Denying Institution IPR2014-00806


Takeaway: A complaint alleging infringement in a first action that is dismissed without prejudice may still act as a time-bar under Section 315(b) if a second action involving the same challenged patent and the same parties is ongoing when the first action is dismissed.

In its Decision, the Board denied institution of inter partes review of the ’000 patent because Petitioner was time-barred under 35 U.S.C. § 315(b).  The Board rendered its Decision after allowing Petitioner to file a Reply in response to Patent Owner’s Preliminary Response and Patent Owner to file a Sur-Reply addressing the time bar.

Petitioner was served with a complaint alleging infringement of the ’000 patent in a first action more than one year prior to the filing of the Petition. Patent Owner filed a second action alleging that Petitioner infringed the ’000 patent.  In the second action, Patent Owner indicated that a question of standing had been raised in an unrelated proceeding, and that without conceding the issue of standing, Patent Owner had “re-undertaken its purchase” of the ’000 patent.  The parties jointly moved to dismiss the first action, requesting that “the work from the First Action should carry over to the Second Action,” and the first action was dismissed without prejudice in favor of the second action.

The Petition in the instant proceeding was filed within one year of service of the complaint in the second action. Patent Owner argued that the effective date for the time-bar under Section 315(b) is the service of the complaint in the first action.  Petitioner argued that (1) Patent Owner lacked standing in the first action, making the service of that complaint a nullity, and (2) the first action’s dismissal without prejudice left the parties in the position as if the complaint had not been served.

With respect to standing, Petitioner’s argument was essentially that Patent Owner would not have executed new assignments for the ’000 patent and serve another complaint had the previous assignments been effective. The Board disagreed, indicating that in its review of the assignments, it did not find any defects in the chain of title.  Accordingly, the Board found the first action was not a nullity because Patent Owner had standing in the first action.

With respect to the dismissal of the first action without prejudice, the Board agreed with Patent Owner that the case was analogous to the situation in Apple, Inc. v. Rensselaer Polytechnic Institute and Dynamic Advances, LLC, Case IPR2014-00319 (PTAB June 12, 2014) (Paper 12).  In that case, one complaint was dismissed without prejudice after consolidation with a second action, and thus, the first action “did not cease in the same sense as a complaint dismissed without prejudice and without consolidation.”  Similarly, in this case, the litigation continued after the first action was dismissed without prejudice such that the parties were involved in litigating the alleged infringement of the ’000 patent “[f]rom the day the Petitioner was served with the complaint in the First Action.”  Thus, Petitioner was time-barred under Section 315(b).

eBay, Inc. v. Advanced Auctions LLC, IPR2014-00806
Paper 14: Decision Denying Institution of
Inter Partes Review
Dated: September 25, 2014
Patent: 8,266,000 B1
Before: Grace Karaffa Obermann, Susan L. C. Mitchell, and Jo-Anne M. Kokoski Written by: Kokoski
Related Proceedings:
Advanced Auctions LLC v. eBay, Inc., No. 13-cv-0360 (S.D. Cal.); Advanced Auctions LLC v. eBay Inc., No. 3:13-cv-01612 (S.D. Cal.); CBM2014-00047