Rackspace US, Inc. v. Personal Web Techs., LLC  

Addressing the one-year time frame for completing inter partes review (IPR) in the context of a stay request, the U.S. Patent and Trademark Office’s (PTO) Patent Trial and Appeal Board (PTAB, or the Board) denied a patent owner’s motion to stay an IPR, stating that the patent owner had not shown good cause for the Board to waive its statutory obligation to issue a final written decision within one year.  Rackspace US, Inc. v. Personal Web Techs., LLC, IPR2014-00057 (PTAB, July 23, 2014) (Zecher, APJ.).

Multiple post-issuance proceedings were brought against the challenged patent by different petitioners, all based on the same prior art.  The Board had already found certain claims unpatentable over the reference in a first IPR, and another one of the challenged claims was the subject of a newly filed IPR petition and an ongoing inter partes reexamination, both based on the same prior art.  In the proceeding in issue, the Board again instituted review of the same challenged claims as in the first IPR, based on the same reference and applying the same claim construction as in the first IPR.  The patent owner appealed the final decision in first IPR to the U.S. Court of Appeals for the Federal Circuit and requested the instant proceeding be stayed pending resolution of that appeal.

One aspect of the patent owner argument for a stay was that a “final decision in the appeal will necessarily implicate the proceedings in the present IPR, particularly if the decision modifies or rejects a claim construction . . . or interprets or applies the [prior art] reference in a different way.”  The patent owner further reasoned that it would be more cost-effective for all concerned to stay the proceeding.  The patent owner argued that the PTAB’s statutory and rule-based authority to stay an IPR proceeding “must be read as an exception” to the statutory requirement that a final determination be issued not later than one year after institution of the IPR, or 18 months on good cause.

The PTAB disagreed, explaining that “absent good cause shown, the proceeding must be completed within one year,” and that the patent owner’s appeal, by itself, does not justify staying the proceeding, “much less qualif[y] as an extraordinary circumstance that would allow [the PTAB] to waive the one year requirement.”  The PTAB reasoned that while the IPR in issue is based on the same reference as applied in the earlier proceeding, the two challenges were different in that the present proceeding presents new testimony, new witnesses, relies on different aspects of the disclosure in the prior art and challenges an additional claim.  The PTAB emphasized that the patent owner did not “explain adequately how staying [the] proceeding pending the outcome of the appeal . . . especially given [that] the differences between the two proceedings [would allow the PTAB] to waive the one year requirement to issue a final written decision.”

Practice Note:  Practitioners are on notice that once the Board institutes review of a patent, it intends to issue a final written decision within one year, irrespective of cost or burden.