December 21, 2015

Committing to the Case: How Inadvertent Errors Can Subject You to the Estoppel Provisions of 35 U.S.C. § 315(e)

Inter partes review (IPR) proceedings allow a party (the petitioner) to challenge the patentability of an issued patent. However, failure comes with a price: 35 U.S.C. § 315(e) bars the petitioner from any future invalidity challenges in another IPR proceeding, before the International Trade Commission (ITC), or in District Court on “any ground that the petitioner raised or reasonably could have raised during that inter partes review.” In Ericsson Inc. v. Intellectual Ventures I, LLC, the petitioner tried to withdraw its challenge to certain claims due to a “copy/paste error,” but the Patent Trial and Appeal Board (PTAB) denied that request and upheld those claims in view of that mistake. Ericsson demonstrates the importance of thoroughly vetting a challenge and how mistakes could condemn your case — and what you could do to survive if found in a similar situation.    

The History of Ericsson’s Attempt to Withdraw Its Challenge

Ericsson challenged several claims of U.S. Patent No. 6,023,783 (the ’783 Patent), including claims 55-59 of the ’783 Patent, as obvious over various prior art references. However, Ericsson’s initial filing, as well as the expert report it submitted, contained a “copy/paste error” that “resulted in a deficient analysis” of those claims. Intellectual Ventures, the patent owner, pointed out this error in its preliminary response as part of its challenge to Ericsson’s position. At the same time, because Intellectual Ventures did not yet have the opportunity to submit evidence to support its technical argument, its preliminary response consisted of “attorney argument,” which the PTAB “gave little weight” and instituted trial. 

Almost three months after the PTAB’s decision to institute, Ericsson attempted to modify its petition to correct what it deemed a “clerical mistake.” Ericsson “represented that it first became aware” of this mistake, which it subsequently deemed a “fatal flaw” in its analysis, during preparation for the deposition of its expert witness. The PTAB denied that motion, in part because the “desired correction was more substantive than clerical in nature.” Ericsson then “unilaterally filed a notice to withdraw its challenge to claims 55-59,” which the PTAB expunged as an unauthorized filing. 

In response, Ericsson sought authorization to re-file its motion, which the PTAB granted based in part on representations by Intellectual Ventures that it would not oppose this motion. However, once Ericsson filed its motion, which again attempted to withdraw its challenge to claims 55-59, Intellectual Ventures changed course and opposed the motion because the “scope of relief” that Ericsson sought was greater than what Intellectual Ventures had agreed to. This issue remained open during the oral hearing, where the PTAB authorized Intellectual Ventures to file an opposition brief and authorized Ericsson to file a reply, which both parties did shortly thereafter.

The Decision Denying Ericsson’s Motion to Withdraw

Ericsson presented three arguments for why its challenge to claims 55-59 should be withdrawn. First, Ericsson presented a jurisdictional challenge to the IPR proceeding, relying on another PTAB decision, GTNX, Inc. v INTTRA, Inc. However, the PTAB quickly determined that GTNX “has no bearing on the instant matter” and rejected Ericsson’s argument that the PTAB “must terminate this IPR proceeding, without prejudice and only in part, just because Ericsson now admits that its evidentiary presentation is deficient.” In other words, the fact that Ericsson presented evidence that “turned out to be incorrect” and the fact that the PTAB relied on that evidence to institute proceedings, did not “serve to revoke retroactively [the PTAB’s] statutory authority to institute a trial.”

Next, Ericsson argued that the PTAB was “compelled to permit Ericsson to withdraw its challenge” in view of the statutory and regulatory provisions governing the termination of an IPR as a result of a settlement or upon request of adverse judgment. However, the PTAB held that those provisions were inapplicable to the facts of this case. Specifically, the PTAB noted that there was no evidence of a settlement and that, rather than seeking adverse judgment, Ericsson was trying to avoid judgment and thereby “reserve[] the right to challenge the patentability of claims 55-59 in this or another forum.”

As its final argument, Ericsson argued that the PTAB’s “extraordinary and discretionary powers under 37 C.F.R. § 42.5(a)” would provide a basis for the relief it sought. However, the PTAB held that “even if we had such discretion, we would choose not to exercise it under the fact and circumstances presented here.” In particular, the PTAB relied heavily on the fact that Intellectual Ventures brought this error to Ericsson’s attention in its Preliminary Response almost four months before Ericsson allegedly first learned of its mistake. The Board also noted that its Decision to Institute “should have apprised Ericsson of the problem with its challenge to claim 55.” The PTAB further faulted Ericsson for waiting “almost six months after Intellectual Ventures filed its Preliminary Response” and for failing to mention its mistake during intervening communications with the PTAB, especially those that occurred after the deposition of Ericsson’s expert, during which the expert “conceded the error in his claim 55 analysis.” 

After reviewing these facts, the PTAB concluded: “It is our opinion that a petitioner, having sought and obtained the institution of an IPR, upon a subsequent determination that it will likely suffer defeat, should not be able to withdraw its challenge to some or all of the claims, over a patent owner’s opposition, in order to avoid the estoppel provisions of 35 U.S.C. §  315(e).” While denying Ericsson’s attempt on the facts before it, the PTAB offered some parting wisdom to petitioners finding themselves in a similar situation. Specifically, the PTAB noted that “Ericsson could have asserted its revised ground of unpatentability in a second IPR petition and then sought consolidation of the two proceedings so that it’s revised, corrected position, if meritorious, could have prevailed before entry of adverse judgment and estoppel.”    

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