The US Court docket of Appeals for the Federal Circuit discovered that ex parte reexamination was unavailable to a challenger who repeatedly tried and failed to boost the identical arguments for a similar patent in a previous inter partes evaluate (IPR) continuing. In re: Vivint, Inc., Case No. 20-1992 (Fed. Cir. Sept. 29, 2021) (Moore, C.J.)
Vivint sued Alarm.com in 2015 for infringement of a number of patents. In response, Alarm requested that the Patent Trial & Enchantment Board (PTAB) institute “a litany of post-issuance review proceedings,” together with three separate IPR petitions directed to one of many patents. The PTAB refused to institute two of the petitions as a result of Alarm failed present to an affordable chance that it could prevail on no less than one challenged declare and in addition refused to institute the third petition as a result of it represented an instance of “undesirable, incremental petitioning.” In response to the PTAB, Alarm had “used prior Board decisions as a roadmap to correct past deficiencies” and permitting such “similar, serial challenges to the same patent” by the identical challenger risked, not solely harassment of patent homeowners, but additionally frustration of congressional intent behind the America Invents Act (AIA).
Greater than a yr later, Alarm filed a request for ex parte reexamination of the patent—a request that used repackaged variations of arguments from its unsuccessful IPR petition. Regardless of the placing similarity between Alarm’s prior and present arguments, together with two out of the 4 unique IPR patentability questions being copied verbatim from the failed petition into the ex parte reexamination request, the PTAB discovered the petition raised substantial new questions of patentability and ordered reexamination. Vivint responded by searching for dismissal of the ex parte reexamination underneath 37 C.F.R. § 1.181, arguing that the PTAB has the authority underneath 35 U.S.C § 325(d) to disclaim the ex parte reexamination request as a result of that statute applies to ex parte reexaminations and IPRs with “equal force.” The PTAB rejected Vivint’s request, stating that any § 1.181 petition elevating a § 325(d) problem have to be filed earlier than reexamination is ordered.
Vivint filed a second § 1.181 petition searching for reconsideration of the § 325(d) difficulty, arguing that it could have been inconceivable for Vivint to file the § 1.181 petition earlier than ex parte reexamination was ordered. Vivint additionally argued that even when the PTAB lacked normal authority to terminate the reexamination, it might train such authority underneath the Administrative Process Act (APA). Vivint additionally asserted that the PTAB “acted arbitrarily and capriciously by applying the same law to the same facts and reaching a different conclusion.” The PTAB rejected Vivint’s arguments and denied its second petition, discovering that Vivint might have sought a waiver of the principles having to do with the required prior-to-ex parte timing of a § 1.181 petition vis-à-vis establishment of ex parte reexamination. The PTAB additionally famous that ex parte reexamination was not inconsistent with denying the preliminary IPR. Finally, after an examiner issued a last rejection for all claims of the patent, Vivint appealed to the PTAB. The PTAB affirmed and Vivint appealed to the Federal Circuit.
On attraction, the Federal Circuit defined that when an ex parte reexamination request presents a considerable new query of patentability, the US Patent & Trademark Workplace (PTO) “may . . . reject the . . . request because the same or substantially the same prior art or arguments previously were presented to” it. The Court docket agreed with Vivint’s argument that the PTAB abused its discretion and acted arbitrarily and capriciously by ordering reexamination and, thereafter, refusing to terminate it. The Court docket acknowledged that abuse of discretion by an company is a call that, “(1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the [agency] could rationally base its decision.” Moreover, a capricious and arbitrary choice “fails to articulate a rational connection between the facts found and the choice made.”
The Federal Circuit discovered that the PTAB’s § 325(d) willpower was contaminated by the authorized error of narrowly decoding its authority to rethink orders granting reexamination. The Court docket acknowledged that, in mild of the failed IPR, it was “arbitrary and capricious” for the PTAB to order reexamination over § 325(d) or, at minimal, refuse to terminate reexamination as soon as Vivint requested it accomplish that. The Court docket defined that the PTAB’s authority to rethink its choice ordering ex parte reexamination is inherent in its potential to resolve issues of reexamination within the first place. The Court docket acknowledged that this similar precept has been utilized within the case of IPR petitions, the place the Court docket held that the PTAB has the authority to rethink IPR establishment choices. The Court docket additionally discovered that the PTAB’s second denial of Vivint’s § 1.181 petition was contaminated with the identical kind of authorized error.
Thus, the Federal Circuit summarized that after the initially denied IPR at difficulty, it was unreasonable for the PTO to order ex parte reexamination and, as soon as ordered, to refuse to terminate it. The Court docket additionally discovered that § 325(d) applies to IPR petitions in addition to requests for ex parte reexamination. Thus, when making use of § 325(d), the PTAB can not deny establishment of IPR based mostly on abusive submitting practices after which grant an almost similar reexamination request. The Court docket defined that “nothing short of termination of the reexamination would be appropriate,” and due to this fact vacated and remanded with directions to dismiss the continuing.
Follow Observe: As demonstrated by this case, making the identical or practically the identical arguments in a number of patent challenges is more likely to be futile. Practitioners and patent challengers are well-advised to at all times put their strongest, most thorough arguments ahead every time and keep away from duplicating arguments between IPR and ex parte reexamination petitions.