In A.C. Dispensing Equipment Inc. v. Prince Castle LLC (Case IPR2014-00511), the PTAB addressed an issue relating to the Patent Owner prosecuting a continuing application while defending an IPR of the patent granted from the parent application.  Specifically, the Petitioner sought authorization from the Board to file a motion to stay prosecution of the Patent Owner’s continuing application, arguing that the Patent Owner has presented claims in the continuing application that are not patentably distinct from the claims that are under review by the Board in the IPR.

On October 17, 2014, the Board denied the Petitioner authorization to file its requested motion.  Instead, the Board stated that, under 37 C.F.R. § 42.73(d)(3)(i), the Patent Owner will not be permitted to obtain from the continuing application any claims that are not patentably distinct from claims that end up being canceled as a result of the IPR proceeding.  Most notably, however, the Board also commented that barring the Patent Owner from concurrently prosecuting claims in the continuing application that “may be patentably indistinct from the claims under review” would be premature.

As a takeaway, with the prospect of a patent owner prosecuting claims in a continuing application that are patentably indistinct from claims that are concurrently under review in an IPR, continuing applications could prove to be powerful tools for patent owners facing IPR proceedings. 

For example, in the event that a patent owner was to have the claims of a patent invalidated over prior art in an IPR, the patent owner could turn around and quickly amend the pending (and once patentably indistinct) claims of a continuing application to include subject matter that would render the pending claims patentable over the IPR prior art and, hence, patentably distinct from the claims of the patent that was ultimately invalidated in the IPR.  The result would be that, within months of having lost the IPR of the patent, the patent owner could have claims granted from the continuing application that read on the petitioner’s product, are patentable over the prior art considered in the IPR, and are patentably distinct from the claims of the invalidated patent.  Such a procedural move by a patent owner would be quite the nuisance for a petitioner on the heels of an IPR victory.