One Bite At The Apple: PTAB Closes IPR Joinder Loophole

[Editor’s Note: This article is the first in a series of three.]

By John L. Strand and W. Brett Morrison

As a result of the America Invents Act enacted three years ago, the United States Patent Trial and Appeal Board (PTAB) now handles inter partes reviews (IPR)—a new trial proceeding used to challenge the validity of patent claims based on patents and printed publications. Recently, the PTAB has caused a split concerning the proper scope of the IPR joinder provision, which grants the PTAB discretion to join a “party” to a previously-instituted IPR. In the past, the PTAB interpreted the term “party” expansively to include petitioners for whom it had already instituted an IPR. Petitioners were quick to jump on this loophole, and have since sought to raise new arguments in an instituted IPR by filing a subsequent petition and seeking joinder with the in-progress proceeding.

This joinder loophole provided many enticing benefits. Notably, the IPR one-year time bar—which prohibits petitioners from petitioning for an IPR more than a year after a patentee serves a complaint on them—expressly does not apply to a request for joinder. Therefore, until recently, the IPR joinder provision was a procedural backdoor that allowed a petitioner to raise additional arguments of unpatentability more than a year after receipt of an infringement complaint. Additionally, the joinder loophole offered a mechanism to overcome a partial IPR institution by seeking joinder of a new petition that reasserts the previously rejected grounds of unpatentability. Petitioners could also use the joinder loophole to challenge patent claims added to a litigation after the initial IPR petition was filed.

Case #1 – Ariosa

The recent case Ariosa Diagnostics v. Isis Innovation Ltd.—involving a challenge to the validity of a patent covering a method of prenatal testing—provides an example of how the joinder loophole enabled reargument of previously rejected grounds for unpatentability. In Ariosa, decided on February 12, 2013, the PTAB instituted an IPR on several grounds, but denied institution on one ground regarding one claim. Not to be discouraged, Ariosa filed a subsequent petition and requested institution on the previously rejected ground. Ariosa concurrently moved to join this petition with the previously instituted IPR. The PTAB authorized joinder over the patent owner’s objection, interpreting the term “party” to cover both the joinder of a new party as well as the joinder of additional issues by a pre-existing party. In reaching this conclusion, the PTAB noted that the IPR joinder provision broadly authorizes the joinder of “any person.” As the statute lacks language directly prohibiting the joinder of issues by the same party, the PTAB concluded that a pre-existing party could seek joinder of a subsequently filed petition, allowing the petitioner to avoid the PTAB time bar.

Case #2 – Target

On September 25, 2014, an expanded PTAB panel reversed course and held that the IPR joinder provision does not authorize the joinder of a pre-existing party to an instituted proceeding. In Target Corp. v. Destination Maternity Corp.—a case involving a challenge to the validity of a patent covering a type of maternity clothing—the PTAB considered and rejected Ariosa’s interpretation, noting that the provision governs the joining of a petitioner as a party to an instituted inter partes review. The PTAB concluded that Target, as a pre-existing party to the proceeding, could not be joined as a party.

Takeaways

In light of the current procedural ambiguity, US practitioners should keep a few pointers in mind:

• Assume you will be limited to a single petition and thoroughly address all important arguments in that petition. The joinder of additional arguments or claims is not guaranteed and, after Target, seems unlikely.
• Begin planning IPR strategy as early as possible. You can no longer reasonably rely on the joinder loophole to get around the one year time-bar.
• Consider challenging claims that have not yet been asserted in the underlying patent litigation. If the patentee asserts additional claims more than one year after filing suit, you will likely be time-barred from challenging those claims via IPR.

The Target decision likely signals a shift in the PTAB’s interpretation of the IPR joinder provision. Since Target issued, additional PTAB decisions have rejected joinder of a pre-existing party. However, the current difference of opinion regarding joinder may only be resolved when a PTAB decision involving this issue is appealed to the United States Court of Appeals for the Federal Circuit, the appeals court in the United States that handles all patent appeals from trial courts across the US and the PTAB.

John Strand

Brett Morrison

John L. Strand is a shareholder and W. Brett Morrison is an associate in the Litigation Practice Group at the intellectual property law firm of Wolf, Greenfield & Sacks, PC in Boston, Massachusetts. John can be reached at John.Strand@wolfgreenfield.com and Brett can be reached at W.Brett.Morrison@wolfgreenfield.com.