Post-Grant Patent Blog

PTAB Adjusts Deadline For Final Decisions In Rare Cases
June 28, 2017

Originally published on June 28, 2017 in Law360

The U.S. Patent and Trademark Office’s Patent Trial and Appeal Board has a near-perfect track record of issuing a final written decision within 12 months of instituting trial in post-grant proceedings. However, in at least four cases, it has not issued a final written decision within 12 months of instituting an inter partes review.[1] All four matters involved joinder of third parties to the original petition. Curiously, there is no express indication on the dockets for any of these cases that the one-year deadline has been extended for “good cause” or adjusted due to “joinder” under 35 U.S.C. § 316(a)(11). Any extension or adjustment of the one-year time frame may affect parallel district court litigation(s), as parties and district courts often expect that a final written decision will issue within one year of institution.

Background

The requirement that the PTAB issue a final written decision within 12 months of institution originates from 35 U.S.C. § 316(a), which states in relevant part:
 

The Director shall prescribe regulations ... (11) requiring that the final determination in an inter partes review be issued not later than 1 year after the date on which the Director notices the institution of a review under this chapter, except that the Director may, for good cause shown, extend the 1-year period by not more than 6 months, and may adjust the time periods in this paragraph in the case of joinder under section 315(c).


The corresponding regulation, 37 C.F.R. § 42.100(c), states in full:
 

An inter partes review proceeding shall be administered such that pendency before the Board after institution is normally no more than one year. The time can be extended by up to six months for good cause by the Chief Administrative Patent Judge, or adjusted by the Board in the case of joinder.[2]


Section 42.100(c) does not specify whether the six-month cap for “good cause” should be read separately from the joinder provision (e.g., no cap in cases of joinder), or whether the PTAB must provide public notice to the parties if it extends or adjusts this deadline.

When the USPTO promulgated its regulations, several commenters asked for guidance regarding the impact of the PTAB missing the one-year deadline and what recourse is available to the parties. The USPTO responded that the “Office does not envision at this time extending any review beyond the time periods set forth in §§ 42.100(c) and 42.200(c).”[3] The USPTO reasoned, “This one-year review will enhance the economy, improve the integrity of the patent system, and promote the efficient administration of the Office.”[4] However, in responding to a different comment regarding joinder, the USPTO cited § 316(a)(11) and stated “the Director may adjust the time periods allowing the Office to manage the more complex case.”[5]

The possibility of extending or adjusting the one-year deadline was characterized as an “escape valve” by the American Intellectual Property Law Association in its Oct. 14, 2014, comments on post-grant proceedings. AIPLA advocated for more generous use of extensions in complex trials, to be determined on a case-by-case basis, and provided the following analysis:
 

To date the Board has operated as if the one-year time period for concluding AIA trials is sacrosanct, apparently because the Office perceives that district court judges rely upon the definitiveness of this one-year time period when granting stays. ... This issue is particularly important in proceedings where additional discovery is sought. Most, if not all, denials of additional discovery on secondary considerations or a real party in interest inevitably are putatively justified by the demands of the one-year time period. But additional discovery burdens the parties, not the Board. Furthermore, if the request for additional discovery were granted, it could be that new evidence might shorten the case one way or the other. Strict adherence to the one-year time limit when Congress provided a six-month escape valve undermines the quality of the AIA proceeding and contravenes the spirit of the AIA.


Until recently, the PTAB had not exercised this “escape valve” even in complex cases or cases of joinder. However, in four recent instances, the PTAB did not issue a final written decision within 12 months of institution.

Case Summaries

In IPR2015-01340, the PTAB instituted trial on May 2, 2016.[6] Four co-defendants in the parallel district court litigation soon filed petitions along with motions for joinder. The board ultimately joined all parties to the IPR on the condition that the original petitioner act as the “lead petitioner” as defined in a joint stipulation that the other parties would not produce separate witnesses, not file substantive papers, not separately cross examine or redirect witnesses, not argue separately at oral argument (including telephone hearings and appeals), and that the lead petitioner would make all final decisions.[7] The last of the joinders was granted on Nov. 22, 2016.[8] These joinders are commonly referred to as “me too” petitioners; the joined parties essentially represent that they will join without affecting any scheduling deadlines. The board heard oral argument on Jan. 25, 2017. The one-year “deadline” passed on May 2, 2017; no final written decision has issued to date.

In IPR2016-00084, the PTAB instituted trial on April 29, 2016, and on Oct. 27, 2016, joined two additional parties who filed “me too” petitions.[9] Again, the board did not permit additional briefing for the joined petitioners and required the earliest petitioner to act as lead petitioner. The board heard oral argument on Feb. 2, 2017. The one-year “deadline” passed on April 29, 2017; no final written decision has issued to date.

In IPR2016-00237, the PTAB instituted trial on two concurrently filed IPRs on June 3, 2016.[10] The board eventually joined three other IPRs with each of the original IPRs, the last of which was granted on Nov. 18, 2016.[11] The board heard oral argument on March 16, 2017.[12] The one-year “deadline” passed on June 3, 2017; no final written decision has issued to date.

In CBM2014-00190, the PTAB instituted trial on April 2, 2015, and on Aug. 6, 2015, joined another party who filed a “me too” petition.[13] The PTAB declined to join two other concurrently filed petitions challenging the same patent.[14] The board later issued a revised schedule, ordering a consolidated oral hearing for all four covered business methods reviews (CBMs) about 10 weeks after the originally scheduled hearing.[15] The board heard oral argument on Jan. 6, 2016.[16] The board issued its final written decision on May 26, 2016, approximately one year and seven weeks after institution in the lead case, but did not discuss any adjustment or extension of the one-year time frame in that decision.

Observations

It is not clear that the PTAB has actually missed or extended any statutory or regulatory deadline by taking more than one year from institution to issue its decisions in the above IPR proceedings. As noted, the PTAB has at least two options for meeting its statutory deadline outside of the default one-year time period set out in 35 U.S.C. § 316(a): an extension for “good cause” or an “adjust[ment]” to the schedule where joinders are involved. In the above proceedings, at least one third-party petitioner joined each IPR/covered business method review post-institution. There is no express indication on the docket for any of these proceedings that the one-year “deadline” was extended for “good cause” by the chief administrative patent judge. Accordingly, the likely explanation is that the one-year date was “adjusted by the Board in the case of joinder” under 35 U.S.C. § 316(a)(11) and 37 C.F.R. § 42.100(c). Thus, rather than changing a “deadline,” it may be fairer to say that the PTAB adjusted or recalculated an internal target date to issue a final written decision within one year of institution.

Regardless of the reason, these cases are noteworthy because the PTAB has been otherwise strikingly successful in hitting the one-year mark, even in cases of joinder or consolidated oral arguments. The PTAB has issued over 1,600 final written decisions since Sept. 16, 2012.[17] To the best of the author’s knowledge, all of these decisions issued within one year of institution of the originally instituted petition except as noted above. This 99.8 percent success rate for hitting the one-year mark illustrates how the four cited cases are truly outliers.

The above PTAB proceedings raise the question of when exactly the PTAB will issue its decision in cases involving joinder. Section 316(a)(11) and Rule 42.100(c) both mention the six-month extension in the context of the “good cause” clause, whereas the clause pertaining to adjustment in “the case of joinder” arguably is not cabined by that six-month time limit. If these two clauses are read separately, the board could plausibly argue that there is no statutory cap on the extension of the one-year period in cases of joinder. Another possibility is that the board could recalculate its “deadline” as one year from the date of the last-instituted joinder petition. Although the board was silent regarding any adjustment or extension in CBM2014-00190, perhaps the board will explain its interpretation of the statute in its final written decisions for the three pending IPRs.

Based on these four cases, PTAB practitioners involved in parallel district court proceedings should be aware that the one-year “deadline” is not absolute in cases involving joinders and may be subject to “adjust[ment].” Practitioners should consider how such adjustments may affect the timing of an IPR decision relative to the resolution of motions or trial in a pending district court case. They should also consider the possibility of a schedule adjustment when seeking or opposing a stay of parallel district court proceedings.

Because the PTAB may adjust the one-year time frame for joinder even in cases involving “me too” petitioners who represent that they will join without affecting any scheduled deadlines, the original petitioner should consider seeking guidance from the PTAB regarding the schedule before consenting to joinder. Such guidance could be sought early in the PTAB proceeding to clarify how joinder may affect the schedule and impact any co-pending district court proceedings.

Some common threads between the above-described PTAB proceedings may help predict the circumstances in which the PTAB will adjust the schedule for joinder. First, three of the four proceedings described involve pharmaceutical patents. Second, at least two of these IPRs involved proceedings in which a district court or the U.S. Court of Appeals for the Federal Circuit issued a decision on the merits either during or before the PTAB proceedings. Third, two of these proceedings involved companion cases in which the board held a consolidated oral hearing. However, these select cases are too few to establish whether adjustment is more likely with certain judges, technologies and/or procedural posture of parallel district court cases.

Conclusion

It is too early to determine whether these PTAB proceedings are the beginning of a new trend for cases involving joinder, or whether they are just a few atypical exceptions to the general rule that the board will issue a final written decision within one year of institution under 35 U.S.C. § 316. While the board has a strikingly strong track record of issuing final written decisions within one year of institution, these four exceptions indicate that this “deadline” is not sacrosanct, at least in cases involving joinders. Time will tell how frequently the PTAB decides to exercise this “escape valve,” and whether it will formally publicize the reasoning behind the extension or adjustment involved in the above cases, or others like them.
 



[1] This article will refer to all post-grant proceedings as IPRs, unless mentioned.

[2] See also 37 C.F.R. §§ 42.200(c), 42.300(c) (corresponding regulations for post-grant review (PGR) and covered business method (CBM)).

[3] See Final Rule, USPTO Response to Comment 14 (July 16, 2012).

[4] Id., p. 155.

[5] Id., USPTO Response to Comment 89.

[6] See IPR2015-01340, Paper 16 (PTAB).

[7] Id., Paper 24 (July 1, 2016).

[8] Id., Paper 53.

[9] See IPR2016-00084, Papers 8, 37 (PTAB).

[10] See IPR2016-00237, -00240, Papers 13, 14 (PTAB).

[11] See IPR2016-01335, Paper 8.

[12] See IPR2016-00237, Paper 80.

[13] See CBM2014-00190, Papers 9, 31 (PTAB).

[14] Id., Paper 31.

[15] Id., Paper 32 (Sept. 9, 2015).

[16] Id.

[17] See AIA Trial Statistics, p. 11 (May 31, 2017).