By Reza Mollaaghababa

Under 35 U.S.C. §314(a), the PTAB has discretion to deny institution of an inter partes review. Cuozzo Speed Techs, LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (”[T]he agency’s decision to deny a petition is a matter committed to the Patent Office’s discretion”).  The PTAB is increasingly relying on its discretion to deny institution of IPR challenges to patents.  In some cases, the PTAB has denied institution of a follow-on petition that presented substantially similar grounds as those presented in an earlier petition, even when filed by a different petitioner.  In other cases, the PTAB has denied institution of an IPR challenge reasoning that institution in view of the advanced stage of a parallel district court trial would not be efficient use of the Board’s and the court’s resources. In other cases, the PTAB has denied institution in cases where it deemed only a small subset of petitioner’s arguments would be likely to establish invalidity of challenged claims.

In April, 2019, the PTAB denied three requests by Valve Corporation (“Valve”) for institution of IPR reviews of U.S. Patent No. 9,235,934 of Electronic Scripting Products, Inc. (“Patent Owner”).  In its decision, the PTAB noted that Valve was not the first party to request IPR review of the ‘934 patent. In particular, HTC corporation and HTC America, Inc. (“HTC”) had previously filed a petition requesting IPR review of the ‘934 patent. Valve filed its petitions after the PTAB’s denial of HTC’s petition for failing to establish a reasonable likelihood of prevailing in establishing the unpatentability of at least one claim of the patent.

The PTAB noted that HTC and Valve were named as co-defendants in a patent infringement lawsuit filed by the Patent Owner alleging that HTC’s devices that incorporate Valve’s technology infringed the ‘934 patent.  In response to Valve’s motion challenging venue, however, the Patent Owner voluntarily dismissed Valve without prejudice. 

The PTAB considered the factors previously set forth in General Plastic Industrial Co. Ltd. V. Cannon Kabushiki Kiasha (IPR2016-01357) for determining whether the PTAB should exercise its discretion to deny a petition that challenges the same patent as a previous petition.  The PTAB in this case emphasized that the application of “the General Plastic factors is not limited solely to instances when multiple petitions are filed by the same petitioner.”  Rather, when different petitioners challenge the same patent, the Board will consider any relationship between those petitioners when weighing the General Plastic factors.  The PTAB held  that “a significant relationship between Valve and HTC with respect to Patent Owner’s assertion of the ‘934 patent” and the “… complete overlap in the challenged claims …” favored denying institution.

Further, the PTAB asserted that Valve either knew about or could have found the new reference cited by in its petition with exercise of reasonable diligence around the time of HTC’s petition. So, the second factor of General Plastic also weighed against institution.

With regard to the third General Plastic factor, the PTAB held that Valve’s access to the PTAB’s institution decision with respect to HTC’s petition before Valve filed its own petition also weighed against institution.

With respect to the “length of time elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition” (factors four and five of General Plastic), the five month delay between the filing of HTC’s petition and Valve’s petition weighed against institution.

Finally, with respect to the sixth and seventh General Plastic factors, the PTAB held that “[i]n general, having multiple petitions challenging the same patent, especially when not filed at or around the same time as in this case is inefficient and tends to waste resources.” 

Accordingly, the PTAB concluded that all General Plastic factors weighed against institution.

In E-One, Inc. v. Oshkosh Corporation, the PTAB denied institution of E-One’s petition challenging validity of certain claims of Oshkosh’s U.S. Patent No. 9,597,536, directed to a fire truck configuration, based on “the overlap between the Petition and the parallel District Court case, and the progress and expected completion date of the Parallel District Court Case.”  The PTAB noted that the “Parallel District Court Case is scheduled to conclude before a final decision would be due in this proceeding …”  The PTAB further justified its denial of institution by noting that the “issues, evidence and argument presented in the Petition essentially duplicate what has been and continues to be litigated in the Parallel District Court Case,” and the District Court had already invested substantial resources in resolving the issues.

On November 12, 2018, Comcast Cable Communications LLC  filed six petitions challenging Claims 1-20 of Rovi Technologies Corporation’s U.S. Patent No. 9,587,363.  The PTAB instituted a trial based on of the petitions, but denied institution of the other petitions.  The Board emphasized: “[i]n considering a balanced assessment of all relevant circumstances in these proceedings, we not persuaded by Petitioner that institution of additional, concurrent proceedings would promote the efficient administration of the Office or the integrity of the system.”

Further, following last year’s U.S. Supreme Court’s decision in SAS Institute v. Iancu, which required that the PTAB either deny institution or institute review of all challenged claims, the Board has used its discretion to deny the institution of an IPR review in cases where it deemed only a small subset of the petitioner’s arguments would reasonably establish invalidity of the respective claims.  The recent PTAB’s cases in which the Board has used its discretion to deny institution of inter partes review provide patent owners with additional tools in defending a challenged patent.  The PTAB appears to be receptive to arguments regarding unfairness of lodging multiple, substantially similar, sequential challenges against the same patent.  Further, the advanced stage of an underlying district court infringement case can weigh against institution of an IPR review of a patent asserted in that case.  In this regard, defendants in patent infringement cases would be advised to consider filing IPR challenges before the district court has expended substantial resources in considering validity issues.  Further, a patent owner who can convince the PTAB that the majority of invalidity grounds put forth by a petitioner are unconvincing may be able to persuade the PTAB to use its discretion to deny institution.