Broad Interpretation of 315(b) time-bar applied to 315(a) challenge

Cisco Sys., Inc. v. Chrimar Sys., Inc. (PTAB 2019) (precedential)

This case was decided back in January 2019, but the USPTO has now designated the decision as precedential. The decision provides another time-bar / preclusion scenario.

Prior to filing its IPR petition, Cisco had filed a declaratory judgment (DJ) action in district court seeking to invalidate Chrimar’s U.S. Patent 8,902,760. However, rather than pursuing the case to judgment or settlement, Cisco dismissed its lawsuit without prejudice. Under typical principles of preclusion, this type of dismissal would not prohibit or estopp Cisco from challenging the patent again at a later date.  However, the question here was how those rules mesh with the Patent Act.

The Federal Circuit has decided several time-bar cases that arise under Section 315(b). That provision creates a one-year deadline for a challenger to file its IPR petition after being sued (and served) for patent infringement.  315(b) does not apply here because Cisco was not sued for infringement but rather filed its own declaratory judgment lawsuit.

Section 315(a) provides:

An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.

The petitioner Cisco easily checks the boxes of the statute — it filed a civil action challenging validity before it filed the IPR petition.  However, Cisco argued that that the voluntary dismissal should reset the case. The voluntary-dismissal argument had already been foreclosed in the 315(b) situation.

Cisco argued that 315(a) (unlike 315(b)) parallels estoppel provisions and thus should follow the same rules.  The PTAB panel rejected that argument — following the Federal Circuit’s lead here to strictly apply the statute as written and without judicial exception. The statute “does not include an exception.”  Thus, the holding: Cisco’s IPR Petition is barred by its prior DJ action even though voluntarily dismissed. 

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Representative claim:

73. A BaseT Ethernet system comprising:

Ethernet cabling having at least first and second individual pairs of conductors used to carry BaseT Ethernet communication signals, the at least first and second individual pairs of conductors physically connect between a piece of BaseT Ethernet terminal equipment and a piece of central network equipment, the piece of central network equipment is a BaseT Ethernet hub;

the piece of central network equipment having at least one DC supply,

the piece of BaseT Ethernet terminal equipment having at least one path to draw different magnitudes of current flow via the at least one DC supply through a loop formed over at least one of the conductors of the first pair of conductors and at least one of the conductors of the second pair of conductors,

the piece of central network equipment to detect at least two different magnitudes of current flow through the loop.

= = = =

The patent arguably covers IEEE standards for Power over Ethernet (PoE).

= = = = =

It looks like this was an all male case: James Marina at Kirkland (along with Robert Kang and Eugene Goryunov) represented the petitioner Cisco while Frank Angileri at Brooks Kushman (along with Tom Lewry, Marc Lorelli, and Chris Smith) represented the patent owner.  The opinion was penned by Judge Robert Weinshenk and joined by panel members Karl Easthom and Gregg Anderson.

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23 thoughts on “Broad Interpretation of 315(b) time-bar applied to 315(a) challenge

  1. 2

    Another decision against delayed filings of IPRs. But this PTAB IPR denial decision does not indicated whether the prior filed but dropped invalidity DJ was filed before or after IPRs became available [or at least inter partes reexaminations]? If after, one has to wonder why a DJ [slower, lower odds of success, and far more billing expensive for clients] was being filed instead? About the only good reason left seems to be where the really good prior art cannot be raised in an IPR because it is not patent or publication art. [Like a statutory bar product sale for which there was no contemporary service manual or sales publications in sufficient detail.] I would be interested in comments on any other good reasons to still use an invalidity DJ suit instead of an IPR?

    1. 2.1

      If the best arguments for invalidity are not 102/103 arguments, moving forward with a DJ might still be the best option for clearing the decks.

      It’s remains an appalling situation that you can’t uses IPRs for 101 challenges. What’s happening is that an otherwise anticipated/obvious claim can actually be shielded from an IPR by reciting some non-obvious but ineligible abstraction that’s not directly related to “doing business”. That’s an absurd situation, particularly given that it’s exactly those types of claims that are so frequently wielded by patent tr0lls, and it’s exactly those types of claims that were handed out in historic numbers by the PTO which necessitated the creation of IPRs in the first place.

      Reminds me: is anyone keeping track of how often the so-called “printed matter doctrine” (a well-known subject matter eligibility screen) is relied on during IPR proceedings?

      1. 2.1.1

        Your whining is noted.

      2. 2.1.2

        Good point, a DJ suit based on 101 and/or 112 may well still be a logical defense step in some cases in view of the IPR unavailablity and the statistics on 101 unpatentability defenses Bob Sachs recently reported on IPWatchdog in “Alice: Benevolent Despot or Tyrant? Analyzing Five Years of Case Law Since Alice v. CLS Bank: Part I” “By Robert Sachs on Aug 29, 2019 05:15 pm.” [Only available if being threatened by the patent, of course.]

        As for a [rare] “printed matter” defense, why could not it be properly raised as part of a 103 IPR petition to preclude a claimed printed matter portion of a claim from being used to distinguish over the petitioner cited prior art cited against the rest of the claim?

        1. 2.1.2.1

          Good question as to PM, Paul.

          Of course, your question highlights the fact that Malcolm refuses to treat PM (and the attached exceptions to that judicial doctrine) in anything remotely approaching inte11ectual honesty.

        2. 2.1.2.2

          Bob Sachs is still peddling his cr @p somewhere out there in the patentsphere? I had no idea. Comedy gold.

          As for a [rare] “printed matter” defense, why could not it be properly raised as part of a 103 IPR petition

          Because whether a “limitation” in a claim relating to the communication of “non-obvious information” raises a 101 issue is a question that is perfect for the Supreme Court to answer (although we all know the answer already: of course it’s a subject matter eligibility question). That would be my position as the patentee.

          Let’s put it this way: it’s going to end up being a very expensive and lengthy proceeding. In the long run, it would be worth it for everybody because it would put to rest a lot of the silliness we hear from the patent maximalists who are “confused” and have a difficulty with the fundamentals.

          To reiterate the obvious point: ignoring a claim limitation during a 103 analysis “because it’s information” is a subject matter eligibility issue. Period. If anyone doesn’t understand this in 2019 then they really have no business being near the patent system. Try something simpler. Burger flipping comes to mind.

          1. 2.1.2.2.1

            MM, I appreciate the academic wish to have the “printed matter” defense or application claim rejection finally considered by the Sup. Ct. and perhaps added to their longstanding list of unpatentable subject matters, and maybe even expand it to stored software instructions? I would also find such an attempt interesting. But getting the Supremes to make major patent law clarifications is not in the litigation objective or budget of most clients. Nor are the results of that always predictable.

            1. 2.1.2.2.1.1

              Your appreciation of the pursuit of ILlogic and disassociation from the reality of innovation in the computing arts is noted, Paul.

        3. 2.1.2.3

          [rare] “printed matter” defense,

          It’s only “rare” because most normal people just raise it as a proper 101 issue, as opposed to the other way around. Tons of eligibility rejections could be presented as types of “so-called PMD” rejections if people wanted to use different words and “ignore limitations” during a 103 analysis instead of recognizing that, under 101, the subject matter referred to in the limitations is being illegally protected in a prior art context.

    2. 2.2

      Q: “would be interested in comments on any other good reasons to still use an invalidity DJ suit instead of an IPR?

      A: $

    3. 2.3

      There is almost no reason to file a DJ of invalidity. People have been successfully getting around the 315(a) bar for years by filing a DJ of non-infringement only, and not saying a peep about invalidity. The patent owner who gets this DJ complaint basically has to counterclaim for infringement (it’s clearly a compulsory counterclaim). When they do, invalidity can be raised as a defense to the infringement charge.

      The PTAB has repeatedly said that this strategy avoids the 315(a) bar because the defendant never actually filed a “civil action challenging the validity of a claim in the patent.” Statute seems clear that all that matters is the document or complaint that initiated the civil action, not subsequent defenses. Don’t raise invalidity in the complaint, and DJ should be just fine without 315(a) barring future IPR challenges.

      Given that the Federal Circuit (and how the PTAB) are applying the 315 bars in an exceedingly literal and textual fashion, there is little reason to doubt this strategy will not continue to work.

      1. 2.3.1

        Thanks LR – but my, how that sounds in the Supreme Court disdain for “scriviners,” doesn’t it?

        1. 2.3.1.1

          the Supreme Court disdain for “scriviners,”

          News flash for Bildo and other denizens of the patent maximalist echo chamber: pretty much every normal person on earth disdains “scriveners”.

          Open a window and get some air. Find some friends who aren’t entitled w@ ckjobs like yourself.

          1. 2.3.1.1.1

            LOL – your cognitive dissonance is noted (seeing as the pejorative is so typically geared to those seeking to protect the rights of innovators).

      2. 2.3.2

        Thanks LR.
        One wonders if Cisco and other in-house and out-house [OC] attorneys ever read comments like these in the above 2+ thread? Or attempt a client recovery?

  2. 1

    “It looks like this was an all male case…” How is that relevant?

    1. 1.1

      The first step to solving a problem is to notice that it exists. Kudos to Prof. Crouch for paying attention.

      1. 1.1.2

        What’s the problem? And again, how is Dennis’ observation relevant?

        1. 1.1.2.1

          The “observation” is only *relevant* if you want to insert an ISM focus into a patent law situation.

          How do you not see the problem in that in this day and age that there is a situation in which no women (and how about others ISMs like race?) are involved?

          Apparently, any ‘decent’ Leftie (like Greg) can easily see the problem.

          Maybe the problem is as caught by Mellow — and you need to be more sensitive and make your moniker more PC friendly…

          Now where did I put my “S” sign….?

            1. 1.1.2.1.1.1

              Great.

              Your feelings are noted.

              As far as that goes, I feel likewise — even (especially) to the pernicious Liberal Left use of that ISM as an attempted “historical correction.”

    2. 1.2

      So you’re saying we have to AtariMansplain it to you… ?

      (J/K)

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