Does 315(b) Codify Party Notice or Patent Notice?

Last summer, the Federal Circuit reversed the Patent Trial & Appeal Board’s (PTAB) practice of accepting IPR petitions as timely filed under 35 U.S.C. § 315(b) where a complaint for infringement was served outside of the one-year window, but dismissed without prejudice. Click-to-Call v. Ingenio   In its reversal, the Court reasoned that “the appropriate question is whether the voluntary, without prejudice dismissal of a civil action in which a complaint had been served nullifies an administrative time bar that is triggered by service of that complaint. It does not.”  As a result, IPR proceedings before the Board that had been instituted under that previous 315(b) exception have been terminated.

Since Click-to-Call, the question has been raised whether the 315(b) bar is triggered by a complaint for infringement of a patent where there is a question as to the ultimate patent owner, which causes the suit to be dismissed without prejudice and re-filed.

I don’t expect the Federal Circuit’s answer to be any different.

The issue was first presented to the Federal Circuit in Hamilton Beach Brands, Inc. v. f’real Foods, this past November.  However, the issue was not decided on procedural grounds (i.e., was raised late, not in a Cross-appeal).  A few weeks back, the PTAB considered the same issue in Sling TV, L.L.C. et al. v. Realtime Adaptive Streaming, LLC, IPR2018-01331, Paper 9 (PTAB January 31, 2019).

In Sling, Realtime Data LLC (“Realtime Data”) filed a complaint on June 6, 2017 naming Sling and alleging infringement of the subject patent. When Realtime Data filed its complaint, however, it did not own the patent, because it had previously recorded an assignment to Realtime Adaptive Streaming on March 7, 2017.  Realtime Data thus voluntarily dismissed the complaint without prejudice, and on October 10, 2017, re-filed.  In an attempt to avoid termination under Click-to-Call, petitioner argued that “Click-to-Call was not controlling because the entity that filed the June 2017 complaint, did not own the patent and thus “did not have standing to file the complaint in the first place.”

In accepting this new distinction to the 315(b) bar, the Board explained (here):

Section 315(b) specifies that the time bar is triggered when “the petitioner is served with a complaint alleging infringement of the patent.” Although the statute’s text is not explicit as to who must file and serve the complaint, § 315(b) is titled “Patent Owner’s Action,” thus suggesting that only service of a patent owner’s complaint triggers the one-year time bar. .  .   .Section 315(b)’s legislative history suggests Congress envisioned that only a patent owner’s complaint would trigger the time bar:

While it is certainly true that headings of the AIA statutes distinguish between “Patent Owners” and “Infringers,” I’m not sure that those labels are designed to do any more than identify the opposing sides of a patent dispute. The Board’s cited legislative history would appear to little more than apply these traditional labels.

Click-to-Call emphasized that the 315(b) bar is designed to force petitioners into action upon notice of the patent. The majority explained, “[s]imply put, § 315(b)’s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events.” And that “[t]he legislative history also clarifies that Congress chose the date of service, as opposed to some other event, as the trigger for § 315(b)’s time bar because service of a complaint is the seminal notice-conferring event in a district court action.”

As pointed out in Judge Taranto’s concurrence, the legislative history makes clear that the one year window was designed to thwart Patent Owner harassment by limiting the time for filing an IPR, citing 157 Cong. Rec. S5429 (daily ed.Sept. 8, 2011) (statement of Sen. Kyl) (stating that the “section 315(b) deadline afford[s] defendants a reasonable opportunity to identify and understand the patent claims that are relevant to the litigation”); H.R. Rep. No. 112-98, at 48 (2011), reprinted in 2011 U.S.C.C.A.N. 67, 78 (expressing concern about use of IPR proceedings as a “tool[] for harassment” by “repeated litigation and administrative attacks”).

Patent suits are routinely brought by exclusive licensees, not the ultimate “patent owners.” Congress certainly was aware of this common practice and there is no indication it was seeking to exclude such suits from the protections of 315(b). If notice of a complaint were nullified by a particular Plaintiff, such as the exclusive licensee, some defendants would have far more than a reasonable opportunity to identify and understand the patent claims — they’d have an unlimited IPR filing window.