IP UPDATE
Exploring the Latest in Intellectual Property Law
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PTAB MTA Pilot Program to the Rescue

by | Aug 1, 2024 |

On review of a final written decision from the Patent Trial & Appeal Board in an inter partes review (IPR), the US Court of Appeals for the Federal Circuit found that all challenged claims were obvious but left open the possibility of the patent owner amending the claims under the Motion to Amend (MTA) Pilot Program. ZyXEL Communications Corp. v. UNM Rainforest Innovations, Case Nos. 22-2220; -2250 (Fed. Cir. July 22, 2024) (Dyk, Prost, Stark, JJ.)

ZyXEL Communications petitioned for IPR challenging claims 1 – 4, 6, 7 and 8 of a patent owned by UNM Rainforest Innovation (UNMRI). The patent relates to methods for constructing frame structures in communication systems using orthogonal frequency-division multiple access (OFDMA) technologies. The patent describes a method for constructing a frame structure with two sections, each of which is configured for a different communication system, where the second communication system is used to support high mobility users (i.e., faster moving users).

Before the Board, ZyXEL argued that claims 1 – 4, 6 and 7 were unpatentable in light of two prior art references (Talukdar and Li), and that claim 8 was unpatentable in light of Talukdar and another prior art reference (Nystrom). During the Board proceedings, UNMRI filed a contingent motion to amend if any of the challenged claims were found to be unpatentable. As part of its motion, UNMRI requested preliminary guidance from the Board pursuant to the Board’s MTA Pilot Program. In its opposition to UNMRI’s motion to amend, ZyXEL argued that UNMRI’s amended claims lacked written description support, and in its preliminary guidance, the Board agreed. UNMRI attempted to file a revised motion to amend, but the Board rejected the revised motion and instead permitted UNMRI to file a reply in support of its original motion. It also allowed ZyXEL to file a sur-reply. The Board determined that claims 1 – 4, 6 and 7 were unpatentable, but that claim 8 was not. The Board also granted UNMRI’s motion to amend and determined that the new claims were nonobvious over the prior art of record. Both sides appealed.

With respect to the Board’s decision on the obviousness of claims 1 – 4, 6 and 7, the Federal Circuit found that substantial evidence supported the ruling. UNMRI’s primary argument was that a person of skill in the art (POSA) would not have been motivated to combine Talukdar and Li, but the Court credited the Board’s reliance on ZyXEL’s expert, who demonstrated sufficient motivation to combine the two references.

The Federal Circuit reversed the Board’s finding that claim 8 had not been shown to be obvious, however. The Court noted that while the Nystrom reference may not explicitly state the benefit of the missing limitations, “a prior art reference does not need to explicitly articulate or express why its teachings are beneficial so long as its teachings are beneficial and a POSA would recognize that their application was beneficial.”

Regarding UNMRI’s motion to amend, ZyXEL argued that the Board erred in granting the [...]

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Don’t Mess With Anna: Texas Town Schools Patent Owner on § 101

by | Aug 1, 2024 |

On cross-appeals from a granted Fed. R. of Civ. Pro. 12(c) motion on subject matter eligibility, the US Court of Appeals for the Federal Circuit found that a patent directed to a method for “assist[ing] an investigator in conducting a background investigation” did not claim patent-eligible subject matter, but that the mere assertion of the patent did not render the case “exceptional” for the purposes of attorneys’ fees. Miller Mendel, Inc. v. City of Anna, Texas, Case No. 22-1753 (Fed. Cir. July 18, 2024) (Moore, C.J.; Cunningham, Stoll, JJ.)

Miller Mendel sued the City of Anna, Texas, for infringement of claims directed to software for managing pre-employment background investigations based on the Anna police department’s use of the Guardian Alliance Technologies (GAT) software platform. Miller Mendel’s complaint asserted “at least claims 1, 5, and 15” of the patent, each of which generally recited a “method for a computing device with a processor and a system memory to assist an investigator in conducting a background investigation” comprising the steps of receiving data identifying the applicant, storing the data, transmitting an applicant hyperlink to the applicant’s email address and receiving an applicant’s response.

Anna moved for judgment on the pleadings, alleging that the patent claims were ineligible for patent protection under 35 U.S.C. § 101. After the district court granted the motion, Miller Mendel filed a motion for reconsideration, arguing that the district court lacked jurisdiction to invalidate any unasserted patent claims. The district court denied the reconsideration motion but clarified that its decision was limited to asserted claims 1, 5 and 15. Anna also filed a motion for attorneys’ fees, which the district court denied, finding that the case was not exceptional. Miller Mendel appealed the § 101 issue, and Anna cross-appealed on the unasserted claims and attorneys’ fees issues.

The Federal Circuit first addressed Miller Mendel’s argument that the district court erred in relying on a declaration filed by Anna in ruling on the Rule 12(c) motion. The Court acknowledged that a Rule 12(c) motion must be treated as one for summary judgment if matters outside the pleadings are presented to and not excluded by the court. However, the district court explained that the declaration was not relevant to its decision, and it did not rely on any material outside the pleadings in its § 101 analysis. Thus, the Federal Circuit found that any error in failing to explicitly exclude the declaration was harmless.

Turning next to the patent eligibility analysis, the Federal Circuit agreed with the district court that under Alice step one, the asserted claims were directed to the abstract idea of performing a background check. The claims and specification emphasized that the invention was a system to “help a background investigator more efficiently and effectively conduct a background investigation” by “automating a majority of the tasks of a common pre-employment background investigation so that fewer hardcopy documents are necessary.” In other words, the problem facing the inventor was the abstract idea of performing background checks more efficiently [...]

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Beware Equitable Doctrine of Issue Preclusion in Multiparty, Multivenue Patent Campaigns

by | Aug 1, 2024 |

Addressing for the first time whether an invalidity order merges with a voluntary dismissal for purposes of finality, the US Court of Appeals for the Federal Circuit held that an interlocutory order merges with the final dismissal, rendering the interlocutory order final for purposes of issue preclusion. Koss Corp. v. Bose Corp., Case No. 22-2090 (Fed. Cir. July 19, 2024) (Hughes, Stoll, Cunningham, JJ.). As a consequence, the Federal Circuit found that the patent owner’s appeal from an adverse decision in an inter partes review (IPR) was moot under the doctrine of nonmutual collateral estoppel.

In July 2020, Koss filed a patent infringement lawsuit against Bose in the Western District of Texas, asserting three patents whose common specification discloses a “wireless earphone that communicates with a digital-audio source, such as an iPod, over an ad hoc wireless network like Bluetooth.” The same day, Koss asserted the same patents against Plantronics. Bose filed a motion challenging venue and also petitioned for inter partes review (IPR) of the three patents. Later in 2020, Bose filed a declaratory judgment action seeking a declaration of noninfringement in the District of Massachusetts on the three patents Koss asserted against Bose in the Texas litigation. The Massachusetts litigation was stayed pending the resolution of the venue motions in the Texas case.

In 2021, the Texas court dismissed Koss’s complaint against Bose for improper venue. Koss then asserted a counterclaim of infringement of the same three patents in the Massachusetts litigation. The Massachusetts court again stayed the litigation pending the resolution of the IPRs, which (by that time) the Patent Trial & Appeal Board had instituted. Meanwhile, Koss’s case against Plantronics was transferred to the Northern District of California, and Plantronics moved to dismiss the complaint on the ground that all the asserted claims (which included all the claims asserted against Bose) were invalid under 35 U.S.C. § 101. The California court granted Plantronics’s motion, rendering all the asserted claims invalid. However, that order did not finally dispose of the case.

Koss then moved for leave to amend its complaint, which the California district court granted. In the amended complaint, Koss asserted two additional patents. Plantronics moved to dismiss the asserted claims in those patents as invalid under § 101. The parties fully briefed Plantronics’s motion, but before the district court issued a decision on the merits of that motion, Koss voluntarily stipulated to dismissal with prejudice, disposing of the lawsuit in its entirety. Koss did not ask the district court to vacate its earlier order finding certain claims invalid under § 101. The California district court then issued an order dismissing the case with prejudice. The deadline for Koss to appeal the judgment came and went – Koss did not appeal.

Arguing that the patents had been finally adjudicated invalid in the Plantronics litigation, Bose moved to dismiss Koss’s appeal from the Board in the IPR proceedings as moot. Koss opposed the motion, arguing that its amended complaint rendered the invalidity decision on the prior complaint non-final because the [...]

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UK Court of Appeal Increases FRAND Rate, Applies It Outside Limitations Period

by | Aug 1, 2024 | ,

The UK Court of Appeal found that the UK High Court of Justice applied flawed reasoning in setting a global fair, reasonable and non-discriminatory (FRAND) royalty rate for a patent portfolio essential to 3G, 4G and 5G cellular technologies. Interdigital Tech Corp. et al. v. Lenovo Group Limited, Case Nos. CA-2023-001489; -001492 (July 12, 2024) (Arnold, Nugee, Birss, LJ.) The Court of Appeal not only concluded that a higher rate was appropriate but applied the rate to sales prior to the limitations period.

In March 2023, the High Court issued its decision in InterDigital v. Lenovo, concluding that Lenovo should pay InterDigital a FRAND rate of $0.175 per cellular unit for a worldwide license to InterDigital’s portfolio. The High Court also found that Lenovo should pay the FRAND rate for all previous unlicensed sales, even if those sales occurred before the statutory damages limitation period. The High Court calculated that the $0.175 rate yielded a lump sum payment from Lenovo to InterDigital of $138.7 million for sales from 2007 to the end of 2023. The High Court’s FRAND rate determination was closer to Lenovo’s offered rate of $0.16 per unit than to InterDigital’s demand of $0.498 per unit. Both parties appealed.

Lenovo argued that the High Court wrongly found that Lenovo should pay a royalty for sales made outside of the six-year limitation period. The Court of Appeal disagreed, finding that the statute of limitations period has no role to “play in a determination of FRAND terms between (necessarily) a willing licensor and a willing licensee.” The Court of Appeal explained that a willing licensor would not “refuse to pay whatever license fees were eventually determined to [be] applicable” to products outside the limitations period and would not be considered willing if it refused. The Court of Appeal concluded that a willing licensee would not try to benefit from delay in agreeing FRAND terms or payment of FRAND royalties and, therefore, would pay with respect to all past units. From a policy perspective, the Court of Appeal noted that there should not be an incentive for the licensee to delay negotiations to minimize the amount it should be required to pay.

InterDigital challenged the per unit rate set by the High Court, including the rate derived from one of the comparable licenses and the adjustments made to reflect Lenovo’s position vis-à-vis the licensee. The Court of Appeal found that the High Court’s rate determination was internally inconsistent because it found that InterDigital had been forced to heavily discount past sales and this aspect was not FRAND while also declining to make any correction to the blended rate that had been derived from the license to account for non-FRAND factors. The Court of Appeal also found that the High Court did not properly justify rejecting InterDigital’s allocation of the lump sum paid by the licensee between past sales and future sales, which would have led to a higher rate.

The Court of Appeal conducted a detailed review of the [...]

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David-Versus-Goliath Trademark Victory Isn’t Necessarily “Exceptional”

by | Jul 25, 2024 |

The US Court of Appeals for the Third Circuit vacated an award of attorneys’ fees for reanalysis, explaining that the district court’s finding that the case was “exceptional” under the Lanham Act was based on policy considerations rather than the totality of the circumstances. Lontex Corp. v. Nike, Inc., Case Nos. 22-1417; -1418 (3rd Cir. July 10, 2024) (Hardiman, Matey, Phipps, JJ.)

Lontex Corporation is a small Pennsylvania business that manufactures and sells compression apparel to professional athletes and the public. Since 2008 it has held a registered trademark for the mark COOL COMPRESSION, which it used in conjunction with its sale of apparel. In 2015, Nike rebranded an athletic clothing line that included a category of “Cool” products designed to reduce body temperature, as well as various fits, including “Compression.” It also began using the words “Cool” and “Compression” together in the names of Nike clothing products sold online and in Nike catalogues. Nike used “Cool Compression” as a product name on tech sheets, which are internal documents used to explain Nike products to employees and third-party retailers.

The following year, upon discovering Nike’s use of the phrase “Cool Compression,” Lontex sent Nike a cease-and-desist letter. Nike’s lawyers directed the company to stop using the phrase “as soon as possible.” Nike took steps to remove the phrase from its website and catalogs but not its tech sheets. Two years later, Nike reached out to its third-party retailers and asked them to stop using “Compression” in product names.

Lontex sued Nike for trademark infringement of its COOL COMPRESSION mark, for contributory infringement based on its supply of “Cool Compression” products to retailers, and for counterfeiting. The district court dismissed the counterfeiting claim, and a jury trial was held on the infringement actions. The jury returned a verdict for Lontex, finding Nike liable for willful and contributory infringement. The jury awarded Lontex $142,000 in compensatory damages and $365,000 in punitive damages but declined to award Lontex disgorgement of Nike’s profits.

Post-trial, Nike renewed motions for judgment as a matter of law on fair use, trademark infringement, contributory infringement, willfulness and punitive damages. Lontex moved for disgorgement of profits and trebling of the damages awarded by the jury. The district court granted Lontex’s request for treble damages, increased the compensatory award to $426,000, and separately awarded Lontex almost $5 million in attorneys’ fees after finding that the case was “exceptional” under the Lanham Act. Both parties appealed.

As to the willfulness finding, Nike argued that the jury should not have been permitted to infer willfulness solely from its continued use of the mark after it received its cease-and-desist letter. The Third Circuit disagreed, pointing out that not only did Nike adopt the “Cool Compression” phrase without doing a trademark search, it also continued to use the phrase after receiving Lontex’s cease-and-desist letter and being advised by its own legal team to stop using it as soon as possible. The Court concluded that a jury could reasonably infer willful infringement. For similar reasons, [...]

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AI Takeover: PTO Issues More Patent Eligibility Guidance for AI Inventions

by | Jul 25, 2024 | ,

The US Patent & Trademark Office (PTO) issued a 2024 Guidance Update on Patent Subject Matter Eligibility, Including on Artificial Intelligence, which focuses on subject matter eligibility for artificial intelligence (AI)-based inventions. 89 Fed. Reg. 58128 (July 17, 2024).

The new guidance is part of the PTO’s ongoing efforts since 2019 to provide clarity on the issue of subject matter eligibility under 35 U.S.C. § 101 and to promote responsible innovation, competition and collaboration in AI technology development as espoused in the Biden administration’s Executive Order 14110, “Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence.” The guidance follows on the heels of the PTO’s recently issued Guidance on Use of AI-Based Tools in Practice Before the PTO and Inventorship Guidance for AI-Assisted Inventions.

The new guidance aims to assist PTO examiners, patent practitioners and stakeholders in evaluating the subject matter eligibility of patent claims involving AI technology. The guidance includes three main sections:

  • Section I provides background on issues concerning patentability of AI inventions.
  • Section II provides a general overview of the PTO’s patent subject matter eligibility guidance developed over the past five years.
  • Section III provides an update to certain areas of the guidance applicable to AI inventions.

As in the prior subject matter eligibility updates and discussions, the guidance document’s analysis of subject matter eligibility focuses on the Alice two-step analysis: an evaluation of whether a claim is directed to a judicial exception (i.e., abstract ideas, natural phenomena, laws of nature), and if so, an evaluation of whether the claim as a whole integrates the judicial exception into a practical application of that exception and/or an analysis of whether the claim recites additional elements that amount to significantly more than the recited judicial exception itself. The guidance highlights a number of relevant recent Federal Circuit cases and is further accompanied by three new examples with hypothetical patent claims for assisting PTO examiners in applying the guidance to an analysis of patent claim eligibility under 35 U.S.C. § 101.

The PTO requests written comments to the guidance through the Federal eRulemaking Portal by September 16, 2024. If there is anything to be gleaned from the guidance or the current state of patentability for AI inventions, the topic will remain highly controversial and heavily debated.



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Preliminary Injunction Upheld in Cancer Relapse Detection Case

by | Jul 25, 2024 |

The US Court of Appeals for the Federal Circuit affirmed the grant of a preliminary injunction (PI) in the biopharmaceutical space, concluding that the plaintiff satisfied the requirements for injunctive relief, including likelihood of success on the merits. The injunction included “carve outs” for patients requiring access to the affected cancer detection kits. Natera, Inc. v. NeoGenomics Laboratories, Inc. Case No. 24-1324 (Fed. Cir. July 12, 2024) (Moore, CJ; Taranto, Chen, JJ.)

Natera and NeoGenomics are both research-focused healthcare companies manufacturing products used for early detection of cancer relapse. Natera and NeoGenomics both offer products designed to identify circulating tumor DNA (ctDNA) within the bloodstream to assess the efficacy of cancer treatment and the risk of recurrence. NeoGenomics’s product is named RaDaR.

Natera owns two patents, one claiming methods for amplifying targeted genetic material, such as cfDNA, while reducing amplification of non-targeted genetic material, and the other claiming methods for detecting variations in genetic material indicative of disease or disease recurrence, such as ctDNA. Natera sued NeoGenomics, alleging that RaDaR infringed both of Natera’s patents, and moved for a PI. The district court granted the PI, finding that Natera satisfied the requirements for injunctive relief, including likelihood of success on the merits as set forth in Purdue Pharma v. Boehringer Ingelheim (Fed. Cir. 2001). The injunction barred NeoGenomics from making, using, selling, offering for sale, marketing, distributing or supplying RaDaR, with certain carve outs for patients already using RaDaR and for finalized or in-process research projects, studies and clinical trials.

To show a likelihood of success on the merits, Natera had to show that it would likely prove infringement and that its infringement claim would likely withstand challenges to the validity and enforceability of the patents. On appeal, NeoGenomics argued that the district court did not properly evaluate the likelihood of success on the merits factor because it failed to resolve a claim construction dispute and instead applied an erroneous construction.

The Federal Circuit noted that NeoGenomics first raised the erroneous claim construction issue in its motion to stay the PI pending appeal, and that neither party raised a claim construction dispute during the PI briefing. The Court therefore concluded that the district court did not abuse its discretion by not engaging in explicit claim construction before evaluating likelihood of infringement. The Federal Circuit also found that the district court did not err by implicitly construing the claims because Natera presented evidence suggesting that RaDaR’s multi-cycle polymerase chain reaction (PCR) process likely practiced the tagging and amplifying steps of the relevant claims.

NeoGenomics also argued that the district court applied an incorrect legal standard in evaluating NeoGenomics’s obviousness challenge, asserting that “mere ‘vulnerability’” of the patent to an invalidity challenge sufficed to defeat a PI. The Federal Circuit explained that the correct analysis addresses whether the patentee has shown that it is more likely than not to prevail over an invalidity challenge. The Court explained that it was not sufficient to merely allege that the individual elements of the claimed [...]

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Canadian Legal Code? Copying Foreign Law Can’t Infringe Copyright Under US Law

by | Jul 25, 2024 |

The US Court of Appeals for the Fifth Circuit held that reprinting foreign law cannot be an infringement of US copyright law. Canadian Standards Association v. P.S. Knight Co., Ltd., Case No. 23-50081 (5th Cir. July 16, 2024) (King, Willett, Douglas, JJ.)

The Canadian Standards Association (CSA) is a nonprofit that owns Canadian copyright registrations to its model codes and standards. More than 40% of the CSA’s codes have been incorporated by reference into Canadian regulations and statutes.

Gordan Knight is the president and sole shareholder of both the Canadian company P.S. Knight and the US company P.S. Knight Americas. These companies sell versions of CSA’s copyrighted model codes and standards without a license.

In 2015, the CSA filed suit against Knight in Canada for infringing its copyrights to the Canadian Electrical Code. Knight was found to infringe, and the Canadian court enjoined Knight from reproducing, distributing or selling any publication that infringed CSA’s copyright to the code.

After losing his appeal against the Canadian court’s ruling, Knight formed P.S. Knight Americas. Using this company, Knight again produced his own versions of the CSA model codes. CSA filed suit against Knight, alleging infringement of its Canadian copyrights. The district court granted CSA’s motion for summary judgment of infringement and granted a permanent injunction against Knight, enjoining him from further infringing CSA’s copyrighted model codes.

Knight appealed, alleging that the district court erred in finding that Canadian copyrights covering laws could be enforced in the United States.

The Fifth Circuit explained that when analyzing infringement of a foreign copyright under US copyright law, a court first determines the ownership and the nature of the copyright by applying the law of the nation where the copyrights are held. Neither party contested that CSA owns valid Canadian copyrights in and to the model codes.

Infringement, however, is decided purely under US law. In a 2002 en banc opinion (Veeck v. Southern Building Code) the Fifth Circuit held that under US law, it is not copyright infringement to copy and reprint the law (in that case, model building codes that were enacted into law). Under Veeck, when model codes are enacted into law, “they become to that extent ‘the law’ of the governmental entities and may be reproduced or distributed as ‘the law’ of those jurisdictions.”

Here, it was uncontested that more than 40% of CSA’s model codes were incorporated into Canadian law by reference, and thus those model codes were part of Canadian law. Since the materials Knight copied were Canadian law, the Fifth Circuit held that such copying could not be infringement in the US: “because United States law applies to questions of infringement, Veeck is outcome determinative.” On this basis, the Fifth Circuit reversed the district court.

In dissent, Judge Douglas argued that the majority misapplied Veeck. He argued that the en banc court in Veeck held that law was not copyrightable subject matter in the US. Since copyrightability is determined based on the law of the foreign jurisdiction, and since [...]

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Credibility at Issue? Court May Compel Party Representative to Appear In Person

by | Jul 25, 2024 |

Addressing for the first time whether a district court can compel a witness to appear in person for testimony involving fraud on the court, the US Court of Appeals for the Federal Circuit affirmed the district court’s determination that it could require an in-person appearance of the sole corporate representative to make a credibility determination. Backertop Licensing LLC v. Canary Connect, Inc., Case Nos. 23-2367; -2368; 24-1016; -1017 (Fed. Cir. July 16, 2024) (Prost, Hughes, Stoll, JJ.)

During an underlying litigation, the US District Court for the District of Delaware identified potential party and attorney misconduct in dozens of patent cases related to IP Edge and Mavexar, a patent monetization firm and an affiliated consulting firm, respectively. The district court found that IP Edge and Mavexar appeared to have created LLCs, recruited individuals to serve as the sole owners, assigned patents to the LLCs for “little or no consideration,” and recorded the complete assignment of patent rights without disclosing that IP Edge and Mavexar retained significant rights to the royalties and to any settlement proceeds resulting from litigation of the assigned patents. The LLCs then filed lawsuits asserting the rights of their assigned patents without reporting the significant rights retained by IP Edge and Mavexar.

The district court conducted an evidentiary hearing to “gather more information about its concerns” over potential professional misconduct violations and real parties in interest not being identified. One of the parties was Backertop Licensing LLC and its sole owner, Lori LaPray. The district court ordered the production of documents related to the potential fraud on the court and a declaration identifying “any and all assets owned by Backertop.” Shortly thereafter, Backertop filed a joint stipulation of dismissal, and two attorneys for Backertop sought to withdraw from their representation. The district court’s investigation continued, however, and Backertop’s “allegedly responsive production” contained documents, several of which “had clearly missing attachments or cover letters.”

Left unsatisfied with the production, the district court ordered LaPray to appear in person for a hearing to “assess her credibility.” Citing preexisting travel plans, a busy work schedule and childcare obligations, LaPray notified the court that she was unable to attend the hearing as scheduled and requested to appear telephonically instead. The district court moved the hearing date to accommodate LaPray’s travel schedule but required in-person appearance because “[c]redibility assessments are difficult to make over the phone.” Backertop argued, for the first time, in its motion for reconsideration that the court’s order was precluded under the Federal Rule of Civil Procedure 45 geographic limit. The district court rejected the argument because Rule 45 does not limit the court’s inherent power to order parties to appear sua sponte. After failing to appear at the rescheduling hearing and the show cause hearing, the district court held LaPray in civil contempt and imposed a $200 per day fine until she appeared in person in court. Backertop and LaPray appealed.

The Federal Circuit concluded that Rule 45’s geographic limit only applies to a party or attorney’s efforts [...]

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From Oops to Encore: The Board’s Premature Adverse Judgment

by | Jul 25, 2024 |

The Director of the US Patent & Trademark Office (PTO) overturned the Patent Trial & Appeal Board’s premature adverse judgment against a patent owner and remanded an inter partes review (IPR) proceeding based on the fact that the patent owner had initially instructed its counsel to cease work on the IPR while seeking new representation for related district court litigation, which contributed to the procedural delays. Shenzhen Xinzexing E-commerce Co., Ltd. v. Shenzhen Carku Technology Co., Ltd., IPR2024-00222 (PTO-Ofc. of Dir. July 10, 2024) (Vidal, PTO Dir.)

Shenzhen Xinzexing E-commerce Co. filed a petition for an IPR to challenge certain claims of a patent owned by Shenzhen Carku Technology Co. (Patent Owner). The petition and associated documents for the IPR were properly served on the Patent Owner at the address of record. The Board issued a notice on November 29, 2023, allowing the Patent Owner three months to file a preliminary response and requiring mandatory notice information to be submitted within 21 days. The Patent Owner did not comply with either obligation.

Following the Patent Owner’s failure to submit the required notices and response, the Board issued a sua sponte adverse judgment on May 21, 2024, interpreting the lack of response as abandonment of the IPR contest. However, on July 8, 2024, the Patent Owner filed the necessary notices and appointed new counsel, indicating that the previous counsel had been instructed to withdraw from the case and that new representation was being arranged.

The Director sua sponte overturned the Board’s adverse judgment, finding that it was premature. The Board’s communications did not clearly indicate that noncompliance with the notice requirements would result in adverse judgment. Given that the Patent Owner had shown efforts to rectify the situation by appointing new counsel and filing the required documents, the director vacated the adverse judgment and remanded the case for the Board to determine whether the petition showed a reasonable likelihood that any of the challenged patent claims were unpatentable.

Practice Note: This decision highlights the necessity of adhering to procedural deadlines and ensuring that consequences for noncompliance are clearly communicated. The Board’s failure to provide explicit notice of abandonment of the contest contributed to the premature adverse judgment, reinforcing the importance of clear procedural guidance.



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