Takeaway: Standing to file a CBM proceeding is evaluated at the time of the filing of the Petition, and does not require article III standing to be maintained throughout the proceeding.

In its Decision, the Board ordered that Patent Owner is not authorized to file a motion to terminate. A conference call was held, where Patent Owner sought authorization to file a motion to terminate the CBM proceeding based on a lack or case or controversy between the parties. In related litigation, “the district court [had previously] granted Patent Owner’s motion to voluntarily dismiss with prejudice, concluding that no case or controversy remained after Patent Owner gave a covenant not to sue Petitioner for infringement of the ‘807 patent.” The Board denied Patent Owner’s request.

Patent owner argued that the Board has discretion to terminate a proceeding “where appropriate,” see 37 C.F.R. § 42.72, and that “after giving its covenant not to sue, there is not case or controversy sufficient to maintain this proceeding.” In essence, Patent Owner argued “that the statute and rule impose a standing requirement that continues throughout a covered business method patent proceeding, not just at the time of filing a petition.” The Board disagreed, and also disagreed that this was an “issue of first impression,” citingeBay Enterprise, Inc. v. Lockwood, Case CBM2014-00026 (PTAB May 15, 2014) (Paper 25).

The Board “agree[d] with the reasoning of the Ebay case” and cited Federal Circuit case law explaining that “the starting point for a standing determination for a litigant before an administrative agency is not Article III [of the Constitution], but is the statute that confers standing before that agency.”

Turning to the case at hand:

In this case, standing is conferred by AIA Section 18(a)(1)(B). This statute places a restriction on who may “file” a petition for covered business method patent review, limiting it to a person who “has been sued for infringement of the patent or has been charged with infringement under that patent.” The statute is unambiguous. By its terms, it specifies a requirement evaluated at the time a petition is filed. Patent Owner points us to no language in the statute, and we see none, imposing a requirement of a continuous infringement controversy between the parties in order to maintain a proceeding. Nor has Patent Owner cited to us authority calling into question the plain language of the statute.

Thus, the Board rejected Patent Owner’s analogy of CBM proceedings to district court proceedings.

In the end, the Board did not authorize briefing of the issue because “Patent Owner has not provided any basis beyond attorney argument for seeking termination” and “engaging in full briefing of the issue would be a waste of the parties’ and the Board’s time.”

Westlake Services, LLC v. Credit Acceptance Corporation CBM2014-00176

Paper 41:  Conference Call Summary and Order Denying Authorization to file Motion to Terminate

Dated:  September 3, 2015

Patents:  6,950,807

Before:  David C. McKone and Gregg I. Anderson

Written by:  McKone

Related proceedings: Credit Acceptance Corp. v. Westlake Servs., LLC, CV 13-01523 SJO (C.D. Cal.)