Abusive Reexam Relief

Late last month, in In re Vivint, Inc., the Federal Circuit tackled the question of whether a post-issuance review proceeding (in this case, ex parte reexamination (“EPR”)) was available to a challenger that repeatedly filed another post-issuance review proceeding (in this case, inter partes review (“IPR”)) to forward the very same argument. The court held that, while the EPR request had shown substantial new questions of patentability, “the Patent Office abused its discretion and acted arbitrarily and capriciously under § 325(d).” As such the court vacated the decision and remanded to the Patent Office (“PTO”) with instructions to dismiss.

But, don’t expect this decision to be much more than a corner case.


Vivint had sued Alarm.com for infringing four of its patents, including the ’513 patent (the only patent at issue on appeal). In response, Alarm.com filed fourteen IPR petitions, three of which (the ’997, ’129, and ’091 petitions) involved challenges to the ’513 patent. The PTO declined to institute IPR for any of the ’513 patent petitions. For the ’997 and ’129 petitions, the PTO determined there was not a reasonable likelihood that Alarm.com would prevail on at least one challenged claim. For the ’091 petition, however, the PTO declined institution based on Alarm.com’s “undesirable, incremental petitioning,” which created a risk of “harassment of patent owners and frustration of Congress’s intent in enacting the Leahy-Smith America Invents Act.” Thus, the PTAB exercised its discretion to deny institution of the ’091 petition.

Over a year later, Alarm.com requested EPR of the ’513 patent. The request raised four questions of patentability, which largely recycled—and even “copied, almost word for word”— arguments raised in the ’091 petition. However, the PTO ordered EPR of the ’513 patent because the “references were presented in a new light” and thus raised substantial new questions of patentability, despite the previous IPR petitions.

Vivint then petitioned for dismissal of the EPR, arguing that the PTO should exercise its discretion under 35 U.S.C. § 325(d) and that it was arbitrary and capricious for the PTO to deny IPR but order EPR while “applying the same law to the same facts.” The PTO denied Vivint’s petitions, stating that, among other reasons, it “had no authority to consider petitions filed after [EPR] was ordered” because it “is required by statute to conduct reexamination” once the EPR order issued. The ’513 was ultimately held invalid, and Vivint appealed.

The Federal Circuit Holding

The Court first addressed Vivint’s argument that Alarm.com’s EPR request did not present a “substantial new question of patentability.” The court rejected Vivint’s argument here, holding that Alarm.com’s request for EPR raised four questions of patentability, all of which presented substantially new questions of patentability because “[i]n each case, the [PTO] has never considered the relevant question of patentability on the merits.”

The court then addressed Vivint’s argument that the PTO abused its discretion under § 325(d) and “acted arbitrarily and capriciously by ordering [EPR], and thereafter, refusing to terminate that proceeding.” As to this argument, the court agreed. Under § 325(d), the PTO may reject a request for EPR if “the same or substantially the same prior art or arguments previously were presented to” it. The court held that the PTO committed legal error by too narrowly interpreting its authority under § 325(d), and then acted arbitrarily and capriciously in ordering the EPR (or at minimum, refusing to terminate the EPR once ordered) despite its previous decision and reasoning for not instituting the ’091 IPR petition. As the court stated, that legal error “infected” the PTO’s analysis. The court stated that there was “nothing in the statutes or regulations preventing the [PTO] from reconsidering a decision ordering [EPR],” and thus, the PTO abused its discretion by concluding otherwise.

The court then explained that while it would normally vacate and remand for the PTO to exercise its authority accordingly, the court said “[d]oing so in this case would be a waste of everyone’s resources” because “[i]t would be arbitrary and capricious for the [PTO] to do anything on remand other than terminate the [EPR].” The court then discussed Alarm.com’s “abusive filing practices,” which guided the PTO’s decision denying institution of the ’091 IPR petition. Alarm.com’s request for EPR had “copied, word-for-word, two grounds from the ’091 petition,” “used prior Board decisions as a roadmap to correct past deficiencies,” and was the “fourth iteration” in a string of “undesirable, incremental” abusive petitioning practices. In fact, Alarm.com’s EPR request “was a more egregious abuse than the ’091 petition under the same considerations already analyzed by the [PTO].” And although the PTO “ostensibly applied § 314(a) to deny institution, it actually relied on § 325(d) considerations for its core analysis.” “It was, therefore, arbitrary for the [PTO] to grant [EPR] after denying institution of the ’091 IPR based on § 325(d).”

The court ended by explaining that its holding was “narrow” and “limited.” The court expressly acknowledged that the Director may order EPR on his “own initiative” under § 303(a), where § 325(d) discretion is inapplicable. The court further acknowledged scenarios where the Director may “may set forth a reasoned basis for exercising his § 325(d) discretion” even in light of abusive filing practices. As such, the court was “not holding that the Director may never launch [an EPR] even when a particular challenger has engaged in improper serial filing.” Rather, the court was merely holding that since § 325(d) applies to both IPR and EPR, the PTO cannot apply it to deny IPR based on abusive filing practices but then order a nearly identical EPR that is even more abusive. “We see no difference between the IPR and [EPR] processes that would justify such conduct and nothing short of termination of the [EPR] would be appropriate.”

What is New?

Applying 325(d) in the context of EPR is not new to practitioners.  The only real change here is that the petition to the Office to terminate the reexamination proceeding no longer has to be filed prior to the Reexamination Order (although it will remain a best practice to do so).  As to the breadth of the Court’s holding, the facts here were fairly unique given the previous IPR denial was based itself on improper conduct (parallel petitioning), and the exact same arguments were refiled years later.  Given the arbitrary and capricious standard for reversing such PTO decisions on appeal, I would not expect to see too many successful arguments on this point going forward— whether EPR or IPR.