Patent owner Carucel Investments, L.P. owns Patent No. 8,718,543 (’543 Patent), titled “Mobile Communication System with Moving Base Station,” which is asserted against multiple parties in district court litigation, including the petitioner, Mercedes-Benz. The patent addresses a problem with mobile telephone systems wherein a mobile telephone user can experience a long handoff time when driving away from the cell signal of one base station and toward that of another base station. The patent interposes a moving base station that travels with traffic and provides signal to mobile telephones in between fixed stations.
Request for Discretionary Denial of ’1644 IPR
Patent owner requested discretionary denial of inter partes review (IPR) IPR2019-01644 (’1644 IPR), arguing that it used the same prior art and substantially similar arguments as the earlier-filed IPR2019-01441 (’1441 IPR), though it challenged different claims. The patent owner cited precedential PTAB decision General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, to argue that the ’1644 IPR was a “follow-on” to the ’1441 IPR and therefore merited denial of institution.
The PTAB considered the General Plastic factors and sided with petitioner. Under the first factor, the ’1644 IPR was not a follow-on petition because it challenged different claims than the ’1441 IPR. In the alternative, patent owner argued that the ’1644 IPR was a follow-on to a separate proceeding involving Volkswagen. While precedential decision Valve Corp. v. Electric Scripting Products, Inc., IPR2019-00062 allows the Board to apply the General Plastic factors to petitions filed by different petitioners with a “significant relationship,” in this instance, the Board found no such relationship. The Board observed that Mercedes-Benz and Volkswagen were not co-defendants against patent owner, and were, in fact, direct market competitors that had not coordinated their IPR filings.
Considering the third factor, the Board observed that neither patent owner nor the Board had responded to the ’1441 IPR by the time petitioner filed the ’1644 IPR. Thus, petitioner had not gained unfair advantage in its second petition by testing the waters with the first petition. Nor did Volkswagen’s IPR confer this advantage to petitioner because the Volkswagen IPR used different prior art and arguments than petitioner’s second IPR.
As to the fifth factor, petitioner argued that its second petition was necessary because patent owner had not asserted claims 34 and 66 of the ’543 Patent when petitioner filed its first petition. The PTAB considered this to adequately explain any delay between filings.
Finally, the sixth and seventh factors weighed in favor of petitioner because the substantial overlap in prior art and arguments of the two petitions would allow the PTAB to consider the second petition without impacting its resources or ability to meet the one-year deadline for a final determination.
Institution of ’1644 IPR
The PTAB instituted the ’1644 IPR, finding that petitioner had shown a reasonable likelihood of success in challenging at least one claim of the petition, as required under 35 U.S.C. § 314. Petitioner cited four prior art references, and, for all elements of the two challenged claims, the Board found that petitioner sufficiently showed a motivation to combine the prior art and a reasonable expectation of success. Meanwhile, patent owner had declined to address the petition on the merits.
Consolidation of ’1441 and ’1644 IPRs
Finally, the PTAB considered petitioner’s motion to join the ’1441 and ’1644 IPRs. The Federal Circuit had held on March 18, 2020, in Facebook, Inc. v. Windy City Innovations, No. 2018-01400, that 35 U.S.C. § 315(c) does not authorize joinder of a person to a proceeding in which that person is already a party. However, two proceedings brought by a single party could be consolidated, even by the Board acting sua sponte, under 35 U.S.C. § 315(d).
Thus, the PTAB treated petitioner’s request for joinder as a request for consolidation, and granted consolidation for the same reasons patent owner used to argue for discretionary denial of the ’1644 IPR. Both petitions used the same prior art and motivations to combine, and thus could be assessed using a single set of briefs, hearings, and expert testimony. Consolidation also would not prejudice patent owner because petitioner had not gained an advantage from filing two separate petitions challenging the ’543 Patent.
Practice Tip: A later-filed IPR petition may not merit discretionary denial if the petition was necessitated by actions of the patent owner, such as by the assertion of additional claims in a related district court action. Further, consolidation, instead of joinder, may be available where substantial overlap in prior art and argument exists between petitions filed by the same petitioner.
Mercedes-Benz USA, LLC v. Carucel Investments, L.P., IPR2019-01644, Paper 9 (March 26, 2020)