A difference between post-grant proceedings (i.e., inter partes review and covered business methods) and its predecessor (i.e., ex parte and inter partes reexaminations) is the ability for parties in post-grant proceedings to settle and request termination of the proceedings. Both federal statutory authority and USPTO rules govern the nature of settlements in post-grant proceedings. According to 35 U.S.C. §§ 317(a) and 327(a), a post-grant proceeding “shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed.” The USPTO further clarifies that “the Board is not a party to the settlement and may independently determine any question of jurisdiction, patentability, or Office practice.” 37 C.F.R. § 42.74(a). Accordingly, even though the parties may reach a joint settlement agreement, termination of the post-grant proceeding with respect to both the petitioner and patent owner is not guaranteed.

The stage of the post-grant proceeding is a key factor in determining when the Board will (i) deny a request to terminate for both the petitioner and patent owner, (ii) grant the request to terminate for the petitioner only, or (iii) grant the request for both the petitioner and patent owner. Generally, PTAB panels have consistently granted a request to terminate a proceeding for both the petitioner and patent owner when the request is filed before briefing has completed. See e.g., Itron, Inc. v. Certified Measurement, IPR 2015-00570, Paper 28, at 2-3 (February 16, 2016)(terminating the proceedings for both patent owner and petitioner while noting that since “Petitioner has not yet filed a Reply in any of the cases, … if we do not terminate these proceedings with respect to Patent Owner, … [the Board] will be required to determine patentability on less than a full record”); CB Distributors, Inc. and DR Distributors, LLC v. Fontem Holdings 1 B.V., IPR2014-01529, at 4 (December 7, 2015)(terminating the proceedings for both patent owner and petitioner where a reply to the patent owner response had yet to be filed).

However, after briefing has completed, the post-grant proceeding is considered to be in an advanced stage, and termination of the proceeding for both the petitioner and patent owner is not guaranteed. See e.g., Interthinx, Inc. v. Corelogic Solutions, LLC, CBM2012-0007, Paper 47, at 2 (November 12, 2013)(denying joint request to terminate with respect to patent owner noting that the proceedings were at an advanced stage where the “matter was briefed fully and ready for oral hearing at the time the parties moved to terminate”). The following cases highlight a few factors the Board considers when terminating a post-grant proceeding at an advanced stage.

I. Decision on the Merits

As stated in 35 U.S.C. §§ 317(a) and 327(a), where there is a joint request by the petitioner and patent owner to terminate a post-grant proceeding, the proceeding shall be terminated with respect to any petition “unless the Office has decided the merits of the proceeding before the request for termination is filed.” When a decision on the merits has not been reached, the Board is required to terminate the proceeding with respect to the petition. See e.g., Lam Research Corp. v. Flamm, IPR2015-01764, Paper 27, at 6 (December 15, 2016) (noting that for a joint request to terminate filed after the oral hearing, the Board was required to terminate the proceeding with respect to the petitioner as the Board had yet to reach a decision on the merits).

When the oral hearing has been conducted, however, both the patent owner and petitioner run the risk of the Board reaching a decision on the merits even though the Board has not issued a final written decision. For example, in Kinetic Technologies, Inc. v. Skyworks Solutions, Inc., the Board denied a joint request to terminate the proceedings for both the patent owner and petitioner noting that settlement was reached after the oral hearing was conducted, and after the Board had substantially decided the merits of the proceedings. IPR2014-00690, Paper 43, at 20-21 (October 19, 2015). Similarly, in Apple Inc. v. OpenTV, Inc., where a joint request to terminate the proceedings was filed after oral hearings were held, the Board denied the request, noting that “[a]lthough the panel has not yet issued a Final Written Decision …, the panel deliberated and decided the merits … before the requests were filed.” IPR2015-00969, Paper 29, at 4 (September10, 2016). Notably, in Kinetic Technologies, the joint request to terminate the proceedings was filed a mere eight days after the oral hearing, thereby demonstrating the risk parties face by waiting to settle after conducting the oral hearing. See IPR2014-00690, Paper 43, at 20 (noting that the oral hearing was held on June 4, 2015 and the joint motion to terminate the proceedings was filed on June 12, 2015).

II. Inability to Construe Claims

The Board may also be more inclined to deny a joint request to terminate, filed at an advanced stage of a proceeding, if issuing a final written decision would clarify claim construction issues of the challenged claims or proposed substitute claims. For example, in Blackberry Corp. v. MobileMedia Ideas, LLC, the Board cancelled an oral hearing based on a request by the parties and terminated petitioner’s involvement based on a joint request to terminate the proceedings. However, the Board maintained the proceeding against the patent owner noting that “the trial issues had been briefed fully at the time the parties moved to terminate the proceeding,” and “in view of the advanced stage of … [the proceedings], … the Board will proceed to a final written decision.” IPR2013-00016, Paper 31, at 3 (December 11, 2013). In the Board’s decision denying the motion to terminate for patent owner, the Board noted that the patent owner filed a motion to amend in lieu of a patent owner response, and the petitioner agreed not to oppose the motion to amend. Id. at 2. The Board subsequently issued a final written decision denying the motion to amend, noting that means-plus-function features recited in the proposed substitute claims could not be construed due to the lack of sufficient structure in the specification for performing the recited function. IPR2013-0016, paper 32, at 12-15 (February 25, 2014).

Similarly, in Blackberry Corp. v. Mobilemedia Ideas, LLC, the Board terminated petitioner’s involvement based on a joint request to terminate the proceedings, but maintained the proceeding against the patent owner, noting the advanced stage of the proceedings where the oral hearing had been completed. IPR2013-00036, Paper 64, at 3 (January 21, 2014). The Board subsequently issued an order terminating the proceedings, noting that due to an inability to construe means-plus-function features recited in the challenged claims, the Board could not conduct a proper factual inquiry for determining obviousness of the challenged claims. IPR2013-00036, Paper 65, at 20-21 (March 7, 2014).

III. Impact on Other Co-Defendants and/or Petitioners

When a joint request to terminate is filed after the oral hearing is conducted, the Board may take into account how termination of the proceeding with respect to both the petitioner and patent owner impacts other parties (e.g., co-defendants in co-pending litigations or petitioners in co-pending post-grant proceedings). For example, in Yahoo!, Inc. v. Createads, LLC, where a joint request to terminate the proceeding was filed after conducting oral argument, the Board terminated petitioner’s involvement in the IPR but maintained the proceeding against the patent owner, noting the advanced stage of the proceedings and that the patent owner had asserted the patent in other district court cases that were stayed pending the outcome of the IPR proceeding. IPR2014-00200, Paper 40, at 2 (October 31, 2014).

On the contrary, in Lam Research Corp. v. Flamm, where a joint request to terminate the proceedings was filed after conducting oral argument, the Board terminated the proceedings for both the petition and patent owner. IPR2015-01764, Paper 27, at 6 (December 15, 2016). The Board noted that since the “parties completed all briefing, the Board held oral hearings, and the statutory deadline for rendering final written decisions is approximately two months away,” it would “not be unreasonable … to proceed to final written decisions, thereby providing the parties and the public with certainty on the grounds of unpatentability.” Id. at 4. However, the Board ultimately granted the request to terminate for both parties, noting that there were other pending proceedings that cover all of the claims at issue in the current proceeding, and any narrowing of issues in the other proceedings by issuing a final written decision in the present proceeding would be speculative. Id. at 5. The Board further found “it significant that many of the remaining parties sued for infringement of the challenged patents are petitioners in those pending inter partes review proceedings, and will have the opportunity to challenge the patents there, as well as in the District Court actions.” Id.

Thus, the Yahoo!, Inc. and Lam Research Corp. cases represent two ends of the spectrum regarding termination of proceedings after conducting oral arguments when multiple parties are involved. In Yahoo!, Inc., where multiple defendants were sued over the same patent in the District Court actions, only one IPR petition was filed at the PTAB with the remaining cases stayed pending resolution of this IPR proceeding. In contrast, in Lam Research Corp., multiple petitions were filed by multiple defendants over the same group of patents with non-overlapping grounds, where issuing a final written decision would not likely narrow issues in the remaining proceedings. As such, the Board maintained the proceeding against the patent owner in Yahoo!, Inc. while terminating the proceeding for both the petitioner and patent owner in Lam Research Corp.

IV. Conclusion

As the above cases illustrate, when the Board will terminate a proceeding at an advanced stage (e.g., after briefing is completed) depends on the particular circumstances of the case. As demonstrated in the Kinetic Technologies and Apple Inc. cases, if the Board has already invested the resources to come to a decision on the merits, the Board is likely to deny a joint request to terminate with respect to both the patent owner and petitioner even though a final written decision has not issued. Furthermore, as demonstrated in the Blackberry Corp. cases, if issuing a final written decision would clarify claim construction issues for future proceedings, the Board is likely to deny a request to terminate with respect to the patent owner. Additionally, as demonstrated by the Yahoo! and Lam Research Corp. cases, when multiple parties have been sued over the same patent, whether other parties have the ability to challenge the patent in other proceedings or are waiting on the result for the present proceeding is likely to determine whether the Board terminates with respect to only the patent owner, or both the patent owner and petitioner.