Revised Opinion in Windy City: Court Still Bars Self-Joinder in IPR Proceedings

by Dennis Crouch

Facebook v. Windy City (Fed. Cir. 2020) [WindyCity Original OP] [WindyCity Revised OP][WindyCity Mark-up Showing Changes]

This was an important PTAB JOINDER case when it was decided by the Federal Circuit back in March 2020.  (Panel of Chief Judge Prost with Judges Plager and O’Malley).  The en banc court has now denied rehearing, but the original panel has also revised its opinion to take into account the the Supreme Court’s intervening decision in Thryv.

In Civil Procedure, joinder is typically divided into distinct area: joinder of claims and joinder of parties.  The AIA statute provides only for joinder of parties, but the PTAB allowed Facebook to join itself to a pending IPR in order to add additional claims. Facebook had wanted to do this type of joinder, because its later-filed IPR petition would have otherwise been time-barred under § 315(b) — and the patent act particularly notes that the 1-year 315(b) time-bar “not apply to a request for joinder”.  In its first decision, the appellate panel held that the self-joinder approach was not permitted by the statute.

Since March, the Supreme Court decided Thryv — and overturned a set of Federal Circuit cases reviewing various petition-stage decisions by the PTAB.  In Thryv, the court held that the USPTO’s interpretation of the § 315(b) one-year time-bar was not reviewable on appeal based upon the “no appeal” provision of § 314(d).

Now the original panel has revised its opinion in Windy City to take into account Thryv.  In its decision, the court explained that 315(c) joinder requires two decisions: (1) determination of whether the joinder-applicant’s petition warrants institution (including whether it is time-barred); and (2) determination of whether joinder should be allowed.  Under Thryv, the first portion of the test is not reviewable on appeal, but the second portion is appealable.

The statute requires the Director (or the Board on behalf of the Director) to make a “joinder decision.”  The statute makes clear that the joinder decision is made after a determination that a petition warrants institution, thereby affecting the manner in which an IPR will proceed.

Thus, the joinder decision is a separate and subsequent decision to the intuition decision.  Nothing in § 314(d), nor any other statute, overcomes the strong presumption that we have jurisdiction to review that joinder decision. . . .

Accordingly, we have jurisdiction to review the Board’s joinder decisions in this case to determine whether the Board (on behalf of the Director) acted outside any statutory limits under § 315(c).

Revised Opinion. Thus, the holding:

Because joinder of the new claims was improper, we vacate the Board’s final written decisions as to those claims, but because we lack authority to review the Board’s institution of the two late-filed petitions, we remand to the Board to consider whether the termination of those proceedings finally resolves them.

Id. I expect that on remand, the PTO will dismiss the late-filed petitions.

In its revised opinion, the court maintained its unanimous secondary opinion offering “additional views” on deference to Precedential Opinion Panels at the PTO.

53 thoughts on “Revised Opinion in Windy City: Court Still Bars Self-Joinder in IPR Proceedings

  1. 5

    Is the patent bar (i.e., readers of patentlyo) comfortable with PTAB as a sustainable legal system? This case comprehensively illustrates a system that is utterly nonsensical and irrational. 1) an agency is permitted to break the law and there is no legal avenue to stop them; 2) courts entertain motion practice over a “petition [that] is filed more than 1 year after…the petitioner is served with a complaint alleging infringement of the patent”; 3) an agency/division run by lawyers must be told by an appeals court that a party cannot be joined unto itself; 4) links on a website substitute for notice-and-comment rules published in the Code of Federal Regulations?

    Does anyone believe this is a reasonable or useful system of justice?

    1. 5.1

      My very imprecise estimate is that support for the IPR/PGR system runs about 4 to 1 against amongst the comment-writers on this blog. This is scarcely surprising and scarcely relevant. The commentariat around these parts is mostly prep-&-pros folks, and people who earn their daily crust by obtaining patents for clients are professionally disquieted by anything that makes it easier to invalidate a patent. As it happens, however, society as a whole did the set up the U.S. patent system as a make-work project for prep-&-pros folks, so the disquietude of the prep-&-pros bar is not really a reliable indicator of the social utility of the IPR/PGR system.

      1. 5.1.1

        … society as a whole did the set up the…

        Er, “ society as a whole did not set up the… .” Please excuse the typo.

      2. 5.1.2

        The commentariat around these parts is mostly prep-&-pros folks, and people who earn their daily crust by obtaining patents for clients are professionally disquieted by anything that makes it easier to invalidate a patent.

        You say that as if that were a bad thing.

        It is not.

      3. 5.1.3

        … and by “earn their crust,” you impugn a lack of ethics.

        Methinks that reflects more on you than on anyone that you would so wish to tar, Mr. “I Use My Real Name.”

      4. 5.1.4

        I get that infringers and litigators like it for purely selfish reasons. I guess I can answer my own question. And I think you are right, they outnumber those who yearn for a rational and equitable system roughly 4 to 1.

        1. 5.1.4.1

          I am a prep and pros person now, but I was doing litigation and have worked with some small companies like yours Josh.

          I think that my position is probably close to many others that I speak with including some of the top scholars in patent law.

          The fact is that IPRs/Alice have dropped the value of a patent by about 80 percent.

          IPRs are not liked because they do not to be fair. It is a roll of the dice whether claims are going to be invalidated and the Constitutional framework for IPRs to faulty as it is with Alice.

          Most of my objection with the CAFC, Scotus, and PTAB have to do with the way they do their job. They are activists that break the law to get their goal accomplished. That bothers me the most. If Congress decides that we shouldn’t have patents, so be it. But instead what we have is judicial activism from people that just believe patents are bad so it is OK to break the law to weaken the patents.

          Also, anyone in this field knows there is massive, massive money like trillions –literally–of dollars behind burning down the patent system. I admit I briefly worked for one of the big ones formulating propaganda statements to Congress during the writing of the AIA.

          1. 5.1.4.1.1

            Again, though, the core problem is that it is more work to be the D in federal court than the P in a patent suit. The imbalance is shocking when you defend a client and realize that you have a few months depending on local rules to put together all your invalidity defenses.

            1. 5.1.4.1.1.1

              As has been advanced before, if the problem is a D/P problem, then this would show is matters outside of IP litigation (while acknowledging that IP may be a multiplier based around least a bit on its former value), and the ‘answer’ is a “Civ Pro” answer and not an “IP” answer.

              Attacking the wrong area is a ‘double fault.’ Not only is the true problem not being addressed, vested (and heavily moneyed) interests are only too glad to see IP scapegoated for their (juristic) person’s benefit to the larger detriment of innovation.

          2. 5.1.4.1.2

            IPRs are not liked because they do not to be fair. It is a roll of the dice whether claims are going to be invalidated…

            Anyone with actual experience with any more than a dozen IPRs knows from personal experience that this assertion is palpably, risibly wrong. Read any more than two dozen IPR decisions and you will be struck at how little difference there is between the legal reasoning and outcomes achieved by the PTAB compared to the reasoning and outcomes that one sees in the Art. III courts. In fact, if there is a salient difference between PTAB & Art. III, it is that the PTAB is noticeably less likely than the courts to say something scientifically wrong along the way to reaching the decision.

            For better or worse, few of the commenters around here have actual experience with IPRs. Many instead form their impressions from anecdotes that Mr. Malone publishes on IP Watchdog. Night Writer’s above claim will likely pass around here with far less derision and disparagement than it honestly merits.

            1. 5.1.4.1.2.1

              Greg’s posts will likely pass around here with far les derision and disparagement than they honestly merit.

            2. 5.1.4.1.2.2

              Goodness what nonsense Greg.

              You don’t even bother to identify the key point of an IPR decision. Under KSR, the PTAB patent judges can pretty much do whatever they want in terms of deciding that something is obvious or is not obvious.

              That is where the rubber hits the road and that is where the roll of the dice come in. One could fill in the same “legal reasoning” and just plug in “obvious” or “non-obvious” and ANYONE with any IPR experience knows this Greg. And knows whether the patent judges decide to fill in “obvious” or “not obvious” is a roll of the dice.

              1. 5.1.4.1.2.2.1

                Under KSR, the PTAB patent judges can pretty much do whatever they want in terms of deciding that something is obvious or is not obvious… and ANYONE with any IPR experience knows… whether the patent judges decide to fill in “obvious” or “not obvious” is a roll of the dice.

                So is your beef here with the AIA or with KSR. I agree that KSR is a mess. You have no evidence, however, that the PTAB applies KSR in a manner differently or worse than the Art. III courts apply KSR. As it happens, the PTAB is slightly less likely than are the Art. III courts to conclude that claims are invalid (see link below).

                Despite your protestations that “ ANYONE with any IPR experience knows this,” the data do not bear you out. There are certainly real problems in patent law right now (both KSR and Mayo/Alice leap readily to mind), but the AIA really is not among the problems.

                link to patentprogress.org

                1. Yeah the data does bear that out. The data shows 81% of the time the PTAB holds some or all of the claims invalid in instituted decisions where they make final decisions.

                  The numbers are probably much higher.

                  The fact is that the numbers and reputation of the PTAB as the death squads match up very well. And the AIA gives the PTAB a test of more likely than not with KSR which means that a patent judge can pretty much decide whatever they want.

                  And ANYONE with any experience at the PTAB knows this.

                  So, in fact, the AIA is the problem in that the proceeding and judicial standards used set up a situation where the patent owner is very unlikely to get a fair shake. The fact is that given almost any decision of the PTAB it could easily be written the other way. I know I could do it easily for almost any decision. Maybe there are 1 or 2 in the entire history of the PTAB since the AIA where that isn’t true.

                2. The data shows 81% of the time the PTAB holds some or all of the claims invalid… where they make final decisions.

                  As well note that 100% of the decisions in which the PTAB invalidates a claim result in a claim being held invalid. If you will insist on confining your observations to the mere subset (less than half of PTAB matters) of IPRs that reach final written decision stage, then you will end up with a frighteningly high (albeit meaningless) rate of invalidity. Those who work in front of the PTAB know that the name of the game for the patentee is to convince the PTAB not to institute. If you include non-institution decisions in your calculations (and to do otherwise is intellectual dishonesty of the first water), then it turns out that the PTAB invalidates at essentially the same rate as the Art. III courts.

                3. >>If you include non-institution decisions in your calculations (and to do otherwise is intellectual dishonesty of the first water), then it turns out that the PTAB invalidates at essentially the same rate as the Art. III courts.

                  Some fancy spin you have there.

                4. Greg loves to toot the “patentprogress” propaganda piece, even as he turns a blind eye to such things as anything shared at the IPWatchdog (that does not fit his desired narrative).

                  I wonder how he would react to this:

                  link to news.bloomberglaw.com

                5. The funny thing too is that Greg purposefully places himself into a bubble (any one who ‘offends him’ is no longer paid attention to), and expressly because of his own choice of echo-chamber enhancement, his views simply become more and more worthless.

                  Once upon a time there may have been an objective base of reason there. But such has long dissipated.

                  Now, he is just an in-house Pharma shill.

            3. 5.1.4.1.2.3

              Anyone with actual experience with any more than a dozen IPRs knows from personal experience that this assertion is palpably, risibly wrong.

              The problem is that anyone with a smidgen of conscience will have trouble willfully lying, but not with speaking based on willful ignorance. ANYONE with any [FILL-IN BLANK] experience knows this.

              1. 5.1.4.1.2.3.1

                Oh goodness, the dark money chimes in.

              2. 5.1.4.1.2.3.2

                NS II refuses to see the irony in his own posts.

                His ability to choose the wrong side on most every issue that he joins in on is pretty uncanny.

  2. 4

    OT, but to my mind perhaps the biggest IP event of the last century.

    A Chinese patent is now worth more than a US patent for the same invention.

    This is earth shattering and means the US will soon trail China in almost all technologies. We have seen this in the wireless space where China now leads all other countries in 5G technology.

    Remember that this was the goal of the Chinese government to create a patent system to spur innovation in China. This was a stated goal and China has worked miracles at improving their patent system. 20 years ago it was a joke. And even five years ago it was at a joke level doing prosecution. Now the Chinese patent office does a good job and the Chinese courts despite all the corruption are a better alternative than the US courts.

    Maybe get that most academics are paid shills for anti-patent international corporations and most of the posts on this blog are paid for by the anti-patent non-profits funded by a few huge international corporations.

    A US patent has dropped in value about 80 percent since the AIA according to the firms that sell patents that present at our law firm. That is how much they can broker a patent for since the AIA.

    Reality is better than living in the psychotic world of the likes of Lemley.

    1. 4.1

      And note now that any IP firm that wants to continue to exist in the US needs to have a very strong Chinese skill set.

      Basically, it used to be that the US drove patents. No more. China is now more important than the US, which has reached junk bond status.

      1. 4.1.1

        And yes fi lth bags the number of filings remain OK, but only due to China continuing to flood the US with Chinese inventions as part of their efforts to create a culture of innovation.

      2. 4.1.2

        Basically what you have in the US is a bunch of people that take money to advocate for the destruction of the US patent system. They have no integrity and no concern for any greater good and only putting money in their private bank accounts. They use their “professorship” to use up what little capital is left in the integrity of being a professor. Just look at them being paid 20K-80K to write a paper that gets accepted in the law journals to an abstract written to burn down IP.

        That is the situation.

        1. 4.1.2.1

          Is it your contention that the reason that one particular (unspecified) CN patent is worth more than its corresponding US cognate is because of the work of Prof. Lemley and his ilk? This seems remarkably unlikely. The value of a patent mostly reflects the value of the size of the market over which that patent ensures exclusivity. Prof. Lemley and his fellows have contributed very little to the growth of the size of the telecoms market in the People’s Republic of China. That is more the work of Deng Xiaoping and his successors.

          1. 4.1.2.1.1

            ?? What?

            My contention is pretty clear. That the work of Mark Lemley has devalued patents in the USA.

            I said nothing about Lemley and China. What has had happened is that we are in an innovation race and we have been hamstrung by Lemley and his ilk while China is using the patent system to promote innovation in China.

          2. 4.1.2.1.2

            Obtuse. Is it deliberate?

          3. 4.1.2.1.3

            Greg, the technological and economic growth of China is not just due to its much larger market, it is also due to large long term large Chinese government investments and encouragements in key technologies and education, as well as industrial intelligence. Not limited to normal return-of-capital considerations. In the U.S. much of the venture capital is private and much is spent on games, social media systems, etc. that require less capital and have higher chances for shorter term return-of-capital and profits. Many major Chinese companies are state-owned. This has been going on for long before China developed an effective patent system.

            1. 4.1.2.1.3.1

              [T]he technological and economic growth of China is not just due to its much larger market, it is also due to large long term large Chinese government investments and encouragements in key technologies and education, as well as industrial intelligence.

              Agreed. Like I said, Deng Xiaoping and his successors have been playing a long game for decades now, and its results are manifesting.

              Even if the AIA and Alice had never happened, the particular outcome to which Night Writer is calling attention—a higher valuation for a given CN patent than for its US cognate—would still obtain in 2020. He is indulging the logical fallacy of post hoc, ergo propter hoc when he suggests that the AIA and Alice are a cause of the observed asset valuation.

              1. 4.1.2.1.3.1.1

                Greg,

                You are full of it.

                Certainly, playing a long game is advantageous and speaks to the rise of Value of the patent system in China. But YOUR view is entirely dismissive of the fall of value here and it is BOTH in play that Night Writer’s comments adhere to.

                1. I am not defending Alice. At post #4.1.4.1.2.2.1 above I name Alice as an example of what is wrong with contemporary U.S. patent law.

                  However, while Alice causes (please excuse the pun) myriad problems in patent litigation of late, it is not responsible for this particular development. It is an inevitable consequence of Chinese economic development that certain Chinese IP assets are going to be more valuable than their corresponding U.S. cognates.

                2. “it is not responsible for this particular development.”

                  I would note that you do not know this, because the particular patent has not been identified. If a hypothetical CN sister application of the claims in Alice was just sold for anything it would justify NW’s claim!

                  Edge cases aside, I do not understand your argument. While the relative valuation of patents is at least partially a function of economy size, it is surely also a function of the laws of a given jurisdiction. With Alice, many US patents lost value. I don’t see how you could conclude that to be a minor factor in the overall relative valuation a priori.

                3. [Y]ou do not know this, because the particular patent has not been identified.

                  Touché! I confess, you have quite caught me with my proverbial pants down here. More to the point, I thank you for your (typically) thoughtful post, which makes some very fair points. Allow me, please, to address them in turn.

                  While the relative valuation of patents is at least partially a function of economy size, it is surely also a function of the laws of a given jurisdiction.

                  Two points in response here:

                  (1) As someone who has a hand in buying and selling patents, I was surprised to see in practice how little the relevant laws of the individual jurisdictions affect the price of these assets. In the abstract, it makes sense that a (e.g.) German patent should trade at a premium over an (e.g.) Saudi patent, in view of the relative merits of their the German and Saudi judicial systems, but in practice this makes far less difference than you might think.

                  (2) It suits Night Writer’s self-interested purpose to play up the Chinese patent system and play down the U.S. patent system. He is trying to make a chicken-little style argument, and therefore he must contrive to simulate the appearance of a falling sky. In reality, however, for a solid piece of IP (i.e., one that really covers a real invention), the U.S. judicial system is still orders of magnitude better than the Chinese judicial system. Just to make this tangibly clear, the highest patent damages award ever granted by a Chinese court was ~$7.2 million in 2017. By contrast, in 2017 the median patent damages verdict in the U.S. was $10.2 million, and in 2016 the top U.S. damages award was $2.5 billion. In other words, the talk of the Chinese patent system being so pro-patentee and the U.S. system being so anti-patentee is mostly just that—talk. Real lived experience does not quite sync up with the chicken-little picture that self-interest motivates some to paint.

                  With Alice, many US patents lost value. I don’t see how you could conclude that to be a minor factor in the overall relative valuation a priori.

                  This is quite fair. I really have gone beyond what I can prove in asserting that everything would be just the same in a paribus equibus world that lacked Alice and the AIA. I withdraw the strong sense of my assertion at 4.1.2.1.3.1.

                  On the other hand, so too is Night Writer going beyond what he can prove. I hope that he will likewise withdraw his 4.1.2.1.1, or else come forward with the actual data (not just appeals to what “everyone knows…”) to establish his assertion that “the work of Mark Lemley has devalued patents in the USA.”

                4. As to (1), as Greg “I Use My Real Name” DeLassus himself has stated,

                  “Anecdote is not evidence.”

                  As to (2), even when Greg has his pants down, ALL that he does is attempt to tar Night Writer with ad hominem.

                  Never mind his own admission of “In the abstract, it makes sense,” and putting aside for the moment the overwhelming cloying k1ssarse opposite-ad-hominem of “I thank you for your (typically) thoughtful post, which makes some very fair points.,” Greg refuses to acknowledge the points made directly by someone he simply does not like.

                  Greg’s posts will likely pass around here with far les derision and disparagement than they honestly merit.

              2. 4.1.2.1.3.1.2

                Well I never thought I would agree with Ben but what he said is correct.

                The value of a US patent can drop and the value of a Chinese patent can rise and they may relatively independent of one another. Although this is not entirely true.

                Greg’s argument is absurd in that he is trying to say that the Chinese would have done well with or without Alice. But if you believe that patents actually promote innovation then Alice/AIA have weakened the US patent system and innovation while the Chinese building up their patent system have strengthened their patents and promoted innovation.
                And it tends to be easier to in innovation contests when your competitor is hamstrung.

    2. 4.2

      Do you have a link for this? I am sure that I am not the only one who would like to read more.

      1. 4.2.1

        One of the problems is that the sale price of the patents is rarely disclosed. The information I am stating comes from companies that broker patent sales.

      2. 4.2.2

        But it is widely accepted that China for the first time leads in wireless technology. That I think you can google and find many articles to support my position.

        My bet is that China will soon become the leader in many technology that require innovation and their patent system will have a lot to do with it.

        1. 4.2.2.1

          Clearly, Greg does not believe that “[the patent system] added the fuel of interest to the fire of genius.”

          No ‘value’ there, per Greg’s obtuseness.

  3. 3

    Does the patent bar as a whole believe IPR and PTAB to be a rational legal system? This case is rife with utter nonsense. In a rational legal system 1) a petition after the time bar would be dismissed, 2) a party would not be permitted to join to itself, 3) a party would not be permitted to argue that they were not “served with a complaint for infringement of the patent” when in fact PACER shows they were, 4) agencies would not be permitted to break the law. And this isn’t even the part of the statute Congress screwed up.

    Patent law nothing but a stupid wagering game.

  4. 2

    I expect that on remand, the PTO will dismiss the late-filed petitions.

    Or not. They can do whatever they feel like. APJs are dictators with respect to institution.

    1. 2.1

      Or, the Director could set up an expanded panel to decide.

      1. 2.1.1

        … which only more emphasizes the political nature of an executive branch with no meaningful checks and balances.

        The notion of a vested property right remains chilled – and your Rah Rah cheerleading changes none of that.

  5. 1

    The problem with cases like this is that the Fed. Cir. still allows complaints to be filed on multi-claim patents with no indication of which claims or which products are allegedly infringed, and does not even require such lawsuit clarification to be made until very much later – too late for the one year IPR filing date bar. Fortunately, many [but not all] D.C.s now have local rules that require earlier such suit specificity. Filing a timely IPR petition against every claim of a multi-claim patent is of course one way to avoid subsequent IPRs and the self-joiner rejection of this case, but that can be costly, and difficult to accomplish with the IPR page limits.

    1. 1.1

      Filing a timely IPR petition against every claim of a multi-claim patent is of course one way to avoid subsequent IPRs and the self-joiner rejection of this case, but that can be costly, and difficult to accomplish with the IPR page limits.

      Yeah, well, life is hard and then you die. With regard to this particular aspect of the IPR system—i.e., the inordinate expense of challenging all claims—this is how Congress wanted it to work. Those who are dissatisfied with the status quo should address their complaints to Congress, who have the power to change it.

      1. 1.1.1

        Yes, but besides the point that this problem does not require Congressional action, since it [and other patent litigation problems] are easily avoided by district court local rules that require earlier specificity about what claims and products are being sued on.
        Note that the old patent suit complaint form was removed from the FRCP several years ago, after Sup. Ct. decisions on complaint specificity in general.

        1. 1.1.1.1

          Interestingly Paul, and perhaps lost in your comment, is that the Supp. Ct. decisions on complain specificity (if you are referring to Iqbal and Twombly – 2009 and 2007 respectively), are NOT related to the change in patent suit complaint form (Form 18 – December 1, 2015).

          There were – and must have been – other drivers that you do not mention.

          Perhaps it is because it may be an uncomfortable narrative to note how our Supreme Court has been influenced.

    2. 1.2

      For what it is worth, I would also favor a change to the FRCP to require the original complaint in a patent infringement suit to identify with specificity the claims being asserted, but the FRCP do not presently require as much. The CAFC is not the entity to change that. Rather, those of us who favor such a change should address ourselves to the Congress or the SCotUS.

      1. 1.2.1

        Local rules can be pretty tough.

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