Apple Inc. v. Iancu

CourtDistrict Court, N.D. California
DecidedFebruary 5, 2021
Docket5:20-cv-06128
StatusUnknown

This text of Apple Inc. v. Iancu (Apple Inc. v. Iancu) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Apple Inc. v. Iancu, (N.D. Cal. 2021).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 APPLE INC., et al., 8 Case No. 5:20-cv-06128-EJD Plaintiffs, 9 ORDER DENYING MOTION TO v. INTERVENE AND MOTION FOR 10 ENTRY OF A PRELIMINARY ANDREI IANCU, INJUNCTION 11 Defendant. Re: Dkt. Nos. 28, 34 12

13 In this suit challenging a precedential rule adopted by the Director of the U.S. Patent and 14 Trademark Office (“PTO”), Proposed Plaintiffs-In-Intervention US Inventor, 360 Heros, Inc., 15 Larry Golden, World Source Enterprises, LLC, Dareltech LLC, Tinnus Enterprises, Clearplay, 16 Inc., and E-Watch, Inc. (collectively “Proposed Intervenors”) move the Court to intervene. The 17 Proposed Intervenors request leave to intervene as of right, or for permissive intervention in the 18 alternative. Plaintiffs Apple Inc., Cisco Systems, Inc., Google LLC, and Intel Corporation 19 (collectively “Plaintiffs”) and defendant Andrei Iancu (“Director”) both oppose the motion. Dkt. 20 Nos. 41 (“Plaintiffs Opp.”), 59 (“Director Opp.”). After careful review, the Court finds that the 21 Proposed Intervenors have failed to satisfy the requirements in order to intervene as of right, and 22 the Court declines the request for permissive intervention. The motion therefore is DENIED. 23 I. BACKGROUND 24 A. Leahy-Smith America Invents Act and Inter Partes Review 25 Recognizing that the country’s patent system was not adequately serving either patent 26 owners or accused infringers, Congress passed the America Invents Act (“AIA”) on September 16, 27 Case No.: 5:20-cv-06128-EJD 1 2011. The AIA was designed to establish a more efficient and streamlined patent system that 2 would improve patent quality and limit unnecessary and counterproductive litigation costs. H.R. 3 Rep. No. 112-98, at 39-40, 112th Cong., 1st Sess. (2011) (“House Report”). To address issues 4 faced by both patent owners and infringement defendants and “improve patent quality,” the AIA 5 revamped the post-grant review process. House Report at 40. Central to the AIA was the creation 6 of Inter Partes Review (“IPR”) conducted by the Patent Trial and Appeal Board (“PTAB”). This 7 proceeding is meant to provide “an administrative process in which a patent challenger may ask 8 the [PTO] to reconsider the validity of earlier granted patent claims.” Complaint (“Compl.”), Dkt. 9 No. 1 ¶ 28 (citing Thryv, Inc. v. Click-To-Call Techs., LP, 140 S. Ct. 1367, 1370 (2020); 35 U.S.C. 10 § 311 et seq.). IPR was intended to provide an alternative to litigation over the validity of 11 previously granted patents by “establish[ing] a more efficient and streamlined patent system that 12 [would] improve patent quality and limit unnecessary and counterproductive litigation costs.” 13 Compl. ¶ 28 (citing House Report at 39-40). 14 The IPR process begins when a party files a petition to institute IPR with the PTO. Id. ¶ 15 32. The AIA permits a party accused of infringement to file a petition for IPR with regard to the 16 same patent claims that are being asserted in a parallel patent infringement suit, so long as the 17 petition is filed within “1 year after the date on which the petitioner . . . is served with a complaint 18 alleging infringement of the patent.” Id. (citing 35 U.S.C. § 315(b)). Furthermore, the AIA 19 specified several requirements that must be met for the Director to grant petition for, or “institute,” 20 IPR proceedings. Compl. ¶ 35. Primarily, the Director may institute IPR only when he 21 determines that “there is a reasonable likelihood that the petitioner would prevail with respect to at 22 least one of the claims challenged in the petition.” Id. (citing 35 U.S.C. § 314(a)). However, the 23 decision to accept or deny a petition is a matter committed to the Director’s discretion and the AIA 24 enumerates discretionary grounds on which the Director may decline to institute IPR even if 25 preconditions are met. Id. (citing 35 U.S.C. §§ 311(c)(1)-(2), 312(a)(1)-(5), 315(a)(1)-(2)). 26 Additionally, the Director has delegated authority to the PTAB to decide whether to grant 27 Case No.: 5:20-cv-06128-EJD 1 or deny institution of IPR on discretionary grounds and also works with the PTAB to designate 2 certain IPR decisions as precedential. Id. ¶ 36. “[B]y default,” the PTAB’s decisions in IPR 3 proceedings have no precedential force in future cases. Id. ¶ 43 (quoting Patent Trial and Appeal 4 Board, Standard Operating Procedure 2 (Rev. 10) (“SOP-2”), at 3, 8-9 (Sept. 20, 2018)). The 5 PTO, however, has established a procedure for designating select PTAB decisions as 6 “precedential.” Id. ¶ 44 (citing SOP-2 at 1-2, 8-12). Decisions designated as precedential are 7 “binding” on the PTAB “in subsequent matters involving similar factors or issues.” Id. (citing 8 SOP-2 at 11). Under this procedure, the Director decides whether to designate a PTAB decision 9 as precedential. Id. ¶ 45 (citing SOP-2 at 11). Although members of the public may nominate a 10 PTAB decision for designation as precedential, the designation procedure otherwise does not 11 allow for public notice of, or any opportunity for public comment on, whether a PTAB decision 12 should be designated as precedential. Id. ¶ 46 (citing SOP-2 at 8-11). 13 B. The Instant Litigation 14 On August 31, 2020, Plaintiffs filed the suit at bar against the Director. The suit 15 challenges the PTO’s authority to reject petitions for IPR based on two decisions designated as 16 precedential by the Director. The decisions, NHK Spring v. Intri-Plex Techs. No. IPR2018-00752, 17 Paper 8, at 20 (P.T.A.B. Sept. 12, 2018) and Apple Inc. v. Fintiv, Inc., No. IPR2020-00019, Paper 18 11 (P.T.A.B. Mar. 20, 2020), articulated an additional standard, under which the PTAB may 19 decline to institute IPR based on a number of factors (“NHK-Fintiv factors”) related to the 20 existence of a parallel district court proceeding on the same challenged patents. Compl. ¶¶ 37-41. 21 The PTAB may decline to institute IPR based on the NHK-Fintiv rule even if the petition was 22 timely filed within the one-year deadline set by 35 U.S.C. § 315(b). Id. ¶ 37. 23 Plaintiffs have raised three claims against the Director’s decision to designate the NHK- 24 Fintiv factors as a precedential rule: (1) the NHK-Fintiv rule is contrary to the policy and text of 25 the AIA; (2) the rule is arbitrary and capricious as the factors are vague and have already led to 26 unjustifiable and unpredictable disparities among similarly-situated IPR petitioners; and (3) the 27 Case No.: 5:20-cv-06128-EJD 1 rule is otherwise procedurally invalid because it was not adopted through notice-and-comment 2 rulemaking required by both the AIA and the Administrative Procedure Act (“APA”). Id. ¶¶ 78- 3 91. They ask that the NHK-Fintiv rule be declared unlawful and for the Court to permanently 4 enjoin the Director and the PTAB from relying on the NHK-Fintiv rule or the non-statutory factors 5 it incorporated to deny institution of IPR. Compl., Relief Requested ¶ 3. 6 C. Proposed Intervenors’ Motions 7 The instant motion to intervene was filed on September 14, 2020, by US Inventor, 360 8 Heros, Inc., Larry Golden, World Source Enterprises, LLC, Dareltech LLC, Tinnus Enterprises, 9 Clearplay, Inc., and E-Watch, Inc. US Inventor is a non-profit corporation whose aim is to foster 10 innovation through advocacy, education, and public outreach on matters of importance to 11 individual inventors and small businesses.

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Apple Inc. v. Iancu, Counsel Stack Legal Research, https://law.counselstack.com/opinion/apple-inc-v-iancu-cand-2021.