Target Corp. v. Destination Maternity Corp.

Interpreting the statutory provision regarding the one-year time limitation and joinder of parties, the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB) issued a divided 3-2 expanded panel decision denying petitioner’s petition as barred by the one-year time limitation and denying petitioner’s motion for joinder as a matter of law, finding that 35 U.S.C. § 315(c) permits joinder of parties, but precludes joinder of issues raised by the same party.  Target Corp. v. Destination Maternity Corp., Case No. IPR2014-00508 (PTAB, Sept. 25, 2014) (Fitzpatrick, APJ) (Green, APJ, dissenting). 

The patent owner, Destination Maternity, sued petitioner Target in district court for infringement of its patent.  Within the allotted one-year time limitation, petitioner filed two IPR petitions seeking invalidation of all of the claims of the patent.  The PTAB instituted both IPR petitions on all but one of the challenged claims.

Section 315(b) provides an exception to the time bar, stating that the one-year bar does not apply to a request for joinder under § 315(c), which allows the PTAB to join “any person who properly files a petition” in an instituted IPR.  After the lapse of the time bar, petitioner filed a third IPR petition concurrent with a joinder motion under § 315(c) requesting that the third petition be joined with its prior two petitions.  The third petition presented new prior art disclosed in a corresponding foreign prosecution, the “new” prior art was previously unknown to the petitioner due to the patent owner’s failure to timely provide the material during discovery in the co-pending litigation.  The new prior art was directed to the subject matter of previously excluded claim, as well other claims of the patent.

The PTAB denied institution of the third IPR as untimely and denied the joinder motion, concluding as a matter of law that § 315(c) unambiguously prohibits joinder of petitions or issues.  The PTAB found that, while § 315(c) does allow a party to join an instituted IPR, it does not permit a party to circumvent the prohibition of issue joinder by seeking to join an instituted IPR in which it is already a party.  The PTAB found that its interpretation was harmonious with the plain language of § 315(b)’s time bar, preventing a time-barred party from filing a petition for IPR regardless of whether it requests joinder under § 315(c).  Such time-barred petitioners may join instituted IPR proceedings, but are limited to the grounds authorized in the IPR.  The PTAB acknowledged a number of contrary PTAB decisions granting issue joinder under § 315(c) (e.g., Arisoa Diagnostics v. Isis Innovation Ltd., Case No. IPR2012-00022), but stated that it reached a different conclusion.  According to the PTAB, its interpretation of § 315(c) and § 315(b) reduces the burden on the PTAB’s resources by restricting the scope of joinder.

The two-judge dissent argued that the majority’s denial of joinder based solely on statutory construction was improper because neither party briefed the issue.  It then presented its own statutory construction, first pointing to the contrary PTAB decisions identified by the majority.  The dissent argued that the majority read out the term “any” from § 315(c) by excluding joinder of the same petitioner to an instituted IPR review.  Further, although § 315(c) textually only provides joinder of “any party,” related statutory language in 35 U.S.C. §§ 311, 312 and 314 clearly contemplate issue joinder because the merits of a petition must be considered to determine whether joinder is proper.  The dissent further argued that legislative history, particularly comments by Senator Jon Kyl, support liberal joinder of a party “and its new arguments” to an instituted IPR.  Finally, issue joinder under § 315(c), according to the dissent, is in line with PTO policy goal of 35 U.S.C. § 316 to ensure “just, speedy, and inexpensive resolution of a proceeding.”