In re Vivint, Inc. (Fed. Cir. 2021)
Vivint sued Alarm.com for infringing its US Patent 6,717,513. Alarm.com responded with three different inter partes review (IPR) petitions. Those three petitions were denied at the institution stage. Two of the petitions were denied on the merits, the third petition was denied based upon the “abusive” IPR filing practices of Alarm.com (noting that there were 15 total IPRs filed involving ‘incremental petitioning’).
A year later Alarm.com petitioned for ex parte reexamination of the ‘513 patent. Most of the reexamination petition was word-for-word identical to the IPR petitions, although there was one new reference added for two of the four patentability questions. The PTO ordered the examination and eventually concluded that that the challenged claims were not patentable.
Inter Partes Review and Ex Parte Reexamination both involve an initial threshold stage where the patent office must decide whether the petition presents a sufficient case to move forward with the full review. But, the standard for IPR is much higher than that of reexamination. IPR’s are only initiated upon a finding of a “reasonable likelihood” that at least one claim will be cancelled while reexaminations require only a “substantial new question of patentability.” Thus, it logically makes sense that a challenge might fail the IPR threshold, but still be sufficient to surpass the reexam requirement.
On appeal, the Federal Circuit offers an interesting opinion. On the one hand, the court agreed that a substantial new question of patentability was presented in the reexam. At the same time, the court found that the PTO abused its discretion in hearing the reexamination.
SNQP: Here, the decision was easy once the court ruled that the “new” portion focused on whether a particular issue had been previously decided on the merits. Although the same questions had been presented in the IPR petitions, denial of an IPR doesn’t count as deciding the issue on the merits.
Discretion to Deny: The reexamination statute provides the PTO with discretionary authority to reject petitions based upon questions previously presented to the office. 35 U.S.C. § 325(d). The most interesting part of the decision here is the ruling that sometimes discretionary denial becomes mandatory — when denial would be “an abuse of discretion or arbitrary and capricious.”
Here, the court looked to the dismissal of the last IPR petition based upon “Alarm.com’s abusive filing practices.” Alarm.com should not then be allowed to take the same approach in yet another new incremental filing — even if the new petition was in reexamination form.
Our holding today is narrow. Section 325(d) applies to both IPR petitions and requests for ex parte reexamination. Thus, 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. We see no difference between the IPR and ex parte reexamination processes that would justify such conduct and nothing short of termination of the reexamination would be appropriate.
Cancellation of Vivint’s claims is Vacated.