.D.

The Patent Trial and Appeal Board erred in determining that an inter partes review (IPR) petition challenging claims of a patent covering an anonymous voice communication system using an online data source was not time-barred under 35 U.S.C. §315(b), the U.S. Court of Appeals for the Federal Circuit has held. The IPR petition was time-barred because a complaint was formally served upon the petitioner, accusing it of infringing the patent at issue, more than one year before the petition was filed. The Board was legally incorrect in determining that, because that civil action had been voluntarily dismissed without prejudice, it was to be treated as having never happened, and therefore not a trigger to the Section 315(b) time-bar. Although the opinion was primarily issued by a three-judge panel, the full court, sitting en banc, held (with two dissenting judges) that the time-bar was triggered when the complaint was served, regardless of what happened subsequently in the civil litigation. Because the IPR was not instituted properly, the Board’s final written decision finding the challenged claims invalid as anticipated or obvious was vacated (Click-to-Call Technologies, LP v. Ingenio, Inc., August 16, 2018, O’Malley, K.).

Patent at issue; prior litigation. Patent owner Click-to-Call Technologies, LP ("CTC") acquired U.S. Patent No. 5,818,836 ("the ’836 patent") in 2012. On June 8, 2001, the exclusive licensee of the ’836 patent, Inforocket.Com, Inc., filed a civil action in the Southern District of New York accusing Keen, Inc. of infringing various claims of the ’836 patent ("the Inforocket Action").In 2003, Keen acquired Inforocket as its wholly-owned subsidiary. Subject to the terms of the merger, Inforocket and Keen stipulated to a voluntary dismissal of the Inforocket Action. Later in 2003, Keen changed its name to Ingenio, Inc. After CTC acquired the ’836 patent, it filed two infringement suits against several companies, including Ingenio. Both of those suits were currently stayed.

IPR proceedings. On May 28, 2013, Ingenio, along with Oracle Corp., Oracle OTC Subsidiary LLC, and YellowPages.com LLC, filed a single IPR petition challenging claims of the ’836 patent on anticipation and obviousness grounds. CTC contended that Section 315(b) statutorily barred institution of IPR proceedings. The Board issued its Institution Decision on October 30, 2013. With respect to the timing issue under Section 315(b), the Board acknowledged that Ingenio was served with a complaint alleging infringement of the ’836 patent on June 8, 2001. Section 315(b) provided that an IPR may not be instituted if the petition requesting the proceeding was filed more than one 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. Nevertheless, the Board concluded that CTC did not establish that service of the complaint against Ingenio in the Inforocket Action barred Ingenio from pursuing an IPR for the ’836 patent because that infringement suit was dismissed voluntarily without prejudice on March 21, 2003. In the Board’s view, Federal Circuit precedent held that such dismissals left the parties as though the action had never been brought. The Board subsequently issued a final written decision on October 28, 2014, determining that 13 challenged claims of the ’836 patent were invalid either for anticipation or obviousness.

Appeal. CTC appealed the Board’s determination on the Section 315(b) time-bar issue. On November 12, 2015, the Federal Circuit issued an order dismissing CTC’s appeal for lack of jurisdiction on the ground that the Board’s decisions to institute IPRs were "final and nonappealable" under 35 U.S.C. §314(d), pursuant to the holding in Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015). CTC petitioned for writ of certiorari, and the Supreme Court granted the petition, vacated the November 12, 2015, decision, and remanded for further consideration in light of the Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016). In the interim, the Federal Circuit issued its decision in Wi-Fi One, LLC v. Broadcom Corp., 837 F.3d 1329 (Fed. Cir. 2016), which held that Cuozzo did not overrule Achates and that later panels of the court remained bound by Achates. On November 17, 2016, the Federal Circuit dismissed CTC’s appeal for a second time. The Federal Circuit then reheard the Wi-Fi One case en banc, and issued a decision on January 8, 2018, expressly overruling Achates and holding that time-bar determinations under Section 315(b) were appealable. The court subsequently granted CTC’s request for a rehearing.

Section 315(b) and voluntary dismissals. The main question this time around was whether the Board erred in interpreting the language in Section 315(b) "served with a complaint alleging infringement of [a] patent" to mean that the voluntary dismissal without prejudice of the civil action in which the complaint was served did not trigger the bar. In the Federal Circuit’s view, it did. In a footnote (footnote 3), the opinion pointed out that the court had considered en banc whether 35 U.S.C. §315(b)’s time bar applied to bar institution when an IPR petitioner was served with a complaint for patent infringement more than one year before filing its petition, but the district court action in which the petitioner was so served was voluntarily dismissed without prejudice. The en banc court held that the time bar applied in such a scenario.

First, the court stated that the plain and unambiguous language of Section 315(b) referred to the service of a complaint, and it contained no exceptions or exemptions for complaints that were subsequently dismissed, with or without prejudice. According to the court, the time-bar was implicated once a party received notice through official delivery of a complaint in a civil action, regardless of what events took place afterward. The court explained that Section 315(b)’s time-bar concerned "real-world facts that limit the [USPTO’s] authority to act under the IPR scheme." The Board’s interpretation of the language would improperly add conditions not present in the statute.

Second, the court reviewed the legislative history, concluding that it provided further support for the proposition that the Section 315(b) time-bar concerned only the date on which the complaint was formally served. Statements during floor debates made it clear that service of the complaint was the relevant triggering event, and there was nothing to indicate that Congress contemplated subsequent events "nullifying" the time-bar.

Finally, the court deemed the Board’s contrary reasoning unpersuasive. "The Board misunderstood that the text of § 315(b) is agnostic as to the ‘effect’ of the service—i.e., what events transpired after the defendant was served," the court said. "The provision only probes whether the petitioner, real party in interest, or privy of the petitioner was served with a complaint alleging patent infringement more than one year before the IPR petition was filed. We reject the Board’s interpretation of § 315(b) for this reason alone." The court went on to explain that the Board also interpreted Federal Circuit precedent incorrectly because that precedent did not refer to service of a complaint being nullified by a dismissal, particularly when service was an event that triggered an administrative time bar, which was not at issue in the cases cited by the Board.

Petitioner’s alternative arguments. The petitioners made two alternative arguments that the IPR petition was not time-barred, both of which were rejected by the court. First, they contended that because the patent claims were materially changed during a subsequent ex parte examination, no one had been served with a complaint alleging infringement of the patent as altered. The court pointed out that reexamination did not result in surrender of the original patent and the issuance of a new patent, and explained that Section 315(b) did not speak in terms of claims or claim scope, but instead referred to the patent. In addition, the petitioners did not show that the amended or new claims were materially different from the original claims. Second, the petitioners argued that the time-bar should not apply to the petitioners who had not received service of the complaint in the earlier civil action because they were not in privity with any served parties. The court rejected this argument because the entities filing the IPR petition chose to refer to themselves as "the Petitioner" in their sole IPR petition. Therefore, they were properly treated as an undifferentiated unit for purposes of deciding the timeliness of the petition.

Accordingly, the IPR was not instituted properly, and the court vacated the Board’s final written decision.

Dissenting opinion. Circuit Judges Timothy B. Dyk and Alan D. Lourie dissented from the en banc holding in footnote 3. In their view, the en banc issue in this case was whether the time bar of Section 315(b) applied when a petitioner was served with a complaint more than one year before the IPR petition, but the complaint was dismissed without prejudice. In Judges Dyk and Lourie’s view, the meaning of "service of a complaint" was not on its face unambiguous, and the statutory language did not by itself determine whether the complaint could include a complaint later voluntarily dismissed without prejudice. They pointed out that courts typically treated voluntary dismissals without prejudice as restoring the parties to the situation that existed before the case had ever been brought.

"This widespread treatment of voluntary dismissals without prejudice provided the background for the enactment of section 315(b)," the dissenting judges said, "and section 315(b) must be read in light of that background legal principle, so that the one year time-bar is not triggered if the underlying infringement action is voluntarily dismissed without prejudice."

This case is No. 15-1242.

Attorneys: Peter J. Ayers (Law Office of Peter J. Ayers) for Click-to-Call Technologies, LP. Stanley Joseph Panikowski, III (DLA Piper US LLP) for Ingenio, Inc. and YellowPages.com, LLC.

Companies: Click-to-Call Technologies, LP; Ingenio, Inc.; YellowPages.com, LLC

MainStory: TopStory Patent FedCirNews

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