PTAB Finds SAS Decision Constrains Discretion In Follow-On Petitions

By: Susan M. Gerber

The PTAB has discretion to deny “follow-on” petitions that challenge the validity of a patent that has been previously subjected to inter partes review.  See 35 U.S.C. § 314(a); Gen. Plastic Indus. Co. Ltd. v. Canon Kabushiki Kaisha, Case IPR2016-01357 (PTAB Sept. 6, 2017) (Paper 19) (providing list of factors to consider in evaluating follow-on petitions).  After the Supreme Court’s decision in SAS Institute Inc. v. Iancu, however, that discretion may be constrained when the earlier petitions involve less than all of the challenged claims.  See Hulu, LLC v. Sound View Innovations, LLC, IPR2018-00366 (PTAB July 6, 2018) (Paper 11).

In this case, Hulu filed its second petition challenging the validity of Sound View’s Patent No. 6,125,371 (“the ’371 patent”).  Sound View argued that that the PTAB should exercise its discretion to deny institution under Section 314(a) because Hulu and others had previously filed petitions for IPR review of the ’371 patent.  On February 2017, Facebook, Inc. sought review of claims 1-3 of the ’371 patent (IPR2017-00985) (“Facebook IPR”).  On October 5, 2017, Hulu sought review of claims 8-10 of the ’371 patent (IPR2018-00017) (“First Hulu IPR”), and it moved to join the Facebook IPR, asserting that “[w]ith respect to the grounds that the Board instituted in the Facebook IPR, Petitioner’s presently submitted petition is identical to the Facebook IPR in all substantive respects, and includes identical exhibits to the Facebook IPR.”  IPR2018-00366 (Paper 11 at 8).  While Hulu’s motion to join was pending, the Facebook IPR was terminated at the request of the parties pursuant to 35 U.S.C. § 317(a), and Hulu’s motion to join was denied as moot.  On October 20, 2017, Unified Patents Inc. filed a petition for review of claims 1-3 and 8-10 of the ’371 patent (IPR2018-00096) (“Unified IPR”).  On April 18, 2018, the PTAB instituted trial in the Unified IPR.

In arguing that Hulu’s second petition for IPR should be denied, Sound View asserted that “the General Plastic factors ‘uniformly support denial of institute of this second Petition by Hulu.’”  IPR2018-00366 (Paper 11 at 10).  Particularly, with respect to the first factor—whether the same petitioner previously filed a petition directed to the same claims of the same patent—given Hulu’s prior petition and its efforts to join Facebook’s petition, Sound View argued “[t]he answer to this question is yes as to claims 8-10 and effectively yes as to claims 1-3.”  Id.  According to Sound View, because the First Hulu IPR challenged claims 8-10, that petition “support[ed] denial of institution as to, at the very least, claims 8-10.”  Id.  But citing the Supreme Court’s decision in SAS and the Office Guidance on the impact of SAS, the PTAB rejected this argument:  “Denying as to only some challenged claims while instituting on others, however, is not an option.”  Id. 

The PTAB then evaluated the rest of the General Plastic factors in light of the First Hulu IPR and Unified IPR.  It declined to exercise its discretion to deny the petition under either Section 314(a) or under Section 325(d) (allowing discretion to deny intuition when patent is subject to multiple proceedings).  Id. at 14.  After reviewing the art presented, the Board instituted review of claims 1-3 and 8-10 of the ’371 patent.  Id. at 37.