101 PTAB Challenges Might Come Back To Haunt Your Parallel Litigation

Leveraging PTAB 101 Determinations in Parallel Litigation

Covered Business Method (CBM) challenges have fallen out of favor with petitioners. This is due to a number of factors, not the least of which is the narrowing of CBM jurisdiction after Unwired Planet. Of course, this 101 challenge option will go away shortly as CBM will sunset in 2020. But, as more patents become eligible for Post Grant Review (PGR), the ability to challenge patent eligibility under 35 U.S.C. § 101 is slowly expanding to all patents.

Given the expanding option to file a PGR to challenge patent eligibility under 101 alongside art-based challenges, is it better to do so (if possible within the 9-month PGR window), or to simply wait out the 9-month window for Inter Partes Review (IPR)?

While 101 challenges can be especially lethal post-Alice, parallel tracking your 101 case at the Patent Trial & Appeal Board (PTAB) is not without its risks.

A growing number of district courts are now weighing in how CBM 101 determinations of the PTAB can impact the calculus under 35 U.S.C. § 101. These decisions may presage the PGR landscape to come. Two CBM decisions in particular discussed what weight should be given to a CBM institution with respect to requests for attorney's fees at the end of a case.

In Global Cash Access, Inc. v. NRT Technology Corp., No. 2:15-cv-00822, 2018 WL 4566678 (D. Nev. Sept. 24, 2018) ( here), the court determined that denied CBM institutions weigh against an exceptional case finding. After the defendant invalidated the asserted patent under 35 U.S.C. § 101 on a motion to dismiss, it moved for attorneys' fees. The Court declined to find the case exceptional, in part because the Board had refused to institute the defendant's two CBM petitions. The Court noted that even though it found the claims invalid, "the fact that another tribunal specialized in patent law declined to institute a proceeding that could have found the [asserted patent] invalid does tend to show that [the plaintiff's] position was not objectively baseless." Global Cash Access, Inc. v. NRT Tech. Corp., No. 2:15-cv-00822, ECF No. 102 (D. Nev. Sept. 24, 2018) (Du).

Another court dealt with the counterpoint to the above scenario - when the CBM petition is instead granted institution. In Credit Card Fraud Control Corp. v. Maxmind, Inc., No. 3:14-CV-3262-M, 2016 WL 3355163 (N.D. Tex. Apr. 7, 2016) ( here), the Court found that a PTAB Decision to institute CBM review is not an automatic...