Takeaway:  Petitioner’s alleged threat to file IPRs against Patent Owner, unless Patent Owner pays Petitioner, is sufficient to grant authorization for Patent Owner to file a motion for sanctions against Petitioner.

Based on specific representations made during a telephone conference, the Board authorized Patent Owner to file a motion for sanctions (hereinafter, “Motion”) against Petitioner that includes dismissal of the petitions (IPR2015-01092, IPR2015-1096, IPR2015-01102, IPR2015-01103).

In an e-mail to the Board, Patent Owner requested authorization to file a sanctions motion for dismissal under 37 C.F.R. §42.12 because the real parties in interest allegedly stated publicly that they intend to use the inter partes review (IPR) process for the purpose of affecting the value of public companies. Patent Owner alleged that the real parties in interest threatened to file IPRs against the challenged patents unless Patent Owner met their demands. Petitioner allegedly filed the IPRs after Patent Owner declined to pay Petitioner.

Patent Owner alleged that Petitioner, during argument presented in the telephone conference, waived confidentiality over certain information allegedly relevant to the allegation of abuse of process. The Board instructed the parties to confer to resolve any dispute regarding the alleged waiver. The Board noted that there is a strong public policy in favor of making information filed in IPR open to the public. Further, under 35 U.S.C. § 316(a)(1) and 37 C.F.R. § 42.14, the default rule is that all papers filed in an IPR are open and available for access by the public. A party may file a concurrent motion to seal, along with a proposed protective order, and the information at issue will be sealed pending the outcome of the motion to seal. No protective order has been entered in these proceedings.

The Board instructed the parties to provide briefs that address: (1) the elements required to establish an abuse of process, (2) any evidence of intent that supports or undermines the allegation of abuse of process in these cases, and (3) the standard of proof that applies when deciding a motion for sanctions. The Board instructed Patent Owner to file the Motion on the same day as a Preliminary Response or, if no Preliminary Response is filed, then no later than the due date for filing the Preliminary Response. Petitioner was instructed to submit a response to the Motion no later than ten business day after filing the Motion and Patent Owner’s reply to Petitioner’s response is due five business days after Petitioner’s response.

COALITION FOR AFFORDABLE DRUGS VI, LLC. v. CELGENE CORPORATION, IPR2015-01092, IPR2015-1096, IPR2015-01102, IPR2015-01103
Paper 7: Order Authorizing Patent Owner’s Motion for Sanctions
Dated: June 9, 2015
Patents: 6,048,501 and 6,315,720
Before: Michael P. Tierney, Michael W. Kim, Jaqueline Wright Bonilla, Grace Karaffa Obermann, and Tina E. Hulse
Written by: Obermann