[co-author: Lisa Hladik]

The USPTO Director recently conducted sua sponte review of a Patent Trial and Appeal Board decision granting adverse judgment in four IPR proceedings where a panel found that the patent owner had abandoned the contests. In a precedential decision, the Director ultimately vacated and remanded the PTAB’s decision, and in doing so clarified the standard for abandonment in an IPR proceeding.

The relevant regulation relating to abandonment is 37 CFR § 42.73(b)(4), which provides that “[a] party may request judgment against itself at any time during a proceeding. Actions construed to be a request for adverse judgment include abandonment of the contest.”

In June 2021, the petitioner filed six petitions for IPR. All six petitions were instituted. The patent owner subsequently filed Patent Owner Responses in only two of the cases. A hearing was held in front of the PTAB relating to those same two cases. During the hearing, patent owner’s counsel was asked about the four other companion IPRs and whether patent owner was “not contesting if a final written decision or adverse judgment was entered.” In response, patent owner’s counsel stated, “Correct, Your Honor. If the Board determines that they have met their burden of proof with respect to those claims [patent owner] hasn’t filed any opposition.” Based on those statements, the PTAB found that the patent owner abandoned the contests in the four companion IPRs and issued adverse judgments against the patent owner in each of those proceedings.

In reviewing the PTAB’s decision, the Director found that the statements by patent owner’s counsel were not “an unequivocal abandonment of the contest.” Rather, in the Director’s view, those statements only demonstrated that the patent owner’s non-opposition to the IPRs was contingent on a determination by the PTAB that the petitioner had met its burden of proof, i.e., that petitioner had successfully proved by a preponderance of the evidence that the challenged claims were unpatentable.

As a result, the Director vacated the four adverse judgments and remanded the proceedings to the PTAB. On remand, the Director instructed that the panel must either issue an order to show cause to clarify whether patent owner is abandoning the IPRs or issue a final written decision on the patentability of the challenged claims.

Practice Tip: Patent owners in PTAB proceedings must articulate clearly to the board whether or not they are seeking adverse judgment, especially in situations where the patent owner has decided to not contest the petition, including by not filing a Patent Owner Response. Although a request for adverse judgment can take several forms, if a patent owner seeks adverse judgment through “abandonment of the contest,” such abandonment must be unequivocal.

Cases:

Apple Inc. v. Zipit Wireless Inc., IPR2021-01124, IPR2021-01125, IPR2021-01126, IPR2021-01129, Paper 14 (PTAB December 12, 2022).