Despite Uncertain Trial Date, PTAB Denies Institution

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Applying the PTAB’s precedential NHK decision, the PTAB exercised its discretion to deny institution of three timely filed IPR petitions due to the advanced stage of a related district court action.  Intel Corporation v. VLSI Technology LLC, IPR2020-00112, Paper 15 (PTAB May 19, 2020); IPR2020-00113, Paper 15 (PTAB May 19, 2020); IPR2020-00114, Paper 15 (PTAB May 19, 2020).

VLSI Technology had sued Intel in the Western District of Texas for infringement of U.S. Patent No. 6,366,522.  That case was consolidated for pre-trial purposes with two other cases VLSI also filed against Intel.  Trial is currently scheduled for October 5, 2020 in all three of these cases, even though they are not consolidated for trial.

Seven months after being sued for infringement of the ’522 patent, Intel filed three IPR petitions challenging the claims of that patent.  Despite being filed well before the one-year time bar, VLSI challenged the petitions contending that the PTAB should exercise its discretion to deny them for the same reasons as presented in NHKAs we previously reported here, the PTAB may exercise its discretion to deny institution due to the “advanced state of the district court proceeding” because the “[i]nstitution of an inter partes review under these circumstances would not be consistent with ‘an objective of the AIA . . . to provide an effective and efficient alternative to district court litigation.’”

The PTAB agreed with VLSI finding that instituting IPR proceedings here would be an inefficient use of Board, party and judicial resources.  The PTAB noted that the parties had made a significant investment in the district court action having already exchanged infringement and invalidity contentions, and nearly completed fact discovery.

The PTAB also found that the October 5, 2020 trial date weighed in favor of denial, even though the PTAB recognized that trial may not proceed on that date for multiple reasons.  First, the PTAB found that two of the three cases set for trial on October 5, 2020 would not occur on that date.  Second, the PTAB noted that all trials currently are suspended in the Western District of Texas through June 30, 2020 in view of the coronavirus pandemic and that it was unclear what impact that may have on the trial date.  Despite these uncertainties, the PTAB found that even if the trial date were changed, it is likely to take place before May 2021 when the final written decisions would be issued.

Accordingly, the PTAB found that the circumstances of the related district court action supported denial of the IPR petitions, regardless of their merits.

Takeaway

These decisions present another reminder that the PTAB may exercise its discretion to deny IPR petitions even if they are filed before the one-year time bar. Petitioners should consider the case schedule of any related action in evaluating how promptly they may need to file an IPR petition to minimize the risk of the PTAB denying the petition. Patent Owners, on the other hand, should consider challenging petitions based on the stage of any related action.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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