Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017), designated precedential in 2017, sets forth seven factors to be considered before discretionarily denying subsequent IPR petitions challenging the same patent. The PTAB analyzed those factors and discretionarily denied petitions filed in Code 200, UAB, et al. v. Bright Data Ltd., IPR2022-00861 and IPR2022-00862, Paper 17 (PTAB July 25, 2022) (Code 200). USPTO Director Katherine Vidal reviewed the Code 200 decisions sua sponte. On August 23, 2022, she vacated the decisions and remanded the cases for further consideration. Code 200, UAB, et al. v. Bright Data Ltd., IPR2022-00861 and IPR2022-00862, Paper 18 (PTAB Aug. 23, 2022) (Vidal Decision).
In her decision, Director Vidal recognized the General Plastic non-exclusive factors as follows:
- whether the same petitioner previously filed a petition directed to the same claims of the same patent;
- whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
- whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition;
- the length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
- whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;
- the finite resources of the Board; and
- the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.
General Plastic at 9 – 10.
In the Code 200, the Board found that the first General Plastic factor supported denial because the petitioners had previously filed an IPR petition (IPR2022-01266) challenging certain claims of the same patent. The Board, however, discretionarily denied the earlier petition without any consideration of the merits. In Code 200, the Board considered the failure to submit a Sand Revolution II stipulation, i.e., agreeing not to raise the asserted IPR grounds at trial in district court, to outweigh the fact that the Board had not addressed the merits of the prior petition. Director Vidal disagreed with this analysis of the first factor.
Director Vidal pointed to language in Intel Corp. v. VLSI Tech. LLC, IPR2022-00366, Paper 14 (PTAB June 8, 2022) for the proposition that “allowing [a petitioner] the opportunity to pursue a decision on the merits” in a second-filed petition, when the first-filed petition was not evaluated on the merits, “best balances the desires to improve patent quality and patent-system efficiency against the potential for abuse of the review process by repeated attacks on patents.” Vidal Decision at 4-5 (citing Intel Corp. at 9–10).
Director Vidal held that where the first petition was discretionarily denied or otherwise was not evaluated on the merits, the first factor must be read in conjunction with the second and third factors. In such a situation, taken together the first three factors “only weigh in favor of discretionary denial when there are ‘road-mapping’ concerns under factor 3 [strategically staging prior art and arguments in multiple petitions to use PTAB decisions as a roadmap] or other concerns under factor 2.” Vidal Decision at 5. Given the Board had found no evidence of road-mapping and found that factor 2 had limited relevance, Director Vidal determined that “the Patent Owner’s concerns of fairness are outweighed by the benefits to the patent system of improving patent quality by reviewing the merits of the challenges raised in the petitions, which have not been addressed to date.” Vidal Decision at 6.
Director Vidal’s decision comes on the heels of her on June 21, 2022 Memorandum, which provided new guidance on the procedure for discretionary denials under Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (designated precedential May 5, 2020)—discretionary denials based on parallel district court litigation. As with the Memorandum, the vacatur in Code 200 appears to be in line with the Director’s efforts to fulfill Congress’ goal of improving patent quality. Limiting the circumstances under which a petition may be discretionarily denied will allow more IPR petitions to reach the merits stage and consequently more patents will be subject to post-grant review. With discretionary denial rates already falling, however, serial petitions against the same patent may become less common as it is more likely that the PTAB will institute the first-filed petition. Thus, the situations where Director Vidal’s decision will apply may be limited. But when it does apply, serial petitioners will face less risk of a double dose of discretionary denial.