Post-Vivint Patent Office Treatment of Ex Parte Reexaminations After Non-Instituted IPRs

Given the various ways the Patent Trial and Appeal Board (PTAB) can exercise discretion to deny institution of an inter partes review (IPR) petition (and the corresponding non-appealability of those decisions), ex parte reexamination is becoming an attractive option to challenge patent validity following a decision not to institute.

Because a later filed ex parte reexamination is often viewed as a “second bite at the apple,” there were questions as to how the U.S. Patent and Trademark Office (USPTO) should treat these second attempts at invalidating a patent. For IPRs, the PTAB has used several bases for discretionary denial of a later-filed IPR, but those bases were not being applied to follow-on ex parte reexamination requests. However, in In re Vivint, the Federal Circuit held that the USPTO has the authority to discretionarily deny an ex parte reexamination request under 35 U.S.C. § 325(d), i.e., if “the same or substantially the same prior art or arguments previously were presented to the Office.” In re Vivint, Inc., 14 F.4th 1342, 1354 (Fed. Cir. 2021).

In re Vivint, Inc.

Alarm.com filed three petitions seeking IPR of Vivint’s patent. The last of the three IPRs was denied institution due to “undesirable, incremental petitioning” as a “similar, serial challenge[] to the same patent, by the same petitioner.” In re Vivint, Inc., 14 F.4th 1342, 1346 (Fed. Cir. 2021) (quoting from the Board’s decision). Moreover, the Board “relied on § 325(d) considerations” to deny institution based on “abusive filing practices.” Id. at 1350.

After the failed IPR petitions, Alarm.com requested ex parte reexamination of the same patent, “largely repackag[ing]” the arguments raised in the third IPR petition. Id. at 1346. During the reexamination, Vivint’s repeated requests for dismissal under § 325(d) were denied. Id. at 1347-48. After final rejection of all claims, Vivint appealed to the PTAB, who affirmed, and then to the Federal Circuit. Id. at 1348.

Applying the Administrative Procedure Act, the court rejected the USPTO’s contention that its decision under § 325(d) was unreviewable. Id. at 1350–51. The Court held that 35 U.S.C. § 325(d) “applies to both IPR petitions and requests for ex parte reexamination.” Id. at 1354. In terminating the reexamination, the court determined that the Office’s decision was “an abuse of discretion and was arbitrary and capricious” because it “cannot deny institution of IPR based on abusive filing practices then grant a nearly identical reexamination request that is even more abusive.” Id. Based on the specific facts of the case and differences between the IPR and ex parte reexamination (EPR) statutory regimes, the Court cautioned that its holding is “narrow” and its ruling is “limited.” Id.

The USPTO has subsequently addressed the application of Vivint in a number of still?pending EPR proceedings, each involving the challenge to the validity of a patent following a non-instituted IPR involving the same patent. Consistent with the “narrow” holding and “limited” ruling of Vivint, these proceedings demonstrate that the application of § 325(d) is having little-to-no effect on the outcome of reexaminations following a non-instituted IPR.

Example Ex Parte Reexamination Proceedings Post-Vivint

1. In re Sound View Innovations, LLC (Request No. 90/015,011)

A party challenged a claim in an IPR using two prior art references, and the Board denied institution, determining that the petitioner failed to make a threshold showing regarding a claimed step. In re Sound View Innovations, LLC, No. 2022-161, slip op. at 2 (Fed. Cir. Nov. 2, 2022) (nonprecedential). The same party subsequently challenged the same claim in an EPR by introducing a third reference and combining it with the prior art from the IPR to address the previously missing claimed step. Id. The patentee requested dismissal under § 325(d), but the Office declined to exercise its discretion, determining that the request was “based on different grounds than Dish’s prior IPR petition” and that the “requester has not presented serial challenges to the [challenged] patent, other than the single prior IPR petition.” Id. at 3.

After reexamination was ordered, the patentee petitioned the Federal Circuit for a writ of mandamus, seeking termination of the EPR under § 325(d). The Court distinguished the facts of the case from those in Vivint, determining that the “demanding standard” for mandamus relief was not satisfied, while reserving the right to address the same arguments in the future under the standards of “an ordinary appeal.” Id. at 3–4.

2. In re Knauf Insulation, Inc. (Request Nos. 90/014,801 and 90/014,807)

After two failed IPRs directed to two patents and then two failed EPRs, the same party filed two new requests for EPR using different grounds than the prior post-grant proceedings, and reexamination was ordered in each. See In re Knauf Insulation, Inc., No. 2022-166, slip op. at 1, (Fed. Cir. Nov. 2, 2022) (nonprecedential). The facts and outcome from one of the requests, Request No. 90/014,801, are representative.

The patentee petitioned the Director seeking to vacate the decision to grant EPR based on § 325(d) and Vivint. The Office of Patent Legal Administration (OPLA), on behalf of the Director, denied the petition, focusing its analysis on the discretionary nature of § 325(d) and distinguishing the facts from Vivint. For example, the OPLA noted that in this case the Office had not rejected the earlier IPR petition due to “undesirable, incremental, or abusive petitioning.” Reexam Petition Decision, No. 90/014,801, at p. 5 (August 31, 2022). Further, the request was based on a single new prior art reference not used in any of the prior proceedings. Id. at 7-8.

The patentee also alleged that the same “arguments” as advanced in an earlier reexamination proceeding were being presented, and requested denial based on the framework in Advanced Bionics, LLC v. MEDEL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020) (precedential). Id. at 6 (“Advanced Bionics”). The patentee was again unsuccessful, with OPLA determining that the framework in Advanced Bionics applies to “AIA trial proceedings, not to ex parte reexamination proceedings.” Id. After reexamination was ordered, the patentee petitioned the Federal Circuit for a writ of mandamus, which was denied for essentially the same reasoning as in In re Sound View Innovations, LLC. In re Knauf Insulation, Inc., at 4.

3. Request No. 90/019,073

A party petitioned for IPR, but the PTAB elected to discretionarily deny institution under 35 U.S.C. § 314(a) by applying the so-called Fintiv factors in view of parallel litigation at the ITC involving the same patent. Determination – Reexam Ordered, No. 90/019,073, at p. 10 (July 18, 2022). Thereafter, the same party filed an EPR request using a single ground that appeared in the prior IPR petition. Id. In response, the patent owner requested denial under § 325(d) based on (1) the use of patent owner’s preliminary response in the earlier IPR as a “roadmap to correct deficiencies” in the prior IPR petition and (2) the Advanced Bionics framework and the requester’s “failure to identify material error.” Id. at 11. The Office denied the request, explaining that the Board “did not identify any deficiencies” in the prior IPR because the Board never addressed the merits. Id. at 12. Furthermore, as in In re Knauf Insulation, Inc., the Office determined that the Advanced Bionics framework applies “to AIA trial proceedings, not to ex parte reexamination proceedings.” Id.

4. Request No. 90/019,081

The Board exercised its discretion to deny institution of a petition for IPR under § 325(d) based on an application of the Advanced Bionics framework. See Determination – Reexam Ordered, No. 90/019,081, at pp. 11-12 (July 18, 2022). Thereafter, the same party filed a request for EPR of the same patent on the basis of (1) one ground using new art that was not cumulative of the art in the IPR petition; and (2) the same two grounds as used in the IPR but with different arguments regarding an alleged missing limitation in the IPR. Id. at 11-12. In determining that discretionary denial was not appropriate, the Office explained that the “request in its entirety is not based on substantially the same prior art or arguments as the prior AIA IPR petition” and the requester had “not made serial challenges” to the patent at issue. Id. at 12.

5. Request No. 90/019,069

A first party filed petitions for two covered business method reviews (CBMs), but the PTAB denied institution because the patents did not qualify for CBM review under the statutory definition. Determination – Reexam Ordered, No. 90/019,069, at pp. 20-21 (May 13, 2022). Later, a second party filed a petition for IPR that resulted in a final written decision determining all challenged claims as unpatentable. Id. at 21. The patentee appealed the final written decision, and the Federal Circuit remanded the case to the PTAB, who ultimately vacated the earlier decision to institute IPR and denied institution because the petition was time-barred, a result of determining that the first party was a time-barred real party in interest of the second party. Id.

In response, the time-barred first party submitted a request for EPR, and the Office ordered reexamination, rejecting the patentee’s § 325(d) arguments. The Office noted that “some of the prior art and arguments cited in the Request are substantially the same as presented in the [earlier IPR],” but because the decision to institute was eventually vacated, the prior art and arguments common to reexam and IPR were treated as though they “were never considered” by the Board in the IPR. Id.

Potential Future Rules Changes

The USPTO recently issued an Advance Notice of Proposed Rulemaking seeking input on potential changes to the rules for PTAB proceedings, with a focus on discretionary denials. Relevant to EPRs, the USPTO seeks comments regarding limiting the ability of a petitioner in a “post-grant proceeding [that] is instituted” to pursue a “subsequent post-grant proceeding,” such as an EPR, against the same claims of the same patent. 88 Fed. Reg. 24506 (April 21, 2023). The Notice’s focus, however, is on restricting activities when an IPR is instituted. Accordingly, even if the proposed rulemaking is adopted by the USPTO, there is expected to be no change to a party’s ability to pursue an EPR after its prior IPR is not instituted.

Takeaways

Consistent with the unusual facts of the case and the Federal Circuit’s caution that its holding is “narrow” and ruling is “limited,” In re Vivint seems to have had little impact on the outcome of ex parte reexamination proceedings. The USPTO has allowed ex parte reexamination requests to proceed following a Board’s decision to deny institution of an IPR involving the same patent so long as the merits of at least one ground in the reexamination request were not addressed by the Board in the IPR. For example, in one proceeding, combining a new reference with prior art from a previous IPR to address a claim limitation determined to be inadequately addressed in the prior IPR proceeding was acceptable. Also, including the same grounds in a reexamination request as a previous IPR discretionarily denied under § 325(d) has been acceptable, provided a new ground is added that was not previously considered and new arguments are presented for the old ground. In addition, the Office has not been fazed by a requester addressing technical arguments in a reexamination request made by a patentee in its patent owner preliminary response in the related IPR proceedings, so long as the Board did not address the merits in the IPR.

Due to the procedure for appealing final decisions in ex parte reexamination proceedings, it may take a few years for decisions in appeals at the Federal Circuit to indicate whether the USPTO is correctly addressing § 325(d). However, patentees will have to meet a heightened standard, demonstrating that the Office abused its discretion or acted in an arbitrary and capricious manner, to change the reexamination outcome.

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