Growing Tension Between the ITC and the PTAB

Growing Tension Between the ITC and the PTAB

One of the most common responses to the patent infringement lawsuit is a petition to the USPTO Patent Trial and Appeal Board (PTAB) that questions the validity of the patent. In order to avoid duplication of work, either the board or the tribunal can postpone the other. According to a recent decision, the US International Trade Commission (ITC) will not waive the PTAB in such situations. In certain automated storage and retrieval systems, robots and their components (337-TA-1228), Judge Lord strongly affirmed that the ITC should not conduct an investigation under Section 337 in order to complete its investigation “at the earliest possible point in time” View of an Inter Partes Review ( “IPR”), which is carried out at PTAB, even if this could deprive an accused infringer of the possibility of having PTAB review an asserted patent before issuing an exclusion decision.

The ITC must conclude its investigations according to Section 337 “at the earliest possible point in time”. See 19 USC § 1337 (b) (1). The ITC has consistently adhered to this requirement and made the ITC a convenient place for patent holders to enforce their rights against infringement of products imported into the USA. The ITC has become even more advantageous in this regard with the enactment of the America Invents Act (“AIA”) and the introduction of IPR procedures before PTAB. Although US district courts have frequently stayed patent litigation pending the outcome of intellectual property rights at PTAB, the ITC has refused to suspend its investigation in similar circumstances.

PTAB is currently reviewing the status of co-pending litigation in deciding whether to initiate a review of a patent, relying on its discretion under 35 USC Section 314 (a) based on so-called Fintiv factors, such as here and discussed here. In particular, the PTAB recently proposed to deny the establishment of an intellectual property if there is an ongoing and rapidly evolving litigation in the US District Court or ITC with the same patent.

Critics of the PTAB’s assessment of the status of co-pending litigation as part of their discretionary analysis have determined that under current standards, the existence of a co-pending ITC investigation will in virtually every case result in the refusal to introduce an intellectual property. These critics therefore argue that the current PTAB standards wrongly shift the power to decide on the validity of a patent from the PTAB to another government agency. In the opinion of these critics, the PTAB should not suspend its proceedings in the face of an ITC investigation. Rather, the ITC should continue its investigations up to the result of an intellectual property. (See, for example, IPR2020-000754, in which the petitioner requested that the PTAB precedent review body issue a decision excluding timing of ITC investigations as considering Fintiv factors.) Judge Lord’s decision agrees with these critics not at all.

The ITC initiated Investigation No. 337-TA-1228 on November 2, 2020. Very quickly thereafter, between November 30, 2020 and January 18, 2021, respondents filed four IPR petitions and one petition for review after grant (“PGR”). Assertion of the invalidity of all asserted patent claims.

On January 19, 2021, the respondents submitted an application to suspend the ITC investigation until the PTAB proceedings were settled, long before the PTAB had even made a decision to initiate proceedings. Respondents argued that the ITC’s practice of refusing to cease investigations into PTAB proceedings effectively denied respondents in ITC investigations the opportunity to contest patents asserted with PTAB. Citing the fact that nineteen IPR petitions have been denied in the past few months due to a pending ITC investigation, respondents argued that the PTAB would likely refuse to set up their petitions if the investigation were not suspended. They therefore argued that patent holders can force respondents to sue the validity of a patent with the ITC rather than the PTAB unless a residence in the ITC is granted.

Judge Lord was not influenced. It denied the Respondents’ request for residence without even considering the complainant’s objection (which was denied for failing to comply with the Principles) and considered that none of the five factors included in a request to suspend an ITC investigation were considered, weighed in favor of a stay. In particular, it found that PTAB is unlikely to complete its proceedings before the ITC’s investigation is complete, and even if PTAB does complete its proceedings, there is no indication that PTAB would invalidate any asserted claims . Remaining an ITC investigation under these circumstances would likely more than double the time it takes for the ITC to complete the investigation, which contradicts the legal requirement that the ITC complete its investigations “at the earliest possible point in time” under Section 337.

Judge Lord pointed out that the anger of those questioned was misplaced with the ITC, stating that the ITC had consistently refused to suspend the investigation for many years in order to comply with its legal obligation to complete the investigation as soon as possible . Judge Lord noted that when the AIA was passed, Congress was aware of the ITC’s jurisprudence and there are indications that Congress did not intend to suspend ITC investigations over IPR petitions. For example, when Congress previously realized that it was desirable to have cases with the same patent in different forums, Congress enacted laws to achieve that result. For example, 28 USC §1659 (a) requires a district court to suspend litigation under Section 337 for an identical investigation. When Congress passed the AIA, it was clearly regulated by law with regard to the ITC. For example, 35 USC §315 (e) and 325 (e) prevent a party from resolving problems in later proceedings in a district court, ITC, or patent office. Finally, under 35 USC Section 315 (b), the AIA also requires a respondent to conduct a PTAB review within one year of filing a district court or ITC complaint.

Judge Lord recognized the intention of Congress, with the passage of the AEOI, to create a more efficient and leaner system in order to improve patent quality and limit unnecessary litigation costs. Judge Lord also acknowledged that the AIA’s purpose of Congress could be thwarted by PTAB’s refusal to initiate a review while an ITC investigation is ongoing. However, doing so would result in Congress and / or PTAB changing current PTAB practices and not suspending ITC Section 337 investigations.

Given Judge Lord’s decision, the ITC continues to be a convenient place for patent owners seeking a quick resolution against infringers. Not only will the ITC continue to resolve cases at a much faster pace than the US District Courts, but the ITC will not delay resolving the matters brought if PTAB has a slower, parallel process.