Amicus Curiae Brief — Atlanta Gas Light Company, Petitioner v. Bennett Regulator Guards, Inc.

No. 18-999

IN THE

Supreme Court of the United States

ATLANTA GAS LIGHT CO.,

Petitioner,

v.

BENNETT REGULATOR GUARDS, INC.,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

BRIEF FOR AMICUS CURIAE INTEL

CORPORATION IN SUPPORT OF PETITIONER

DONALD B. VERRILLI, JR.

Counsel of Record

GINGER D. ANDERS

MUNGER, TOLLES & OLSON LLP

1155 F Street NW, 7th Floor

Washington, D.C. 20004

(202) 220-1100

donald.verrilli@mto.com

Counsel for Amicus Curiae Intel Corporation

i

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES...................................... ii

INTEREST OF AMICUS CURIAE............................1

INTRODUCTION AND SUMMARY OF THE

ARGUMENT ..............................................................2

I. This Court should review the Federal

Circuit’s conclusion that the Board’s

timeliness rulings are judicially

reviewable. .......................................................5

A. The Federal Circuit erred in holding

that the Board’s timeliness determinations are reviewable. ..........................6

B. Appellate review of institution

decisions based on timeliness will

undermine the effectiveness of inter

partes review. ...........................................10

II. This Court should also grant certiorari

with respect to the Federal Circuit’s

erroneous construction of Section 315(b) ......13

A. The Federal Circuit erred in holding

that a complaint that is dismissed

without prejudice triggers Section

315(b)’s limitations period .......................14

B. The Federal Circuit’s construction of

Section 315(b) will adversely affect

companies like Intel. ................................18

CONCLUSION .........................................................22

ii

TABLE OF AUTHORITIES

Page(s)

CASES

In re Affinity Labs of Tex., LLC,

856 F.3d 883 (Fed. Cir. 2017) .............................. 11

Applications in Internet Time, LLC v.

RPX Corp.,897 F.3d 1336

(Fed. Cir. 2018) .................................................... 21

Bay Area Laundry & Dry Cleaning

Pension Tr. Fund v. Ferbar Corp.,

522 U.S. 192 (1997) .............................................. 15

Bonneville Assocs., Ltd. P’ship v.

Barram,165 F.3d 1360

(Fed. Cir. 1999) .................................................... 16

Click-To-Call Techs., LP v. Ingenio, Inc.,

899 F.3d 1321 (Fed. Cir. 2018) .................. 4, 14, 15

Cuozzo Speed Techs., LLC v. Lee,

136 S. Ct. 2131 (2016) .................................. passim

FTC v. Minneapolis-Honeywell

Regulator Co.,

344 U.S. 206 (1952) ........................................ 15, 16

FTC v. Standard Oil Co.,

449 U.S. 232 (1980) ................................................ 6

iii

Gerhardson v. Gopher News Co.,

698 F.3d 1052 (8th Cir. 2012) .............................. 16

Jorge v. Rumsfeld,

404 F.3d 556 (1st Cir. 2005) ................................ 16

Kasten v. Saint-Gobain Performance

Plastics Corp.,

563 U.S. 1 (2011) .................................................. 15

Oil States Energy Servs., LLC v.

Greene’s Energy Grp., LLC,

138 S. Ct. 1365 (2018) .......................................... 12

United States v. Ibarra,

502 U.S. 1 (1991) ............................................ 15, 16

WesternGeco LLC v. ION Geophysical

Corp.,

889 F.3d 1308 (Fed. Cir. 2018) ............................ 21

Wi-Fi One, LLC v. Broadcom

Corporation,

878 F.3d 1364 (Fed. Cir. 2018) ...................... 3, 5, 9

STATUTES

5 U.S.C. § 706 ............................................................ 11

18 U.S.C. § 3731 ........................................................ 15

35 U.S.C. § 141(c) ........................................................ 6

35 U.S.C. § 311(a) ...................................................... 12

35 U.S.C. § 312 ............................................................ 8

iv

35 U.S.C. § 314 ............................................................ 7

35 U.S.C. § 314(a) .................................................... 7, 9

35 U.S.C. § 314(d) .............................................. passim

35 U.S.C. § 315 .................................................. 7, 9, 17

35 U.S.C. § 315(a)(2) ................................................. 17

35 U.S.C. § 315(b) .............................................. passim

35 U.S.C. § 315(e) ...................................................... 20

35 U.S.C. § 317 .......................................................... 12

35 U.S.C. § 317(a) ...................................................... 12

35 U.S.C. § 318 ............................................................ 2

35 U.S.C. § 318(a) ........................................................ 6

35 U.S.C. § 319 ........................................................ 2, 3

America Invents Act,

Pub. L. No. 112-29,

125 Stat. 284 (2011) ............................................... 2

LEGISLATIVE MATERIALS

157 Cong. Rec. S1375 (daily ed. Mar. 8,

2011) ............................................................... 17, 18

157 Cong. Rec. S5409 (daily ed. Sept. 8,

2011) ..................................................................... 11

v

H.R. Rep. No. 112-98 (2011).............................. passim

RULES

Sup. Ct. R. 13.1 .......................................................... 16

Sup. Ct. R. 37.6 ............................................................ 1

TREATISES

9 Charles Alan Wright & Arthur R.

Miller, Federal Practice & Procedure

§ 2367 (3d ed. 2018) ............................................. 17

OTHER AUTHORITIES

Am. Intellectual Prop. Law Assoc.,

Report of the Economic Survey (2017) ................. 10

Julie E. Cohen & Mark A. Lemley,

Patent Scope and Innovation in the

Software Industry,

89 Cal. L. Rev. 1 (2001) ........................................ 19

Michael D. Frakes & Melissa F. Wasserman, Does Agency Funding Affect

Decisionmaking?: An Empirical Assessment of the PTO’s Granting Patterns, 66 Vand. L. Rev. 67 (2013) .................. 10, 11

Mark A. Lemley & Carl Shapiro, Patent

Holdup and Royalty Stacking, 85

Tex. L. Rev. 1991, 2009 (2007) ............................ 18

vi

Brian J. Love et al., Determinants of Patent Quality: Evidence from Inter

Partes Review Proceedings, 90 U.

Colo. L. Rev. 67 (2019) ................................... 11, 12

Brian J. Love & James Yoon,

Predictably Expensive: A Critical

Look at Patent Litigation in the

Eastern District of Texas,

20 Stan. Tech. L. Rev. 1 (2017)............................ 20

FTC, To Promote Innovation: The

Proper Balance of Competition and

Patent Law and Policy (2003).............................. 18

Eugene Gressman et al., Supreme Court

Practice (9th ed. 2007) ......................................... 16

U.S. Patent & Trademark Office, U.S.

Patent Statistics Chart, Calendar

Years 1963–2015 .................................................. 10

1

INTEREST OF AMICUS CURIAE 1

Intel Corporation is a global leader in the design and

manufacture of semiconductor products, including

hardware and software products for networking, telecommunications, cloud computing, artificial intelligence, autonomous driving, and other applications. Intel’s chips power a large percentage of the world’s computers, from everyday desktops and laptops to the servers that form the backbone of the modern digital economy.

Intel owns one of the Nation’s largest patent portfolios, with tens of thousands of patents. Intel routinely

places in the top ten annually in number of patents

granted by the U.S. Patent and Trademark Office

(PTO). Intel is therefore a strong supporter of the patent system. At the same time, Intel’s experience—like

that of most successful technology companies—overwhelmingly has been as a defendant in suits brought by

increasingly sophisticated non-practicing entities seeking return on litigation as a portfolio investment strategy. In light of the increasing offensive assertion of invalid patents by third parties who are strangers to their

issuance, especially in areas of emerging technology, Intel believes that inter partes review performs a critical

function within the patent system. Intel has a strong

interest in having an efficient post-grant review available as an alternative to expensive and time-consuming

1 Pursuant to Supreme Court Rule 37.6, counsel for amicus cu-

riae state that no counsel for a party authored this brief in whole

or in part, and no party or counsel for a party, or any other person

other than amicus curiae or its counsel, made a monetary contribution intended to fund the preparation or submission of this

brief. All parties have consented in writing to the filing of this

brief.

2

patent litigation, which in the past has been the primary vehicle to challenge the validity of weak patents.

INTRODUCTION AND SUMMARY

OF THE ARGUMENT

In the America Invents Act, Pub. L. No. 112-29, 125

Stat. 284 (2011), Congress created inter partes review

to further “the public’s ‘paramount interest in seeing

that patent monopolies [] are kept within their legitimate scope.’” Cuozzo Speed Techs., LLC v. Lee, 136 S.

Ct. 2131, 2144 (2016) (citation omitted). To that end,

Congress conferred broad authority on the Patent Trial

and Appeal Board (Board) to adjudicate a patent’s validity, and it designed the inter partes review procedure

to ensure that the proceeding would remain streamlined, cost-effective, and focused on the ultimate question of patentability.

In particular, Congress limited the grounds on which

the Board’s decision may be subject to judicial review.

While the Federal Circuit may review the Board’s ultimate determination of patentability, 35 U.S.C. §§ 318,

319, the decision “whether to institute” an inter partes

review is “final and nonappealable,” 35 U.S.C. § 314(d).

In Cuozzo, this Court construed Section 314(d) to bar review of the Board’s decision to institute inter partes review and its subsidiary construction of statutes relating

to the institution decision. 136 S. Ct. at 2139. Notwithstanding that direction, the Federal Circuit has carved

out an exception to Cuozzo, holding that it may review

the Board’s institution decisions to the extent they are

based on a determination that the petition was timely

filed. And the court has exercised that newfound au-

3

thority to overturn the Board’s long-standing and correct construction of the limitations period for seeking inter partes review. Both rulings are wrong, and both

warrant this Court’s review.

I. In Wi-Fi One, LLC v. Broadcom Corporation, 878

F.3d 1364 (2018), the en banc Federal Circuit held that

when the Board institutes inter partes review after determining that the petition has been timely filed under

35 U.S.C. § 315(b), that subsidiary timeliness determination is subject to judicial review. The court applied

that holding in this case, reviewing the Board’s conclusion that the petition was timely filed and holding that

the Board should not have instituted the proceeding.

The court therefore vacated the Board’s ultimate determination that the patent claims at issue were invalid.

The Federal Circuit’s decision cannot be reconciled

with the statutory text, Cuozzo, and Congress’s purpose

of providing an efficient means of canceling invalid patents. Congress expressly provided that only the

Board’s final determination of patentability, and not its

decision to institute inter partes review, would be reviewable. 35 U.S.C. § 319, 314(d). That framework reflects Congress’s judgment that appellate review should

focus on patentability—the critical question that affects

the public interest—and that the Board’s invalidation of

a patent should not be overturned on the basis of procedural “technicalit[ies].” Cuozzo, 136 S. Ct. at 2140. Section 315(b)’s limitations provision, which provides that

“inter partes review may not be instituted” more than

one year after the petitioner or related party has been

served with an infringement complaint, is just such a

technicality.

4

Permitting appellate review of the Board’s timeliness

determinations will undermine Congress’s purposes in

creating inter partes review for the very same reasons

this Court identified in Cuozzo. Because a patentee will

appeal the Board’s timeliness determination only when

the Board has instituted review and invalidated the patent, appellate review of the issue will simply enable the

Federal Circuit to overturn the Board’s invalidation of a

patent for reasons having nothing to do with patentability. Reinstating patents that the expert agency has held

to be invalid will undermine the public interest in promoting innovation by clearing away invalid patents.

That perverse result cannot be justified by any other

policy reflected in the statutory framework.

II. Having held that the Board’s timeliness determinations are subject to appellate review, the Federal Circuit erroneously overturned the Board’s established

understanding of when the limitations period starts to

run. Click-To-Call Techs., LP v. Ingenio, Inc., 899

F.3d 1321, 1330 (Fed. Cir. 2018). The Federal Circuit

held that Section 315(b)’s one-year limitations period,

which runs from the date on which the petitioner is

“served with a complaint,” 35 U.S.C. § 315(b), is triggered by service of any complaint, including complaints that are dismissed without prejudice. That

hypertechnical interpretation disregards the background principles that (1) the triggering occurrence

defined in a limitations provision is generally construed to be limited to events that actually alter the

parties’ rights, and (2) a complaint that is dismissed

without prejudice does not alter the parties’ rights, because dismissal leaves the parties as though the complaint had never been filed.

5

The Federal Circuit’s decision unmoors Section

315(b) from its purpose of ensuring that inter partes

review proceedings do not interfere with ongoing infringement litigation concerning the same patent.

H.R. Rep. No. 112-98, at 47 (2011) (House Report). By

holding that a complaint filed and quickly dismissed

years in the past can prevent a petitioner from seeking inter partes review, the Federal Circuit has transformed Section 315(b) into a trap for the unwary. Any

time a company is served with a complaint alleging

infringement, it will face a dilemma: prepare and file

an inter partes review petition even though the complaint may be quickly dismissed and the dispute

might never recur, or forever lose the ability to invoke

inter partes review with respect to the patents involved in the suit. Moreover, because Section 315(b)’s

time bar is also triggered by service on “real part[ies]

in interest”—a term that the Federal Circuit has construed in a highly fact-dependent and unpredictable

manner—companies will be forced to monitor complaints filed and dismissed against a wide range of affiliates in order to protect their ability to seek inter

partes review. Congress could not have intended Section 315(b)’s narrow limitations provision to obstruct

access to inter partes review in this manner.

ARGUMENT

I.

This Court should review the Federal Circuit’s conclusion that the Board’s timeliness rulings are judicially reviewable.

In Wi-Fi One, the Federal Circuit held that the

Board’s decision to institute inter partes review is judicially reviewable to the extent it rests on a determination that the petition was timely filed. 878 F.3d at 1374.

6

That conclusion is irreconcilable with the plain text of

Section 314(d) and this Court’s decision in Cuozzo. Permitting appellate review of the Board’s timeliness determinations will undermine Congress’s purpose in creating inter partes review, and provide a ready means for

patent owners to have their patents reinstated even

when the Board has concluded that the patents are invalid.

A.

The Federal Circuit erred in holding

that the Board’s timeliness determinations are reviewable.

1. In the inter partes review scheme, Congress made

clear its intent to preclude judicial review of the Board’s

decision to institute inter partes review—regardless of

the subsidiary grounds on which that decision is based.

Rather than broadly providing that the Federal Circuit

would have jurisdiction to review any “final decision” of

the Board—a formulation that generally encompasses

interlocutory decisions that merge into the final decision—Congress specified that the court would have jurisdiction to review only the Board’s “final written decision . . . under section 318(a).” 35 U.S.C. § 141(c) (emphasis added); see FTC v. Standard Oil Co., 449 U.S.

232, 239-242 (1980). Section 318(a) in turn states that

the Board shall issue a “final written decision with respect to the patentability of any patent claim challenged

by the petitioner.” 35 U.S.C. § 318(a) (emphasis added).

Congress thus provided that appellate review would be

limited to the Board’s final decision with respect to the

patentability of the claims on which review was instituted.

At the same time, Congress expressly barred judicial

review of the Board’s decision to institute inter partes

7

review. Section 314(d) provides that “[t]he determination . . . whether to institute an inter partes review under this section shall be final and nonappealable.” 35

U.S.C. § 314(d). The determination whether to institute

inter partes review encompasses several subsidiary

questions. Section 314(a) establishes the substantive

standard for institution, providing that the Board may

institute inter partes review if it determines that there

is a “reasonable likelihood” that the petitioner will prevail with respect to a challenged patent claim. 35 U.S.C.

§ 314(a). The Board must also interpret several other

provisions of the Patent Act. In addition to the Act’s relevant substantive patentability provisions, the Board

must apply Sections 311 through 315, which set forth

various procedural prerequisites to institution of inter

partes review. As particularly relevant here, in some

cases the Board must determine whether the petition

was timely filed within the meaning of Section 315(b),

which provides that “an inter partes review may not be

instituted” more than one year after a complaint alleging infringement of the patent was served on the petitioner or certain other parties. 35 U.S.C. § 315(b).

The plain language of Sections 314(d) and 315(b) disposes of the question whether the Board’s timeliness determinations are judicially reviewable. Section 315(b)

expressly addresses a situation in which “inter partes

review may not be instituted.” In cases where timeliness is implicated, the Board must apply Section 315(b)

in order to “determin[e] . . . whether to institute an inter

partes review” under Section 314. Section 314(d), in

turn, renders such determinations “final and nonappealable.” Section 314(d) therefore precludes review of

a determination whether a petition was timely under

Section 315(b).

8

Cuozzo confirms that conclusion. 136 S. Ct. at 2139.

There, the patent owner wished to appeal the Board’s

determination, in instituting inter partes review, that

the petition complied with Section 312(a)(3)’s requirement that the petition identify the asserted grounds of

invalidity “with particularity.” The Court held that the

Board’s ruling on that subsidiary issue was unreviewable. Ibid. Elaborating on Section 314(d)’s scope, the

Court explained that the provision “applies where the

grounds for attacking the decision to institute inter

partes review consist of questions that are closely tied

to the application and interpretation of statutes related

to the Patent Office’s decision to initiate inter partes review.” Id. at 2141. Put another way, “where a patent

holder grounds its claim in a statute closely related to

th[e] decision to institute inter partes review, § 314(d)

bars judicial review.” Id. at 2142.

A challenge to the Board’s institution decision on the

ground that the Board misapplied Section 315(b) is

“closely tied to the application and interpretation of

statutes related to” the decision to institute inter partes

review. Cuozzo, 136 S. Ct. at 2141. Section 315(b) is by

definition “related to” the institution decision, as it supplies one of the requirements the Board must evaluate

and find satisfied in order to institute inter partes review. In that respect, Section 315(b) is indistinguishable from Section 312, the provision at issue in Cuozzo.

Both establish conditions precedent that the petition

must satisfy, and the Board must adjudicate, in the

course of deciding whether to institute inter partes review. Given that the Court found Section 312 to be

9

“closely related” to the institution decision, Section 315

must also be. 2

2. The Federal Circuit, however, held in Wi-Fi One

that Section 314(d)’s preclusion of judicial review is implicitly limited by its reference to “[t]he determination

. . . whether to institute an inter partes review under

this section.” 878 F.3d at 1372 (citing 35 U.S.C. §

314(d)). In the Federal Circuit’s view, the phrase “under

this section” refers to the Board’s application of the “reasonable likelihood of prevailing” standard set forth in

Section 314(a). Therefore, the Federal Circuit reasoned,

only appeals raising issues that are “closely related to”

the “patentability merits of particular claims” fall

within the bar on appellate review. Wi-Fi One, 878 F.3d

at 1372.

That conclusion rests on a misunderstanding of

Cuozzo and Section 314(d). Cuozzo construed Section

314(d)’s reference to “[t]he determination . . . whether to

institute an inter partes review under this section” to

render unreviewable “questions that are closely tied to

the application and interpretation of statutes related to”

the institution decision. 136 S. Ct. at 2141. Thus, the

Board’s application of a statute related to the institution

decision is unreviewable—regardless of whether that

2 Cuozzo stated that certain appeals—those that “implicate con-

stitutional questions, that depend on other less closely related

statutes, or that present other questions of interpretation that

reach, in terms of scope and impact, well beyond” the institution

decision—might fall outside section 314(d)’s bar on appellate review. 136 S. Ct. at 2141. But an appeal challenging a timeliness

determination under Section 315(b) does not fall within either of

those categories: it does not raise constitutional questions or

have implications reaching well beyond the circumstances in

which the Board may institute an inter partes review.

10

application involved a substantive question related to

the merits of patentability. Section 315(b) is clearly a

statute that is closely related to the institution decision;

it is therefore irrelevant that the Board’s consideration

of timeliness is not substantively related to its consideration of patentability.

B.

Appellate review of institution decisions

based on timeliness will undermine the

effectiveness of inter partes review.

Congress established inter partes review to “protect

the public’s ‘paramount interest in seeing that patent

monopolies [] are kept within their legitimate scope.’”

Cuozzo, 136 S. Ct. at 2144 (citation omitted). Invalid

patents impose real costs on third parties operating in

the same technical domain, as those parties must expend resources to license the patent, design around it,

or risk a costly and lengthy infringement suit. See Am.

Intellectual Prop. Law Assoc., Report of the Economic

Survey 41 (2017) (“AIPLA Survey”) (calculating median

cost of litigating a single claim of a high-valued patent

to be $3 million). Congress therefore determined that

the PTO should be given “significant power to revisit

and revise earlier patent grants.” 3 Cuozzo, 136 S. Ct. at

3 The immense annual volume of patent applications, combined

with the PTO’s limited resources, makes it inevitable that a significant number of issued patents should have been rejected for

failure to satisfy the requirements for patentability set forth in

the Patent Act. See, e.g., U.S. Patent & Trademark Office, U.S.

Patent Statistics Chart, Calendar Years 1963–2015 (showing

that patent applications more than doubled to approximately

630,000 between 2000 and 2015). Indeed, research suggests that

the average patent is examined for less than 20 hours before the

PTO renders a decision. See Michael D. Frakes & Melissa F.

Wasserman, Does Agency Funding Affect Decisionmaking?: An

11

2139-2140 (citing House Report 45, 48); see 157 Cong.

Rec. S5409 (daily ed. Sept. 8, 2011) (Sen. Schumer).

Section 314(d)’s bar on appellate review of institution

decisions performs a critical function in the inter partes

review framework. The only situation in which a patent

owner would challenge an institution decision (under

Section 315(b), or otherwise) is one in which the Board

has instituted inter partes review and ultimately invalidated the patent. Permitting appellate review of institution decisions therefore “would undercut” Congress’s

grant of broad authority to the Board to reconsider

granted patents. Cuozzo, 136 S. Ct. at 2139. Once the

Board has issued a final determination that a patent is

invalid, that determination is reviewed deferentially, in

recognition of the Board’s technical expertise and its authority as the agency charged with examining patentability in the first instance. 5 U.S.C. § 706; In re Affinity

Labs of Tex., LLC, 856 F.3d 883, 889 (Fed. Cir. 2017).

But if the Federal Circuit may review the Board’s timeliness rulings, the Board’s “final decision could be unwound,” not because the court has concluded that the

Board’s patentability determination was unsupported

by substantial evidence, but instead based on a “minor

statutory technicality” that has nothing to do with the

validity of the patent. Cuozzo, 136 S. Ct. at 2140. That

would leave a likely-invalid patent in force and undermine the efficacy of inter partes review. 4

Empirical Assessment of the PTO’s Granting Patterns, 66 Vand.

L. Rev. 67, 72 n.16 (2013).

4 The Board’s patentability determinations in inter partes review are affirmed approximately 75% of the time. Brian J. Love

et al., Determinants of Patent Quality: Evidence from Inter Partes

Review Proceedings, 90 U. Colo. L. Rev. 67, 102 (2019).

12

Conversely, permitting appellate review of the

Board’s timeliness determinations would not serve any

policy embodied in the inter partes review framework.

While inter partes review is in some respects an adversarial proceeding between the petitioner and the patent

owner, its primary purpose is not to adjudicate private

rights, but to undo invalid patents that impede the innovation-encouraging policies of the patent system.

Cuozzo, 136 S. Ct. at 2139-2140; Oil States Energy

Servs., LLC v. Greene’s Energy Grp., LLC, 138 S. Ct.

1365, 1374 (2018). Unlike traditional limitations periods, then, Section 315(b) is not intended to protect any

private interest of the patentee. Specifically, Section

315(b) does not further any recognized interest in repose, because Congress provided that any party “who is

not the owner of a patent” may seek to institute inter

partes review at any time during the patent’s term. 35

U.S.C. § 311(a). Even if a particular challenger is timebarred, therefore, the patent remains subject to inter

partes review at the instigation of other parties. For the

same reason, Section 315(b) does not protect any cognizable interest in the identity of the particular challenger. Indeed, Congress elsewhere indicated that the

presence of a proper petitioner is not essential to the

Board’s authority to adjudicate patent validity: Section

317 provides that even if the petitioner settles with the

patent owner, the PTO may continue the adjudication,

invalidate the patent, and defend its decision on appeal.

35 U.S.C. § 317(a); Cuozzo, 136 S. Ct. at 2139-2140. Appellate review of the Board’s timeliness determinations

is therefore not necessary to protect any private interest

of the patentee.

Rather than protecting the patentee’s private interests, Section 315(b)’s time bar regulates the relationship

13

between inter partes review and district court proceedings. The time bar applies in the limited circumstance

in which a party seeks to institute inter partes review

after it has been served with an infringement complaint.

The provision ensures that inter partes review does not

delay or otherwise interfere with a district-court action

that has already substantially progressed towards judgment. House Report 47; see pp. 17-18, infra. Appellate

review of the Board’s application of Section 315(b) would

not help prevent that interference. Once the Board concludes that a petition is timely and institutes inter

partes review notwithstanding a concurrent districtcourt action, appellate review of that decision will not

take place until after the conclusion of the inter partes

review proceeding anyway.

In sum, holding that the Board’s invalidation of a patent may be vacated because the petition was untimely

will simply prolong the life of a likely-invalid patent,

thereby undermining the efficacy of inter partes review,

without serving any other policy recognized in the inter

partes review framework.

II. This Court should also grant certiorari with

respect to the Federal Circuit’s erroneous

construction of Section 315(b).

If this Court grants certiorari with respect to the

first question presented and holds that the Federal

Circuit lacked jurisdiction to review the Board’s timeliness determination, petitioner will be entitled to vacatur of the Federal Circuit’s decision. Conversely, if

this Court were to hold that the Federal Circuit did

have jurisdiction to review the Board’s timeliness determination, the question whether the Federal Circuit

correctly construed Section 315(b) in the course of that

14

review will be squarely presented. That question also

warrants review.

The Federal Circuit held that a complaint that is

served on an accused infringer but then dismissed

without prejudice triggers Section 315(b)’s one-year

limitations period, notwithstanding the background

principle that dismissal of a complaint without prejudice leaves the parties in the same position as though

the complaint had never been filed. Click-To-Call,

899 F.3d at 1330-1331; Pet. App. 5-6. That erroneous

construction rests on an unduly rigid interpretation of

the statutory text, isolated from the statutory context

and purpose, and it will give rise to a number of adverse consequences. This Court should therefore

grant certiorari on that question as well, so that it

may fully resolve the case in the event that it concludes that the Federal Circuit had jurisdiction to address Section 315(b).

A.

The Federal Circuit erred in holding

that a complaint that is dismissed without prejudice triggers Section 315(b)’s

limitations period.

Section 315(b) provides that “[a]n inter partes review

may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which

the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” 35 U.S.C. § 315(b). The Federal

Circuit held that Section 315(b)’s use of the phrase “is

served with a complaint” unambiguously means that

the one-year limitations period is triggered whenever

the petitioner is served with a complaint, even if the

complaint is dismissed without prejudice. Click-To-

15

Call, 899 F.3d at 1330. The Federal Circuit was able

to reach that conclusion only by focusing on the literal

meaning of the words “served with a complaint,” to the

exclusion of Section 315(b)’s function as a limitations

provision and the larger statutory context. See Kasten

v. Saint-Gobain Performance Plastics Corp., 563 U.S.

1, 7 (2011) (statutory construction “depends upon

reading the whole statutory text, considering the purpose and context of the statute, and consulting any

precedents or authorities that inform the analysis”).

Section 315(b) defines an event—“serv[ice] with a

complaint”—whose occurrence starts the running of

the limitations period. While the literal meaning of

the words “served with a complaint” might encompass

service of any complaint, regardless of whether the

complaint was subsequently dismissed without prejudice, limitations provisions are generally construed

more narrowly. Specifically, they are construed in

light of the background principle that limitations periods ordinarily run from the date on which the party’s

relevant legal rights are definitively altered with respect to the action governed by the limitations period.

See Bay Area Laundry & Dry Cleaning Pension Tr.

Fund v. Ferbar Corp., 522 U.S. 192, 201 (1997). As a

result, in determining whether a limitations period has

been triggered, courts consider whether the assertedly

triggering event had the effect of altering the parties’ legal position with respect to the action. United States v.

Ibarra, 502 U.S. 1, 3 (1991); FTC v. Minneapolis-Honeywell Regulator Co., 344 U.S. 206, 212 (1952).

For instance, this Court has construed 18 U.S.C. §

3731, which requires the government to file an appeal

“within thirty days after the decision, judgment or order

has been rendered,” more narrowly than its literal

16

sweep would suggest. Ibarra, 502 U.S. at 3, 7. Specifically, the Court held that a judgment that had been rendered but that was the subject of a reconsideration motion did not start the running of the appeal period, because the judgment did not definitively determine the

parties’ rights. Ibid. Similarly, this Court has long construed its Rule 13.1, which provides that a petition for

certiorari must be filed “within 90 days of the entry of

judgment,” not to run from the entry of any judgment,

but instead to run from entry of only those judgments

that are not subsequently modified. Minneapolis-Honeywell Regulator Co., 344 U.S. at 212-213. Put another

way, subsequent modifications that materially alter the

parties’ rights prevent the initial judgment from triggering the limitations period. Eugene Gressman et al., Supreme Court Practice 396-397 (9th ed. 2007).

In the case of Section 315(b), then, the phrase

“served with a complaint” should not be construed literally to encompass all complaints regardless of their

legal effect. Instead, in determining whether a particular complaint should trigger the limitations period,

the court should take into account subsequent events

that determine the complaint’s legal effect. It is wellestablished that a complaint that is subsequently dismissed without prejudice is treated as though it was

never filed at all. See, e.g., Gerhardson v. Gopher

News Co., 698 F.3d 1052, 1056 (8th Cir. 2012); see also

Jorge v. Rumsfeld, 404 F.3d 556, 563 (1st Cir. 2005);

Bonneville Assocs., Ltd. P’ship v. Barram, 165 F.3d

1360, 1364 (Fed. Cir. 1999); 9 Charles Alan Wright &

Arthur R. Miller, Federal Practice & Procedure § 2367

(3d ed. 2018). Because a subsequently-dismissed complaint leaves the parties in the same legal position as

though the complaint were never filed, service of such

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a complaint does not alter the parties’ legal rights

with respect to the inter partes review proceeding to

which Section 315(b)’s limitations period pertains.

Once the complaint has been dismissed, it does not

threaten the defendant with liability for infringement,

and it does not provide the defendant with a vehicle to

challenge the patent’s validity. Such a complaint

therefore does not trigger Section 315(b)’s time bar.

That construction is reinforced by the statutory

context and purpose. Section 315 is entitled, “relation

to other proceedings or actions,” indicating that its

provisions govern the relationship between inter

partes review and other actions, primarily districtcourt actions. See, e.g., 35 U.S.C. § 315(a)(2) (governing situations in which a district-court action should

be stayed during a concurrent inter partes review proceeding); 157 Cong. Rec. S1375 (daily ed. Mar. 8, 2011)

(Sen. Kyl) (Section 315 “impose[s] time limits and

other restrictions when inter partes and post-grant review are sought in relation to litigation”). A complaint

that has been dismissed is no longer an “action,” and

it has no relationship to the IPR proceeding.

Moreover, Section 315(b)’s purpose is to ensure

that IPR proceedings do not interfere with ongoing

district court litigation well after that litigation is underway. The House Report described Section 315(b)

as a “[t]ime limit[] during litigation,” and it stated

that “[p]arties who want to use inter partes review

during litigation are required to seek a proceeding

within 12 months of being served with a complaint alleging infringement of the patent.” H.R. Rep. No. 11298, at 47; 157 Cong. Rec. S1375 (Mar. 8, 2011) (Sen.

Kyl). Congress therefore contemplated that the limitations period would govern when a complaint is not

18

dismissed, but instead ripens into litigation. The Federal Circuit’s decision completely divorces Section

315(b)’s scope from that limited purpose.

B.

The Federal Circuit’s construction of

Section 315(b) will adversely affect on

companies like Intel.

Under the Federal Circuit’s hypertechnical reading

of Section 315(b), service of any complaint will start

the limitations clock running. That will impose significant costs on companies that wish to preserve their

ability to challenge a patent’s validity through inter

partes review.

1. Companies like Intel are frequent targets of patent infringement lawsuits, often by nonpracticing entities that assert that Intel’s products infringe vague or

potentially invalid patents. Microprocessors and other

computer components may each implicate hundreds or

thousands of patents. See, e.g., FTC, To Promote Innovation: The Proper Balance of Competition and Patent

Law and Policy 6 (2003) (hereafter “FTC Report”) (“One

industry representative from a computer hardware firm

reported that more than ‘90,000 patents generally related to microprocessors are held by more than 10,000

parties.’”) (quoting testimony of Peter Detkin, then-Vice

President and Assistant General Counsel at Intel);

Mark A. Lemley & Carl Shapiro, Patent Holdup and

Royalty Stacking, 85 Tex. L. Rev. 1991, 2009 (2007).

And there is a broad consensus among practitioners and

policymakers that the PTO issues many patents of questionable validity, particularly in areas of emerging technology. FTC Report 5-7; Julie E. Cohen & Mark A. Lemley, Patent Scope and Innovation in the Software Industry, 89 Cal. L. Rev. 1, 42-45 (2001). Accordingly, when

19

Intel is served with a complaint alleging infringement,

it often concludes that the asserted patent claims may

be invalid on one or more grounds that could be raised

in inter partes review.

Under the Federal Circuit’s rule, any time a company is served with a complaint alleging infringement, it will face a dilemma: prepare and file an inter

partes review petition even though the complaint may

be quickly dismissed and the dispute might never recur, or forgo the petition and forever lose the ability to

invoke inter partes review with respect to the patents

involved in the suit. While forgoing inter partes review may be the most reasonable course if a complaint

is dismissed and the defendant is relatively certain

that the dispute will not recur, that course entails significant downside risks. A complaint that is dismissed

without prejudice for procedural reasons could be refiled with its deficiencies corrected. And a complaint

that appears to be insubstantial when asserted

against particular products may present more of a

concern if it is refiled with allegations running against

different or additional products. 5

Conversely, seeking inter partes review upon the

filing of any and every subsequently-dismissed complaint would impose significant burdens. Although

inter partes review is designed to be less costly than

5 Indeed, before the Federal Circuit’s decision, parties could set-

tle infringement actions by agreeing to dismiss without prejudice, an outcome that would preserve the accused infringer’s

right to seek inter partes review in the future, if the parties’ dispute subsequently recurred or expanded to encompass different

products. Now, however, accused infringers have no choice but

to seek inter partes review within a year of service of the complaint.

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litigation, such proceedings are still expensive. According to a 2015 survey, the median cost of pursuing

inter partes review through hearing is $275,000.

Brian J. Love & James Yoon, Predictably Expensive:

A Critical Look at Patent Litigation in the Eastern District of Texas, 20 Stan. Tech. L. Rev. 1, 30 n.90 (2017).

In addition, an IPR petition must be rigorously researched and carefully prepared, as any ground that

could have been, but was not, asserted in the IPR proceeding cannot be raised in any subsequent proceeding before the PTO or in any civil action. 35 U.S.C. §

315(e). Simply preparing the petition therefore may

require a significant investment in attorney time and

expert assistance. Under the Federal Circuit’s decision, then, any accused infringer served with a complaint will be forced to shoulder the substantial burden of preparing and filing an inter partes review petition if it wishes to preserve its ability to challenge

the patents before the Board—even if the dispute between the parties is quickly obviated by dismissal of

the complaint.

2. That burden is greatly exacerbated by the Federal Circuit’s expansive conception of the parties

whose receipt of a complaint will trigger the limitations period. Section 315(b) provides that the limitations period is triggered not only by service of a complaint on the petitioner itself, but also by service of a

complaint on a “real party in interest, or privy of the petitioner.” 35 U.S.C. § 315(b). As a result, a petitioner

may find itself time-barred not because it was served

with a complaint, but because some other entity was

served with the complaint and that entity is later determined to be a “real party in interest” or “privy” of petitioner.

21

To make matters worse, the Federal Circuit has

adopted extremely fact-specific constructions of both

terms, making it impossible to determine with any ex

ante certainty whether an entity will satisfy one or both

definitions. The Federal Circuit has held that status as

a “real party in interest” turns on “whether the nonparty is a clear beneficiary [of the patent’s invalidation] that has a preexisting, established relationship

with the petitioner.” Applications in Internet Time,

LLC v. RPX Corp., 897 F.3d 1336, 1351 (Fed. Cir.

2018). That definition could potentially encompass a

wide range of entities with a relationship to the petitioner and a general interest in the inter partes review

proceeding, such as development partners, contractual affiliates, or corporate subsidiaries. The definition of “privy” is similarly fact-specific, as it turns on

the application of multiple non-exhaustive factors, including “an agreement to be bound,” “pre-existing substantive legal relationships,” and a previous opportunity to litigate the patent. WesternGeco LLC v. ION

Geophysical Corp., 889 F.3d 1308, 1319 (Fed. Cir.

2018).

A company therefore must monitor complaints filed

against a broad range of affiliates in order to ensure that

it does not lose its own opportunity to seek inter partes

review because of litigation involving an affiliate or subsidiary. That burden is already heavy enough for companies that, like Intel, operate in fields in which infringement claims, and invalid patents, are prevalent.

But that task will be nearly insurmountable in a regime

in which even complaints that are quickly dismissed—

and are therefore that much harder to detect—trigger

the time bar.

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CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

DONALD B. VERRILLI, JR.

Counsel of Record

GINGER D. ANDERS

MUNGER, TOLLES & OLSON LLP

1155 F Street NW, 7th Floor

Washington, D.C. 20004

(202) 220-1100

donald.verrilli@mto.com

Counsel for Amicus Curiae Intel

Corporation

MARCH 4, 2019