Second Chance Just Ahead on Green Billboard.An expanded, split panel of the PTAB recently decided that it may be appropriate to join the same party’s serially-filed IPR petitions into a single proceeding, even when one such petition would otherwise be time-barred but for the joinder.  Zhongshan Broad Ocean Motor Co., Ltd. v. Nidec Motor Corp., IPR2015-00762, Paper 16 (PTAB Oct. 5, 2015). The decision offers guidance on situations where the PTAB may exercise discretion in consolidating proceedings involving the same petitioner, and broadly interprets the statute to permit joinder of the same parties and issues. 

Due to potential infirmities in a first petition that the Petitioner (Zhongshan) timely filed, it filed a second petition more than one year after it had been served with an infringement complaint.  Ordinarily, the second petition would be time barred. But, here, the Petitioner also filed a motion to join the two proceedings when it filed its second petition. Under 35 U.S.C. § 315(b), the one-year time limitation “shall not apply to a request for joinder under subsection (c).”  In turn, § 315(c) states that “the Director, in his or her discretion, may join as a party to [an] inter partes review any person who properly files a petition under section 311.”  In its original decision, the PTAB denied the Petitioner’s joinder motion on the basis that the Petitioner could not be joined as a party to a proceeding in which it is already a party, and because PTAB refused to exercise its discretion to institute the second IPR.

On rehearing, the expanded panel was confronted with resolving the following issues:

(a)        whether the original panel abused its discretion and should have adopted the broader interpretation of the phrase “join as a party” in § 315(c) as a different panel did in Target Corp. v. Destiny Maternity Corp., Case IPR2014-00508, Paper 28 (February 12, 2015) (non-precedential), and

(b)        whether the PTAB should be bound by the Patent Office’s recent arguments to the Federal Circuit that the PTAB has discretion to join IPR proceedings, even if the petitions are filed by the same party.

The expanded panel concluded that § 315(c) permits joinder of any person who properly files a petition under § 311, including a petitioner who is already a party to the earlier instituted IPR.  The panel further concluded that § 315(c) encompasses both party joinder and issue joinder (including new grounds of unpatentability).

The panel further concluded that § 315(c) encompasses both party joinder and issue joinder (including new grounds of unpatentability).

Thus, the expanded panel agreed with the Petitioner, determining that the panel abused its discretion in originally denying the joinder motion and, thus, granted the Petitioner’s rehearing request, and joinder motion, and also granted the second IPR petition following its consideration of the merits of that petition.

The expanded panel stated that § 315(c) makes clear that the decision to grant joinder is discretionary. Over the Patent Owner’s arguments to the contrary, the panel concluded that joinder is appropriate here because the additional grounds presented in the second petition merely seek to rectify a procedural deficiency regarding a denied ground from the first petition—a ground known to the Patent Owner and, thus, a ground that does not meaningfully prejudice the Patent Owner in its further prosecution of the original IPR. Further, the panel acknowledged the public’s interest in securing a speedy resolution of every proceeding, which interest would be served here by considering in a consolidated proceeding the merits of a previously denied ground now that the procedural deficiency has been rectified.  Further, the panel stated that the schedule for oral argument may be modified upon joinder.

Two of the five judges on the expanded panel dissented, disagreeing with the majority’s interpretation of “any person” in § 315(c), stating that “any person” must only be one who can be “joined as a party.”  According to the dissent, this means that the Petitioner (Zhongshan), which was already a party in the proceeding, could not be joined. The dissent also disagreed with the majority’s interpretation that § 315(c) encompasses joinder of issues, especially when Target Corp. made clear that the language of the statute fails to specifically mention the joinder of issues.  Finally, the dissent acknowledged the legislative history and the concern therein over potential harassment of patent owners.  The one-year statutory bar provision of § 315(b), said the dissent, serves to limit the harassment potential of IPRs and the majority’s decision frustrates that purpose.  Granting joinder, according to the dissent thus offers the Petitioner an “end-run around a statutory bar” that is supported neither by legislative history nor the statute.

The issue of joinder of parties is currently the subject of two appeals to the Federal Circuit. See Yissum v. Sony, Nos. 15-1342, -1343. Oral argument in those appeals is scheduled to occur December 7, 2015.  Until that court addresses the issue, parties should take into account the guidance offered in the expanded panel’s decision.