Expect Already-Instituted IPRs & PGRs to Move Forward in a Time of COVID-19-Related Delays

April 03, 2020

Key Takeaways

  • On March 31, 2020, PTO Director Andrei Iancu ordered the PTAB to grant any requests for extensions for pre-institution briefing schedules for any COVID-19-related delays.
  • Significantly, the March 31 order does not require the PTAB to grant requests for extensions of deadlines in already-instituted IPRs or PGRs.
  • PTAB Reviews are, by design, more conducive to operation during this time of government-enforced social distancing than district court jury or bench trials. 
    • Hearings and testimony, even cross examination, can be conducted remotely.
    • As of March 13, 2020, all PTAB oral hearings must be conducted remotely until further notice.
  • Since the onset of the crisis, some federal district courts appear more willing to grant contested motions to stay cases in favor of IPRs even before an IPR has been instituted.

1. The PTO is Requiring Extensions for Most Patent Deadlines, Including Pre-Institution Briefing, but not for Already-Instituted IPRs & PGRs

Section 12004(a) of the CARES Act, which was enacted on March 27, 2020, authorized the Director of the PTO to “toll, waive, adjust, or modify” any timing deadline established under Title 35 of the United States Code (the “Patent Act”), including any deadline created by the America Invents Act, during (and for up to 60 days after the conclusion of) the COVID-19 national emergency declared by the President on March 13, 2020. Exercising this authority, on March 31, 2020, PTO Director Andrei Iancu issued an order (the “March 31 Order”) that requires the PTAB to extend filing deadlines that precede its decision on whether to institute an Inter Partes Review (“IPR”) or Post-Grant Review (“PGR”).  See March 31 Order, available at https://www.uspto.gov/sites/default/files/documents/Patents%20CARES%20Act.pdf.

The March 31 Order requires the PTAB to provide a 30-day extension of time for a “patent owner preliminary response” in an IPR or PGR “or any related responsive filings,” upon a request from a party affirming that “a filing . . . was or may be delayed due to the COVID-19 outbreak.” March 31 Order at 3. In cases where the PTAB extends the pre-institution briefing, the March 31 Order further authorizes the PTAB to extend the 3 month deadline from the time of the petition, or receipt of the patent owner’s preliminary response, to decide whether to institute an IPR or PGR. Id. The March 31 Order expansively defines a delay “due to the COVID-19 outbreak” to include any circumstance where the requesting party was “personally affected by the COVID-19 outbreak, including, without limitation, through office closures, . . . inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances, such that the outbreak materially interfered with timely filing . . . .” Id. at 2.
In contrast, the March 31 Order does not require the PTAB to extend post-institution filing deadlines in IPR or PGR proceedings.  Rather, the March 31 Order merely states “[f]or all other situations, a request for an extension of time where the COVID-19 outbreak has prevented or interfered with a filing before the Board can be made by contacting the PTAB . . . .” Id. at 3. Importantly, the March 31 Order does not authorize the PTAB to extend the deadlines for the PTAB to issue a final decision in an instituted IPR or PGR. By regulation (37 CFR § 42.100 & 37 CFR § 42.200), the PTAB has one year from the time of institution to issue a final written decision, although that time can be extended for up to six months for “good cause” by the Chief Administrative Patent Judge.

2. By Design, the PTAB Can Conduct Remote Trials in IPRs & PGRs More Readily Than District Courts Can in Patent Litigations

PTO Director Iancu’s decision to give the PTAB discretion to move IPR and PGR trials forward without delay may be explained by the fact that while these trials were not designed with the COVID-19 pandemic in mind, their design allows them to move forward notwithstanding the current social distancing restrictions. There is no need for witnesses to appear in person to testify in IPRs. Even before the COVID-19 outbreak, (a) direct testimony in IPR proceedings was submitted exclusively in writing through expert declarations, and (b) APJs frequently “attended” hearings by teleconference. Although cross-examination of witnesses traditionally has been done through in-person depositions, the rules allow those depositions to take place remotely. See 37 CFR § 42.53(a) (“Parties may agree to video-recorded testimony. . . . In addition, the Board may authorize or require live or video-recorded testimony.”). And although the rules allow live testimony to be presented in PTAB hearings, it is permitted only “under very limited circumstances,” such as where the PTAB “considers the demeanor of a witness critical to assessing credibility.”  See, e.g., K-40 Elecs., LLC v. Escort, Inc., Case No. IPR2013-00203, Paper 34 at 2 (PTAB May 21, 2014) (designated as precedential on Mar. 18, 2019).  Moreover, PTAB trials in IPRs and PGRs are limited in time—“ordinarily provid[ing] for an hour of argument per side for a single proceeding,” making them more amenable to remote hearings. See PTAB Trial Practice Guide August 2018 update at 19, available at https://www.uspto.gov/sites/default/files/documents/2018_Revised_Trial_Practice_Guide.pdf.

As a result, in response to the pandemic, Director Iancu was able to order that all hearings in IPRs “will be conducted remotely by video or telephone” without substantially disrupting existing procedures.  See USPTO update on in-person meetings (Mar. 13, 2020), available at https://www.uspto.gov/about-us/news-updates/uspto-update-person-meetings.  
District court trials, by contrast, involve much more extensive witness testimony and can last far longer than PTAB trials, and therefore are far more challenging to conduct remotely.  That is particularly true for jury trials, which as a practical matter simply cannot be conducted consistent with the existing social distancing directives in place.  Thus, while many courts have ordered that all oral arguments and other hearings be conducted remotely for the duration of the crisis, they have generally postponed all upcoming jury trials, and most if not all bench trials, to a future date.  See, e.g., In Re: Coronavirus/Covid-19 Pandemic, 1:20-mc-00172-CM, ECF 1 at 2 (S.D.N.Y. Mar. 27, 2020) (ordering “that the conduct of jury trials be and hereby is suspended until June 1, 2020”); E.D. Tex. General Order 20-03 at 1 (Mar. 16, 2020) (“All jury trials (criminal and civil) scheduled to begin on any date from this date through May 1, 2020, are continued, to a date to be reset by each presiding judge.”).

3. District Courts are Increasingly Granting Motions to Stay Cases Even Before IPR Institution  

The COVID-19 pandemic appears to be motivating federal district courts to stay litigation in favor of IPRs, even where an IPR has been requested but not yet instituted. Over the past decade, district courts would frequently stay litigation in favor of instituted IPRs, but courts rarely would grant a stay where an IPR petition had not yet been granted. In March 2020, two contested motions to stay pending IPRs were granted, even though the IPR had not been instituted, and in spite of the “reluctan[ce]” by courts “to stay proceedings before the PTO has instituted IPR.” NST Global, LLC v. Sig Sauer Inc., 1-19-cv-00792, ECF 73 at 9 (D.N.H. Mar. 24, 2020); see also Weserve Drone, LLC v. SZ DJI Tech. Co., Ltd., 2-19-cv-04382, ECF 54 (C.D. Cal. Mar. 17, 2020).  

On March 30, 2020, the parties in one case in the Northern District of California stipulated to a stay pending IPR even though there was no institution decision, noting the joint stipulation was made “in light of the limitations on proceedings in the interim created by the COVID-19 pandemic and restrictions.” Impinj, Inc. v. NXP USA, Inc., 4-19-cv-03161, ECF 62 at 1 (N.D. Cal. March 30, 2020). The Court granted the motion that day. Id., ECF 63

The recent move to grant stays in favor of IPRs not yet instituted, however, has not been embraced by all courts. During March 2020, motions to stay litigation in favor of IPRs that had not been instituted were denied in the Eastern District of Texas and the Districts of Delaware, Kansas, and Massachusetts. See Novozymes N.A., Inc. v. Danisco US Inc., 1-19-cv-01902, ECF 35 (D. Del. Mar. 31, 2020); No Spill, Inc. v. Scepter Canada, Inc., 2-18-cv-02681, ECF 93 (D. Kan. Mar. 31, 2020); Uniloc 2017 LLC v. Samsung Elecs. Am., Inc., 2-19-cv-00259, ECF 55 (E.D. Tex. Mar. 24, 2020); Parallel Network Licensing, LLC v. RamQuest Software , Inc., 4-19-cv-00487, ECF 46 (E.D. Tex. Mar. 13, 2020); Plastipak Packaging, Inc. v. Ice River Springs Water Co., 1-19-cv-11193, ECF. 99 (D. Mass. Mar. 19, 2020).
Nevertheless, based on a limited data set, since the onset of the crisis, some federal district courts appear more willing to grant contested motions to stay cases in favor of IPRs even before an IPR has been instituted.