No. 2015-1944, --- F.3d ----, 2018 WL 313065 (Fed. Cir. Jan. 8, 2018)
Patent owners, take note: The Federal Circuit has lifted the bar on appealing the Patent Trial and Appeal Board’s time-bar determinations in inter partes review (“IPR”) proceedings. See Wi-Fi One, LLC v. Broadcom Corp., No. 2015-1944, --- F.3d ---, 2018 WL 313065 (Fed. Cir. Jan. 8, 2018) (en banc).
Under the 2011 America Invents Act’s IPR provisions, a person may file with the Patent and Trademark Office a petition to institute an IPR of a patent. “IPR and other post-grant proceedings are intended to be quick and cost effective alternatives to litigation for third parties to challenge the patentability of issued claims.” Wi-Fi One, 2018 WL 313065, at *1. The statute provides, in 35 U.S.C. § 314, that the PTO Director may allow an IPR to be instituted—that is, may grant the petition—only if the petition “shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” Id. § 314(a). The Supreme Court has found that even if this threshold is met, the Director has the discretion to deny the petition. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016). The Cuozzo Court held that pursuant to § 314(d), the Director’s decision whether to authorize the institution of an IPR is final and, with a few caveats, nonappealable. Id. at 2137, 2142. This holding formed the backdrop for the Federal Circuit’s recent en banc opinion in Wi-Fi One.
Wi-Fi One concerned the interaction between § 314(d)’s “No Appeal” provision and the time bar imposed by a different section, § 315(b). § 315(b) provides that an IPR “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.” In Wi-Fi One, the patent owner (initially Telefonaktiebolaget LM Ericsson, but ownership transferred to Wi-Fi One, LLC during the IPR) sought to block Broadcom Corp.’s petitions to initiate an IPR to invalidate three patents. Ericsson/Wi-Fi One argued that the Director lacked authority to institute IPR because the action was time-barred under § 315(b). 2018 WL 313065, at *4. The IPR went forward over the patent owner’s protests, and the PTAB ultimately found, in its Final Written Decisions, that the petitions were not time-barred. Id. A panel of the Federal Circuit first found that under binding circuit precedent the PTAB’s time-bar decision was nonappealable. The court then convened en banc and overruled the cited precedent (Achates Reference Pub’g, Inc. v. Apple Inc., 803 F.3d 652, 658 (Fed. Cir. 2015)). 2018 WL 313065, at *8. The en banc court held that a § 315(b) time-bar determination did not fall within § 314(d) and could be appealed. Id. at *5, *8. The en banc court remanded the case to the panel to determine the merits of the time-bar appeal.
The en banc Wi-Fi One decision raises several questions patent owners may want to consider.
First, what will the practical effects of the decision be on IPR participants? IPR is meant to be an efficient and economical way to challenge patents. See Cuozzo, 136 S. Ct. at 2144; Wi-Fi One, 2018 WL 313065, at *1. By opening up judicial review to time-bar determinations, will Wi-Fi One expand the amounts of time and money parties expend in IPR proceedings? At first glance, one might think a time-bar determination should be relatively uncomplicated. The concurring opinion in Wi-Fi One characterizes § 315(b) as “simply plac[ing] a limit on the PTO’s authority to institute IPRs that is based on a comparison of two or more dates.” 2018 WL 313065, at *10 (O’Malley, J., concurring). The facts of Wi-Fi One suggest that in practice, the analysis may be more complicated than a clear-cut date comparison. As noted, Broadcom petitioned for IPR of three of Ericsson’s (later Wi-Fi One’s) patents. See id. at *3-*4. Earlier, Ericsson had sued 10 companies for infringement of those patents, and in the IPR proceeding, Wi-Fi One argued that Broadcom—which was never a defendant in the Ericsson patent infringement case—was nonetheless time-barred because it was in privity with some of those defendants. Id. As this summary suggests, the time-bar question may not always be so simple as comparing dates and may provide fodder for appeals. And thus the opportunity to appeal § 315(b) determinations may extend the life—and costs—of IPR proceedings.
Another question: How and when can a patent owner show that a petition is time-barred? Ericsson/Wi-Fi One raised § 315(b) early on, in its responses to Broadcom’s petitions, and it sought discovery to support its privity theory. 2018 WL 313065, at *4. But the PTAB denied discovery on the grounds that Ericsson/Wi-Fi One had not shown “more than a ‘mere possibility’ of uncovering useful information related to privity.” In re Telefonaktiebolaget LM Ericsson, 564 F. App’x 585, 586 (Fed. Cir. 2014). Ericsson/Wi-Fi One unsuccessfully attempted to override that denial in federal court. See id. So it was perhaps no surprise when, after instituting the IPR having denied the discovery motion, the PTAB found that the petitions were not time-barred. Reflecting on this history, a patent-owner/respondent might consider how best to make its initial factual showing that § 315(b) applies. If discovery would be helpful, what type of information would be helpful? And how can the respondent best make the case for seeking discovery under PTAB trial practice regulations?
Last, who does this interpretation of the law benefit—petitioners or patent owners? The answer appears complex. For instance, patent owners might consider whether the ability to raise, and then preserve for appeal, a § 315(b) argument gives them some cover if they disagree with the PTAB’s ultimate patentability determination. Petitioners might see benefits too. The Wi-Fi One decision noted that the PTAB may decide the § 315(b) question upfront, in the institution stage. 2018 WL 313065, at *6. If a petition is denied upfront on § 315(b) grounds, the petitioner might value having the opportunity to appeal that determination.