En Banc Federal Circuit: Patentee’s Service of Complaint, Followed by Voluntary Dismissal, Triggers IPR Clock

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On August 16, 2018 the en banc Federal Circuit held that a patentee’s initial service of a complaint triggers the one-year period for filing of an IPR petition—even if the complaint was voluntarily dismissed without prejudice to refiling. Click-to-Call Technologies, LP v. Ingenio, Inc., __ F.3d __, 2018 WL 3893119 (Fed. Cir. Aug. 16, 2018), sets a rule that some observers have worried invokes uncertain consequences for IPR. Some patent owners could use Click-to-Call to strategically file and serve a complaint, then immediately withdraw, so as to start the one-year IPR petition period for their adversaries. Time will tell whether any patent owners adopt this strategy. Notably, a patent owner who files a Rule 41 notice of dismissal prior to its adversary’s answer may do so only once. If the patent owner tries to repeat the pattern, Rule 41(a)(1)(B) indicates that the dismissal would be prejudicial.

Click-to-Call’s story goes back nearly two decades. Seventeen years ago, the owner of U.S. Patent 5,818,836 (“the ’836 patent”) filed and served a litigation complaint alleging infringement by Keen, Inc.—a predecessor-in-interest of the appellee, Ingenio, in Click-to-Call. The 2001 infringement complaint was voluntarily dismissed without prejudice to refiling about a year later. In 2013, after being named as a defendant in new litigation concerning the ’836 patent (brought by the patent’s current owner, Click-to-Call Technologies), Ingenio filed an IPR petition. The PTAB instituted IPR proceedings, holding that the 2001 complaint did not bar Ingenio’s petition due to the voluntary and nonprejudicial nature of the dismissal.

The August 16, 2018 opinion rejects the PTAB’s reasoning and orders dismissal of Ingenio’s IPR as time-barred. Analyzing the text and legislative history of the IPR time-bar statute, 35 U.S.C. § 315(b), Click-to-Call holds that the statute unambiguously triggers the one-year period for filing an IPR petition on the date the complaint is served, regardless of what may follow. The opinion was authored by Judge O’Malley and issued by a three-judge panel that included Judge Taranto and District of Delaware Chief Judge Stark (sitting by designation), but notably the Federal Circuit convened en banc to join the panel’s interpretation of § 315(b). This sua sponte en banc action was due to the Federal Circuit recognizing that multiple cases under submission presented the same statutory issue, and multiple panels of the court were reaching different outcomes. The August 16, 2018 opinion resolves the matter for future cases.

Judge Dyk (joined by Judge Lourie) dissented from the en banc court’s interpretation of § 315(b). The dissent urges that the statute is ambiguous as to what is meant by “service of the complaint,” and cites several Federal Circuit opinions holding that voluntary dismissal of a complaint without prejudice returns the parties to the status quo ante. Judge Dyk’s dissent also expresses concern that the August 16, 2018 rule might be misapplied so as to deprive accused infringers of the opportunity to become fully familiar with the claims against them before filing an IPR petition. A concurrence by Judge Taranto addresses these criticisms and endorses the panel’s reasoning.

We will continue to monitor at both the district court and appellate level.

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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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