The Evolving Scope of the Inter Partes Review Statutory Time Bar

Inter partes review (“IPR”) is an adversarial administrative proceeding at the United States Patent and Trademark Office allowing a party to challenge the validity of an issued patent before the Patent Trial and Appeal Board (“PTAB”).  Since the enactment of the America Invents Act, IPR proceedings have become an integral part of litigating patent disputes, often proceeding concurrently with patent infringement lawsuits in United States district courts.  Indeed, 9,545 petitions have been filed since IPR proceedings became available in September 2012.¹

Although any person other than the patent owner may file an IPR petition, in practice the vast majority of IPR petitioners are defendants in concurrent district court litigation, or by related entities.  There are numerous reasons why IPRs are particularly attractive to such petitioners, such as having the technical expertise of the PTAB’s administrative patent judges, as well as the statutory requirement that the PTAB issue a final decision in an IPR within one year of institution.² To provide protection to patent owners, Congress enacted statutory bars to deter accused infringers from abusing the IPR process for harassment or delay.³  Under 35 U.S.C. § 315(a), an IPR may not be instituted if the petitioner has already filed a declaratory judgment action challenging the validity of the patent in a district court.  Section 315(b) imposes a one-year time bar, providing that an IPR cannot be instituted if the petition is “filed more than one year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.”  The one-year time period is meant to “afford defendants a reasonable opportunity to identify and understand the patent claims that are relevant to the litigation.”⁴

One important consideration for patent owners as well as IPR petitioners is understanding when the IPR time bar begins and ends.  Until recently, the PTAB regularly looked beyond the statutory language to interpret the scope of the time bar.  The PTAB, for example, ruled that in view of the legislative history, service of a counterclaim for patent infringement qualified as service of a “complaint” triggering the time bar.⁵  Conversely, the PTAB held also held that subsequent events such as the voluntary dismissal of the related patent lawsuit could reset the one-year clock for filing an IPR petition.⁶ Likewise, in practice, both patent holders and accused infringers generally understood that a voluntary dismissal would restore the status quo with respect to both the patent infringement suit as well as the accused infringer’s timeframe for filing an IPR petition, and factored this consideration into the calculus of settlement negotiations.

In August 2018, the Federal Circuit’s decision in Click-to-Call Technologies, LP v. Ingenio, Inc. signaled a fundamental change in interpreting the statutory time bar.7 Click-to-Call involved an IPR petition that was filed more than one year after the first lawsuit on the patent at issue, which was voluntarily dismissed, but less than one year after the second lawsuit on the same patent.8 Turning to the statutory language of Section 315(b), the Federal Circuit held that because the statutory language of “served with a complaint alleging infringement of the patent” was plain and unambiguous, the statute therefore did not “contain any exceptions or exemptions for complaints” that were served and subsequently dismissed, nor did it indicate that “the application of § 315(b) is subject to any subsequent act or ruling.”⁹ Thus, the Federal Circuit concluded that “§ 315(b)’s time bar is implicated once a party receives notice through official delivery of a complaint in a civil action, irrespective of subsequent events.”¹⁰ This decision is now the final word on this issue after the Supreme Court declined to certify the question for review.¹¹

After Click-to-Call, decisions from the Federal Circuit and the PTAB generally confirmed that the one-year clock for filing an IPR petition began upon service of a patent infringement complaint, and would run irrespective of any subsequent events.  In the Bennett Regulator Guards decision, for example, the Federal Circuit held that involuntary dismissal of a patent infringement complaint also did not reset the § 315(b) time bar.¹²

One factual scenario that initially avoided the ambit of Click-to-Call was whether the time bar could be triggered by service of a complaint by a party who lacked Article III standing to assert the patent.  In a line of decisions before, and shortly after Click-to-Call, the PTAB held that service of such a complaint could not trigger the one-year time bar because a complaint without standing could not be a proper federal pleading.¹³  In an August 23, 2019 decision, however, the PTAB’s Precedential Opinion Panel reversed the underlying institution decision in GoPro, Inc. v. 360Heros, Inc., holding that the unambiguous language of Section 315(b) made no exceptions for when the time bar applied, including when the party serving the complaint lacked standing to assert the patent.¹⁴  Notably, although this precedential decision represents the final ruling of the PTAB, the Federal Circuit has yet to weigh in on this particular issue.  Instead, in the Hamilton Beach decision, the Federal Circuit merely observed that whether service of a complaint without standing triggers the § 315(b) time bar was an issue “not present, or considered in Click-to-Call.”¹⁵  Indeed, the PTAB’s decision in GoPro acknowledged that “Hamilton Beach at least suggests that the question remains an open one.”¹⁶

Although there may still be some unresolved exceptions, as a practical matter, both patent owners and accused infringers should assume that serving a patent infringement complaint will irrevocably start the one-year clock for filing an IPR petition, and that no subsequent events such as a voluntary dismissal or an agreement between the parties can reset the clock.  Serving a patent infringement complaint now commits a patent owner to facing a potential IPR, and commits the accused infringer to filing an IPR petition within one year, and parties should keep this consideration in mind in attempting to amicably resolve patent disputes.