The Court of Appeals for the Federal Circuit, in an unusual en banc decision, Click-To-Call Technologies LP v. Ingenio Inc.ⁱ, upended what many accepted as black-letter law: that dismissal of a patent infringement complaint without prejudice places the parties in the same position as before the complaint, resetting the one-year clock to petition for inter partes review (IPR). At issue in the case was the Patent Trial and Appeal Board’s (PTAB) interpretation of the one-year time-bar statute, which reads as follows:

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent. …

35 USC §315(b) (emphasis added). This decision could help patent owners by barring accused infringers from availing themselves of the just, speedy and inexpensive IPR procedures at the Patent Office.

The specific facts of Click-to-Call are complicated, but suffice it to say that Ingenio, the accused infringer/IPR petitioner, voluntarily dismissed a patent infringement action in 2001 and received a license to the patent at issue.ⁱⁱ  The patent owner subsequently reasserted the patent in 2012, and the defendants, including Ingenio, petitioned for IPR. The petitioners won a final written decision in the IPR canceling all instituted claims (the PTAB had declined to institute review of some claims).ⁱⁱⁱ  During the IPR, the patent owner asserted that service of the 2001 complaint barred the IPR.^iv The PTAB disagreed, stating that dismissing the complaint without prejudice placed the parties in the same position as if the complaint was never filed, thus resetting the section 315(b) time-bar clock.^v

The Patent Office cited two cases supporting its position: Graves v. Principi, 294 F.3d 1350 (Fed. Cir. 2002) and Bonneville Associates, Ltd. Partnership v. Barram, 165 F.3d 1360 (Fed. Cir. 1999).^vi In both, the Federal Circuit held that, basically, appeals that were dismissed were treated as if they never happened.^vii As such, when appellants tried to refile their appeals, they were untimely.^viii In Click-to-Call, the court declined to extend its prior holdings (i.e., that “[t]he dismissal of an action without prejudice leaves the parties as though the action had never been brought,” because doing so would turn them “on their head.”^ix)

When considering whether to defer to the Patent Office (under Chevron), the Click-to-Call court found no ambiguity in the statute.^x The court took a literal approach to statutory interpretation, similar to how the Supreme Court read 35 USC section 314(a) in SAS Inst. v. Iancu (“Where a statute’s language carries a plain meaning, the duty of an administrative agency is to follow its commands as written, not to supplant those commands with others it may prefer.”)^xi Reading the statute literally, the Federal Circuit held, “A defendant served with a complaint as part of a civil action that is voluntarily dismissed without prejudice remains ‘served’ with the ‘complaint.’ This remains true even if that action becomes a ‘nullity’ for other purposes.”^xii Therefore, service of a complaint irreversibly triggers the one-year time bar under section 315(b), irrespective of what happens afterwards.^xiii

The dissent, consisting of Judges Dyk and Laurie, would have gone beyond literal meaning: “[I]nterpretation of [the] word or phrase depends upon reading the whole statutory text, considering the purpose and context of the statute, and consulting any precedents or authorities that inform the analysis.”^xiv However, Judge Taranto, in a concurring opinion, argued that the dissent crossed the line from judicial review to judicial overreach, stating, “If there turns out to be a problem in the statute’s application according to its plain meaning, it is up to Congress to address the problem.”^xv

This case could present several problems for accused infringers. First, accused infringers who relied on the Patent Office’s prior interpretation of the statute might not be able to file an IPR petition. Second, service of a complaint may trigger a time bar for filing any IPR petitions in the future, even reasons that cannot be anticipated, such as assertions against future acquired companies or yet-to-be conceived products. Third, because accused infringers cannot “un-ring” the time-bar clock; they must consider filing a prophylactic IPR petition if they anticipate future litigation. Gone are the days of “kicking the can down the road” in hopes of achieving a long-term settlement. Indeed, if the initial service of a complaint triggers an irreversible deadline to file an IPR, settlement could become more problematic. Of course, no time bar applies to ex parte reexamination, which is available to “any person … at any time.”^xvi

The complexities of IPR and similar proceedings continue to grow with every new clarification from the courts and change in Patent Office leadership. Please let us know if you have any questions about how these and other changes will impact you.