Key Takeaways:
- The USPTO has extended the deadline to request Director review of IPR institution decisions from 14 days to 30 days, giving parties more time to react when outside events change the circumstances of an instituted IPR.
- More broadly, district court developments—such as claim dismissals, invalidity rulings or Sotera stipulation violations—may now present “exceptional circumstances” to reconsider, and even terminate, ongoing IPR proceedings.
U.S. Patent and Trademark Office (“USPTO”) Director John Squires has issued a precedential decision extending the deadline for Director reviews of decisions on whether to institute inter partes review (“IPR”). Requests for the Director’s review are now due 30 days following the underlying decision on which review is sought. Importantly, Director Squires reaffirmed that the deadline to seek Director reviews may be even further extended in “exceptional circumstances.”
The USPTO Director may review decisions of the Patent Trial and Appeal Board, including decisions to institute IPRs and decisions not to institute them. 37 C.F.R. § 47.21(d)(1), (2). By regulation, the deadlines to seek review are 14 days for institution decisions, 37 C.F.R. § 47.21(d)(1), and 30 days for final decisions (that is, merits decisions in an IPR) and decisions not to institute the proceeding 37 C.F.R. § 47.21(d)(2).
In Light & Wonder Inc. v. Evolution Malta Ltd. (IPR Nos. 2015-01072, 2015-01073, and 2015-01078), Director Squires waived the 14-day deadline for challenges to institution decisions, making the deadline 30 days. The 30-day deadline is consistent with the window for seeking review of final decisions and non-institution decisions. 37 C.F.R. § 47.21(d)(2).
But the Light & Wonder decision did not stop there. Director Squires went on to hold that “in exceptional circumstances, the Office may extend the deadline for filing a request for Director Review of a decision on institution, so long as the IPR’s trial has not progressed meaningfully.” Light & Wonder, IPR No. 2015-01072, Paper 30 at 3. And here, the Director found that “exceptional circumstances” warranted extending the deadline. The patents at issue in Light & Wonder were the subject of U.S. District Court litigation (parallel to the IPR proceedings) and had been held invalid in District Court under 35 U.S.C. § 101 as being directed to ineligible subject matter.
Director Squires held that the intervening events after institution could present “exceptional circumstances” warranting Director review of these IPRs’ institutions. As examples of “exceptional circumstances,” he identified “dismissal of all or substantially all claims in a co-pending litigation, findings of fact and conclusions of law that render all or substantially all challenged claims invalid in litigation, and a violation of a Sotera stipulation”—that is, a stipulation that a party will limit its District Court invalidity arguments to those it raised or could have raised in an IPR. Id. at 4.
Applying the “exceptional circumstances” test in Light & Wonder, Director Squires took up the request for review based on the intervening invalidity decision in District Court. Id. at 4. And even though the District Court decisions could be changed on appeal (which had not yet been exhausted), Director Squires reversed the institution of the IPRs, ending the proceedings. Id. at 6.
In this posture, requests for Director review are not truly requests to “review” the decision to institute the IPR. These requests are based on changed circumstances concerning the challenged patent. Indeed, those changed circumstances form the “exceptional circumstance” justifying the extension of the review deadline. These requests for Director review are more accurately characterized as requests for a new institution decision based on the changes that have occurred since the IPR was instituted. By opening the door to these challenges, Director Squires seems to invite a flood of challenges to ongoing IPR proceedings—challenges that he, as Director, will decide.
In practice, though, exceptions for “exceptional circumstances” seem to be circumscribed to situations where there are no issues left to be decided in a district court proceeding—at least, that is the tenor of the Light & Water decision. So, although that decision is precedential, it might not have a broad sweep, especially considering the recent reductions in IPR petitions and institutions.
In practical terms, parties to an IPR (whether challenging claims or defending them) should be vigilant for “exceptional circumstances” due to district court decisions that could now readily trigger reconsideration of the IPR’s institution. The three categories of “exceptional circumstances” identified in Light & Water—claim dismissals, validity determinations and Sotera violations—each seem sufficient to trigger reconsideration. Other decisions by a district court or the International Trade Commission could have similar impacts, even before those decisions’ appeals are exhausted. Patent owners and challengers are already incentivized to litigate these issues zealously, but the additional consequences that might now attach should draw additional attention and resources to litigating them in district court.
Should you have any questions regarding this development, please contact the author or your Dinsmore IP attorney.