“Without Prejudice” Dismissal of Earlier Complaint Does not Restart 315(b) Clock

As I predicted it would back in May, the Federal Circuit has now reversed the long-standing practice of the Patent Trial & Appeal Board (PTAB) to accept certain IPR petitions outside of the 1-year window of 35 U.S.C. § 315(b). While 315(b) precludes petitions filed more than one year after service of a complaint of infringement for a subject patent, the Board had consistently held that where a first-filed complaint (outside the window) was dismissed without prejudice, that the one-year window would essentially reset. In other words the PTAB adopted the legal principal that a voluntary dismissal of a complaint renders the earlier proceeding a nullity and leave the parties as if the action had never been brought.

In its en banc ruling today in Click-to-Call v. Ingenio (here), the Court reversed the Board’s longstanding practice.

The majority explained that the plain, unambiguous language of the statute controlled:

The Board misunderstood that the text of § 315(b) is agnostic as to the “effect” of the service—i.e., what events transpired after the defendant was served. The provision only probes whether the petitioner, real party in interest, or privy of the petitioner was served with a complaint alleging patent infringement more than one year before the IPR petition was filed. We reject the Board’s interpretation of § 315(b) for this reason alone.

. . . . .

[T]he appropriate question is whether the voluntary, without prejudice dismissal of a civil action in which a complaint had been served nullifies an administrative time bar that is triggered by service of that complaint. It does not.

. . . .

A voluntary dismissal without prejudice only leaves the dismissed action without legal effect for some purposes; for many other purposes, the dismissed action continues to have legal effect. Indeed, a voluntary dismissal without prejudice (1) may give rise to costs and fees under Rule 11.

This reasoning follow’s the Court’s questioning during the oral hearing in which “notice” was the focus. The dissent (Dyk, Lourie) focus on the intent of the statute and similar statutory disputes in other areas of the law.

As to PTAB cases now pending that were previously accepted under the Board’s now defunct 315(b) practice, I would expect a flurry of terminations.