A fairly straightforward Federal Circuit decision today, that affirmed a PTAB determination of obviousness, provides insight into a potential reigning in of the PTAB on two issues. In Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 2016-2321 (August 22, 2017), Judges Dyk and Wallach filed a concurring opinion that casts some level of doubt on the PTAB’s practices of: 1) construing 35 U.S.C. §315(c) to encompass both party joinder and issue joinder and 2) using expanded panels to decide requests for rehearing.
More specifically, Broad Ocean filed a Petition seeking inter partes review, citing two grounds; the first based on an obviousness argument and the second an anticipation argument. The second ground relied on a Japanese reference, but failed to include the requisite affidavit attesting to the accuracy of the translation of the reference, pursuant to 37 C.F.R. §42.63(b). As such, the Board denied the ground (while instituting an IPR trial on the first ground).
Broad Ocean responded to this denial by filing a second IPR Petition that included the requisite affidavit. Because the second petition was time barred pursuant to 35 U.S.C. §315(b), Broad Ocean included a motion for joinder, pursuant to 35 U.S.C. §315(c), seeking to join the second proceeding with the first.
The original 3-judge panel denied this Petition, finding that §315(b) does not allow a party to join issues to a proceeding to which it is already a party. Broad Ocean filed a request for rehearing of this denial and an expanded board of 5 judges set aside the original panel’s decision, concluding that §315(c) encompasses both party joinder and issue joinder.
This expanded panel then went on to find that the subject patent was unpatentable pursuant to both the first obviousness ground, and the second ground based on the Japanese reference. Nidec appealed both the substance of the decision and the joinder procedure undertaken by the Board. The Federal Circuit affirmed the Board without reaching the joinder issue because it found that the Board correctly determined that the challenged claims were obvious, thus negating the need to reach the procedural issue.
In a concurring opinion authored by Judge Dyk, and joined by Judge Wallach, it was pointed out that the joinder provision of §315(c) is clearly tied to the time bar of §315(b). As such, the justices remarked that “[w]e think it unlikely that Congress intended that petitioners could employ the joinder provision to circumvent the time bar by adding time-barred issues to an otherwise timely proceeding…” Additionally, the justices expressed their “concern” with the PTO’s practice of using an expanded administrative panel to decide requests for rehearing. While the Patent Office argued that the expanded panel is used to ensure uniformity in PTO decisions, the justices questioned “whether the practice of expanding panels where the PTO is dissatisfied with a panel’s earlier decision is the appropriate mechanism of achieving the desired uniformity.”
In the end, the PTAB’s unpatentability determination stands, but a couple of key PTO practices may soon be reversed.