In Westlake Services, LLC v. Credit Acceptance Corp., the PTAB denied a Patent Owner’s request for authorization to file a motion to terminate. IPR2014-00176, Paper 41 (Sept. 3, 2015). In so ruling, the Board made it clear that standing for a CBM proceedings must only exist at the time a petition is filed.
During a conference call to discuss the Patent Owner’s request to terminate the CBM proceeding, the Patent Owner argued that: 1) AIA § 18(a)(1)(B) and 37 CFR § 42.302(a) “impose a standing requirement that continues throughout a covered business method patent proceeding, not just at the time of filing a petition,” and 2) termination of the CBM proceeding was appropriate under 37 CFR § 42.72 because there was no case or controversy sufficient to maintain the CBM proceeding in view of the Patent Owner’s dismissal of infringement claims against the Petitioner with prejudice.
Guided by a prior PTAB decision in Ebay Enterprise, Inc., and Ebay, Inc. v. Lawrence B. Lockwood (CBM2014-00026), the Board rejected the Patent Owner’s request and denied termination of the CBM proceeding, finding that: 1) standing for a CBM proceeding is conferred by AIA § 18(a)(1)(B); 2) standing for a CBM proceeding is “evaluated at the time a petition is filed;” and 3) AIA § 18(a)(1)(B) does not impose “a requirement of a continuous infringement controversy between the parties in order to maintain the proceeding.”
In its decision, the Board noted that an Article III case or controversy analysis, as applied by district courts, does not apply to administrative proceedings before the USPTO. The Board further noted that, although 35 U.S.C. § 327 “provides for termination as to a petitioner upon a joint request of a petitioner and patent owner,” in this proceeding the Petitioner had not requested termination.
Some takeaways from this decision are:
- A Patent Owner contemplating dismissal of infringement claims against a Petitioner in an underlying litigation should consider conditioning dismissal of the infringement claims in the litigation upon the Petitioner’s cooperation in filing a joint request to terminate any co-pending PTAB proceeding, and include a provision stating such in any settlement agreement.
- Strategic factors a Patent Owner should consider when contemplating dismissal of infringement claims against a Petitioner include:
1. Whether the party to be dismissed is the sole Petitioner in the PTAB proceeding. When multiple Petitioners are present in the PTAB proceeding, a joint request to terminate is likely to require the request to be made by the Patent Owner and all Petitioners.
2. Whether the PTAB proceeding has been instituted. This may be a strategic factor for Patent Owners to consider in view of the joinder rules for PTAB proceedings.