SAS Affects Use of Disclaimer to Obtain Motion to Dismiss

December 6, 2018

      In IPR2018-00673, Paper No. 27, the Patent Trial and Appeal Board (“Board”) refused to grant patent owner Wi-Lan’s motion to dismiss despite its disclaimer of the only claims for which the Board had found petitioner LG as having a reasonable likelihood of success.  LG filed an IPR petition seeking to invalidate claims 1-4 and 6-9 of U.S. Patent No. 9,497,743 (“the ’743 patent”).  The Board’s institution decision found that LG had established a reasonable likelihood that LG would prevail in showing the unpatentability of claims 1-4 of the ’743 patent, but not for claims 6-9.  Pursuant to SAS, however, the Board instituted trial on claims 1-4 as well as claims 6-9.

      Within weeks of the institution decision, Wi-Lan disclaimed claims 1-4 of the ’743 patent and subsequently filed a motion to dismiss IPR2018-00673.  Wi-Lan argued in its motion that it would be a “waste of resources” for the Board to continue the trial through a final written decision because, after the disclaimer of claims 1-4, the only remaining claims were claims 6-9 for which the Board had not found a reasonable likelihood of success.

      LG disputed Wi-Lan’s argument.  In particular, LG argued that it should have the opportunity to fully present its case on all of the challenged claims, “not just those the Board preliminarily favored.”  Since the Board had acknowledged in previous IPRs that preliminary claim construction can and often does change once the trial record progresses, and claim construction weighed heavily on the Board’s preliminary finding on claims 6-9, LG urged that the Board should let the trial proceed.  Moreover, referencing SAS, LG noted that “the Board’s final written decision [is required to] address every claim the petitioner presents for review.” 

      The Board agreed with petitioner LG and denied patent owner Wi-Lan’s motion to dismiss.  In its denial, the Board emphasized that Wi-Lan disclaimed claims 1-4 only after the institution decision, thus making 37 C.F.R. § 42.107(e) inapplicable.  The Board also recognized that its preliminary assessment of claims 6-9 in the institution decision should not be the basis for a dismissal, particularly in this case where the record on claim construction had not yet been fully developed.

      If seeking to dismiss an IPR or otherwise avoid institution by using disclaimer, a patent owner should consider whether disclaimer would be appropriate prior to the institution decision.  In this case, Wi-Lan would likely have avoided institution of the IPR by disclaiming claims 1-4 at the same time as its preliminary response or at least some time before the institution decision.  Yet, under the same circumstances, a petitioner must seriously consider whether to oppose a patent owner’s motion to dismiss.  LG successfully opposed the motion and maintained the pendency of the IPR.  But given the Board’s preliminary assessment of claims 6-9 favorable to Wi-Lan, and the statistical likelihood that the final written decision would likewise find the claims not unpatentable, LG risked an unfavorable outcome in the IPR and the corresponding estoppel effect against claims 6-9 that could apply to most if not all invalidity challenges at the district court based on printed publications and patent.  Given that risk and with the foreknowledge of the apparent delinquencies outlined in the institution decision, LG could have preserved its invalidity challenges at the district court and strengthened its invalidity bases by joining the motion to dismiss, which likely would have been granted by the Board.