Agency Discretion Dictated by Petitioner Joinder Rationale
As discussed previously, in Target Corp. v. Destination Maternity Corp (IPR2014-00508) a divided PTAB panel permitted issue joinder. While the dissent argued that acceptance of issue joinder might permit a proverbial "second bite at the apple," the majority countered that such gamesmanshp could be thwarted by judicious use of agency discretion.
As I have pointed out, petitioner's sometimes exclude claims from an IPR petition that are not asserted against them in an ongoing litigation. For example, a complaint is filed alleging infringement of claims 1-10, but not claims 11-15. After the 12 month IPR window has passed, and the IPR for claims 1-10 is timely filed, the patentee may then amend their complaint to add claims 11-15. In this way. when the motion to stay pending IPR is argued, the patentee emphasizes that claims 11-15 are not part of the IPR. That is, there is no reason to "stay" as trial will be necessary for claims 11-15 regardless of the IPR outcome. In such a case, issue joinder would seem warranted— as opposed to a case in which the petitioner fails as to claims 11-15, but files a second petition as a "do-over."
It seems the PTAB agrees, as demonstrated recently in Amneal Pharmaceuticals LLC. v. Endo Pharmaceuticals Inc. (IPR2014-01365, Paper 13, February 4, 2015).
While Amneal was decided prior to the most recent Target decision, it nevertheless provides insight to the PTAB's application of discretion (at least as to those panels aligned with the majority in Target). In deciding to allow issue joinder for some claimsof a second petition, but not all, the panel explained:
[W]hen a § 315(b) bar would apply absent joinder, we hesitate to allow a petitioner a second bite one month after institution in a first case, at the expense of scheduling constraints for everyone, as well as additional costs (and potential prejudice) to Patent Owner, absent a good reason for doing so.
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Based on the contentions of both parties here, and considering the particular facts of this case, we are not persuaded that Petitioner has shown that joinder is justified in relation to the ground challenging claims 5, 16, and 46. Petitioner has not articulated persuasive reasoning as to why this panel and Patent Owner should take the time and resources to address claims not at issue in a related district court case, when Petitioner could have challenged those claims, and provided analysis, in its original Petition or another petition filed before the relevant § 315(b) bar date.
Challenges to claims 44 and 47, however, stand on different footing. In its Joinder Motion, Petitioner points out that Patent Owner asserted infringement of claims 44 and 47 of the '216 patent for the first time against Petitioner in a related district court case, Endo Pharms. Inc. v. Amneal Pharms., C.A. No. 12-CIV-8115 (S.D.N.Y.), on February 5, 2014. Joinder Motion 4, 7. Thus, Patent Owner asserted these two claims in a district court case after Petitioner filed its Petition in IPR2014-00360 on January 16, 2014, and after the § 315(b) bar date passed for Petitioner on January 17, 2014. Patent Owner concedes these facts . . .Because Patent Owner asserted claims 44 and 47 for the first time after Petitioner filed its first Petition, and after the § 315(b) bar date passed, we are persuaded that Petitioner has shown that joinder is justified in relation to the ground in the current Petition challenging claims 44 and 47
Going forward, at least for panels aligned with the majority in Target, petitioners will need to justify issue joinder in relation to what might have been done in a first filing. This practice will ensure that the agency's discretion is not encouraging gamesmanship on either petitioner (i.e., "do-over") or patentee (i.e., amended complaint) sides.