Article by Clyde Shuman
The Patent Trial and Appeal Board of the U.S. Patent and Trademark Office has made precedential a January 2019 ruling holding that companies which challenge the validity of a patent in district court will be blocked from seeking inter partes review of that patent, even if the district court case is voluntarily dismissed.
The America Invents Act prohibits inter partes review from being instituted if the challenger has previously filed a case in district court challenging the validity of a claim in the same patent. See 35 U.S.C. § 315(a)(1). However, in Cisco Systems Inc. v. Chrimar Systems, Inc., case number IPR2018-01511, the Board held there is no exception to the rule for district court validity challenges that are dismissed without prejudice. In its January 2019 decision, the Board wrote, “Congress could have included an exception to the [declaratory judgment rule] for a civil action that was dismissed without prejudice, but did not.” The Board continued, “Further, the ordinary meanings of the terms ‘file’ and ‘civil action’ show that the phrase ‘filed a civil action’ in § 315(a)(1) applies to a civil action that was dismissed without prejudice… [Dictionary] definitions indicate that the § 315(a)(1) bar is implicated once a party commences a noncriminal litigation, irrespective of subsequent events.”
In previous decisions, the Board treated a district court invalidity challenge that was dismissed without prejudice “as if it had never existed.” However, an August 2018 Federal Circuit decision in Click-To-Call v. Ingenio, 899 F.3d 1321, 1328 n.3 (Fed. Cir. 2018) (en banc), held that the one-year clock to file a petition for inter partes review starts when the accused infringer is sued for infringement, even if the complaint is subsequently voluntarily dismissed. In Cisco Systems, the Board extended this ruling to district court cases where the validity of the patent is challenged (e.g., declaratory judgment proceedings).
The Board rejected Cisco’s argument that the term “civil action” in § 315(a)(1) requires substantive litigation, e.g., “a bite at the apple.” Per the Board, “As discussed, the ordinary meaning of the phrase ‘filed a civil action’ only requires that a party commenced a noncriminal litigation, not that the party engaged in any substantive litigation.”
The Board also rejected as non-persuasive Cisco’s argument that voluntary dismissal of a complaint without prejudice nullifies the initial filing thereof.
Notably, the Board said, “Further, this Decision does not hold that § 315(a)(1) bars Petitioner from filing another civil action challenging the validity of a claim of the ’760 patent.”
In light of the Board’s ruling here, the burden is now on those who decide to challenge a patent in district court, to make sure their complaints are free and clear of mistakes. Repairing errors via inter partes review is no longer an option.
