Jun 16, 2020Legal
PTAB Reverses Discretionary Denial Based on WDTX Trial

Board Acknowledges Slipping WDTX Trial Date

Some weeks back I highlighted the institution decision in Sand Revolution II LLC., v. Continental Inter Modal Group – Trucking LLC. (IPR2019-01393), which held that despite most General Plastic Factors favoring institution, the majority felt as though a looming WDTX trial date trumped all other GP factors and denied institution.  After petitioner’s unsuccessful request for a Precedential Opinion Panel (POP) hearing, the Board ordered additional briefing.

Today, the Board reversed course instituting the Sand Revolution IPR.  In the process, the Board provided some insight into slipping WDTX trial dates and steps petitioners can take to help avoid discretionary denials of parallel AIA trial petitions.

In the decision, the panel makes the point (here) that while the parallel district court trial date has now slipped several times, the PTAB has not missed a beat.

" [G]enerally, barring exceptional circumstances, the Board adheres to a one-year statutory deadline prescribed by 35 U.S.C. § 316(a)(11) for entry of final decisions in instituted inter partes reviews. And, even in the extraordinary circumstances under which the entire country is currently operating because of the COVID-19 pandemic, the Board continues to be fully operational. See Ex. 1013. The Board’s judges and staff continue to operate on their normal schedules, albeit remotely, and Board oral hearings continue to be conducted on schedule.

(emphasis added)

In the face of slipping trial dates, and the growing docket of the WDTX pushing dates out naturally, this factor of the 314(a) analysis is beginning to deteriorate for Patent Owners.

As to other Fintiv factors, the Board distinguished “investments” in the district court proceeding unrelated to validity, explaining:

" Here, the parties have exchanged infringement and invalidity contentions, and the district court has conducted a Markman hearing and entered a related Order, repeatedly set and amended the case’s schedule, granted several pro hac vice motions, heard and denied a motion to dismiss, and transferred the case from one judge to another. But aside from the district court’s Markman Order, much of the district court’s investment relates to ancillary matters untethered to the validity issue itself.  .  .   . Also, we recognize that much work remains in the district court case as it relates to invalidity: fact discovery is still ongoing, expert reports are not yet due, and substantive motion practice is yet to come.  Thus, although the parties and the district court have invested effort in the related district court litigation to date, further effort remains to be expended in this case before trial.

(emphasis added, internal citations omitted)

With regard to overlap between the district court and petition, the Board provided guidance on steps petitioners may take turn this factor in their favor:

" Notably, Petitioner stipulates only that it will not pursue, in district court, the “same grounds” presented in the Petition in this case.  Petitioner could have stipulated that it would not pursue any ground raised or that could have been reasonably raised in an IPR, i.e., any ground that could be raised under §§ 102 or 103 on the basis of prior art patents or printed publications.  A broader stipulation of that nature, not at issue here, might better address concerns regarding duplicative efforts and potentially conflicting decisions in a much more substantial way.  Likewise, such a stipulation might help ensure that an IPR functions as a true alternative to litigation in relation to grounds that could be at issue in an IPR.  Further still, Petitioner could have expressly waived in the district court any overlapping patentability/invalidity defenses. Doing so might have tipped this factor more conclusively in its favor.

(emphasis added)

Given the popularity of WDTX among NPE plaintiffs, these 314(a) disputes will continue to rage on at the PTAB.  But, at least the agency has now budged off its binary view of competing trials dates to a more reasoned approach.

Scott A. McKeown is an author of the Patents Post Grant

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