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Federal Circuit Concurring Opinion Asks Whether the Exception To One-Year Time Bar For Filing Inter Partes Review Petitions Via Joinder Under 35 U.S.C. 315(b) Apply Only When No New Patentability Issue Is Introduced Via Joinder
August 28, 2017

In Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., No. 2016-2321 (Fed. Cir. Aug. 22, 2017), a concurring opinion by Judges Dyk and Wallach questioned whether petitioners may use joinder to circumvent time bar limitations, and also questioned the Patent and Trademark Office’s practice of expanding panels of the Patent Trial and Appeal Board (“Board”) in order to achieve uniformity of the Board’s decisions.

Zhongshan Broad Ocean Motor Co., Ltd. (“Zhongshan”) filed a first IPR petition challenging a set of claims of U.S. Patent No. 7,626,349 based on obviousness and anticipation.  Zhongshan Broad Ocean Motor Co. Ltd. et al. v. Nidec Motor Corporation, IPR2014-01121.  The Board instituted trial on the obviousness ground. IPR2014-01121, paper #20 (P.T.A.B. January 21, 2015).  The Board did not adopt the anticipation ground because of failure to submit an affidavit attesting to the accuracy of the submitted translation of a Japanese reference relevant to the anticipation ground. Id.  Subsequently, Zhongshan filed a second IPR petition asserting the same anticipation ground based on the same reference, along with the affidavit missing in the first IPR petition.  Zhongshan Broad Ocean Motor Co. Ltd. et al. v. Nidec Motor Corporation, IPR2015-00762.  

A panel of three administrative patent judges declined to institute review of the second IPR petition because that petition was time barred.  IPR2015-00762, paper #12 (P.T.A.B. July 20, 2015).  A complaint was served on Zhongshan more than one year from filing the second petition.  With respect to the exception to the time bar based on a joinder motion, the panel majority held that Zhongshan was already a party to a proceeding from the first IPR petition and 35 U.S.C. 315(b) and (c) do not permit Zhongshan to join issues to the first IPR trial.  Id.

35 U.S.C. 315(b) and (c) provide as follows:

35 U.S.C. 315 (b) Patent Owner’s Action.—

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent. The time limitation set forth in the preceding sentence shall not apply to a request for joinder under subsection (c).

35 U.S.C. 315 (c) Joinder.—

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

Zhongshan requested a rehearing.  For rehearing, an expanded panel of five administrative patent judges reached a different conclusion.  The expanded panel found that Section 315(c) permits the joinder of any person who properly filed a petition under Section 311, and concluded that Section 315(c) “encompasses both party joinder and issue joinder.”  Then, the expanded panel instituted review of the second petition and granted Zhongshan’s joinder motion.  IPR2015-00762, paper #16 (P.T.A.B. October 5, 2015).  The expanded panel issued a final written decision finding all the challenged claims unpatentable based on the obviousness ground raised in the first petition and based on the anticipation ground raised in the second petition. IPR2014-01121, paper #78 (P.T.A.B. May 9, 2016).

Nidec appealed to the Federal Circuit.  Nidec argued on appeal that the Board improperly applied the joinder and time-bar provisions (Section 315(b) and (c)) to allow joinder and institution of the second IPR petition.  The Federal Circuit did not reach this issue, as it affirmed the Board’s conclusion based on the obviousness ground included in the first IPR petition.  Nidec Motor Corporation v. Zhongshan Broad Ocean Motor Co. Ltd. et al., Appeal No. 2016-2321 at pp. 5-6 (Fed. Cir. Aug. 22, 2017).

In a concurring opinion, Judges Dyk Wallach raised “serious questions as to the Board’s interpretation of the relevant statutes and current practices.”  Zhongshan Broad Ocean Motor Co. Ltd. et al., Appeal No. 2016-2321, Concurring Opinion at p. 2 (Fed. Cir. Aug. 22, 2017).  With respect to Section 315(c), the concurring opinion stated it is unlikely that “Congress intended that petitioners could employ the joinder provision to circumvent the time bar by adding time-barred issues to an otherwise timely proceeding, whether the petitioner seeking to add new issues is the same party that brought the timely proceeding, as in this case, or the petitioner is a new party.” Id. at p. 3.  The concurring opinion further stated that the exception to the time bar for a request for joinder under Section 315(b) was “plainly designed to apply where time-barred Party A seeks to join an existing IPR timely commenced by Party B when this would not introduce any new patentability issues” (emphasis added).  Id.     

The concurring opinion further expressed concern about the PTO’s practice of expanding a panel for the purpose of requests for rehearing, which in this case resulted in setting aside the earlier panel decision.  Noting Nidec’s argument that addition of two administrative patent judges to the expanded panel was motivated by the PTO’s desire to achieving uniformity in the Board decisions, the concurring opinion questioned whether the practice of expanding panels is “the appropriate mechanism of achieving the desired uniformity.” Id. at pp. 3-4.    

The concurring opinion in Nidec raises interesting issues. In particular, the interpretation and practical implications of the exception to the time bar through a request for joinder under Section 315(b) have been at issue in several IPR proceedings.  The concurring opinion seems to indicate that joinder of a party who files a time-barred petition should be allowed as long as such time-barred petition would not introduce any new patentability issues.   To this point, the Federal Circuit has not defined what “introducing no new patentability issues” means.  For instance, from a procedural standpoint, practitioners may raise questions such as: (1) whether, in order not to introduce any new patentability issues, a time-barred petitioner should reproduce and file the same petition filed by a timely petitioner; and (2) whether a time-barred petitioner does not raise any new patentability issues as long as a time-barred petitioner relies on the same prior art reference(s) adopted by the Board in a timely petition.  With respect to issue joinder by the same party, the concurring opinion appears to conclude that Section 315(b) should not permit addition of a time-barred issue via joinder, regardless of whether a party is the same party or a new party to an initial petition. 

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