On June 19, 2015 the District Court for the Middle District of Florida denied Defendants’ motion in limine requesting the exclusion of evidence relating to a denial of an IPR institution from the Patent Trial and Appeal Board (Stoneeagle Services, Inc. v. Pay-Plus Solutions, Inc. et al, 8-13-cv-02240 (FL MD)). This decision contradicts recent decisions in other jurisdictions in which the results of IPR decisions have not been allowed in District Court actions (see Interdigital Commc’ns, Inc. v. Nokia Corp., No. 13-10-RGA,2014 WL 8104167 (D. Del. Sept. 19, 2014) and Ultratec, Inc. et al. v. Sorenson Communications, Inc., No. 3:13-CV-00346 (W.D. Wisc. Oct. 8, 2014 ).
In the present case, Defendant Pay-Plus Solutions had previously filed a Petition for Inter Partes Review and a request for Covered Business Method Patent Review of U. S. Patent RE43,904, a reissue of U.S. 7,792,686, directed to a method of facilitating payment of health care benefits on behalf of a payer comprising the step of electronically transmitting a stored-value card account payment of the authorized benefit amount concurrently with an explanation of benefits (IPR2014-01414). Petitioner (Defendant) argued that the claims were unpatentable as obvious over the combination of several references. In its denial of institution (3/4/15), the PTAB concluded that “Petitioner fails to demonstrate a reasonable likelihood of prevailing in showing the un-patentability of any of the challenged claims.”
Defendants argued in support of the motion in limine to exclude the PTAB decision that Patent Office procedures have distinctly different standards, parties, purposes, and outcomes compared to civil litigation (In re Swanson, 540 F.3d 1368, 1377 (Fed. Cir. 2008)) and that different results between those forums and the current forum may be entirely reasonable (citing Ethicon, Inc. v. Quiqq, 849 F. 2d 1422, 1428 (Fed. Cir. 1998)). Defendants also cited to several cases that purported to support the premise that “numerous district courts have [ ] excluded testimony, evidence, and argument regarding Patent Office proceedings,”
For example, two recent District Court cases have denied entry of evidence from PTAB decisions to be before the jury. In Interdigital Commc’ns, Inc. v. Nokia Corp., No. 13-10-RGA,2014 WL 8104167, at *1 (D. Del. Sept. 19, 2014) the Court excluded evidence regarding a similar PTAB decision denying IPR review in view of the “marginal relevance” and “significant risk of confusion of the issues” and in Ultratec, Inc. et al. v. Sorenson Communications, Inc., No. 3:13-CV-00346 (W.D. Wisc. Oct. 8, 2014), the Court held that “because of the different standards, procedures and presumptions applicable to IPR proceedings, evidence concerning the proceedings is irrelevant and highly prejudicial to the jury’s determination of the validity of the patents. The Ultratec court did, however, allow some evidence to be considered, outside the presence of the jury.
The Court in the present case agreed with Petitioner that [U]nlike the situation in Interdigital Comm., Inc. v. Nokia, Corp., 690 F.3d 1318 (Fed. Cir. 2012), the petition for Inter Partes Review of the ‘904 patent was instituted by [a defendant], and therefore the denial of the petition on the basis that there is no likelihood of success by Defendants is relevant to the present case.
The Court held that the evidence of the PTAB proceedings should be allowed in the District Court case, and noted that the Court can and will instruct the jury on the appropriate law to apply to this case and can, if requested, further instruct the jury that different standards apply to these various proceedings. This holding suggests that evidence of IPR/PTAB decisions will not necessarily be viewed as prejudicial and uniformly denied entry into District Court cases as it appeared from other recent cases, but entry of PTAB decisions may now be available as evidence a case by case basis.