Supreme Court asked to apply Multiple Proceeding rule to end harassing validity challenges

By Gene Quinn
October 21, 2018

A recently filed Petition for Writ of Certiorari invites the United States Supreme Court to correct treatment of two critical sections of the AIA — 35 U.S.C. § 314(d) and 35 U.S.C. § 325(d) — by the United States Patent and Trademark Office (USPTO) and the Federal Circuit. If the Court takes the case it will clarify the proper role of AIA proceedings within the wider scheme of the patent system and determine whether title to a patent ever quiets, or whether it can be endlessly challenged in a never-ending series of duplicative challenges until the patent owner finally loses all rights. The case would require the Court to address the Multiple Proceedings rule.

The Multiple Proceedings rule, § 325(d), instructs the Patent Trial and Appeal Board (PTAB) to “take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office” when deciding whether to institute an inter partes review (IPR). But as petition explains forth, the PTAB has inconsistently and unpredictably treated § 325(d). For instance, the PTAB barred an IPR in another case when a particular prior-art reference had not been previously raised against the patent and the PTO had only conducted its original examination; yet in this case, the Board instituted the IPR even though the PTO had previously considered and rejected the same and similar references in several prior PTO reviews.

The Federal Circuit, for its part, has injected significant uncertainty into whether it will review PTAB rulings under the Multiple Proceedings rule, despite Congress’s stated intent that parties not file repetitive IPRs. Indeed, until recently, the Federal Circuit had indicated that the AIA’s judicial-bar provision, § 314(d), precludes review of all PTO institution decisions. Thus, shielding from the scrutiny of judicial review the duplicative challenges that the Multiple-Proceedings rule was specifically intended to prevent.

The case now before the Supreme Court on Petition for Writ of Certiorari dates back to 2000, when the Patent Office examined and granted U.S. Patent No. 6,158,011. Over the ensuing 16 years, the ’011 Patent produced some $22-million in infringement and licensing revenue. During that same time, the patent withstood scrutiny from nine PTO and judicial reviews challenging the patent’s validity. This included three PTO reexaminations, two PTO de novo reviews of those reexaminations, a district court jury verdict and judgment, and a 2014 precedential Federal Circuit decision. Each time the challenged claims of the ’011 patent was confirmed valid.

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In 2015, Petitioner SSL sued Respondent Cisco for infringing the ’011 Patent. Cisco responded by filing a request for inter partesreview at the PTAB, using the same prior art that the patent had already repeatedly overcome in those prior reviews. Yet, instead of denying Cisco’s request as duplicative and barred by the Multiple Proceedings rule, the PTAB decided to review the patent once more — the tenth review of the ’011 Patent’s validity. The PTAB made this decision to institute because previous Directors elected to delegate the institution decision to the PTAB itself. With the institution decision being delegated to the very people who will decide the petition it is hardly surprising that the Multiple Proceeding rule of 35 U.S.C. 325(d), which is intended to stop duplicative challenges has become a nullity. Equally unsurprisingly, the PTAB compounded this error by thereafter concluding what none of the other nine prior PTO or judicial reviews had: that the ’011 Patent was invalid as obvious over this same previously presented and rejected prior art.

In refusing to apply § 325(d), the PTAB emphasized that Cisco was not the same party that had prompted the PTO’s other prior reviews. But as the petition explains, this ruling ignores the statute’s text and structure, as well as Congress’s clear intent. Congress did not limit § 325(d) to blocking the same party from launching multiple validity challenges to the same patent — rather, § 325(d) applies so long as the “same or substantially the same prior art or arguments were previously presented to the [PTO].” And otherrelated provisions in the statute address and estop the same party from doing so. See 35 U.S.C. §§ 315(e), 325(e). Based on very basic canons of statutory construction the PTAB simply misinterpreted § 325(d). Had Congress intended § 325(d) to require the same party or real party in interest they could and would have used that language, which is used elsewhere within the AIA. That Congress did not require the same party and instead focused only on the same or similar prior art is dispositive, at least if one follows fundamental, well-established canons of statutory construction.

To the extent § 325(d) is ambiguous and one must look to the legislative history, Congressional intent couldn’t be any clearer. Congress explicitly proclaimed that it “recognizes the importance of quiet title to patent owners to ensure continued investment resources.” H.R. Rep. No. 98 Pt. 1, 112th Cong., 1st. Sess. at 48 (2011). And further, Congress did not want IPRs “to be used as tools for harassment … through repeated litigation and administrative attacks on the validity of a patent.” Id.

A tool for harassment is precisely what multiple challenges based on the same and similar prior art have become. This case is a testament to the concerns of Congress coming to fruition. Sadly, the PTO and Federal Circuit have not used the tools provided by Congress to protect patent owners from harassment by repeated litigation and administrative attack. And for this reason, a patent never enjoys quieted title.

The Federal Circuit declined to review the PTO’s § 325(d) ruling in this case despite the Supreme Court’s recent holding in SAS,specifying that PTO institution decisions are judicially reviewable if the challenge thereto does not require evaluating the merits of an IPR petition’s invalidity theory. And § 325(d) requires no such merits analysis; it merely asks whether the “same or substantially the same prior art or arguments were previously presented to the [PTO].” Thus, as the petition explains, the Federal Circuit here not only mistakenly declined to review the PTO’s § 325(d) ruling in this case; but also, has raised doubts and uncertainties as to its own standard for judicial review of the PTAB’s institution decisions

The Multiple Proceedings rule has become the essence of uncertainty. What exactly does it mean? §325(d) gives the PTO Director the authority to refuse a petition when “the same or substantially the same prior art or arguments” were previously presented. For IPRs like this one to proceed despite numerous prior rulings in various fora upholding a patent’s validity is a travesty.

The facts of this case underscore the mischief that can befall a patent owner under the current practice of the PTAB, enabled by the Federal Circuit.

What is happening at the PTO and Federal Circuit undermines one of the bedrock elements of our patent system: predictability. And in turn, this unpredictability puts at risk the incentives to innovate and invest in innovation — all of which the patent system has sought to foster and incentivize since our Nation’s inception. In short, if these rulings stand, it will frustrate the constitutional goals of the patent system: “To promote the progress of science and useful arts ….” U.S. CONST., Art. I, § 8.

The petition presents the following questions for the Supreme Court’s consideration:

  1. Whether courts may review an agency’s ruling on whether the § 325(d) Multiple-Proceedings rule applies and bars an IPR’s institution when (1) the analysis of whether that rule applies does not require an evaluation of the IPR’s invalidity merits; and (2) § 325(d) specifies criteria for the rule’s application, viz., that a prior PTO proceeding presented the “same or substantially the same prior art or arguments” as those in the IPR petition.
  2. Whether the Board erred in instituting an IPR notwithstanding 35 U.S.C. § 325(d) when (1) the same or substantially the same prior art and arguments in the IPR were presented to the PTO in multiple prior reviews; (2) the text of § 325(d) does not require that the same party have previously filed or participated in such prior PTO reviews, contrary to the Board’s standard; and (3) other AIA provisions address this “same party” or “estoppel” context.

Those concerned with this ruling and the failure of the PTO and Federal Circuit to stop never-ending and harassing challenges to the validity of a patent need to be heard. As I recently wrote, “[t]he fight goes on to invalidate claims until the patent owner loses and the claims are invalidated.” But that is precisely what the § 325(d) Multiple-Proceedings rule was intended to prevent. And this needs to stop.

Amicus briefs urging the Court to accept this case are due on or before November 13, 2018.

 

Image Source: Deposit Photos.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 4 Comments comments. Join the discussion.

  1. EG October 22, 2018 8:52 am

    Hey Gene,

    If SCOTUS had a sense of “justice” (if you detect sarcasm and skepticism in the use of that term, you would correct), they should grant this petition on the 325(d) question and answer “yes” to both questions. But given that SCOTUS authored Blonder-Tongue which essentially says the validity of the patent may be potentially challenged as many times as there are accused infringers (and where the current challenger isn’t in “privity” to other accused infringers who failed to show the patent to be invalid, no matter how many times that occurs), I wouldn’t hold my breath on this petition being granted.

  2. Paul Morgan October 22, 2018 9:11 am

    I wonder if a more effective recourse might have been a request for reconsideration of this issue by an expanded PTAB panel under the new directors new guidelines for that?

  3. Elliot October 22, 2018 9:57 am

    > the PTAB has inconsistently and unpredictably treated § 325(d)

    Not really. You slightly misquoted the law saying ” ‘The Multiple Proceedings rule, § 325(d), instructs the Patent Trial and Appeal Board (PTAB) to “take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office’ ”

    Yet the provision says “the Director MAY take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office.” The provision is not instructive, its permissive. There is no issue here, and this petition will go nowhere.

  4. Non Sequitur II October 22, 2018 1:36 pm

    As noted by Elliot @3, 325(d) is explicitly permissive. The director could simply ignore previously asserted arguments and prior art as a consideration, if he were so inclined. That being said, the Director still cannot make decisions that are arbitrary or capricious. However, it is hard to argue that limiting its applicability in this way is arbitrary, capricious, or an abuse of discretion. For this reason, an appeal to the Director himself to institute a different policy has a much greater likelihood of success.

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