In a proceeding that included Patent Office Director Andrei Iancu on the panel, the PTAB issued an order this past week denying institution of 3 IPRs filed by Valve. The decision demonstrates that the PTAB continues to tighten its standards for institution of post-grant challenges, including based upon considerations related to what it perceives as fairness to patent owners.

In federal district court, Valve and HTC had been accused of infringing the same patents. The plaintiff dismissed its case against Valve without prejudice. HTC proceeded to file its own IPR challenges for the asserted patents, and the PTAB issued its institution decisions for each of the HTC’s challenges. Recently, the Federal Circuit found that an accused infringer must file an IPR challenge within one year of being served with a complaint, even if the complaint was dismissed without prejudice. In response to that decision, Valve filed its own IPR challenges.

The PTAB denied institution of Valve’s IPR challenges as an exercise of its statutory discretion under 35 U.S.C. 314(a). In reaching the decision, the PTAB considered the factors it created in the General Plastic decision. As part of that analysis, the PTAB found that Valve and HTC were “similarly situated” because both companies were co-defendants in the same case and were accused of infringing the same patents. The PTAB found that instituting Valve’s later-filed IPR challenges would give Valve an unfair advantage over the Patent Owner because Valve could use the Patent Owner’s preliminary responses and the PTAB’s institution decisions for the HTC IPR challenges when preparing Valve’s IPR challenges. The fact that Valve filed its IPR challenges in order to account for the change in law did not prevent the PTAB from denying institution.

This decision is yet another cautionary signal to game companies and other defendants to not delay filing PTAB challenges, even if they believe there are legitimate reasons for waiting to file. Given the PTAB’s increasing scrutiny of the timing of post-grant challenges beyond just the one-year statute of limitations triggered by the service of a complaint, game companies are best served to promptly file any PTAB challenges for patent assertions against their products, including in situations where they are not directly named as a party.