Conflict at the PTAB: Divided Expanded Panel Overturns Divided Joinder Decision

Authored by Michelle Carniaux and Michael E. Sander

In one of the first PTAB decisions of its kind, a 4 to 3 split expanded panel issued an opinion granting a rehearing request and effectively overturned an earlier panel’s decision to deny a joinder motion. See IPR2014-00508, No. 28 (Feb. 12, 2015).

In March 2014, Petitioner Target Corporation (“Target”) filed a petition for IPR with a joinder motion in an attempt to join the petition to one of its recently instituted IPR trials on the same patent. See IPR2014-00508. Because the newly filed petition was filed outside Target’s one-year bar date, granting of the new petition was contingent on not only the substantive merits of the petition, but also the granting of the joinder motion. See 35 U.S.C. § 315(b),(c); 37 C.F.R. § 42.122(b).

On Sep. 25, 2014, a divided 3 to 2 panel denied Target’s motion for Joinder, and, as a result, Target’s IPR petition was denied. See IPR2014-00508, No. 20 (P.T.A.B. Sep. 25, 2014). The three APJ majority concluded that the joinder provision could only apply to joining petitions filed by other parties, and would not apply to joining two petitions brought by the same party to avoid the one year statutory bar. The majority based their decision by strictly construing the joinder provisions of IPR procedure:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition . . ..

The statute . . . refers to the joining of a petitioner . . .. Because Target is already a party to the proceeding . . ., Target cannot be joined . . .. In our view, § 315(c) is not ambiguous as to whether it permits for joinder of petitions or issues. It unambiguously does not.

See IPR2014-00508, No. 18 Order at 3, 7 (P.T.A.B. Sep. 25, 2014) (emphasis omitted; internal cites and marks omitted). This issue was brought up for the first time in the Board’s motion denying joinder; the patent owner did not raise it in their briefing.

Unusually, the decision included a dissent by the two APJs added to the proceeding, whose statutory construction of § 315(c) came to an opposite conclusion, i.e., that a motion for joinder may join a two petitions brought by the same party. Id.

Subsequently, Target filed a request for rehearing challenging the split decision on the joinder motion. In its request, Target requested a further expanded panel in light of the importance of the issues raised to not only Target’s proceeding, but also other IPR proceedings and the IPR process generally.

In yet another unusual move, the panel was expanded to include two additional APJs, bringing the total to seven, to consider the rehearing request. On February 12, 2015, in a 4 to 3 decision, a majority granted Target’s rehearing request effectively overturning the original split panel decision denying Target’s motion for joinder. The majority was composed of the two dissenting APJs from the original decision and the two APJs added to the panel for the request for rehearing.

In the majority opinion, the decision first addressed whether adding the two judges was appropriate:

Patent Owner contends that there is no regulatory or statutory authority for the Board to expand the panel. . . . We are not persuaded by Patent Owner’s arguments. . . . Each . . . inter partes review shall be heard by at least 3 members of the Patent Trial and Appeal Board . . .. Thus, Congress did not limit the panel that may hear an inter partes review to a three member panel, but set only the minimum size of the panel.

See IPR2014-00508, No. 28 at 3-4 (P.T.A.B. Feb. 12, 2015) (marks and citations omitted, emphasis in original). Citing the PTAB Rules of Practice, the Board continued that the “the Chief Judge, acting on behalf of the Director, has the authority to designate an expanded panel in appropriate cases.” Id. at 5.

The expanded panel’s majority then continued to the substance of the matter, concluding that the joinder provision does not prohibit a party joining itself across two petitions. The Board found that the phrase “any person” in the joinder statute was ambiguous as to whether it included the entity that filed the original petition. See id. at 8; see also 35 U.S.C. § 315(c) (“[the Director] may join as a party to that inter partes review any person”).

Finding the term ambiguous, the Board then reviewed the legislative history. Specifically, the majority pointed out Senator Kyl’s statements on joinder proceedings, noting that joinder could apply to “new arguments”:

By specifically referring to “new arguments,” Senator Kyl’s remarks contemplate not only the joinder of parties, but . . . contemplate the joinder of additional issues to the pending proceeding.

See IPR2014-00508, No. 28 at 11. The majority looked at other portions of the legislative history and policy considerations and concluded that a single party may join two proceedings, and that Board’s original decision was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c),” and thus granted the request for rehearing.

In a cordial but stern twenty-two page dissent, the minority opinion suggested that even assuming § 315(c) was not entirely clear, “the absence from the statute of an express prohibition against joining issues presented in another petition to an instituted inter partes review does not inform whether the authority to do so has been granted.” Id. dissent at 4. The dissent went through the same legislative history cited by the majority, coming to an opposite conclusion. With respect to the majority’s policy arguments, the dissent listed their own and generally cautioned against using policy arguments to “substitute our judgment for that of Congress.” Id. at 16.

Dissents are rare in PTAB proceedings. But this opinion is even more notable because it appears to be the first case where a PTAB 3 to 2 split decision was overturned in a rehearing request by a 4 to 3 split expanded panel.