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IP Alert: PTAB Precedential Opinion Panel Issues First Decision, Allowing Same-Party Joinder in IPR Proceedings

March 18, 2019

On March 12, in Proppant Express Investments, LLC v. Oren Technologies, LLC, the Patent Trial and Appeal Board (PTAB) Precedential Opinion Panel (POP) decided that the PTAB has discretion to allow same-party joinder of new issues into an existing proceeding. Notably, this is the first precedential decision the POP has issued since its inception.

Under this ruling, joinder may be allowed even beyond the one-year time bar that would normally preclude a litigation defendant from filing additional petitions for inter partes review (IPR). The decision is binding precedent allowing PTAB administrative patent judges to decide whether to join new issues raised by a petitioner in a second-filed petition into a previously instituted proceeding. The decision emphasizes that the PTAB will exercise this discretion only in limited circumstances. Indeed, on the facts of this particular case the decision denies the request for joinder.

The decision addresses three issues, holding first that a petitioner may be joined to a proceeding in which it is already a party. The POP notes that the language of the statute at issue, 35 U.S.C. § 315(c), provides discretion to “join as a party . . . any person who properly files a petition under section 311 that . . . warrants the institution of an inter partes review under section 314” (emphasis added). The expansive use of “any person” in the statute persuaded the POP that it has discretion to join every person—even one who is already a party to the proceeding. The POP also reasons that “person” should be read consistent with other sections in the statute, which are not limited. The POP rejected several contrary arguments advanced in amicus briefs, in particular noting that allowing discretionary same-party joinder under section 315(c) is less likely to promote gamesmanship than a per se prohibition, which would allow a district court plaintiff to strategically wait to alter or add patent claims until after the one-year bar date for IPR petition.

Second, the decision holds that section 315(c) permits joinder of new issues into an existing proceeding. In similar reasoning, the POP decides this issue by concluding that the statutory language does not limit the issues that can be raised in a joinder petition. Specifically, although section 315(c) requires the person requesting joinder to “properly file[] a petition under section 311” and also that such a petition must “warrant[] the institution of an inter partes review under section 314,” the POP concludes that neither section 311 nor section 314 restricts a petitioner from adding new issues through its joinder motion. The decision distinguishes recent Federal Circuit precedent from the Nidec v. Zhongshan case, noting that in that case the question was whether a time-barred party could circumvent the time-bar by filing a motion for joinder under section 315(c), not whether issue joinder is allowed generally under section 315(c).

Third, the decision holds that the PTAB should exercise discretion only “where fairness requires it and to prevent undue prejudice to a party”—with the existence of a time bar under section 315(b) being one of several factors to be considered. While the decision again notes that a per se prohibition on same-party joinder would promote gamesmanship, it holds that the exception allowed by section 315(c) should not swallow the general one-year time limit imposed by section 315(b). Specifically, this time limitation is important to ensure “quiet title to patent owners” and to prevent IPR from being “used as [a] tool[] for harassment,” as noted in legislative history of the statute. The decision does not enumerate a specific list of factors for consideration, but notes that certain actions taken by a patent owner in co-pending litigation, such as adding newly asserted claims, might justify joinder. Other factors, such as the factors enumerated in the PTAB’s precedential General Plastic case, might make joinder inappropriate. The POP specifically notes that a petitioner’s mistakes or omissions would not generally justify joinder outside the one-year bar.

Finally, on the specific facts of this case, the POP declined to exercise its discretion to join the late-filed petition. Here, petitioner Proppant Express timely filed a first petition for IPR upon being sued for patent infringement. Proppant subsequently filed a second petition more than a year after it was served with the complaint, which would have been time-barred under section 315(b). Seeking to avoid the time bar, Proppant moved for joinder of the second petition with the instituted first petition, arguing that the time bar should not apply because joinder of parties is permitted.

The decision holds that Proppant’s own conduct created the need for it to request joinder, and that this case therefore does not involve “one of the limited circumstances in which the Board will exercise its discretion to allow same party and/or issue joinder.” The decision notes that Proppant’s first petition erroneously failed to make out a proper case against one of the claims, and Proppant acknowledged that it filed the second petition to correct that error. According to the POP, granting this motion would “obviate the careful balance the statute and legislative history contemplate.”

As mentioned above, in addition to setting new precedent for the PTAB, this opinion is notable as the first precedential review since the Precedential Opinion Panel was established in September 2018. The revised Standard Operating Procedures that created the Precedential Opinion Panel explain that the panel would hear issues of “exceptional importance.” Either party to a decision can request precedential review by emailing the PTAB and including a request for rehearing. The revised procedures replace prior procedures that required a majority vote of administrative patent judges to establish precedential cases. The prior procedures had proven unwieldy and therefore set very little precedent in the first years of the PTAB’s existence. The decision here resolves a series of conflicting decisions relating to same-party joinder and illustrates how the Director of the USPTO can use the POP procedure to establish policy for the PTAB.

This precedential review is relevant to individuals and companies engaged in, or expecting to be engaged in, proceedings at the PTAB. Under this decision, petitioners have one less way to correct errors in their petition. However, patent owners should be aware that their litigation conduct could open the door to follow-on IPR petitions that could be instituted by the PTAB.

For more information on this decision, please contact Fitch Even partner David A. Gosse, author of this alert. 

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