Addressing its decision to institute a covered business method (CBM) patent review based on a second petition, the U.S. Patent and Trademark Office’s (PTO) Patent Trial and Appeal Board (PTAB or Board) found that its decision to institute was not an abuse of discretion. Motorola Mobility LLC v. Intellectual Ventures I LLC, Case No. CBM2015-00004 (PTAB, July 24, 2015) (Kauffman, APJ).

The petitioner (Motorola Mobility) previously filed a petition for CBM patent review of the challenged claims but, in the view of the Board, failed to demonstrate that the challenged patent was a “covered business method patent.” The Board therefore denied the petition. Motorola then filed in a second petition requesting a review of the same challenged patent. This time the Board instituted a CBM review.

The patent owner (Intellectual Ventures I) sought rehearing, asking that the Board reconsider its decision via an expanded panel. The patent owner argued that the Board abused its discretion by not denying institution on the second petition based on 35 U.S.C § 325(d).

An abuse of discretion may be determined “if a decision is based on an erroneous interpretation of law, if a factual finding is not supported by substantial evidence, or if the decision represents an unreasonable judgment in weighting relevant factors.” In relevant part § 325(d) states that “[a] petitioner is not entitled to multiple challenges against a patent” and that “[i]n determining whether to institute or order a proceeding … the Director may take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office.”

According to the Board, § 325(d) does not require the Board to “deny any second petition against a patent.” Rather, as the Board explained, § 325(d) states that “the Director may take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office.” Accordingly, the Board found that the patent owner failed to demonstrate an abuse of discretion.

The Board also disagreed with the patent owner’s contention that “the rehearing request presents a significant question, namely whether a petitioner that has fully litigated the issue of whether a challenged patent is a covered business method patent may be permitted to re-litigate that same issue in a second petition against the same patent.” The Board explained that “Section 325(d) does not preclude institution of a covered business method review where, as here, the merits of the earlier petition were not reached.”