Contributors: Akin Gump
PTAB: Informal Delivery of Complaint Does Not Start One-Year Clock for Filing IPR
by Matthew George Hartman & Rubén H. Muñoz
Patent Trial and Appeal Board, 35 U.S.C. § 315(b), Inter Partes Review.
A Patent Trial and Appeal Board (PTAB or Board) panel has determined that emailing a proposed amended complaint is not “service of a complaint” under 35 U.S.C. § 315(b).
On January 23, 2018, Aristocrat Technologies, Inc. (“Petitioner”) filed an inter partes review (IPR) challenging claims of U.S. Patent No. 9,022,852 (the “’852 Patent”), which is directed to a method of operating a slot machine. The owner of the ’852 Patent, High 5 Games, LLC (“Patent Owner”), had previously asserted the ’852 Patent against several defendants in district court, including Petitioner. Patent Owner first included claims alleging infringement of the ’852 Patent in its second amended complaint. Notably, before Patent Owner sought leave to file its second amended complaint, the Magistrate Judge recommended that Patent Owner send a redline version of its proposed amendments to the defendants, including Petitioner, to see if they would consent to the amendments. Pursuant to that recommendation, on December 1, 2016, Patent Owner circulated, via email, a redline version of its second amended complaint to the defendants. The defendants did not consent to the amendments and on December 23, 2016, Patent Owner sought leave from the court to file the second amended complaint. The district court granted leave and Patent Owner formally filed and served the second amended complaint on January 30, 2017.
Patent Owner argued in the IPR that the petition was time-barred under § 315(b) because Petitioner was served with a complaint on December 1, 2016, which is more than one year before the January 23, 2018, filing date of the petition. Relying on the Board’s precedential analysis in LG Electronics, Inc. v. Mondis Technology Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015), Patent Owner contended that the express language of § 315(b) requires only that the petitioner be served with “a” complaint, as happened here when Patent Owner emailed the proposed second amended complaint to Petitioner. The Board disagreed and distinguished LG Electronics by explaining that the factual situations and questions presented there were different. Specifically, the Board noted that in LG Electronics there was no dispute that there was valid service of the complaint. Moreover, rather than considering the present issue—namely, whether email delivery constituted “service of a complaint” at all—the Board in LG Electronics addressed whether a prior valid service can be obviated by a subsequent complaint or partial dismissal of a complaint. Because of these fundamental differences, the Board concluded that Patent Owner’s reliance on LG Electronics was misplaced.
The Board next considered the language of § 315(b) and determined that emailing a document styled as a proposed amended complaint, without authorization from the district court, was not “service” under the plain meaning of that term. In reaching its conclusion, the Board noted that the Federal Circuit has held that the plain meaning of the phrase “served with a complaint” in § 315(b) is “‘presented with a complaint’ or ‘delivered a complaint’ in a manner prescribed by law.” Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018) (emphasis added). The Board also referenced the Supreme Court’s “bedrock principle” that “a defendant is not obligated to engage in litigation unless . . . brought under a court’s authority by formal process.” Murphy Bros. v. Michetti Pipe Stringing, 526 U.S. 344, 347 (1999). Here, Petitioner did not receive formal process and was not officially a defendant in relation to the ’852 Patent by virtue of receiving Patent Owner’s email containing its proposed amended complaint. As such, Petitioner was not obligated to engage in litigation related to the ’852 Patent. Thus, Petitioner was not “served with a complaint” in a manner prescribed by law and its petition was not time-barred.
Practice Tip: When calculating the statutory one-year deadline to file an IPR under 35 U.S.C. § 315(b), parties should carefully scrutinize the specific circumstances surrounding service of a complaint. Presenting a complaint to a defendant in a lesser manner than that “prescribed by law” may not constitute service under the statute.
Aristocrat Techs., Inc. v. High 5 Games, LLC, IPR2018-00529, Paper 26 (PTAB July 29, 2019)
Withdrawal of Petitioner from IPR Proceeding All But Ensures Success in Contingent Motion to Amend
by Caitlin E. Olwell, Matthew George Hartman & Rubén H. Muñoz
Patent Trial and Appeal Board, Obviousness, Prior Art, Unpatentability, Inter Partes Review.
On remand from the Court of Appeals for the Federal Circuit, the Patent Trial and Appeal Board granted patent owner’s motion to amend on the basis that the totality of the record did not demonstrate by a preponderance of the evidence that patent owner’s proposed substitute claims were unpatentable.
The Board originally issued a final written decision in an inter partes review (IPR) proceeding, holding that the challenged claims of U.S. Patent No. 6,904,796 (the “’796 Patent”) were unpatentable as obvious or anticipated by the prior art. The ’796 Patent is directed to a tire positioning tool that is able to work with remote tire monitoring systems made by different manufacturers. In its final written decision, the Board denied patent owner’s motion to amend because patent owner failed to set forth a prima facie case for the relief it requested or satisfy its burden of proof to show patentability of the proposed substitute claims. Of relevance here, the Board determined that certain proposed substitute claims included a means-plus-function limitation that could not be construed, and therefore were indefinite under 35 U.S.C. § 112.
Patent owner appealed the Board’s decision, but petitioners never entered an appearance nor took part in the appeal. The Federal Circuit affirmed the Board’s findings of unpatentability of the original claims, but vacated and remanded the Board’s denial of patent owner’s motion to amend. The Federal Circuit explained that the Board erred in assigning the burden of proof to patent owner and, citing Aqua Products, Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017) reiterated that the Board must justify any finding of unpatentability by reference to the record in situations where the challenger has stopped participating in the proceeding and the Board proceeds to final judgment. The Federal Circuit later clarified that a petitioner bears the burden of proving that the proposed amended claims are unpatentable by a preponderance of the evidence. See Bosch Auto. Serv. Sols., LLC v. Iancu, Order on Petition for Panel Rehearing, No. 2015-1928 (Fed. Cir. Mar. 15, 2018).
On remand, the parties notified the Board that they had reached a settlement. Petitioners also informed the Board that they wished to withdraw from the IPR and would no longer oppose patent owner in the proceeding. The Board granted petitioners’ request to withdraw and treated such abandonment as a request for adverse judgment. Patent owner—the only party left in the proceeding—requested that the Board reconsider its proposed amended claims per the Federal Circuit’s guidance. Those amended claims included, inter alia, additional limitations reciting a “means for recording” and a “means for selecting.”
Turning to the proposed claims, the Board found that the additional limitations were responsive to the grounds of unpatentability involved in the IPR proceeding and that those limitations did not enlarge the scope of the claims of the ’796 Patent. See 37 C.F.R. § 42.121(a)(2)(i); 35 U.S.C. § 316(d)(3). The Board further held that the proposed substitute claims were adequately described in the ’796 Patent’s specification and did not introduce new subject matter. See 37 C.F.R. § 42.121(a)(2)(ii); 35 U.S.C. § 112 ¶ 1.
After determining that patent owner’s motion to amend met the pertinent statutory and regulatory requirements, the Board found that the totality of the record did not establish by a preponderance of the evidence that the proposed substitute claims were unpatentable. Relying on the Federal Circuit’s guidance, the Board emphasized its role in evaluating the patentability of the claims in light of the record and confirmed that patent owner does not bear the burden of proving that the substitute claims are patentable. And while the Board originally rejected certain proposed amended claims as indefinite under 35 U.S.C. § 112, the Board recognized that petitioners’ withdrawal from the IPR proceeding had changed the “facts and evidence on indefiniteness.” For instance, in light of petitioners’ request, the Board had expunged petitioners’ opposition to the motion to amend.
Thus, on the current record, the Board found that petitioners did not meet their burden to show by a preponderance of the evidence that the amended substitute claims were unpatentable as indefinite under 35 U.S.C. § 112. Consequently, the amended claims were deemed patentable.
Practice Tip: When a petitioner withdraws from an IPR proceeding, the Board may deny a motion to amend only if it justifies that finding of unpatentability by reference to the evidence of record. Thus, in cases where a patent owner may escape from the Board with substitute claims that can be asserted against future defendants, a patent owner may have an incentive to reach settlement with the IPR petitioner before a decision is final.
Autel U.S. Inc., and Autel Intelligent Technology Co. Ltd. v. Bosch Automotive Service Solutions LLC, Case IPR2014-00183, Paper 62 (Aug. 1, 2019)