Patent practitioners are well-aware of the so-called “one-year bar” for inter partes review (IPR) proceedings, which requires IPR petitions to be filed within a year after being served with a complaint for patent infringement:
An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 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.1
Failing to comply with the one-year bar may preclude a party from having the validity of a patent adjudicated by the Patent Trial and Appeal Board (the “Board”). This seemingly straightforward provision, however, does not always have a straightforward application. The following scenarios, addressed in detail below, illustrate some of its “gray areas”:
- Amended complaints and intervenors;
- Dismissals without prejudice; and
- Complaints served before enactment of the Leahy-Smith America Invents Act (AIA).
THE “GRAY AREAS”
A. Amended complaints and intervenors
Although amending a complaint leads to service of a new (amended) complaint, the one year IPR bar will typically still be triggered based on the original complaint rather than the amended complaint.2 If an amended complaint asserts new patents, however, the one-year bar for the newly added patents is triggered based on service of the amended complaint.3 Unfortunately, the precise date when an amended complaint is served is not always black and white. For example, courts often require permission before amending a complaint, which typically takes the form of a motion for leave, with the amended complaint attached as an exhibit. This leaves some uncertainty regarding the official date of service of the amended complaint. The Board resolved that uncertainty in the TRW Automotive decision: for purposes of the one-year IPR bar, an amended complaint cannot be “served” until the corresponding motion for leave is granted—until then, the amended complaint is “merely a proposed complaint, not an actual ‘complaint.’”4
Similar uncertainties exist with respect to intervenors. Intervention in patent disputes often arises when a manufacturer wants to participate in, and defend against, a patent infringement lawsuit involving its customers and products. A potential intervenor must file a motion to intervene, along with a proposed pleading, and the court can either allow or deny the request.5 The one-year bar is straightforward for the original defendants, who must be served with a complaint after the lawsuit is filed. A potential intervenor, however, is not a party to the lawsuit and has not been served with a complaint. Although the Board has not addressed how the one-year bar would apply to intervenors, its reasoning in the TRW Automotive decision (discussed above) may provide some insight. For example, in TRW Automotive, the Board concluded that an amended complaint cannot be “served” until the corresponding motion for leave is granted by the court. Similar reasoning suggests that a potential intervenor cannot be served with a complaint until the court grants its request to intervene and the intervenor officially becomes a party to the lawsuit. Under that reasoning, the clock for the one-year bar could only start, at the earliest, after the court allows the party to intervene. There is no requirement, however, for a plaintiff to serve a complaint on an intervenor; for strategic reasons, the plaintiff may instead choose to only pursue complaints against the customers of the intervenor. In that scenario, if the intervenor is not served with a “complaint alleging infringement of the patent” during the course of the litigation, the clock for the one-year bar might not ever be triggered for the intervenor.
B. Dismissals without prejudice
If a patent case is re-filed after being dismissed without prejudice, is the one-year bar triggered by the dismissed complaint or the subsequently-served complaint? Generally speaking, “[t]he dismissal of an action without prejudice leaves the parties as though the action had never been brought.”6 Strict adherence to that principle seemingly suggests that, after a dismissal without prejudice, the one-year bar would be triggered only by a subsequent complaint rather than the dismissed complaint. Based on the Board’s decisions, however, the result may depend on the particular circumstances surrounding the dismissal.
Generally, a complaint dismissed without prejudice will not trigger the one-year IPR bar.7 The one-year bar could be triggered by a dismissed complaint, however, if the cause of action is immediately continued in another lawsuit (e.g., in connection with a consolidation and/or transfer). The Board found that, in the following scenarios, a dismissed complaint did in fact trigger the one-year bar:
- The original lawsuit was dismissed without prejudice for purposes of consolidation with another co-pending lawsuit; the cause of action from the original lawsuit was continued immediately in the co-pending lawsuit.8
- Due to a potential standing issue in the original lawsuit, a second lawsuit was filed. The parties agreed to dismiss the original lawsuit and continue, uninterrupted, in the second lawsuit.9
- The original lawsuit was “dismissed” without prejudice due to standing issues associated with a related bankruptcy proceeding. Rather than a formal dismissal, however, the court actually stayed the lawsuit pending the bankruptcy proceedings. The lawsuit was later re-filed in another jurisdiction but then transferred and consolidated with the original lawsuit.10
The Board’s primary consideration in these decisions was whether (i) the original lawsuit was dismissed indefinitely or (ii) the cause of action, after being dismissed, immediately continued in another lawsuit. An indefinite dismissal will likely reset the clock for the one-year bar. If the cause of action, however, continues uninterrupted in a separate lawsuit, without any interruption or delay, the dismissed complaint may still trigger the one-year bar.
C. Pre-AIA complaints
The AIA provisions relating to IPR proceedings went into effect September 16, 2012. From the statutory language alone, the one-year bar is ambiguous as to whether it applies to complaints served before those provisions went into effect. For example, because the one-year bar is triggered based on the date a complaint “is served,” there was some initial uncertainty whether it applies to a complaint that was served before the one-year bar even existed (the “is served” language could be interpreted to only apply prospectively to complaints served after enactment of the statute). Applying the one-year bar retroactively could, in some circumstances, preclude a party from pursuing an IPR altogether. For example, a party served with a complaint over a year before the effective date of the AIA would be deprived of the opportunity to pursue an IPR: that party would already be precluded by the one-year bar when the IPR procedures first went into effect. Applying the one-year bar prospectively, on the other hand, would exempt certain parties from the time limitations for filing IPR petitions.
This uncertainty has been resolved by the Board, which concluded that the one-year bar does apply to complaints served before enactment of the AIA.11
In view of the steep ramifications of the one-year bar, it is crucial for patent practitioners to be aware of its various “gray areas.” Even when there is no clear answer, awareness of these “gray areas” will allow patent practitioners to advise their clients of risks and potential outcomes, and ultimately recommend a course of action that may lead to the preferred outcome. For example, when facing a potential dismissal without prejudice, a defendant should carefully consider the nature of the dismissal (e.g., an indefinite dismissal versus a dismissal for purposes of consolidation) and its potential impact on the one-year bar, and plan accordingly with respect to timing of any future IPR petitions. Finally, the Board’s decisions for these relatively new procedures are continuously evolving, and it is important for patent practitioners to stay informed of the latest developments.