by Travis Gasa
A patent challenger that has repeatedly attempted and failed to invalidate a patent through Inter Partes Review (IPR) is not permitted to then try an Ex Parte Reexamination according to the Federal Circuit. In re Vivint, Inc., Appeal No. 2020-1992 (Fed. Cir. Sept. 29, 2021)
The court found, at least under the facts of this case, that it was arbitrary and capricious for the USPTO to grant a petition for reexamination of a patent, or at least to refuse to terminate the reexamination proceeding once petitioned to do so, when the USPTO had already denied institution of a previously-filed IPR for abusive filing practices. However, the court indicated its holding is narrow and left open the possibility that the Director, using his or her “own initiative” authority under 35 U.S.C. § 303(a), could still order reexamination of a patent in such circumstances.
Vivint sued Alarm.com in 2015 for infringement of U.S. Pat. No. 6,717,513. Alarm.com responded by filing three IPR petitions against the ‘513 patent. The USPTO declined to institute the first two IPRs, since it found that Alarm.com failed to make the threshold showing that there was a reasonable likelihood it would prevail on at least one challenged claim. For the third IPR, the USPTO denied institution because it was an example of “undesirable, incremental petitioning” (i.e., serial petitioning).
Over a year later, Alarm.com filed a request for ex parte reexamination of the ‘513 patent, effectively reusing verbatim two of its grounds of invalidity from the third IPR petition. The USPTO found the request raised a substantial new question of patentability and ordered reexamination. Vivint petitioned the USPTO to terminate the reexamination, but the USPTO claimed it had no authority to terminate once the reexamination was ordered.
The first main issue on appeal was whether the two reused IPR grounds of invalidity in the reexamination request still qualified as presenting a “substantial new question of patentability,” the standard for ordering reexamination.
The Federal Circuit held that a question of patentability remains “’new’ until it has been considered and decided on the merits.” In this regard, although Alarm.com had already presented two nearly identical grounds of invalidity in the third IPR, this IPR was denied institution for discretionary reasons. As a result, those two grounds had not been “considered and decided on the merits” and therefore were still “new.”
The second main issue on appeal was, even if the reexamination request included a substantial new question of patentability, whether the USPTO should have ordered reexamination or, once ordered, should have terminated the reexamination after being petitioned to do so.
The court held that it was arbitrary and capricious for the USPTO to order reexamination of the ‘513 patent when it had already used its discretion, effectively under 35 U.S.C. § 325(d), to deny an IPR for the same patent for abusive filing practices. Section 325(d) allows the Director to reject a reexmination request or IPR petition because “the same or substantially the same prior art or arguments previously were presented to the Office.” The court stated that “the Patent Office, when applying § 325(d), cannot deny institution of IPR based on abusive filing practices then grant a nearly identical reexamination request that is even more abusive.”
The court also held that, once the USPTO orders reexamination, it also has the authority to terminate the proceeding (contrary to the USPTO’s arguments), such that it was also arbitrary and capricious to have failed to terminate the reexamination proceeding after patentee Vivint petitioned for such relief.
The court noted its holding was limited and did not foreclose the possibility that the Director could order reexamination in such circumstances. In this regard, the court observed that 35 U.S.C. § 303(a) provides the Director with the authority to raise, “[o]n his own initiative, and any time, … a substantial new question of patentability” in an ex parte reexamination. However, this type of authority was not the basis for ordering the reexamination at issue in the case.
In summary, the court’s holding in this case appears to require the USPTO to dismiss a post-issuance review petition when a prior such petition was already denied institution for abusive filing practices under § 325(d). While it appears possible in theory to pursue serial post-issuance proceedings at the USPTO, particularly given the different institution standards for IPRs and reexaminations, serial petitioners employing abusive practices similar to those used by Alarm.com may find subsequent petitions dismissed by the USPTO under § 325(d).