Kokusai Electric Corporation v. ASM IP Holding B.V.

Informative decision only: persuasive authority, not binding precedent. When the parties jointly request termination of an instituted inter partes review under 35 U.S.C. § 317(a) after settlement, and the merits have not been decided, the Board may terminate without a final written decision and without deciding a pending motion to amend, even though petitioner has withdrawn its opposition, because deciding the motion requires a patentability determination under 35 U.S.C. § 318(a) and the parties identified no explicit statutory basis for issuing a certificate absent a final written decision. Termination does not bar the patent owner from seeking reissue or reexamination to pursue the substitute claims. No prior precedent directly addressed this issue; the Board relies on the Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012), for the general expectation that a proceeding will terminate after a settlement agreement is filed. A petitioner that settles cannot buy entry of substitute claims by withdrawing its opposition to a motion to amend, and the order treats the motion as still requiring a patentability determination. A patent owner cannot obtain a partial grant of a motion to amend as a side term of settlement, and must pursue the substitute claims through reissue or reexamination, which the order says the Office has clear authority to handle and which the decision does not restrict. The Board relied on the statutory text of 35 U.S.C. §§ 317(a), 318(a) and 318(b) and 37 C.F.R. § 42.121, and cites no Federal Circuit, CCPA or Supreme Court authority. LEGAL TEST OR STANDARD: Under 35 U.S.C. § 317(a), an instituted review shall be terminated as to any petitioner on joint request unless the Office has decided the merits before the request is filed. If no petitioner remains, the Office may terminate or proceed to a final written decision. The Board applied this to terminate without deciding the motion to amend, noting that a decision on a motion to amend requires a patentability determination under 35 U.S.C. § 318(a) and 37 C.F.R. § 42.121, and that a certificate under 35 U.S.C. § 318(b) follows a final written decision. TRIGGERING FACTS: Trial was instituted December 3, 2018. Briefing was complete, including the motion to amend and the petitioner's opposition, but the oral hearing (August 27, 2019) had not occurred and no merits decision had issued. The parties filed a joint motion to terminate with the settlement agreement on July 12, 2019. Petitioner withdrew its opposition to the motion to amend under the settlement, and the parties asked the Board to grant in part the motion to replace canceled claims with substitute claims. Counsel confirmed that the settlement and the termination request were not contingent on the motion to amend being decided, and that they sought termination without a final written decision. They did not seek a decision if the substitute claims were found unpatentable. They identified no explicit statutory basis for a certificate absent a final written decision, and the only reason given for not using reissue or reexamination was efficiency. KEY QUOTE: "Therefore, the fact that Petitioner has withdrawn its opposition as a consequence of the settlement of this proceeding does not remove the issue of patentability of the “non-contingent” substitute claims in deciding Patent Owner’s Motion to Amend." (Paper 38, p. 4) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The Board cites the Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012), for the general expectation of termination after settlement, and the April 2019 Notice Regarding Options for Amendments by Patent Owner Through Reissue or Reexamination During a Pending AIA Trial Proceeding, 77 Fed. Reg. 16655 (Apr. 22, 2019), as cited in the order. PRACTICE TIP: Do not build a settlement around a joint request that the Board grant a motion to amend, even an unopposed one. Plan to pursue substitute claims by reissue or reexamination, and file those requests before the Office issues a certificate canceling all claims or the Federal Circuit issues a mandate, as the cited Notice describes.