Non-Infringement DJ Action Does Not Preclude Inter Partes Review

As previously reported, Patent Owner in the inter partes review styled as Ariosa Diagnostics v. Isis Innovation Ltd. (IPR 2012-00022) earlier sought authorization to file a motion challenging the standing of Patent Challenger to bring the IPR petition.  The Board held that such issues could be addressed in the Patent Owner Preliminary Response and, therefore, denied Patent Owner’s request for authorization at an early stage of the IPR.

35 USC §315 – (a) Infringer’s civil action.  (1) Inter partes review barred by civile action.—An inter partes review may not be instituted if, before the date on which the petition for such review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent…(3) Treatment of counterclaim.—A counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim for purposes of this subsection.

Since that ruling, however, Patent Owner made its argument that Patent Challenger lacked standing to bring the inter partes review in its Preliminary Response.  Further, on February 12th, the Board denied Patent Owner’s request and ruled that the Patent Challenger did, indeed, have standing to bring the present inter partes review proceeding.  In short, a party’s filing of a declaratory judgment action seeking judgment of non-infringement does not preclude that party from later filing a petition for inter partes review, even if the challenger later files an affirmative defense of invalidity.

More specifically, Patent Owner argued in its Preliminary Response that Patent Challenger lacked standing because the challenger filed a civil action seeking a declaration of non-infringement and then, in response to an inevitable counterclaim of infringement in the same suit, Patent Challenger asserted an affirmative defense of invalidity.  That sequence of events, per Patent Owner, was tantamount to bringing a civil action challenging the validity of a claim of the patent, contrary to the estoppel provisions of 35 USC §315.  Further, per Patent Owner, to allow this proceeding to move forward would thwart the intent of Congress.

The Board’s decision turned on the language of 35 USC §315 that “clearly defines which civil actions, when filed, bar a party from filing an inter partes review – civil actions challenging the validity of a patent.”  Order at 7.  Because a civil action for a declaratory judgment of non-infringement is not a civil action challenging the validity of a patent, there is no bar to the filing of a petition seeking inter partes review when such civil action has been filed.

Lastly, in response to the Patent Owner’s argument that the path taken by the challenger in this case thwarts Congress’s intent, the Board found persuasive the fact that the challenger cannot just file a declaratory judgment action – some action on the part of the Patent Owner creating a case or controversy is necessary.  As such, allowing a party to file both a declaratory judgment action of non-infringement and an inter partes review petition does not allow for harassment of a patent owner.