Decision Denying Institution IPR2014-00401

LinkedInTwitterFacebookGoogle+Share

Takeaway: A petition filed more than one year after the petitioner is served with a complaint alleging infringement will bar institution of inter partes review, even if that complaint is dismissed, if the dismissal is “with prejudice.”

In its Decision, the Board denied institution of inter partes review, holding that the Petition was time-barred under 35 U.S.C. § 315(b).  Petitioner was served with three complaints alleging infringement of the ‘180 patent.  The first was served on April 5, 2007, the second on March 17, 2010, and the third in 2013.  The third complaint was served within one year of the Petition’s filing date, and therefore, would not act as a bar to institution.  Petitioner argued that the 2007 and 2010 complaints did not bar institution for a number of reasons, each of which the Board rejected.

Petitioner argued that based on an alleged ambiguity of Section 315(b) of the statute, essentially any complaint asserting infringement served within one year of filing a petition could prevent the time bar. In particular, Petitioner argued that the statute only required that “a complaint” be served within one year, and that in this case, “a complaint” was served in 2013, which was within one year of the Petition’s filing date.  The Board was not persuaded, “declin[ing] Petitioner’s invitation to amend the statute by inserting either ‘latest’ or ‘first’ (or ‘third,’ in this case) into the statute.”

Petitioner also argued that dismissal of the 2007 and 2010 complaints, with prejudice, “nullified the legal effect of service of [the] corresponding complaint[s].”   Citing Universal Remote Control, Inc. v. Universal Electronics, Inc., Case IPR2013-00168, slip op. at 6 (PTAB Aug. 23, 2013) (Paper 9)), Petitioner argued that voluntary dismissals with prejudice were found to nullify service.  However, the Board stated that Universal Remote Control explained that dismissals without prejudice left the parties as if no action had been brought.  The petitioner in that case unsuccessfully argued the same point raised by Petitioner in the instant proceeding – that a dismissal with prejudice should be treated the same as a dismissal without prejudice.  Thus, the 2007 and 2010 complaints, which were dismissed with prejudice, barred institution of this proceeding.

In addition, Petitioner argued that it should not be barred because at least some of its invalidity counterclaims or affirmative defenses with respect to the 2007 and 2010 complaints were dismissed without prejudice, and therefore, the complaints should be treated accordingly. The Board was not persuaded.  It noted that the relevant time period is that between service of a complaint alleging infringement and the filing date of a petition.  Petitioner failed to show “that the date of any of Petitioner’s affirmative defenses and counterclaims also pertain[s] to the statute.”  Regardless of how Petitioner’s defenses and counterclaims were dismissed, the Board stated that “with prejudice” dismissal of the claims asserted against Petitioner did not place the parties “in the same position as if the action had never been brought.”  Thus, the 2007 and 2010 complaints barred institution of the inter partes review.

Microsoft Corporation v. VirnetX Inc., IPR2014-00401
Paper 10: Decision Denying Institution of
Inter Partes Review
Dated: July 23, 2014
Patent: 7,188,180 B2
Before: Michael P. Tierney, Karl D. Easthom, and Stephen C. Siu
Written by: Siu
Related Proceedings:
VirnetX Inc. v. Microsoft Corp., Case No. 6:07-cv-00080 (E.D. Tex.); VirnetX Inc. v. Microsoft Corp., Case No. 6:10-cv-00094 (E.D. Tex.); VirnetX Inc. v. Microsoft Corp., Docket No. 6:13-cv-00351 (E.D. Tex.); VirnetX Inc. v. Cisco Systems, Inc., Docket No. 6:10-cv- 00417 (E.D. Tex.); VirnetX Inc. v. Apple Inc., Docket No. 6:13-cv-00211 (E.D. Tex.); Inter partes reexam 95/001,792; Inter partes reexam 97/001,270; andIPR2014-00405