Federal Circuit Holds That Same Party and New Issue Joinder Are Not Permitted in IPR Proceedings

On March 18, 2020, a Federal Circuit panel (Judges Prost, Plager, and O’Malley), in Facebook, Inc. v. Windy City Innovations, LLC, No. 18-1400, held that 35 U.S.C. 315(c) does not permit a petitioner in an inter partes review (IPR) proceeding at the Patent Trial and Appeal Board (PTAB) to engage in “same party” and “new issue” joinder. These joinder procedures allowed an IPR petitioner to file a second, otherwise time-barred IPR petition challenging new patent claims and alleging new grounds, and to join that second IPR with an already instituted IPR proceeding involving the same petitioner. 

The PTAB, in a 2019 decision designated precedential by its Precedential Opinion Panel (POP)—Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019)—had previously indicated that these joinder procedures were permissible in limited circumstances. The Federal Circuit’s March 18, 2020 Facebook decision abrogates the PTAB’s 2019 Proppant decision, and moreover indicates that the Federal Circuit will accord no deference to POP opinions on matters of statutory interpretation.

Background

In the Facebook proceedings, patent owner Windy City sued Facebook on June 3, 2015 in district court for infringement of four patents, thereby imposing on Facebook, pursuant to 35 U.S.C. 315(b), a June 3, 2016 deadline—or time bar—to file an IPR petition against those patents at the PTAB. Facebook timely filed such an IPR petition at the PTAB on June 3, 2016, challenging some, but not all, of the claims of the four asserted patents.

In October 2016, Windy City identified the specific patent claims it was asserting against Facebook in district court litigation. Because some of the asserted claims were not included in Facebook’s first IPR petition, Facebook prepared two additional IPR petitions challenging the additional asserted claims and moved to have those petitions joined with the first IPR proceeding under 35 U.S.C. 315(c), which allows joinder under certain circumstances, notwithstanding the existence of a § 315(b) time bar. The PTAB granted Facebook’s joinder motion. In a final written decision addressing all claims in the joined IPR proceedings, the PTAB held that Facebook had shown that some, but not all, of those claims were obvious. Facebook and Windy City both appealed.

The Federal Circuit Decision

On appeal, the Federal Circuit agreed with Windy City’s arguments that § 315(c) does not permit (i) an IPR petitioner to join an IPR proceeding to which it is already a party (i.e., “same party” joinder) and (ii) new issues to be added to a pending IPR proceeding (i.e., “new issue” joinder). As to “same party” joinder, the Federal Circuit held that the plain language of § 315(c)—which states that the PTAB Director may at his or her discretion “join as a party…a person” to an instituted IPR proceeding—does not allow the PTAB to join a party who already is a party to an instituted IPR proceeding, explaining that “[i]t would be an extraordinary usage of the term ‘join as a party’ to refer to persons who were already parties.” As to “new issue” joinder, the Federal Circuit explained that “§ 315(c) authorizes joinder of a person as a party, not ‘joinder’ of two proceedings” and thus that § 315(c) “does not permit the joined party to bring new issues from the newer proceeding into the existing proceeding.” The Federal Circuit further asserted that its reading of § 315(c) as limited to the joinder of parties was enforced by § 315(d), which separately addresses the consolidation of “proceedings.”

The Federal Circuit thus vacated the PTAB’s final written decisions with respect to the claims challenged in Facebook’s time-barred, post-June 2016 IPR petitions. The Federal Circuit affirmed the PTAB’s determinations with respect to the remaining claims on appeal.

The Federal Circuit Views on Proppant and POP

As to the PTAB’s prior decisions interpreting § 315(c), including the 2019 Proppant decision, the Federal Circuit held that, “[b]ecause we conclude that the clear and unambiguous language of § 315(c) does not authorize same-party joinder or joinder of new issues, we need not defer to the PTO’s interpretation of § 315(c),” and concluded that the Proppant decision “is incorrect under the unambiguous meaning of the statute.” 

Judges Prost, Plager, and O’Malley further included an “additional views” section in which they opined that, even if § 315(c) were deemed ambiguous, “we would find that no deference is due to the POP opinion in Proppant.” The Federal Circuit explained that “[w]e apply Chevron deference to an agency’s implementation of a particular statutory provision only when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.” The Federal Circuit noted that the America Invents Act—the statute governing IPR proceedings—did not include “any congressional authorization, for either the [PTAB] Director or the Board, to undertake statutory interpretation through POP opinions. Thus, just as we give no deference to nonprecedential Board decisions, we see no reason to afford deference to POP opinions.”