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Bid To Close IPR 'Loopholes' Shot Down By Precedent Panel

The Patent Trial and Appeal Board’s precedent-setting panel won’t look at whether the board can still review a patent after certain district court and U.S. International Trade Commission challenges.

Bitmicro LLC had wanted the Precedential Opinion Panel to analyze whether patent owners could still face inter partes reviews after the same petitioner sued in district court for a declaratory judgment of noninfringement. The data storage technology company also wanted to know whether the board still needed to consider the factors set out in General Plastic v. Canon to decide if an IPR was appropriate in cases where the petitioner had challenged the patent at the ITC.

The panel shot down both requests Tuesday without expounding on its decision, and the IPRs will continue.

Bitmicro filed a joint request for rehearing at the PTAB and the POP after the board took up Samsung Electronics Co. Ltd. and SK Hynix Inc.'s challenge to its flash memory patent.

Before turning to the PTAB, the petitioners had challenged four of Bitmicro’s patents at the ITC — including the one now being reviewed by the board — and sued in district court for a declaration of noninfringement. The patent owner claims both of those ongoing challenges should have blocked the IPR from being instituted.

When a company challenges the validity of a patent at the district court, then they’re not eligible to ask the PTAB to review the patent, Bitmicro said. The company argued that requests for a declaration of noninfringement should trigger that same ban, as a validity challenge would become part of that litigation.

“Petitioners seek a loophole where they can initiate a district court action before filing an IPR petition on the same patent, knowing full well the controversy involves invalidity, but still avoiding the statutory consequences,” the request stated. “Such a result ensures that patent owners will face duplicative actions in the chosen district court forum.”

Then, Bitmicro said the board didn’t apply the test set out in its precedential General Plastic decision, which is used to determine when an IPR should be granted. The company had argued that the factors weighed against instituting review and particularly warned that the two bodies could end up with different results, as Samsung and SK Hynix had taken different positions on claim construction at the ITC and PTAB, the patent owner said.

The board had said it didn’t need to weigh General Plastic, in part because there are different “evidentiary standards and burdens” and the IPR request was a follow-on petition rather than just a related one. But Bitmicro said the U.S. Patent and Trademark Office has already decided otherwise, with the agency's 2018 trial practice guide specifically saying ITC cases count in General Plastic analyses.

“While the decision suggested that the different standards applied at the ITC made the events there irrelevant, the Patent Office decided otherwise when issuing the update,” Bitmicro wrote. “It would be clear error for the board to disregard the office’s guidance, as it cannot depart from its own guidance on an ad hoc basis.”

Counsel for each of the parties didn’t immediately respond to requests for comment.

The patent-in-suit is U.S. Patent Number 6,529,416.

Samsung and SK Hynix are represented by F. Christopher Mizzo, Craig Murray, Gregory S. Arovas and G. William Foster of Kirkland & Ellis LLP, and Joseph Colaianni, Linhong Zhang and David Holt of Fish & Richardson PC.

Bitmicro is represented by Wayne M. Helge, James T. Wilson and Aldo Noto of Davidson Berquist Jackson & Gowdey LLP.

The case is Samsung Electronics Co. Ltd. v. BiTMICRO LLC, case numbers IPR2018-01410 and IPR2018-01411, before the Patent Trial and Appeal Board.