Third parties seeking to challenge pre-AIA patents in the USPTO often choose between IPR and ex parte reexamination. In some cases, petitioners pursue both proceedings, sequentially or in parallel, taking advantage of different timelines to completion, different standards for institution, and using insights gained in one proceeding in the other. The PTAB recently exercised its discretion to terminate three reexaminations filed against patents also challenged by IPR in Ariosa Diagnostics, Inc. v. Illumina, Inc., IPR2014-01093, Paper 81 (May 24, 2016). In the pending appeal, the stage is set for the Federal Circuit to consider the extent of the PTAB’s discretion in terminating post-grant proceedings in these circumstances. Case Nos. 2016-2388, 2017-1020 (Fed. Cir.).

This blog reported on the PTAB’s final written decision in Ariosa Diagnostics, Inc. v. Illumina, Inc., IPR2014-01093, one of several challenges Ariosa Diagnostics initiated against patents Illumina asserted in a co-pending district court action, Illumina, Inc. v. Ariosa Diagnostics, Inc., Case No. 3:14-cv-01921 (N.D. Cal). The Petitioner, Ariosa Diagnostics, filed a second IPR petition against the same patent, IPR2015-01091, four months after the PTAB instituted trial in IPR2014-01903. The PTAB denied the second petition not on substantive grounds, but for being “an attempt to perfect the petition” in IPR2014-01093. The Petitioner also filed three requests for ex parte reexamination of the same patent before the PTAB issued its final written decision in IPR2014-01093, all of which the PTAB granted (Ex parte reexamination nos. 90/013,666; 90/013, 667; and 90/013,671). The references relied upon in the reexamination requests included references underlying the IPR challenges and references that were not considered during the IPRs.

The Patent Owner, Illumina, requested that the PTAB terminate the reexamination proceedings for being duplicative of issues raised in the two IPRs, arguing that the PTAB has discretion to reject “any request for ex parte reexamination or petition for post-grant or inter partes review on the basis that the same or substantially the same prior art or arguments previously were presented to the Office.” Co-inventors of the subject patent founded Ariosa Diagnostics, and the Patent Owner alleged that the reexaminations should be terminated for being “an improper attempt by the inventors of the [] patent to invalidate their own patent…by evading the doctrine of Assignor estoppel.”

The Petitioner countered that the AIA contemplates co-pendency of multiple patent office proceedings, citing Game Show Network, LLC. v. John H. Stephenson, IPR2013-00289 (March 21, 2014), and pointed to the AIA legislative history as recognizing that “substantial new questions of patentability can exist even when art has been previously considered or cited.” According to the Petitioner, assignor estoppel does not apply to Patent Office invalidity proceedings.

The PTAB cited 35 U.S.C. § 315(d) as granting the Director broad discretion to terminate ex parte reexamination, regardless of whether the same or substantially the same prior art or arguments were previously presented. Here, while the prior art disclosures relied upon in the IPR petitions and reexaminations were “somewhat different,” the PTAB found the arguments presented in the different proceedings to be substantially similar. Termination of the reexaminations was supported by 35 U.S.C. § 315(d) as well as 35 U.S.C. § 325(d), which the PTAB explained contemplates denial of review “when the art applied in two petitions is different, but the arguments are substantially the same.” The PTAB concluded that it had sufficiently addressed the references and related arguments in the IPRs, and termination of the reexamination proceedings was appropriate. The PTAB did not apply the doctrine of assignor estoppel citing Redline Detection, LLC v. STAR EnviroTech, Inc., IPR2013-00106, slip. op. at 4–5 (PTAB Aug. 27, 2013) (“[T]he Board noted that 35 U.S.C. § 311(a) states that ‘a person who is not the owner of a patent may file with the Office a petition to institute inter partes review of the patent.’…Patent Owner provides no explanation or argument as to why assignor estoppel provides an exception to that statutory mandate.” (emphasis in original)).

Interestingly, the PTAB highlighted that the Petitioner provided no explanation as to why it could not have presented its invalidity grounds from the reexamination in the IPR. The PTAB also noted that Petitioner waited to file the reexamination requests until the IPR final decision was imminent, allowing the opportunity to adjust its invalidity challenges based on the Patent Owner’s responses in the IPRs, and failed to explain why it waited to file the reexamination requests using variations of the same art. The AIA allows multiple Patent Office proceedings, and there is no formal requirement to explain, e.g., how the grounds for challenge in a reexamination differ from those presented in a related IPR. In view of the PTAB’s observations, however, the prudent Petitioner will have such an explanation in hand.

The Petitioner appealed both the IPR final written decision and the PTAB’s decision granting Patent Owner’s motion to terminate the ex parte reexaminations. The Federal Circuit consolidated the appeals, and the parties have submitted their briefs. The Director of the USPTO intervened, arguing that the Federal Circuit lacks jurisdiction to review the PTAB’s decision to terminate the reexaminations. According to the Director, the Patent Act limits review to final decisions on patentability of reexamined claims and, even if the court did have jurisdiction, only the Patent Owner can challenge the PTAB’s decision. The Federal Circuit’s ultimate decision will be of great interest for both this issue and whether the PTAB properly applied Dynamic Drinkware, LLC. v. National Graphics, Inc., 800 F.3d 1375 (Fed. Cir. 2015), to require the claims of a published patent application be entitled to the benefit of priority of an underlying patent application in order to establish an earlier prior art date for the published application under 35 U.S.C. § 102(e).