NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.

When a petitioner asserts in an IPR the same prior art and arguments that it is asserting in a co-pending district court case, and that case is nearing its final stages and will be resolved (trial set March 25, 2019) before any Board trial would conclude (September 2019), the Board may deny institution under 35 U.S.C. § 314(a) because instituting would be an inefficient use of Board resources. The advanced state of the district court proceeding is an additional factor supporting denial, and the Board may weigh it alongside a § 325(d) denial because § 314(a) discretion is not encompassed by § 325(d). The decision follows General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, Case IPR2016-01357 (Paper 19) (PTAB Sept. 6, 2017) (precedential as to § II.B.4.i). It distinguishes General Plastic on timing, and it uses General Plastic's statement that an AIA objective is to provide an effective and efficient alternative to district court litigation. It applies the Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586 (Paper 8) (PTAB Dec. 15, 2017) (informative), § 325(d) factors. Petitioners must now expect that a timely petition, filed before the § 315(b) bar, can still be denied if the parallel case will finish first and the art and arguments overlap. They must also expect denial where the Examiner already applied the same art. Patent owners can cite the district court schedule, the identical invalidity contentions and the Board's projected trial end date as a separate basis for denial. They can do so even when § 325(d) also applies. The Board cited Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1367 (Fed. Cir. 2016), for the point that the PTO is permitted, but never compelled, to institute an IPR. LEGAL TEST OR STANDARD: Section 314(a) discretion is separate from § 325(d). The Board weighed the Becton, Dickinson § 325(d) factors: (a) the similarities and material differences between the asserted art and the prior art involved during examination; (b) the cumulative nature of the asserted art and the prior art evaluated during examination; (c) the extent to which the asserted art was evaluated during examination, including whether the prior art was the basis for rejection; (d) the extent of the overlap between the arguments made during examination and the manner in which Petitioner relies on the prior art or Patent Owner distinguishes the prior art; (e) whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation of the asserted prior art; and (f) the extent to which additional evidence and facts presented in the Petition warrant reconsideration of prior art or arguments. Under § 314(a), it treated the advanced state of the district court proceeding as an additional factor weighing against institution. TRIGGERING FACTS: The petitioner asserted the same prior art (Braunheim and the AAPA) and arguments in its district court invalidity contentions. The district court trial was set for March 25, 2019, and expert discovery was ending November 1, 2018. The Board's trial would not conclude until September 2019. The patent had expired, so the same claim construction standard applied and the district court had already construed the claim terms. The Examiner had already applied the same art to reject all pending claims. The petition was filed shortly before the § 315(b) bar, which was timely and did not itself favor denial. KEY QUOTE: "Institution of an inter partes review under these circumstances would not be consistent with “an objective of the AIA . . . to provide an effective and efficient alternative to district court litigation.”" (Paper 8, p. 20) PRIOR PRECEDENT AFFECTED: Follows and relies on General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, Case IPR2016-01357 (Paper 19) (PTAB Sept. 6, 2017) (precedential as to § II.B.4.i), including its statement that there is no intent to limit § 314(a) discretion so that it is encompassed by § 325(d). Distinguishes General Plastic on petition timing, because there was no tactical advantage from the delay. Applies the six factors of Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, slip op. at 17-18 (Paper 8) (PTAB Dec. 15, 2017) (informative). PRACTICE TIP: Before filing, compare your petition's art and arguments with the prosecution history and your district court invalidity contentions, and check the district court schedule against the likely date of a final written decision. If the cases overlap and the district court will finish first, address in the petition why the art or arguments differ from the Examiner's and why the Board should not deny institution under §§ 314(a) and 325(d). As patent owner, put the district court schedule and the overlap in your preliminary response.