Luv N' Care v. McGinley (IPR2017-01216): An Unpaid Fee, a Later Filing Date and the Time Bar

A petitioner sued for infringement has one year from service of the complaint to file an inter partes review petition under 35 U.S.C. § 315(b). Luv N’ Care, Ltd. v. Michael L. McGinley, IPR2017-01216 (Paper 13, September 18, 2017), shows how that deadline can be lost when a petition is filed close to it and the fee does not go through. The decision records that it was designated on January 10, 2018, and it is listed here with the Board’s informative decisions. Designations can change, so check the USPTO’s current list of precedential and informative decisions.

Background

The petition challenged McGinley’s U.S. Patent No. 8,636,178. According to the petition, the infringement complaint had been served on March 31, 2016, so the one-year window closed at the end of March 2017.

On March 30, 2017, the petitioner uploaded its petition and exhibits through the Board’s electronic filing system and tried to pay the fee from a deposit account. The payment did not clear. The petitioner discovered the problem later, paid on April 11, 2017, and was given that date as the filing date. It then moved to have the petition assigned the March 30 date, supported by an affidavit saying the account had been funded and that the failure was due to a computer problem.

The Board issued an order to show cause why the motion should not be denied. The petitioner did not respond.

What the Board decided

The Board denied the motion and denied institution.

The fee is a condition of the filing date. Under 35 U.S.C. § 312(a)(1), a petition may be considered only if accompanied by the fee. The rules implement that: under 37 C.F.R. § 42.103(b), no filing date is accorded until full payment is received, and under § 42.106 an incomplete petition receives no filing date. The Board noted that, as held in its precedential Lumentum v. Capella decision, § 312(a) is not jurisdictional, but it found no good cause to excuse the requirement here.

The record contradicted the petitioner’s account. Office records showed the deposit account lacked sufficient funds at the time of the attempted payment; funds were added the next day, but no new payment was attempted then. The receipt the petitioner relied on stated in bold that the payment had not cleared, and the petitioner did not address that warning. There was no persuasive evidence of a system error, and the petitioner offered no explanation for waiting about ten days to pay. Its failure to answer the show-cause order further supported the finding that good cause was lacking.

The petition was time-barred. With an April 11, 2017 filing date, the petition came more than one year after service of the complaint, so § 315(b) barred institution.

Why it matters

The decision turns on routine mechanics, which is why it is useful. A petition is not filed when it is uploaded; it is filed when it is complete, and completeness includes a fee actually received. A deposit account without sufficient funds is treated as no payment. Because § 315(b) is a hard statutory limit, a defect cured even a few days late can end the challenge.

Contrast the result in Lumentum v. Capella, where the Board allowed a correction without losing the filing date because the circumstances were different and the petitioner acted in good faith. For how the one-year bar is measured and how dismissed complaints are treated, see Oracle v. Click-to-Call and discovery and the one-year time period. For petition requirements generally, see the basics of an IPR petition.

The filing system and fee amounts have changed since 2017, so check current USPTO instructions for filing and payment.

Key takeaways

• A petition receives a filing date only when it is complete, including full payment of the fee (37 C.F.R. §§ 42.103(b), 42.106).
• An attempted payment from an underfunded deposit account is not payment.
• The Board will not assign an earlier date without good cause, and ignoring a show-cause order weakens any claim of good cause.
• Filing close to the § 315(b) deadline leaves no room to fix mistakes.