Takeaway: The bar under 35 U.S.C. § 325(a)(1) is a statutory requirement and, thus, cannot be waived.

In its Decision, the Board ordered the termination of the trials in CBM2014-00072, CBM2014-00073, CBM2014-00074, and CBM2014-00075, and vacated its Decisions on Institution in each of these proceedings, because it found that Petitioner had filed a declaratory judgment action that resulted in a bar under 35 U.S.C. § 325(a)(1).

Petitioner had filed Petitions in CBM2014-00072, CBM2014-00073, CBM2014-00074, and CBM2014-00075 on February 18 and 19, 2014. The Board then instituted trial based on these Petitions.  In a subsequent teleconference, Patent Owner requested authorization to file a motion to dismiss each of the four proceedings.  The Board authorized Patent Owner to file the requested motion, Petitioner to file an opposition, and Patent Owner to file a reply.

A primary basis for Patent Owner’s Motion was the case of SecureBuy, LLC v. CardinalCommerce Corp., Case CBM2014-00035 (PTAB Apr. 25, 2014), in which the Board had indicated “that § 18 of the Leahy-Smith America Invents Act (or “AIA”) . . . ‘provides that covered business method patent review proceedings shall employ all the statutory standards and procedures of a post-grant review (i.e., 35 U.S.C. §§ 321–29) except for those expressly excluded (i.e., 35 U.S.C. §§ 321(c); 325(b), (e)(2), (f)).’”  After noting that the bar § 325(a)(1) of the AIA was not one of the expressly excluded sections, the Board pointed out that in SecureBuy, institution of covered business method review had been declined because the petitioner in that case had filed multiple declaratory judgment actions asserting the invalidity of at least one of the claims of the patent at issue.

For each of these four proceedings, Patent Owner asserted in its Motion to Dismiss that Petitioner had “filed a declaratory judgment action challenging the validity of all four patents in 2011.” Petitioner, in its opposition, did not dispute this assertion.  Instead, Petitioner argued that Patent Owner had waived this argument by not raising it in Patent Owner’s Preliminary Response or in a request for rehearing of the Decisions on Institution.  The Board disagreed, finding that 35 U.S.C. § 325(a)(1) was a statutory requirement that the Board did not have the authority or discretion to waive.

Patent Owner also tried to argue that SecureBuy was not controlling because it only contained an incomplete analysis of § 18 and thus reached an incorrect conclusion.  The Board disagreed with this position as well, holding that “[a]s a precedential opinion, under agency authority (SOP 24), SecureBuy controls the outcome of this matter based on the facts presented.”

GTNX, Inc. v. INTTRA, Inc., CBM2014-00072, CBM2014-00073, CBM2014-00074, CBM2014-00075
Paper 20 (CBM2014-00072, CBM2014-00073, CBM2014-00075); Paper 21 (CBM2014-2014-00074): Termination of Instituted Trials under 35 U.S.C. § 325(a)(1) and 37 C.F.R. § 42.72
Dated: December 10, 2014
Patents: 7,756,794 C2 (CBM2014-00072); 7,761,387 C1 (CBM2014-00073); 7,752,142 B2 (CBM2014-00074); 7,827,119 C1 (CBM2014-00075)
Before: Lora M. Green, William A. Capp, and Frances L. Ippolito
Written by: Green