Patentee Challenges PTAB Decision to Institute IPR Proceeding

Every time Congress has tasked the USPTO with conducting a new post grant patent proceeding the agency finds itself fending off legal challenges to their new authority. For ex parte patent reexamination, Ethicon v. Quigg explored whether or not the USPTO had authority to conduct such a reexamination in parallel to a district court proceeding. Thereafter, In re Swanson and In re Trans Texas Holdings explored topics such as issue preclusion and the appropriate threshold for granting an ex parte patent reexamination. Similarly, when inter partes reexamination was introduced Sony v. Dudas challenged the USPTO’s procedural treatment of these filings. Not surprisingly, now that the new patentability challenges of the America Invents Act (AIA) are being embraced by patent challengers the USPTO is seeing another flurry of lawsuits.

In early March, patentee Versata filed suit against the USPTO under the Administrative Procedure Act (APA) challenging the agency’s definition of a “covered business method,” and the ability to raise 101 as a statutory ground in a Covered Business Method (CBM) challenge. (101 is argued as not being embraced by 35 U.S.C. § 282, complaint here).

Last week, patentee Mentor Graphics also filed an APA action in the EDVA challenging the USPTO’s decision to institute an IPR on its patent and seeking an injunction to stop the proceeding. Mentor Graphics alleges that the petitioner should be barred by the 12 month window of 35 USC § 315(b) based on the fact that it acquired a company that was sued some years previously on their patent. (complaint here). The USPTO explained in the Trial Order that the patentee had not shown that the petitioner had exercised control over the previous litigation (i.e., privy), and, that in any event the acquisition occurred post IPR petition filing.

The prohibition of 315(b) is essentially a codification of a laches time bar. The policy behind the statute is to encourage litigants to come to the USPTO early in a litigation battle. Applying this laches prohibition to new parties of a new lawsuit would seem a difficult sell.