Federal Circuit Rules That IPR Issue-Joinder Practice Is Not Allowed

March 19, 2020 – Article

Last March I wrote about the PTAB’s Precedential Opinion Panel (POP) taking up its first case in Proppant Express Invs., LLC et al. v. Oren Tech., LLC (article here). In that case, the POP concluded that, where fairness requires it, 35 U.S.C. § 315(c) allows a petitioner to file an otherwise time-barred IPR petition and join that petition to its previously-instituted IPR to request joinder and consideration of new issues (“issue joinder”). Although this tool was rarely used, issue joinder allowed an IPR petitioner to attempt to add new claims/grounds to a previously instituted IPR if, for example, those claims were asserted by the patent owner after petitioners’ one-year-filing window. Just over a year later, the Fed. Cir. has reversed this POP decision.

In Facebook, Inc. v. Windy City Innovations, LLC (CAFC No. 18-1400), Facebook successfully obtained issue joinder before the PTAB. It filed a petition for IPR against each of the four patents Windy City asserted against it but, largely due to delays associated with a motion to transfer, Windy City’s asserted claims were not identified until approximately four months after Facebooks one-year-filing window. Once those claims were identified, Facebook prepared two additional IPR petitions challenging any asserted claim that was not previously challenged. Although it was prior to the POP’s decision in Proppant Express, the Board allowed Facebook’s request for issue joinder.

At the conclusion of the IPR proceedings, Facebook obtained a mixed result and appealed to the Fed. Cir., with Windy City cross-appealing. On appeal, the Fed. Cir. held that § 315(c) is unambiguous and precludes issue joinder. That is, § 315(c), properly interpreted, does not authorize same-party joinder because a party cannot be joined to a proceeding “as a party” if it is already a party to that proceeding. The Court found that this is simply consolidating two proceedings together, not joining one party to an earlier-filed proceeding:

Section 315(c) authorizes the Director to ‘join as a party to [an IPR] any person who’ meets certain requirements, i.e., who properly files a petition the Director finds warrants the institution of an IPR under § 314. No part of § 315(c) provides the Director or the Board with the authority to put two proceedings together. That is the subject of § 315(d), which provides for ‘consolidation,’ among other options, when ‘[m]ultiple proceedings’ involving the patent are before the PTO.

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Assuming that the Board in fact joined Facebook ‘as a party’ to its existing IPRs, the question before us is whether § 315(c) authorizes a person to be joined as a party to a proceeding in which it is already a party. The clear and unambiguous language of § 315(c) confirms that it does not. Subsection (c) allows the Director to ‘join as a party to [an IPR] any person who’ meets certain threshold requirements. It would be an extraordinary usage of the term ‘join as a party’ to refer to persons who were already parties.

Similarly, the Court determined that § 315(c) does not authorize the joinder of new issues to a previously filed IPR proceeding:

Setting aside the question of same-party joinder, the language in 315(c) does no more than authorize the Director to join 1) a person, 2) as a party, 3) to an already instituted IPR. This language does not authorize the joined party to bring new issues from its new proceeding into the existing proceeding, particularly when those new issues are otherwise time-barred. As discussed above, § 315(c) authorizes joinder of a person as a party, not “joinder” of two proceedings.

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The strongest case that Facebook can make is that the statute does not expressly prohibit the introduction of new issues in the joined proceedings…. The lack of an express prohibition, however, does not make § 315(c) ambiguous as to whether it permits joinder of new issues. Rather, it simply permits the Director, at his or her discretion, to join any person as a party to an already-instituted IPR. The already-instituted IPR to which a person may join as a party is governed by its own petition and is confined to the claims and grounds challenged in that petition [under SAS].

Going forward, joinder will be limited to allowing third-party petitioners, whether time-barred or not, to join a previously instituted proceeding but without raising any new issues: “We therefore conclude that the unambiguous meaning of § 315(c) is that it allows the Director discretion to join a person as a party to an already instituted IPR but does not permit the joined party to bring new issues from the newer proceeding into the existing proceeding. Any other conclusion would improperly join proceedings, rather than parties—which § 315(c) does not authorize.”

As to the question of whether the PTO’s interpretation of § 315(c)—as exemplified by Proppant Express—is entitled to deference, the Fed. Cir. concluded that because § 315 (c)’s language is clear and unambiguous, the Court need not defer to the PTO’s interpretation. However, in a separate opinion, the panel offered its “additional views” to address their alternative holding if § 315(c) were deemed ambiguous:

[W]e conclude that, were the statute ambiguous, we would alternatively resolve this matter in the same way. Specifically, we would find that no deference is due to the POP opinion in Proppant and that the most reasonable reading of § 315(c) is the one we adopt in our majority opinion.

It remains to be seen whether the Fed. Cir.’s decision in Facebook v. Windy City will curb the PTO’s desire to take up issues via their precedential opinion panel. Given the underlying goal of providing consistency across panels when there is no other binding precedent, our hope is that the PTO continues to utilize this helpful tool.