Apple Inc. v. Zipit Wireless, Inc.

When a patent owner has filed no response after institution and counsel's statement that it is not contesting is expressly contingent on the Board finding that the petitioner met its burden, the Board may not treat that statement as an unequivocal abandonment of the contest and enter adverse judgment under 37 C.F.R. § 42.73(b)(4). Because the petitioner bears the burden of proving unpatentability by a preponderance of the evidence under 35 U.S.C. § 316(e), the Board must instead either issue a show cause order clarifying whether the patent owner is abandoning the contest or issue a final written decision addressing patentability of the challenged claims. No prior precedent directly addressed this issue; the decision cites none of the Board's earlier decisions on adverse judgment. For petitioners, a patent owner's silence or conditional non-opposition does not yield a quick adverse judgment, so the petitioner must still carry its burden from the onset, with particularity, and should expect a merits decision or a show cause order. For patent owners, a statement that they will not oppose only if the petitioner meets its burden preserves the contest and does not forfeit the claims, though the Board may then ask them to clarify, and the claims can still be held unpatentable on the merits. The Director relied on 35 U.S.C. § 316(e) and Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016), which cites 35 U.S.C. § 312(a)(3), for the burden of proof and the particularity requirement. LEGAL TEST OR STANDARD: The Director asked whether counsel's statements were an unequivocal abandonment of the contest. Adverse judgment under 37 C.F.R. § 42.73(b)(4) requires one. The Director read the statements against the petitioner's burden under 35 U.S.C. § 316(e), proof of a proposition of unpatentability by a preponderance of the evidence, and Harmonic's holding that the petitioner has the burden from the onset to show with particularity why the patent is unpatentable. TRIGGERING FACTS: Apple filed six petitions, and review was instituted in all six before the same panel. Zipit filed Patent Owner Responses in two cases but none in the four at issue. At the hearing in the two companion cases, Zipit's counsel was asked whether Zipit was not contesting a final written decision or adverse judgment in the four others. Counsel answered that if the Board determines Apple met its burden of proof on those claims, Zipit has not filed any opposition. The Board then entered adverse judgments finding abandonment. KEY QUOTE: "Instead Patent Owner’s non-opposition was contingent on the Board determining that Petitioner met its burden of proving by a preponderance of the evidence that the challenged claims are unpatentable." (Paper 14, p. 3) PRIOR PRECEDENT AFFECTED: No prior precedential or informative decision is directly affected. The decision follows 35 U.S.C. § 316(e) and Harmonic Inc. v. Avid Tech., Inc., 815 F.3d 1356, 1363 (Fed. Cir. 2016), and vacates the Board's adverse judgments (IPR2021-01124, Paper 13; IPR2021-01125, Paper 14; IPR2021-01126, Paper 13; IPR2021-01129, Paper 14). PRACTICE TIP: Patent owners that do not file a response should say clearly whether they are abandoning the contest, because a conditional statement keeps the case open. Petitioners who want an adverse judgment should get an unequivocal statement of abandonment on the record and be ready to carry their burden if the Board treats the statement as ambiguous.