Intellectual Property > IP Newsflash > Federal Circuit: Time-Bar Challenge to IPR Doomed by Patent Owner’s Conclusory and Newly Raised Arguments
22 Nov '19

The Federal Circuit rejected a patent owner’s time-bar challenge to an inter partes review (IPR) proceeding, holding that the patent owner failed to provide sufficient details to establish proper service of a complaint for infringement. The court further held that the patent owner was precluded from relying on the petitioner’s waiver of service because it did not raise that argument to the Patent Trial and Appeal Board.

On July 9, 2015, Game and Tech, Co. (GAT) filed a complaint for infringement against Wargaming Group Ltd., and its affiliate, Wargaming.net (collectively, “Wargaming”). On December 10, 2015, a process server served Wargaming.net with a summons and attached documents. However, the summons was not signed by the clerk of the court and did not bear the court’s seal. The same month, GAT mailed a copy of the complaint and summons to Wargaming Group’s office in Cyprus. In February 2016, counsel for Wargaming contacted GAT’s counsel about the lawsuit, and stated that while it believed service was not proper, Wargaming would waive service and related defenses in exchange for an April 1 deadline to respond to the complaint. No formal waiver of service was filed with the district court. However, the parties appeared at a scheduling conference on March 15, 2016, and on April 1, Wargaming filed a motion to dismiss for improper venue or, in the alternative, for failure to state a claim.

Nearly a year later, on March 13, 2017, Wargaming filed an IPR petition, which included a statement that the IPR was not time-barred because Wargaming had not been served with a complaint. Because the parties offered competing arguments and evidence on whether service was proper, the Board opted to institute the IPR and to allow the parties to develop the record regarding service. In its final written decision, the Board determined that neither service in the U.K. nor in Cyprus met the requirements of Rule 4 of the Federal Rules of Civil Procedure. The Board added that it had “no authority to overlook defects in service . . . and deem service to have occurred,” emphasizing that “no district court has deemed service to have occurred.” The Board also found that the challenged claims were unpatentable as obvious over the prior art.

On appeal, the Federal Circuit criticized the Board’s refusal to make a determination on service absent a confirmation from the district court. According to the court, the Board “must necessarily determine whether service of a complaint alleging infringement was properly effectuated” in order to institute an IPR. Furthermore, the court found that the Board cannot merely expect to rely on a district court finding, especially because district courts rarely make such explicit findings.

Next, construing the language of Section 315(b), the court held that Rule 4 provides the proper starting point to evaluate whether service of a complaint is properly effectuated and such a decision should normally be made prior to institution. Nevertheless, the court found no additional error in the Board’s analysis. In particular, the court held that GAT failed to show any specific defects in the Board’s findings as to service. The court added that GAT was precluded from arguing Wargaming waived service or that service was effective under the Hague convention because those arguments were not made to the Board.

Practice Tip: A patent owner must be prepared to present evidence showing how service was either properly effected or waived in the event an IPR is filed. In addition, a patent owner would be well advised to raise, prior to the Board’s decision on institution, any and all arguments challenging the timeliness of an IPR petition.

Game & Tech. Co. v. Wargaming Grp. Ltd., No. 2019-1171 (Fed. Cir. Nov. 19, 2019) (Dyk, Plager, and Stoll; opinion by Stoll)