Ariosa v. Isis (IPR2012-00022): An Incomplete-Petition Notice and the § 315(a)(1) Bar

Ariosa Diagnostics v. Isis Innovation Limited, IPR2012-00022, concerned U.S. Patent 6,258,540. Two early papers in the proceeding are covered here. The first is a Board notice of September 27, 2012, finding the petition incomplete. The second is Paper 20, entered February 12, 2013, which rejected the patent owner’s argument that Ariosa was barred from seeking inter partes review at all.

A later order in the same case, setting guidelines for a foreign-language deposition, is covered separately.

Background

The notice. Ariosa filed its petition on September 17, 2012. On review, the Board’s staff found that four exhibits did not match the exhibit list. Two exhibits listed as “Intentionally Left Blank” had been uploaded as duplicates of other exhibits. The petition also lacked the petitioner’s service information and did not clearly designate lead and back-up counsel.

The standing challenge. Before filing its petition, Ariosa had sued Sequenom, the exclusive licensee, for a declaratory judgment that it did not infringe the ‘540 patent. Sequenom counterclaimed for infringement, and Ariosa answered by raising invalidity as an affirmative defense. Isis argued that this amounted to Ariosa filing “a civil action challenging the validity” of the patent, which under 35 U.S.C. § 315(a)(1) bars institution.

What the Board decided

The incomplete petition

The notice treated the exhibit problems as a deficiency preventing a filing date. Under 37 C.F.R. § 42.106(b), Ariosa had one month to correct it; if corrected, the petition would receive the filing date of the corrected submission, and if not, it would be dismissed. The missing service and counsel information under 37 C.F.R. § 42.8(b)(3) and (b)(4) was treated separately as a defect, also to be corrected within one month.

The § 315(a)(1) bar

The Board held that Ariosa was not barred.

• “Filed a civil action” means filing a complaint. Looking to the Federal Rules of Civil Procedure, under which a civil action is commenced by filing a complaint, the Board read § 315(a)(1) to refer to the complaint that starts the case. Defenses raised in an answer are not the filing of a civil action.
• A non-infringement action does not challenge validity. Ariosa’s complaint sought a declaration of non-infringement only.
• A defense differs from a counterclaim. Relying on Cardinal Chemical Co. v. Morton International, Inc. (1993), the Board explained that an invalidity counterclaim is an independent claim that survives a finding of non-infringement, while an affirmative defense is tied to the infringement claim. Section 315(a)(3) says an invalidity counterclaim does not trigger the bar. Reading the bar not to reach affirmative defenses is consistent with that exception, not contrary to it.
• No harassment concern. The Board pointed to legislative history indicating Congress wanted accused infringers to keep their choice of venue, and noted that a declaratory judgment plaintiff must still show an actual case or controversy.

Why it matters

For petition filing, the notice shows how unforgiving early filing review can be. Mismatched exhibits alone delayed the filing date, and a later filing date can matter where the one-year bar of § 315(b) is close. See the basics of an IPR petition. Current practice on filing-date review should be checked with the Board.

For standing, Paper 20 marks the line § 315(a) draws. A petitioner or real party in interest that first files a suit challenging validity cannot later seek IPR. Seeking a declaration of non-infringement, or defending against an infringement claim with an invalidity defense, does not have that effect. Section 315(a)(2) separately provides that a civil action challenging validity that the petitioner files on or after the petition date is automatically stayed until the patent owner moves to lift the stay, files an infringement action or counterclaim, or the petitioner moves to dismiss. For how threshold requirements differ across proceedings, see starting an AIA post-grant proceeding.

Key takeaways

• An exhibit list that does not match the uploaded exhibits can keep a petition from receiving a filing date under § 42.106(b).
• Missing service information and counsel designations under § 42.8(b) are defects to be corrected, not grounds for denying a filing date.
• A declaratory judgment action for non-infringement is not a civil action challenging validity under § 315(a)(1).
• Raising invalidity as an affirmative defense does not trigger the bar, consistent with the counterclaim exception in § 315(a)(3).