Recently the Patent Trial and Appeal Board (Board) at the United States Patent and Trademark Office (USPTO) denied institution in two separate inter partes review (IPR) challenges. IPR2016-01441 (relating to U.S. Patent No. 8,225,408) and IPR2016-01443 (relating to U.S. Patent No. 8,677,494). Both IPR petitions were filed by Blue Coat Systems, LLC, against Finjan, Inc. In both instances the Board found that the Blue Coat IPR petitions were harassing and denied institution.
“We are encouraged by the PTAB’s comprehensive decisions denying both of Blue Coat’s petitions. The PTAB is spot on to recognize that piecemeal and serial challenges to Finjan’s patents — or any others’ valid patents — are not only harassing, but also contrary to ‘Congress’ intent in enacting the Leahy-Smith America Invents Act,'” commented Julie Mar-Spinola, CIPO of Finjan Holdings. “This is an instance where the USPTO truly met its objective to ‘take into account the interests of justice and fairness to both petitioners and patent owners where multiple proceedings involving the same patent claims are before the Office.'”
Although two separate panels of the Board handled each case, the decisions were remarkably similar. Indeed, so similar were these decisions denying institution that it is surprising the same Administrative Patent Judge did not author both decisions. There was, however, overlap between the panels. APJ James Arpin and APJ Zhenyu Yang were on both panels. APJ Patrick Boucher wrote the decision in IPR2016-01441, while APJ Charles Boudreau wrote the decision in IPR2016-01443.
Each decision explained that other panels of the Board have considered a variety of factors in deciding whether to exercise discretion not to institute review, including, inter alia:
(1) the finite resources of the Board;
(2) the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than one year after the date on which the Director notices institution of review;
(3) whether the same petitioner previously filed a petition directed to the same claims of the same patent;
(4) whether, at the time of filing of the earlier petition, the petitioner knew of the prior art asserted in the later petition or should have known of it;4
(5) whether, at the time of filing of the later petition, the petitioner already received the patent owner’s preliminary response to the earlier petition or received the Board’s decision on whether to institute review in the earlier petition;
(6) the length of time that elapsed between the time the petitioner learned of the prior art asserted in the later petition and the filing of the later petition;
(7) whether the petitioner provides adequate explanation for the time elapsed between the filing dates of multiple petitions directed to the same claims of the same patent; and
(8) whether the same or substantially the same prior art or arguments previously were presented to the Office.
Explaining that these factors are but a guide, and that not all factors need to be present in order for the Board to exercise its discretion to refuse to institute a petition for inter partes review (IPR), the Board declined to institute both challenges. In the challenge to the ‘494 patent the Board specifically stated: “With these factors in mind and for the reasons that follow, we exercise our discretion and do not institute a review based on the instant Petition.”
In both cases the IPR challenge was the seventh petition filed against the patents. With respect to the ‘494 patent Blue Coat is already a party in two related proceedings, with respect to the ‘408 patent Blue Coat is already a party in one related proceeding.
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With respect to the third factor, the Board in both cases noted that the challenged claims are dependent upon claims that are already subject to an active proceeding. Thus, although the claims are different these petitions would require duplicative work given the need to consider base claims already being challenged in a related proceeding.
With respect to factors four, six and eight, the Board pointed out that the prior art presented by Blue Coat is virtually identical to the prior art presented in related cases. Further, the prior art is not late discovered art. In one case a journal article was published more than forty years ago and Blue Coat provided no reason why it did not or should not have been aware of that article, or that it was previously unavailable.
With respect to factors five and seven, the Board noted that these petitions were filed after related proceedings were instituted and Blue Coat provided insufficient reasons why it did not, or could not, have included challenges to these claims in those related cases. Blue Coat did attempt to argue that it could not have reasonably challenged these claims because it would have jeopardized their joinder request, but the Board pointed out that there is no compulsion to join any proceeding. Essentially, Blue Coat could have simply forgone joining the related proceedings and filed their own challenged, but they did not do that.
The Board also saw Blue Coat’s efforts for what they undoubtedly were – an attempt to harass Finjan. The Board explained relative to the ‘408 patent challenge:
Petitioner’s decision to limit the scope of its earlier challenges appears, instead, to have been a tactical one meant to improve its likelihood of success in joining IPR2015-02001 and IPR2016-00157. Thus, it is appropriate to consider the harassing impact that the resulting piecemeal challenges have on Patent Owner in defending its patent.
Ultimately, the Board said all of these considerations informed their analysis of the first two factors. The Board explained that their resources are better devoted to initial petitions rather than follow-on petitions.
These two decisions could mark a turning point in the maturation of the Board. At least several patent owners, including Finjan, are routinely subject to serial, harassing IPR challenges. The Patent Office doing something about harassing IPR challenges is long overdue. If the Director is not going to exercise the discretion vested in that Office by the America Invents Act (AIA) hopefully more panels of the Board will take it upon themselves to do just that. Patent owner harassment needs to stop. Patent owners shouldn’t have to be subjected to many dozens of IPR challenges before someone recognizes there is coordinated harassment – perhaps even collusion – against certain patent owners who have the audacity to want to be paid for blatant, ongoing, willful infringement.