The complex interactions between an Inter Partes Review (“IPR”) before the patent office and a patent infringement action in Federal District Court require a patent challenger to think strategically about the approach they take to challenge a patent.

Judge James Donato’s recent holding in IpLearn-Focus, LLC v. Microsoft Corp. highlighted the effect that District Court litigation can have on an IPR. IpLearn-Focus, LLC v. Microsoft Corp., No. 3-14-cv-00151 (N.D. Cal. 2014). In this case, Judge Donato denied defendant Microsoft’s motion to stay proceedings pending its petition for an IPR on the plaintiff’s patents. The motion to stay was denied largely because, while Microsoft had petitioned the Patent Trial and Appeal Board (“PTAB”), the IPR had not been instituted.

The most interesting part of Judge Donato’s ruling is that he ordered Microsoft to advise the PTAB that Microsoft had taken the position in the District Court that the claims at issue were indefinite.  According to IpLearn-Focus’s briefs, Microsoft had argued that the claims were indefinite in the District Court, but had not made that argument in its IPR petitions, which were filed after Microsoft was informed of IpLearn-Focus’s expert’s claim constructions positions. Microsoft’s decision not to pursue indefiniteness may be justified because indefiniteness under § 112 cannot form the basis for instituting an IPR.[1] The law is clear, however, that parties must disclose to the PTAB the existence of related District Court litigation, as well as relevant information that is inconsistent with a position advanced by the party during IPR proceedings. Here, Microsoft argued before the District Court that the term “volitional” is indefinite, but argued before the PTAB that it would be understood by a person of ordinary skill in the art.

Judge Donato’s order suggests that both IPR petitioners and patentees should think strategically about the positions they take in a District Court action and understand that inconsistencies may be disclosed to the PTAB. The decision may also be useful precedent for a party seeking to compel disclosure to the PTAB of a position taken by an opposing party before the District Court, and provides an additional incentive for patent challengers to petition for an IPR early in the litigation process to minimize the impact of District Court litigation on the IPR.

[1] At least one PTAB decision, however, has terminated an IPR sua sponte where the claims at issue were indefinite. See Blackberry Corp. et al. v. MobileMedia Ideas, LLC, Case IPR2013-00036, Paper 65 (PTAB Mar. 7, 2014). In Blackberry, the PTAB found that because the claims were indefinite they could not be construed and therefore could not be analyzed for obviousness. Unable to rule on validity under § 103, the PTAB terminated the IPR proceeding under 37 C.F.R. § 42.72.