35 U.S.C. § 315(b) bars petitions for an inter partes review that are filed “more than one year after the date on which the petitioner, real party in interest or privy of the petitioner is served with a complaint alleging infringement of a patent.” In Terremark v. Joao Control & Monitoring Systems, the Patent Trial and Appeal Board (PTAB) applied that statutory bar to reject a petition filed one day too late, despite the petitioners’ protestations that the Patent and Trademark Office (PTO) systems were “apparently malfunctioning” and that the time bar for one of the petitioners had not yet expired. Thus, in addition to the important reminder to promptly file an IPR petition, this decision confirms that if the one year bar applies to any single petitioner or real party of interest, that petition will be denied despite the presence of other parties to the petition to which the one year bar does not apply.
Terremark’s Five Arguments and Why PTAB Rejected Them
In this case, the petition was filed by a host of different entities listed as “real parties-in-interest” and as petitioners in the “lead and backup counsel” section. After sorting through the “various lists of petitioning parties,” the PTAB identified six parties as the Petitioner: “Terremark North America LLC, Verizon Communication Inc., Verizon Services Corp., Verizon Business Network Services, Time Warner Cable Inc., iControl Networks, Inc. and Coxcom, LLC.” The PTAB then noted a fact critical to its decision: “Because at least one of the petitioning parties was served with a complaint on June 23, 2014… the statutory bar date for [a petition] is June 23, 2015.” However, the Petitioner’s filing “was accorded a filing date of June 24, 2015,” when the Petitioner “filed, served and paid the fee” for the IPR proceeding—one day after the bar date.
The Petitioner filed a Motion to Recognize June 23, 2015 as the filing date and presented five arguments for why § 315(b) should not bar its challenge. In particular, the Petitioner argued that (1) the PTO’s website “was apparently malfunctioning” on the night of June 23, 2015; (2) its three petitions were filed serially to avoid having to reload exhibits, causing Petitioner to file the third petition (at issue here) after midnight on June 23; (3) the Board has authority to recognize June 23, 2015 as the filing date; (4) there is no prejudice to Patent Owner because Petitioner took “immediate remedial measures”; and (5) one party to the Petition was served a complaint after June 23, 2014, and thus is not affected by the one year time bar. The PTAB rejected all five arguments.
Addressing the first argument, the PTAB noted that their internal investigation revealed that the PTO’s website was functioning properly on June 23. In addition, the PTAB rejected Petitioner’s evidence, consisting of screenshots of the Patent Review Processing System (PRPS) website showing a “pending” status, as not persuasive because the “pending” status is a normal status message that occurs during a typical uploading of a document. The PTAB suggested additional reasons could have caused the uploading malfunctions, such as problems with the Petitioner’s own network connection. Finally, the PTAB found it particularly compelling that, regardless of any uploading problems, the Petitioner failed to serve the Patent Owner or pay the fee in a timely manner.
The PTAB rejected Petitioner’s second argument, that the sequential filing of exhibits caused a delay, as unpersuasive for the simple reason that each Petition required the separate uploading of exhibits. None of the petitions uploaded on June 23 cross-referenced exhibits in other petitions. Instead, each petition required a full set of exhibits to be uploaded.
Regarding Petitioner’s third argument, that the Board has authority to recognize June 23 as the filing date, the PTAB agreed that it has authority in some situations to recognize a different filing date, but noted a few prominent distinctions between the facts of this case and the facts of the eight Board decisions cited by Petitioner in which the PTAB modified a filing date. Specifically, the PTAB distinguished those cited decisions as involving actual malfunctioning of the PRPS website, as verified by PTAB’s own investigation; a petitioner’s timely filing of a petition but neglecting to push “submit” button; or a petitioner filing the petition on time, but with incorrect exhibits. In all the cited decisions, the PTAB noted that none involved the combination at issue in Terremark: failure to timely file, serve and pay the required fee.
Petitioner’s fourth argument, that Patent Owner was not prejudiced, was also rejected as misplaced because the standard for permitting a late filing is not solely dependent on prejudice to the Patent Owner.
Finally, Petitioner’s last argument, that the one year bar did not apply to one of the parties to the petition, was also rejected. In particular, Petitioner noted that CoxCom LLC, one of the parties to the petition, was served with a complaint in August, 2014, such that the one year bar did not prevent it from filing an IPR petition. However, the PTAB held that the presence of one party affected by the one year bar, in this case Verizon Communications Inc., is enough to require all parties to the Petition to meet that one year bar. In other words, if multiple parties join a petition, the earliest date that a party was served a complaint will set the one year bar for filing an IPR for all the parties on the petition.