Jones Day
The PTAB denied Bestway (USA), Inc. (“Petitioner”)’s request for PGR of U.S. Patent No.
Recently, the PTAB denied Bestway, Inc.’s (“Petitioner”) recent request for PGR. No. No. The ‘512 patent is part of a patent family that claims a frame assembly for a “frame pool.” Bestway, PGR2024-00036, Paper 2 at 10-11 (P.T.A.B. Aug. 21, 2024) (“Reply”). A prior art “frame pool” appears here, followed by an image of the ‘512 patent’s frame assembly:
U.S. Pat. No. 3,225,362.
‘512 Patent, Figs. 1. 2.
Under rule 42.73(b), a “
ction that is construed as a request for an adverse judgment includes (1) [a]isclaimer or revocation of the involved patent or application” or “(2) [d]ancellation of a claim so that the party has a remaining claim in the case.” 37 C.F.R. SS 42.73 (b).[c]In its response to the Petition Patent Owner formally disclaimed all Challenged Claim. Patent Owner used its statutory disclaimer in its Preliminary response to argue against institution. However, it urged the PTAB not to interpret the disclaimer as a demand for an adverse judgment. Id., Paper 5, at 5 (P.T.A.B.). Aug. 8, 2024) (citing Exh. 2001).
In a PTAB authorized Reply, the Petitioner agreed to the post-grant review, but argued the PTAB should render a negative judgement, despite Patent Owner’s request for the contrary. Id., Paper 6, at 1-2 (P.T.A.B. Aug. 21, 2024) (“Reply”). Petitioner noted the ‘512 family of patents includes other issued and pending continuations applications and argued Patent Owner’s desire to avoid estoppel provisions of Rule 42.73 (d) (which would prohibit Patent Owner from obtaining and enforcing patentably distinct claims from the 512 patent claims). Reply at 1-2. Petitioner argued that (1) the PTAB could enter an adverse judgment and (2) Patent Owner’s long history of sending harassing cease and desist letters alleging infringement by Petitioner against related patents justified such discretion in this instance, especially given Petitioner’s “significant expenses” in filing its Petition to “curtail the continued harassment.” Decision at 3. It was also undisputed (1) Patent Owner sent a letter claiming that certain Petitioner’s product infringed on three related patents, but had not filed suit against Petitioner about those patents; and (2) Patent Owner never asserted nor threatened to assert any claims of the ‘512 against Petitioner. The PTAB agreed with Patent Owner and found that Petitioner’s’significant expense’ in preparing and submitting its Petition did not justify an adverse judgment against Patent Owner. Decision at 7. The PTAB noted that 35 U.S.C. SS 315 prohibits Petitioner from filing an IPR for any patents referred to in Patent Owner’s Letter or any patents issued afterward with claims substantially similar the Challenged Claims. Id. Despite Petitioner’s arguments to contrary, the PTAB concluded that efficient administration of PTAB weighed in favor of entering an adverse judgment. The PTAB reasoned such a move would discourage other patent owners in a similar situation from filing disclaimers before institution, where appropriate, and instead encourage patent holders to litigate each AIA trial proceeding until the Final Written Decision. Decision at 8. The PTAB thus denied institution and refused to enter an adverse judgment. Id.
Takeaways:
At a minimum, the PTAB has discretion over whether statutory disclaimer constitutes adverse judgment before institution. Moreover, a disclaimer filed before institution is viewed favorably by the PTAB, as it conserves administrative/judicial resources. The timing of a disclaimer is crucial. A petitioner’s “significant expenditure” during the preparation and filing a request is part of their litigation strategy. It is not enough to render a negative judgment against a patent holder, especially when the patent holder has not sued petitioner or otherwise alleged the infringement of the Challenged Claims.
