IP News

The majority distinguished the Supreme Court's decision in Association for Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576 (2013) by explaining that "the claims here are not directed to the cell-free fetal DNA itself" but are instead directed to "a process for selective removal of non-fetal DNA to enrich a mixture in fetal DNA." Id. at 12. The majority further explained that "the inventors used their discovery to invent a method of preparing a fraction of DNA that includes physical process steps to selectively remove some maternal DNA in blood to produce a mixture enriched in fetal DNA." Slip. Op. at 13. Because these methods are directed to "more than merely the natural phenomenon that the inventors discovered," the majority concluded that the "claims are not directed to a patent-ineligible concept." Id. at 14.

In dissent, Judge Reyna explained that in his opinion "the claims are directed to a natural phenomenon" and the "patents' only claimed advance is the discovery of that natural phenomenon." Id. at 16. In particular, the dissent found nothing "new or useful about the claimed invention" (id. at 17) and rejected the idea that a "method of preparation case" should be treated "differently than any other process claim under our law." Id. at 20.

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Federal Circuit: Same Party Cannot Join IPR Petitions under 35 U.S.C. §315(c)

On March 18, 2020, a Federal Circuit panel of Chief Judge Prost, Judge Plager, and Judge O'Malley issued a unanimous opinion, authored by Chief Judge Prost, in Facebook, Inc. v. Windy City Innovations, LLC, Case Nos. 2018-1400, 2018-1401, 2018-1402, 2018-1403, 2018-1537, 2018-1540, and 2018-1541. The panel vacated the PTAB's decision to join petitions in several inter partes review (IPR) proceedings on the ground that, under 35 U.S.C. §315(c), a party may not add otherwise time-barred issues to IPRs by joining its own prior petition. Slip Op. at 24.

One year after being served with Windy City's complaint, Facebook filed timely IPR petitions challenging some, but not all, of the claims of the patents asserted against it. Id. at 2. At that time, Windy City had not identified which claims — out of 830 in the asserted patents — it was asserting in district court. Id. Months later, after Windy City identified the claims it intended to assert in district court, Facebook filed two additional IPR petitions, challenging additional claims and requesting joinder with the prior filed — and instituted — IPR petitions. Id. at 2-3. At the time of filing, Facebook's additional petitions were untimely under the 35 U.S.C. §315(b) one-year time bar. Id. at 3.

In considering Facebook's motions for joinder of the additional IPR petitions, the Board concluded that the additional challenged claims were similar to those challenged in the timely petitions, were "not likely to affect the scope of the trial significantly," and "would not significantly disrupt the trial schedule, briefing, or discovery." Slip. Op. at 7. The Board explained that "Facebook did not unduly delay in challenging" the additional claims in the subsequent petitions. Id. In particular, the Board agreed with Facebook that Windy City's district court complaint could not reasonably be considered an allegation that Facebook infringed all 830 claims of the asserted patents. Id. For these reasons, the Board found that Facebook "could not have reasonably determined which claims were asserted against it within the one-year time bar" and joined the petitions. Id.

On appeal, Windy City argued that the Board's decisions granting joinder were improper. It raised two issues of statutory interpretation: 1) "whether 35 U.S.C. §315(c) permits a person to be joined as a party to a proceeding in which it was already a party ('same-party' joinder)"; and 2) whether §315(c) "permits new issues to be added to an existing IPR through joinder ('new issue' joinder), including issues that would otherwise be time-barred." Id. at 10. The panel concluded that the clear and unambiguous text of §315(c) does not authorize same-party joinder and does not authorize the joinder of new issues. Id. at 12.

Section 315(c) authorizes the USPTO Director "to join as a party … any person who properly files a petition … that the Director … determines warrants the institution of an inter partes review." Slip. Op. 11. In its opinion, the panel explained that the Board's joinder of Facebook's additional petitions was not the joinder of anyone as a party but was actually the joinder of later filed proceedings to earlier proceedings. Id. at 14. It concluded that no part of §315(c) provides the Director or the Board with the authority to put two proceedings together. Id. Instead, joinder of proceedings is provided by §315(d), which allows for consolidation of multiple proceedings involving a patent before the Patent Office. Id. Per the Federal Circuit, "[t]he difference between joining two proceedings and joining a person 'as a party' is a matter of the plain meaning of familiar legal terms." Id. at 14. As a result, it concluded that the unambiguous language of §315(c) does not provide for the proceedings at issue to be joined. Id. at 15.

The panel acknowledged that its decision was at odds with PTAB precedent on the issue. Slip Op. at 16 (citing the PTAB's precedential decision in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019)). Although in Proppant the PTAB allowed same-party joinder, the panel rejected the Board's reasoning, finding it "incorrect under the unambiguous meaning of the statute." Id. at 16. Specifically, the Federal Circuit panel found that the "phrase 'join as a party to a proceeding' on its face limits the range of persons covered to those who … are capable of being joined as a party to a proceeding," and an existing party to a proceeding is not capable of being added to that same proceeding. Id. Essentially, "[a] party cannot logically be joined as a party in a proceeding if it is already a party to that proceeding." Id. at 17 (internal quotations omitted).

The panel also set forth a second reason for rejecting the Board's approach to §315(c) — the provision "does not authorize the joined party to bring new issues from its new proceeding into the existing proceeding, particularly when those new issues are otherwise time-barred." Id. Despite acknowledging that this ruling potentially incentivizes patent owners to file suits on patents containing hundreds of claims while avoiding identifying specific asserted claims until after the one-year bar date, the panel explained that defendants have the option to file petitions challenging all of the claims of the asserted patents and can tailor their strategies in district court to force earlier disclosure of the asserted claims. Id. at 21-22. Thus, the panel found that "the clear and unambiguous language of §315(c) does not authorize same-party joinder, and also does not authorize joinder of new issues, including issues that would otherwise be time-barred." Id. at 23.

In an attached statement of additional views, Chief Judge Prost, Judge Plager, and Judge O'Malley addressed questions of deference to the PTAB's precedential Proppant decision. Slip Op. at 41. Although the panel found the language of §315(c) unambiguous, it explained that even if the provision was ambiguous, it would have reached the same result. Id. at 42.

The Federal Circuit panel first rejected Chevron deference, explaining that the PTO's precedential opinion panel procedure "falls short of traditional notice-and-comment rulemaking that could receive Chevron deference." Id. at 52. Under the PTAB's approach, the announcement of issues for review is not published in the Federal Register, there is no formal opportunity for public comment, decisions are not published in the Federal Register, and in some instances, decisions are not subject to judicial review. Id. at 52-53. Similarly, the panel determined that "Skidmore deference does not apply" to the PTAB's Proppant decision because "the Director's interpretation of § 315(c) [is] inconsistent with the plain language of the statute and therefore unpersuasive." Id. at 55 (citing PhotoCure ASA v. Kappos, 603 F.3d 1372, 1376 (Fed. Cir. 2010). As a result, the panel explained that even if §315(c) were ambiguous it would reach the same conclusion. Id. at 55.

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Jeff Ginsberg is a Partner at Patterson Belknap Webb & Tyler LLP and Assistant Editor of this newsletter. Matthew Weiss is an Associate in the Firm's Litigation department with a focus on patent litigation. He has experience litigating matters related to patent infringement and validity, trade secret misappropriation, breach of contract, and unfair competition in state and federal court and in administrative proceedings before the PTAB and ITC.