Click-to-Call Technologies, LP v. Ingenio, Inc., __ F.3d __, 2018 WL 3893119 (Fed. Cir. Aug. 16, 2018), the court found that the Patent Trial and Appeal Board (“the Board” or “PTAB”) had committed legal error by concluding that a petitioner was not time-barred because an earlier district court infringement action was voluntarily dismissed without prejudice, and it vacated the Board’s Final Written Decision on the basis that the PTAB lacked the jurisdiction to institute the IPR.
The rather complex procedural history of the case goes back to June 8, 2001, when Infrorocket.Com (“Infrorocket”), the exclusive licensee of U.S. Patent No. 5,818,836 (“the ‘836 patent”), filed a civil action in the U.S. District Court for the Southern District of New York against Keen, Inc. (“Keen”), a predecessor-in-interest of appellee, Ingenio, LLC (“Ingenio”). Infrorocket served a complaint asserting infringement of the ‘836 patent on Keen on September 14, 2001. However, on March 21, 2003, following a merger of the parties, Infrorocket voluntarily dismissed the suit “without prejudice,” and the case was dismissed.
Appellant, Click-to-Call Technologies, LP (“CTC”), subsequently acquired the ‘836 patent, and, on May 29, 2012, asserted patent infringement claims against multiple parties, including Ingenio. Almost a year later, on May 28, 2013, Ingenio, together with Oracle Corp., Oracle OTC Subsidiary LLC, and YellowPages.com LLC (together, “Petitioners”), filed a single IPR petition challenging the claims of the ‘836 patent on both anticipatory and obviousness grounds. Despite acknowledging that Ingenio was served with the infringement complaint back in 2001, the Board ultimately concluded that the service did not bar Ingenio’s IPR petition, reasoning that a voluntary dismissal without prejudice “leaves the parties as though the action had never been brought” and essentially nullifies the effect of service for the purposes of applying the statutory IPR time bar.
In reviewing the Board’s statutory interpretation pursuant to Chevron, U.S.C., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), the Federal Circuit first looked to whether the language at issue has a plain and unambiguous meaning with regard to the particular dispute in the case. Section 315(b) provides that an IPR “may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” The court found that the phrase “served with a complaint” is clear and unequivocal, and explained that the statute does not contain any exceptions for complaints that are served and then subsequently dismissed, with or without prejudice. Noting that Congress could have included additional language to address the effect of a dismissal, but chose not to do so, the court refused to read such a limitation into the meaning of the statute, and instead took the statute text as Congress’s “final expression of its intent.” This understanding of the time bar, the Federal Circuit reasoned, is consistent with the legislative history of §315(b) and the Supreme Court’s notion that the core purpose of service is to provide notice of the pendency of a legal action, such that defendants are provided with a reasonable opportunity to identify and understand the patent claims. Finding no gap to fill or ambiguity to resolve in the statutory language, the Federal Circuit had no need to proceed to Chevron’s second step.
While the Board relied on Graves v. Principi, 294 F.3d 1350 (Fed. Cir. 2002) and Bonneville Assocs., Ltd. P’ship v. Barram, 165 F.3d 1360 (Fed. Cir. 1999) as support for its assertion that the Federal Circuit has consistently interpreted the effect of voluntary dismissals as leaving the parties as if the action had never been brought, the court found both cases to be inapplicable here. Whereas Graves and Bonneville both concern whether an appellant’s filing of a notice of appeal and the subsequent dismissal of that appeal tolls the jurisdictional deadline to appeal from the decision below, the appropriate question in the instant case is whether the voluntary, non-prejudicial 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.
The Federal Circuit also rejected Petitioners’ alternative arguments. First, Petitioners argued that, because the claims of the ‘836 were materially changed during a 2008 ex parte reexamination, they were not served with a complaint alleging infringement of this patent more than one year before the IPR petition was filed. However, the court distinguished reexamination and reissue, noting that only the latter resulted in the surrender of the original patent and the issuance of a new patent. Second, the Petitioners asserted that even if the § 315(b) time bar applied to Ingenio, it would not apply to the YellowPages.com, Oracle Corp., or Oracle OTC Subsidiary LLC, as they were not in privity with Ingenio at the time of service of the complaint in 2001. However, the Federal Circuit explained that the efforts to separate Ingenio from the other Petitioners to save the petition were in vain, because all four petitioners had declared themselves as “the Petitioner” in their sole IPR petition, and because § 315(b) is applied petition-by-petition, not petitioner-by-petitioner. The court also refused to entertain arguments directed to what-if scenarios regarding separate petitions and joinders, noting that “the availability of a path not taken does not validate the path actually taken.”
Judge Dyk, joined by Judge Lourie, dissented, urging that 1) the meaning of “service of a complaint,” is not on its face unambiguous; 2) treating voluntary dismissals without prejudice as restoring the parties to the situation that existed before the case had ever been brought is a well-established principle; and 3) any intention to deviate from this well-established rule would be explicitly stated in the statute or rule. A concurrence by Judge Taranto addresses these criticisms and offers additional support for the majority’s opinion.
It is uncertain how patent owners will use the Federal Circuit’s decision in Click-to-Call, but it is speculated that patent owners could strategically file and serve a complaint, and then immediately voluntarily dismiss the case, as a means to control the clock start for the one-year IPR filing deadline of opponents, without the hassle of seeing a civil infringement action all the way through. However, patent owners would only be able to do this once, pursuant to F.R.C.P. 41(a)(1)(B), and may face punishment if the filed suit is found to be frivolous.