Director Vidal’s sua sponte Director Review decision of Apple Inc. v. Zipit Wireless, Inc. (IPR2021-01124, -01125, -01126, -01129) was recently designated as precedential. The decision dealt an immediate setback for Apple and will likely have a long-term effect on inter partes review (IPR) procedures.
Apple filed six petitions for IPRs before the Patent Trial and Appeal Board (“Board”). The Board instituted IPRs for all six petitions which were assigned to the same panel of Administrative Patent Judges (APJs). The patent owner, Zipit, filed Patent Owner responses to only two of the IPRs (IPR2021-01130 and IPR2021-01131). At the Board hearing for IPR2021-01130 and IPR2021-01131, Zipit’s council was asked if the failure to file responses to the remaining four IPRs meant that Zipit was “not contesting if a final written decision or adverse judgment was entered with respect to those IPRs.” Zipit’s counsel responded, “Correct, Your Honor. If the Board determines that they have met their burden of proof with respect to those claims Zipit hasn’t filed any opposition.” The Board subsequently entered adverse judgments under Rule 42.73(b) for the four remaining IPRs in favor of Apple, asserting that Zipit’s statements at the Board hearing was an abandonment of the contests.
The adverse judgments, and the Board’s reasoning for entering them, prompted Director Vidal’s sua sponte precedential decision. In the decision, Director Vidal questioned the Board’s interpretation of the Zipit council’s statements to imply an unequivocal abandonment of the contest. Instead, the Director interpreted Zipit’s statements to mean that Zipit wanted the Board to weigh Apple’s evidence addressing the patentability of the challenged claims in the four IPRs and then make the necessary determination under the standard used in IPR proceedings. As the Board did not meet this standard, Director Vidal vacated the adverse judgments and remanded the IPRs back to the Board.
The decision provides some clarity regarding whether a patent owner must formally respond to all IPRs instituted against them or risk abandonment of contest. Director Vidal’s decision suggests a patent owner may participate in one or more IPRs while asserting that the Board must still follow the procedural standard of determining unpatentability by a preponderance of evidence for the remaining IPRs, regardless of whether a response is filed.
Perhaps more importantly, this decision provides an important practice point: all parties participating in an IPR must choice their words wisely. As evident from the Director’s need to issue a decision clarifying the statements of record, failing to clearly express your parties’ intentions can result in a costly outcome. Expressing clear intent can maximize the chance that the PTAB makes procedural rules according to the parties’ wishes.
