Timeliness of IPR petition under §315(b) is an issue of whether to initiate the proceeding, and Board’s determination is nonappealable under §314(d), and the court cannot review it.

Sadao Kinashi | October 21, 2015

Achates Reference v. Apple Inc.,

September 30, 2015

CAFC Panel and Opinion Author: PROST, LOURIE and LINN (Author)

Summary

The patentee, Achates sued QuickOffice and others for patent infringement. One year later, Achates joined Apple as a codefendant. Several months later, Apple filed petitions for IPR in USPTO against each of the patents. Achates argued that Apple had a relationship with QuickOffice based on their blank indemnification agreement and that such relationship caused Apple’s petitions for IPR to be time-barred under 35 U.S.C. § 315(b). CAFC held that timeliness of the petition for IPR under §315(b) is an issue of whether to initiate the proceeding, and Board’s determination is nonappealable under §314(d), and the court cannot review it.
特許権者のAchates社は、QuickOffice社らに訴状を送達してから1年後にApple社を原告として追加した。数ヵ月後Apple社は米国特許庁に当事者系レビューの請求を提出した。Achates社は、Apple社は最初の被告QuickOfficeから賠償保証を受ける契約をしているので、QuickOfficeの関係者であり、当事者系レビューの請求は米国特許法315条(b)に規定する期限を徒過していると主張した。CAFCは、当事者系レビューの請求が、期限内に提出されたかどうかは、当事者系レビューを開始するかどうかに関する問題であり、審判部の決定は、314条(d)の規定により、裁判所が見直すことはできないと判示した。

Details

I. BACKGROUND
On June 20, 2011, Achates sued QuickOffice and other parties for infringement of patents. One year later, Achates joined Apple in the suit for infringement of the patents. On December 14, 2012, Apple filed petitions for IPR in USPTO against each of the patents
In responding to the petitions, Achates contended that Apple had a relationship with QuickOffice based on a blank indemnification agreement, and that such relationship caused Apple’s petitions for IPR to be time-barred under 35 U.S.C. § 315(b).

§ 315 (b) PATENT OWNER’S ACTION.–An 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. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

§ 314 (d) NO APPEAL.–The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.

35 U.S.C. §315(b) and §314(d).

Achates moved for discovery of evidence to prove Apple’s specific relationships with the codefendants. The Board denied the motion, finding no basis of the relationship under § 315(b) between Apple and QuickOffice.
The Board found that none of the codefendants were real parties in interest or privies of Apple. Specifically, the Board concluded that there was no evidence that any of the codefendants had “the right to intervene or control Apple’s defense to any charge of patent infringement” and that Apple and codefendants had “distinct interests in the related [district court] litigation.” Thus, the Board instituted IPR proceedings for the patents.
In its final written decisions, the Board reaffirmed its earlier decisions that the IPR proceedings were not time-barred. The Board ultimately invalidated all the challenged claims as either anticipated and/or obvious.
On appeal, Achates challenged the Board’s final decisions that Apple’s petitions were not time-barred under § 315(b). Achates did not appeal the Board’s decisions that the claims are invalid. Apple asserted that because the question is regarding the decision to initiate the IPR, the court lacks jurisdiction over the appeal under § 314(d). In the alternative, Apple argues that the Board’s decisions should be affirmed on the merits.

II. PRECEDENTS

Regarding reviewability of Director’s institution decision, CAFC especially referred to:

In re Cuozzo Speed Techs, 793 F.3d 1268 (Fed. Cir. 2015), and
Versata Dev. Grp., Inc. v. SAP America (“Versata II”), 793 F.3d 1306 (Fed. Cir. 2015).

In Cuozzo, CAFC declined to review the initiation decision, holding that § 314(d) also precludes review the issue in the final decision. (CAFC also stated that “the IPR statute does not limit the Board’s authority . . . to the grounds alleged in the IPR petition”).
In Versata II, the Board instituted the CBM (Covered Business Method) Review, and invalidated the patent stating that the challenged claims were directed to an “abstract idea,” and not patent-eligible under § 101.
In Versata II, CAFC distinguished the final decision on the merits and the initiation decision: “institution and invalidation are two distinct actions.” Then CAFC pointed out that although the issue of whether a patent is a CBM was first determined by the Director at the initiation stage, the same issue was necessarily implicated in the final merits determination and was appropriate for review because of the fundamental limitation of the Board’s “ultimate invalidation authority” in a CBM review to those patents that meet the CBM definition.
CAFC emphasized that the basis for review of the CBM issue in Versata II was that the issue fundamentally related to the Board’s “ultimate authority to invalidate” only CBM patents in a CBM review.

II. PRESENT CASE
USPTO and Apple argued that the Board’s decision that an IPR petition is timely is part of the determination on institution and is therefore nonappealable, even after the final written decision.
Achates argued that the question of whether Apple’s petition was time-barred is related to the Board’s ultimate authority to invalidate the patents, and therefore, like Versata II, is reviewable under §319.
CAFC agreed with Apple and USPTO that Versata II is limited to the unique circumstances of CBM review, the Board’s determination to initiate the IPRs in this case is not reviewable under §314(d).
CAFC held that §315(b) time bar does not impact the Board’s authority to invalidate a patent claim, and the Board may still invalidate a claim challenged in a time-barred petition via a properly-filed petition from another petitioner.
According to CAFC, §315(b) providing that “[t]he time limitation . . . shall not apply to a request for joinder under subsection (c)” means that an otherwise time-barred party may nonetheless participate in an inter partes review proceeding if another party files a proper petition.
The fact that the Board considered the time-bar in its final determination does not mean the issue suddenly becomes available for review or that the issue relates to the Board’s ultimate authority to invalidate.
CAFC thus held that 35 U.S.C. §314(d) prohibits CAFC from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of §315(b), even if such assessment is reconsidered during the merits phase of proceedings and restated as part of the Board’s final written decision.
Thus, CAFC dismissed the appeals.

Take Away:
Whether a petition of IPR is timely under §315(b) is just an issue of whether to initiate the proceeding, and Board’s determination is NOT reviewable by the court under §314(d).
Whether the patent is CBM is not just an issue of whether to initiate the proceeding but also it defines Board’s authority to invalidate the patent, thus the review of Board’s determination by the court is not barred under §314(d). Versata II.

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