Lessons Learned: Director Emphasizes Patent Quality in Evaluating General Plastic Factors

By Emily Tait –

 In the precedential decision Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017), the PTAB articulated seven non-exclusive factors to be considered before discretionarily denying a subsequent IPR petition challenging the same patent.  Director Vidal recently revisited the General Plastic factors after initiating sua sponte Director review of the Board’s decisions to discretionarily deny certain petitions.  See Code200, UAB, et al. v. Bright Data Ltd., IPR2022-00861 and IPR2022-00862, Paper 18 (PTAB Aug. 23, 2022) (Vidal Decision), at 6 (quoting Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261, 272 (2016) (quoting H.R. Rep. No. 112-98, pt. 1, at 45, 48) (hereinafter, “Code200”).  Based on the Director’s review and resulting decision, she vacated and remanded the Board decisions for further consideration, and affirmed “the Board’s mission ‘to improve patent quality and restore confidence in the presumption of validity that comes with issued patents.’”

General Plastic holds that the PTAB may discretionarily deny a petition pursuant to 36 U.S.C. §§314(a) and sets forth the following non-exclusive factors for the Board to consider when deciding whether to exercise its discretion to deny institution of review in order to address multiple, serial petitions:

(1) whether the same petitioner previously filed a petition directed to the same claims of the same patent;

(2) whether at the time of filing of the first petition the petitioner knew or should have known of the prior art asserted in the second petition;

(3) whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Boards’ decision on whether to institute review in the first petition;

(4) the length of time that passed between the time the petition learned of the prior art asserted in the second petition and the filing of the second petition;

(5) whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;

(6) the finite resources of the Board; and

(7) the requirement under section 316(a)(ii) to issue a final determination no later than one year after the date on which the Director notices institution of review.

General Plastic at 9-10.

On review of the Board’s decision in Code200, the Director disagreed with the Board’s determination that “the Petitioner’s failure to submit a Sand Revolution II stipulation ‘weighs strongly in favor of exercising discretion to deny institution and outweighs the fact that the Board did not substantively address the merits of the prior petition.”  Code220, at 4 (footnote omitted) (citing Dec. 12).  Noting that General Plastic factor 1 “must be read in conjunction with factors 2 and 3[,] the Director explained that “[w]here the first-filed petition under factor 1 was discretionarily denied or otherwise was not evaluated on the merits, factors 1-3 only weigh in favor of discretionary denial when there are ‘road mapping’ concerns under factor 3 or other concerns under factor 2.”  Id. at 5.  Such road mapping concerns arise where “follow-on petitions would allow petitioners the opportunity to strategically stage their prior art and arguments in multiple petitions, using [the Board’s] decisions as a roadmap, until a ground is found that results in the grant of review.”  Id. (citing General Plastic, at 17).  In the underlying decisions, the Board found “no evidence of road-mapping[]” and the Director explained that such road-mapping concerns are “minimized” when a later petition is “not refined based on lessons learned from later developments.”  Id.

Ultimately, the Director found factors 1, 2, and 3 did not weigh in favor of discretionary denial of the subsequent petitions because the Board did not substantively address the first-filed petition and there were no “road-mapping” concerns or other concerns related to fairness.  Factors 2, 4, 5, and 7 were found to have limited relevance, and factor 6—the “finite resources of the Board”—was found to be “outweighed by the Board’s mission to improve patent quality.”  Id. at 6.