Location, Location, Location: How Filing a Declaratory Judgment Action May Affect IPR

Posted by Stuart Duncan Smith on Jul 1, 2015

In patent litigation, forum matters. Whether because of the convenience of keeping the dispute nearby or the perceived benefits of litigating in a particular court, parties challenging allegations of infringement often secure a preferred forum with a declaratory judgment action, rather than waiting to be sued. But what effect does filing a declaratory judgment action have on the challenger’s ability to then request IPR? Several recent PTAB decisions offer some clarity.

Congress created IPR as an efficient alternative to traditional district court litigation and, to that end, constrained when and how IPR can be used with litigation. Among those constraints, IPR cannot occur if the petitioner previously filed a declaratory judgment action challenging the validity of the patent. Does this mean that a potential petitioner cannot choose its preferred forum with a declaratory judgment action if it plans to use an IPR? Not exactly.

Decisions

Several decisions from the PTAB have addressed whether a party can avoid the constraint by limiting the declaratory judgment action to just infringement. Because validity would typically come up as a defense to the patent owner’s counterclaim for infringement in the natural course of the litigation, some patent owners felt that a declaratory judgment action for noninfringement still challenges the validity of the patent, if not directly, and should bar IPR.

However, the PTAB appears to have rejected that interpretation, adopting a broad view of its own authority. In two related IPRs filed by Ariosa Diagnostics (IPR2012-00022 and IPR2013-00250), the PTAB concluded that if the validity challenge is not in the complaint, it does not challenge the validity of the patent and does not bar IPR.

Recently, the PTAB revisited and reaffirmed that decision in several related IPRs filed by Hulu, among others (IPR2015-00196, IPR2015-00198, and IPR2015-00209). Prior to the IPRs, Hulu had filed a complaint seeking a declaration that it does not infringe “a valid claim, if any.” The patent owner argued that Hulu put validity at issue with the phrase “if any,” but the PTAB disagreed and instituted the IPR.

Takeaways

These decisions suggest that with careful attention to the rules, a party may be able to both secure its preferred forum with a declaratory judgment action while also holding onto the option to request an IPR. Parties considering this strategy should proceed with caution, though, since the final written decision in the Ariosa IPR is currently on appeal to the Federal Circuit.

District court litigation and IPR have a complex relationship, and each are more effective when they are planned together from the start. Failing to understand how they interact can have severe consequences, and so parties should have counsel experienced with both district court and PTAB rules.

Wolf Greenfield's Post-Grant Blog

Here, the Post-Grant Proceedings Group
at Wolf Greenfield keeps you up to date
on the latest decisions and best practices, and what they mean for you. Learn more about the group and its members.

New Call-to-action
New Call-to-action
New Call-to-action

Subscribe to Email Updates

Recent Posts

Follow Us

This blog is intended to promote thought and debate on developing areas of the law. The opinions, commentary and characterizations of cases provided on this blog are not legal advice and do not represent the opinions of Wolf Greenfield or its clients.