United States: Federal Circuit Nixes PTAB's Same-Party And New Issue Joinder Precedent

The Federal Circuit overturned PTAB precedent that broadly allowed joinder under 35 U.S.C. § 315(c), holding that (1) a party cannot be "joined as a party" to a proceeding if it is already a party to that proceeding, and (2) the statute does not authorize joinder of new issues.

Background

In Facebook, Inc. v. Windy City Innovations, LLC, No. 2018-1400 (Fed. Cir. Mar. 18, 2020), the Federal Circuit overturned the PTAB's decision that joined together four IPRs filed within the 35 U.S.C. §315(b) time bar with two IPRs filed after the time bar. Significantly, the court held "that the [PTAB] erred in allowing Facebook to join itself to a proceeding in which it was already a party, and also erred in allowing Facebook to add new claims to the IPRs through that joinder." In so holding, the court also accorded no deference to the "precedential opinion panel" status of Proppant Express Investments, LLC v. Oren Tech. LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019)—decided by the PTO's Director, Commissioner of Patents, and Chief APJ—on which the PTAB relied to decide joinder was appropriate.

The parties long-running dispute notably began when, in 2015, Windy City filed and served a complaint against Facebook alleging infringement of four related patents that shared the same specification and collectively had 830 claims.  The complaint did not specify which claims Facebook allegedly infringed. Facebook filed an unsuccessful motion to dismiss followed by a successful motion to transfer the case from a federal court in North Carolina to one in California. The California court's local patent rules did not require Windy City to identify which claims Facebook allegedly infringed until after the §315(b) one-year statutory bar date.  So Facebook filed a motion with the court and requested identification of the claims before the bar date.  The court denied that motion.

On the one-year bar date, Facebook filed four IPR petitions challenging some, but not all, of the 830 claims of the four asserted patents.  Then, several months later, Windy City identified the claims of each patent that it was asserting in the district court case.  These asserted claims included claims that Facebook had not challenged in the first four IPR petitions.  Facebook then filed two additional IPR petitions of the additional asserted claims and moved the Board to join the newly challenged claims to the existing, already instituted proceedings.

The Board granted Facebook's motion for joinder reasoning that, among other things, although the newly challenged claims were not identical to those in the original petitions, the substance was similar and the addition of the new claims was not likely to affect the scope of the trial significantly.  The Board also reasoned that Facebook could not have reasonably determined which of the 830 claims in the patents were asserted against it within the one-year time bar. Ultimately, although two of the three Administrative Patent Judges on the Board's panel raised "concerns with permitting a party to, essentially, join to itself," they noted that a decision of the Board's Precedential Opinion Panel, Proppant Express Investments, LLC v. Oren Tech. LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019), had previously determined that same-party joinder is permitted under §315(c).   The Board subsequently entered final written decisions on all six petitions.  The parties appealed and cross-appealed. Although the appeals also challenged the final written decisions on the merits, this post focuses only on the issues related to joinder.

Federal Circuit

The Federal Circuit overturned the Board's joinder decision and held that the clear and unambiguous meaning of §315(c) does not authorize joinder of two proceedings, and does not authorize the Director to join a person to a proceeding in which that person is already a party. The Court thus overruled the PTAB's precedential opinion panel decision in Proppant Express Investments that permitted same party joinder. Specifically, the Court focused on the language of section 315(c) highlighted below:

(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.

In assessing whether §315(c) allows for same-party joinder or for new-issue joinder, the Court relied on the same language for both types of joinder emphasizing that §315(c) authorized joining parties, not joining proceedings.  The Court emphasized that a party cannot be "joined as a party" in a proceeding if it is already a party to that proceeding. Likewise, a new issue is akin to a new proceeding, and cannot be joined under §315(c).  The Court further noted that that §315(d) already provides for consolidating proceedings, and reading 315(c) to include proceedings would render section §315(d) superfluous, which is contrary to statutory interpretation principles.  Further, the Court reiterated there is a clear distinction between §315(c), which refers to the joinder of a person as a party, and §315(d), which refers to the consolidation of multiple proceedings and the issues in each.  Thus, the Court held that §315(c) does not authorize same-party joinder or joining new issues to a proceeding.

Policy Considerations

The Court was sympathetic to the policy considerations that Facebook advanced, including that accused infringers could be forced to decide between filing petitions addressing hundreds of claims or filing petitions on a fraction of the claims with the risk that the patent owner will assert claims not covered by the petitions, noting that "no matter how valid, policy considerations cannot create an ambiguity when the words on the page are clear."  The Federal Circuit held that the plain language of the statute is unambiguous: it does not permit same-party joinder or authorize joinder of new issues. The Federal Circuit suggested that "if Congress enacted into law something different from what it intended, then it should amend the statute to conform to its intent."

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