Bar to File IPR Triggered by Declaratory Judgment Action, Even if Complaint Was Dismissed Without Prejudice

Feb 21, 2019

Reading Time : 4 min

Petitioner Ruiz Food Products, Inc. identified FourKites, Inc. (“FourKites”) as a real party-in-interest in two inter partes review (IPR) petitions and disclosed that FourKites had previously filed an action for declaratory judgment of invalidity against the patents-at-issue. Despite the previously filed declaratory judgment action, Petitioner argued that 35 U.S.C. § 315(a)(1) did not bar institution of the IPR proceedings because FourKites’ declaratory judgment complaint had been dismissed without prejudice. In support of this argument, Petitioner relied on prior Federal Circuit and PTAB precedent for the proposition that dismissal without prejudice of a declaratory judgment action nullified the effect of service of that complaint and, therefore, could not act as a time bar under § 315(a)(1). See Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002); Oracle Corp. et al. v. Click-to-Call Tech. LP, Case IPR2013-00312, slip op. at 17 (PTAB Oct. 30, 2013) (Paper 26) (precedential).

After the IPR proceedings were instituted, the Federal Circuit issued an opinion distinguishing Graves and vacating the PTAB’s final written decision in Oracle Corp. Specifically, in Click-to-Call Techs., LP v. Ingenio, Inc., the Federal Circuit held that service of a complaint in a patent infringement action can trigger the time-bar provision of 35 U.S.C. § 315(b) even if the complaint was later dismissed without prejudice. 899 F.3d 1321, 1325, 1334-35 (Fed. Cir. 2018) (en banc in relevant part). In light of the Federal Circuit’s decision in Click-to-Call with respect to § 315(b), Patent Owner MacroPoint LLC moved to dismiss the IPR proceedings and averred that the holding of Click-to-Call applied equally to § 315(a)(1) and, therefore, the IPR proceedings were time-barred. Petitioner, in response, argued that the Federal Circuit’s decision in Click-to-Call was cabined to § 315(b) and that a dismissal without prejudice still renders an action as if it had never been filed for purposes of § 315(a)(1).

Section 315 contains two provisions addressing time bars based on civil actions. The first provision, set forth as § 315(a)(1), governs actions brought by a petitioner or a real party-in-interest. Under § 315(a)(1), the PTAB may not institute IPR proceedings if a petitioner or real party-in-interest filed a civil action challenging the validity of a patent claim before the petition’s filing date. The second provision, set forth as § 315(b), governs actions brought by a patent owner. Unlike § 315(a)(1), which establishes a bar on the date that the petitioner or real party-in-interest filed an action challenging patent validity, the time bar under § 315(b) is triggered one year from the date a patent owner served a patent infringement complaint.

In determining whether the IPR proceedings were time-barred, the PTAB turned to the statutory language of 35 U.S.C. § 315. The PTAB explained that nothing in § 315(a)(1) provides any exceptions for complaints that are filed before an IPR petition but later dismissed. Moreover, as the Federal Circuit previously discerned in Click-to-Call regarding § 315(b), the PTAB concluded that Congress could have—but did not—include an exception in § 315(a)(1) for actions that were filed but later dismissed without prejudice. Just as the Federal Circuit in Click-to-Call found the language of § 315(b) to be plain and unambiguous, the PTAB held the same for § 315(a)(1). According to the PTAB, the plain and unambiguous text set forth in § 315(a)(1) did not include any exception regarding dismissals.  

Next, the PTAB considered Petitioner’s argument that § 315(a)(1) is inapplicable to the present circumstances because of background legal principles concerning dismissals. The background legal principle on which Petitioner relied was the same as that considered in Click-to-Calli.e., that a dismissal without prejudice leaves the parties in the same legal position as if the complaint was never filed. In Click-to-Call, however, the Federal Circuit found such principle to be “anything but unequivocal.” Relying on the Federal Circuit’s reasoning, the PTAB rejected Petitioner’s argument and concluded that Petitioner’s proffered background legal principle cannot justify applying a dismissal exception to the plain, unambiguous statutory language of § 315(a)(1).

The PTAB then considered and rejected Petitioner’s three alternative arguments for why FourKites’ complaint should not trigger the time bar of § 315(a)(1). First, the PTAB dismissed Petitioner’s argument that FourKites’ complaint did not implicate § 315(a)(1) because it was a counterclaim, not a complaint. While § 315(a)(3) provides that a counterclaim of invalidity does not constitute a “civil action” to trigger the time bar of § 315(a)(1), the PTAB explained that there was no ambiguity in the statutory language that could justify interpreting “counterclaim” from § 315(a)(3) to include FourKites’ declaratory judgment action. Second, despite Petitioner’s attempts to argue otherwise, the PTAB held that Patent Owner did not waive any objection to institution under § 315(a)(1) by failing to object prior to institution of the IPR proceedings because this is a jurisdictional issue that cannot be waived. Third, the PTAB considered Petitioner’s argument that FourKites’ complaint should not constitute a “civil action” because the complaint was dismissed for lack of subject matter jurisdiction. Without addressing how this issue may be decided after Click-to-Call, the PTAB found Petitioner’s argument unavailing because the district court did not actually dismiss FourKites’ complaint for lack of subject matter jurisdiction.

Accordingly, the PTAB held that institution of the IPR petitions was time-barred by 35 U.S.C. § 315(a)(1). It therefore lacked jurisdiction over the IPR proceedings.

Practice Tip:

A potential IPR petitioner must not only avoid filing a declaratory judgment action of invalidity, but must also ensure that no such action has been filed by a real party-in-interest. A declaratory judgment action of invalidity—even if dismissed without prejudice—triggers the bar provision of § 315(a)(1) and forecloses the filing of an IPR.

Ruiz Food Products, Inc. v. MacroPoint LLC, Case IPR2017-02016 & IPR2017-02018, Paper 22 (Feb. 14, 2019).

Share This Insight

Previous Entries

IP Newsflash

April 23, 2025

The Federal Circuit recently refused to apply collateral estoppel to claims of a patent asserted in district court litigation based on a Patent Trial and Appeal Board (PTAB) decision finding similar claims from the same patent unpatentable because the PTAB applied a lower burden of proof than what is required to invalidate claims in district court.

...

Read More

IP Newsflash

April 7, 2025

The Central District of California denied a defendant’s motion to dismiss or transfer plaintiff’s first-filed declaratory judgment action based on defendant’s later-filed patent infringement suit in Wisconsin.  Though suit was seemingly imminent when defendant advised plaintiff it might be infringing defendant’s patents, plaintiff responded by requesting a licensing agreement in lieu of litigation. The court found that plaintiff’s action was not anticipatory forum-shopping litigation because plaintiff only filed suit after defendant neglected to respond to its licensing offer.

...

Read More

IP Newsflash

April 1, 2025

The District of Delaware recently denied in part a motion to compel production of documents and testimony between a patentee and potential investors, valuation firms and an international bank based on the common interest exception. In so doing, the court reaffirmed that disclosure of privileged information to third parties will generally waive privilege unless it can be shown that the parties’ interests are identical and the communications are legal, not solely commercial.

...

Read More

IP Newsflash

March 24, 2025

The Federal Circuit affirmed a Patent Trial and Appeal Board (PTAB) final written decision holding that the prior art exception of AIA Section 102(b)(2)(B) does not apply to a prior sale by an inventor when the sale is conducted in private. According to the Federal Circuit, a sale must disclose the relevant aspects of the invention to the public to qualify for the prior art exception of Section 102(b)(2)(B).

...

Read More

IP Newsflash

March 21, 2025

Under the Lanham Act, a plaintiff who prevails on a trademark infringement claim may be entitled to recover the “defendant’s profits” as damages. The Supreme Court in Dewberry Group, Inc. v. Dewberry Engineers Inc. unanimously construed “defendant’s profits” in 35 USC § 1117(a) to mean that only the named defendant’s profits can be awarded, not the profits of other related corporate entities. The Court, however, left open the possibility that other language in § 1117(a) may allow for damages linked to the profits of related entities, if properly raised and supported.

...

Read More

IP Newsflash

March 13, 2025

In a series of rulings on a motion in limine, the District of Delaware recently distinguished between what qualifies as being incorporated by reference and what does not for the purposes of an anticipation defense. In short, a parenthetical citation was held to be insufficient, while three passages discussing a cited reference met the test.

...

Read More

IP Newsflash

March 4, 2025

On February 28, 2025, the USPTO announced that it was rescinding former Director Vidal’s 2022 memorandum on discretionary denials by the Patent Trial and Appeal Board. The 2022 memorandum effectively narrowed the application of discretionary denials in cases with parallel district court litigation by specifying instances where discretionary denial could not be issued. With the withdrawal of the memorandum, individual PTAB panels will regain flexibility in weighing discretionary denials. While the long-term effect of that increased flexibility is not yet known, the immediate effect is likely to be a shift towards the discretionary analysis applied by PTAB panels before the issuance of the memorandum.

...

Read More

IP Newsflash

March 3, 2025

A District of Delaware judge recently granted a defendant’s motion to include a patent prosecution bar in its proposed protective order after determining that litigation counsel’s ability to practice before the Patent Office—without ever having represented the plaintiffs at the Patent Office in the past—weighed heavily in favor of the bar.

...

Read More

© 2025 Akin Gump Strauss Hauer & Feld LLP. All rights reserved. Attorney advertising. This document is distributed for informational use only; it does not constitute legal advice and should not be used as such. Prior results do not guarantee a similar outcome. Akin is the practicing name of Akin Gump LLP, a New York limited liability partnership authorized and regulated by the Solicitors Regulation Authority under number 267321. A list of the partners is available for inspection at Eighth Floor, Ten Bishops Square, London E1 6EG. For more information about Akin Gump LLP, Akin Gump Strauss Hauer & Feld LLP and other associated entities under which the Akin Gump network operates worldwide, please see our Legal Notices page.