Cisco Systems, Inc. v. Chrimar Systems, Inc.

When a petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent before the date the petition was filed, the Board cannot institute inter partes review under 35 U.S.C. § 315(a)(1), which provides that review "may not be instituted if, before the date on which the petition for such review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent." The bar applies even if the petitioner voluntarily dismissed that civil action without prejudice, because the statute has no exception for such dismissals. The decision departs from Emerson Elec. Co. v. SIPCO, LLC, Case IPR2015-01579, slip op. at 2−3 (PTAB Jan. 14, 2016) (Paper 7), a non-precedential decision holding that the § 315(a)(1) bar does not apply when the earlier civil action was dismissed without prejudice. It does so in light of the Federal Circuit's discussion of the § 315(b) time bar. For petitioners, a district court declaratory judgment action challenging validity is now an unavoidable bar to IPR, and voluntarily dismissing it without prejudice before filing the petition does not cure the problem. For patent owners, a preliminary response showing that the petitioner or real party in interest earlier filed such a civil action is a basis for denying institution, however briefly that action was pending. The Board relied on Click-to-Call Technologies, LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018) (en banc), which held that the § 315(b) time bar applies even when a prior civil action was dismissed voluntarily without prejudice. LEGAL TEST OR STANDARD: Section 315(a)(1) is read by its text and ordinary meaning, informed by Click-to-Call. Institution is barred if (1) the petitioner or real party in interest (2) filed a civil action challenging the validity of a claim of the patent (3) before the date the petition was filed. The statute has no exception for dismissal without prejudice. Black's Law Dictionary defines "file" as "[t]o commence a lawsuit", so the bar is implicated once a party commences noncriminal litigation, irrespective of subsequent events. TRIGGERING FACTS: Petitioner had filed a civil action challenging the validity of a claim of the '760 patent before filing the Petition, and later voluntarily dismissed it without prejudice. The Petition itself acknowledged the earlier action (Pet. 7). Petitioner argued that the action was not substantive litigation, that the legislative history shows a purpose of preventing two bites at the apple, and that dismissal without prejudice nullifies the act of filing. The Board rejected each argument. KEY QUOTE: "For these reasons, § 315(a)(1) bars institution of an inter partes review even though Petitioner voluntarily dismissed its earlier civil action challenging the validity of a claim of the ’760 patent without prejudice." (Paper 11, p. 8) PRIOR PRECEDENT AFFECTED: Declines to follow Emerson Elec. Co. v. SIPCO, LLC, Case IPR2015-01579, slip op. at 2−3 (PTAB Jan. 14, 2016) (Paper 7), a non-precedential decision. Applies to § 315(a)(1) the reasoning of Click-to-Call Technologies, LP v. Ingenio, Inc., 899 F.3d 1321 (Fed. Cir. 2018) (en banc), which addressed the § 315(b) time bar. PRACTICE TIP: Before filing an IPR petition, check whether the petitioner or any real party in interest ever filed a civil action challenging validity of a claim of the patent. Do not rely on a voluntary dismissal without prejudice to avoid § 315(a)(1). Patent owners should raise any such earlier filing in the preliminary response.