The Patent Trial and Appeal Board has extended an olive branch to patent owners last week just as a constitutional challenge to its existence began heating up in the Supreme Court.
With Chief Judge David Ruschke and Deputy Chief Judge Scott Boalick signing on to the decision, the PTAB made clear in a decision this past week that it will no longer tolerate multiple, serial petitions for inter partes review (IPR) that target the same patent claims. Serial petitions are a hot-button issue for patent owners, many of whom feel besieged by the administrative procedures set up by the America Invents Act (AIA) to determine patent validity.
“We are mindful of the goals of the AIA—namely, to improve patent quality and make the patent system more efficient,” Judge Sheila McShane wrote in General Plastic Industrial v. Canon Kabushiki Kaisha, issued by the PTAB on Sept. 6. But “we also recognize the potential for abuse of the review process by repeated attacks on patents.”
The AIA allows anyone sued for patent infringement to petition for inter partes review for one year. The board is required to say within six months whether it will launch a review of challenged claims. Patent owners have complained that some petitioners hold arguments in reserve, then use the board’s decision denying institution as a guide to filing a new petition.
McShane’s decision says the board won’t accept such gamesmanship in the future without good cause. “Multiple, staggered petitions challenging the same patent and same claims raise the potential for abuse,” she wrote. “The absence of any restrictions on follow-on petitions would allow petitioners the opportunity to strategically stage their prior art and arguments in multiple petitions, using our decisions as a roadmap, until a ground is found that results in the grant of review.”
Michael Sandonato, one of three Fitzpatrick, Cella, Harper & Scinto attorneys who defended Canon’s patents before the board, said in a written statement that he was pleased that a panel including top PTAB leadership found the staggered filings were inappropriate. “The patents at issue protect important Canon technology, and we are heartened that the board is not allowing General Plastic to challenge them in unfair ways,” he said.
General Plastic was represented by Locke Lord, which had argued that the AIA permits multiple petitions so long as they’re not based on the same previous arguments and prior art. The denial of a first petition “should not be fatal” if petitioners can later locate new invalidating art, they argued.
Patent owners have been vocal about the issue. Former PTO Director Michelle Lee had promised a review earlier this year before her tenure ended abruptly, and the PTO’s Patent Public Advisory Committee gave Ruschke an earful about serial petitions at its May meeting.
The board is facing a more existential threat right now at the Supreme Court, where the justices are gearing up to hear a constitutional challenge to inter partes review this fall or early next year. Over the last two weeks major pharmaceutical, industrial and agriculture companies submitted amicus curiae briefs calling on the high court to end IPRs and send all patent validity challenges back to federal court. Conservative think tanks have weighed in against the PTAB too.
Ironically, one of the issues patent owners have groused about in briefing to the Supreme Court is the PTAB’s habit of stacking some panels with additional judges. Two judges of the U.S. Court of Appeals for the Federal Circuit recently penned a concurring opinion to express “serious concerns” about the practice.
In General Plastic the board reasserted the chief judge’s authority to expand a panel for various reasons, including “the exceptional nature of the issues presented,” such as serial petitioning. The panel started with five judges—more than the usual three—because it involved five consolidated IPR petitions. Then Ruschke and Boalick joined in the decision to deny rehearing and set out ground rules for serial petitions.
Ropes & Gray partner Scott McKeown recently analyzed expanded panels at the PTAB and found they occur in only about .5 percent of cases. He concluded that they’re used to secure uniformity of decisions, not to reach particular results.