`Tel: 571-272-7822
`
`Paper 10
`Entered: February 27, 2018
`
`UNITED STATES PATENT AND TRADEMARK OFFICE
`
`BEFORE THE PATENT TRIAL AND APPEAL BOARD
`
`COLAS SOLUTIONS INC.,
`Petitioner,
`v.
`BLACKLIDGE EMULSIONS, INC.,
`Patent Owner.
`
`Case IPR2018-00243
`Patent 7,503,724 B2
`
`
`
`
`
`
`
`
`
`Before MITCHELL G. WEATHERLY, JAMES A. TARTAL, and
`TIMOTHY J. GOODSON, Administrative Patent Judges.
`WEATHERLY, Administrative Patent Judge.
`
`DECISION
`Denying Institution of Inter Partes Review; Denying Joinder
`35 U.S.C. § 315
`
`INTRODUCTION
`I.
`Petitioner Colas Solutions Inc. (“Colas”) filed a Petition (Paper 1,
`“Pet.”) to institute an inter partes review of claims 1–33 of U.S. Patent No.
`7,503,724 B2 (Ex. 1001, “the ’724 patent”). Along with its Petition, Colas
`filed a Motion for Joinder requesting that we join Colas as a party to Asphalt
`Products Unlimited, Inc. v. Blacklidge Emulsions, Inc., Case IPR2017-
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`01241. Paper 3 (“Mot.” or “Motion”). Blacklidge Emulsions, Inc. (“Patent
`Owner”) filed an Opposition to the Motion for Joinder (Paper 7, “Opp.”),
`and Colas filed a Reply (Paper 8, “Reply”). After receiving our
`authorization, Patent Owner filed a Sur-Reply. Paper 9 (“Sur-Reply”).
`For the reasons discussed below, we deny both the Motion for Joinder
`and the Petition to institute an inter partes review.
`II. PROCEDURAL BACKGROUND
`A brief summary of how this case fits into the context of certain
`related proceedings is helpful to understand the issues relevant to this
`Decision.
`On May 12, 2016, Colas filed a petition for inter partes review of the
`’724 patent in Case IPR2016-01031 (“the -1031 IPR”). See Pet. 3. The next
`day, on May 13, 2016, Colas filed a Complaint for Declaratory Judgment of
`Invalidity and Unenforceability in district court, in which it challenged the
`validity of the ’724 patent. See id. at 4; Ex. 2001, 6–7, 17; Colas Solutions,
`Inc. v. Blacklidge Emulsions, Inc., Case No. 1:16-cv-00548 (S.D. Ohio)
`(“the DJ Action”). Consistent with the automatic stay provision of
`35 U.S.C. § 315(a)(2), the DJ Action was stayed and, according to Colas, it
`remains stayed. Pet. 4; Mot. 5; see also Sur-Reply 2 (Patent Owner
`asserting that the DJ Action “is still pending”). We instituted trial in
`the -1031 IPR on November 9, 2016. See -1031 IPR, Paper 7. On
`November 2, 2017, we issued a Final Decision in the -1031 IPR in which we
`determined that Colas did not show by a preponderance of the evidence that
`any claim of the ’724 patent is unpatentable. See -1031 IPR, Paper 38.
`Colas has appealed our Final Decision to the U.S. Court of Appeals for the
`
`2
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`Federal Circuit. See -1031 IPR, Paper 39; Colas Solutions, Inc. v. Blacklidge
`Emulsions, Inc., Case No. 18-1359xxx (Fed. Cir.).
`While Colas’s -1031 IPR was running its course, the Board was
`presented with another challenge to the ’724 patent. On April 4, 2017,
`Asphalt Products Unlimited (“APU”) filed a petition for inter partes review
`of the ’724 patent in IPR2017-01241 (“the -1241 IPR”). Pet. 4. Colas
`represents that it is unrelated to APU, and APU echoed that representation in
`its petition. Id.; -1241 IPR, Paper 1, 3. The petition in the -1241 IPR
`presented different challenges to the ’724 patent than those presented in the -
`1031 IPR. See -1241 IPR, Paper 1, 3, 6–7. On October 24, 2017, we
`instituted trial in the -1241 IPR. See -1241 IPR, Paper 23. The -1241 IPR
`remains pending.
`On November 24, 2017, Colas filed its Petition and Motion for
`Joinder in this case. Colas states that its Petition relies on the same alleged
`grounds of unpatentability as presented in APU’s petition in the -1241 IPR.
`See Mot. 4.
`
`III. LEGAL STANDARDS
`Section 315 of Title 35 creates two bars to institution of inter partes
`review. The first bar, which is set forth in § 315(a)(1), applies if the
`petitioner filed a civil action challenging the patent’s validity before filing
`the petition. See 35 U.S.C. § 315(a)(1) (“An inter partes review may not be
`instituted if, before the date on which the petition for such a review is filed,
`the petitioner or real party in interest filed a civil action challenging the
`validity of a claim of the patent.”); see also 37 C.F.R. § 42.101(a). The
`second bar, set forth in § 315(b), applies if the petitioner was served with a
`complaint for patent infringement more than a year before the petition was
`
`3
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`filed. See 35 U.S.C. § 315(b) (“An inter partes review may not be instituted
`if the petition requesting the proceeding is filed more than 1 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 the patent.”); see also
`37 C.F.R. § 42.101(b).
`Section 315 also conveys to the Director discretion to join a party to
`an existing proceeding as follows:
`(c) Joinder.—If the Director institutes an inter partes review, the
`Director, in his or her discretion, may join as a party to that inter
`partes review any person who properly files a petition under
`section 311 that the Director, after receiving a preliminary
`response under section 313 or the expiration of the time for filing
`such a response, determines warrants the institution of an inter
`partes review under section 314.
`The Board’s rules specify that “[a]ny request for joinder must be filed,
`as a motion under § 42.22, no later than one month after the institution date
`of any inter partes review for which joinder is requested.” 37 C.F.R.
`§ 42.122(b). When a request for joinder is filed, the second of the two bars
`set forth in § 315, the one-year time bar of § 315(b), does not apply. See
`35 U.S.C. § 315(b) (“The time limitation set forth in the preceding sentence
`shall not apply to a request for joinder under subsection (c).”); see also
`37 C.F.R. § 42.122(b) (“The time period set forth in § 42.101(b)1 shall not
`apply when the petition is accompanied by a request for joinder.”).
`
`
`1 The time period referenced in 37 C.F.R. § 42.101(b) parallels the one-year
`bar set forth in 35 U.S.C. § 315(b). Compare 37 C.F.R. § 42.101(b) with
`35 U.S.C. § 315(b).
`
`4
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`
`IV. ANALYSIS
`The Petition and Motion present the issue of whether a party that is
`otherwise barred under 35 U.S.C. § 315(a)(1) may join an existing
`proceeding under 35 U.S.C. § 315(c). Colas did not address § 315(a)(1) in
`its Petition or its Motion for Joinder. The Petition states that it “is timely in
`view of Petitioner’s accompanying Motion for Joinder to [the -1241 IPR],
`which was instituted on October 24, 2017.” Pet. 6. Similarly, the Motion
`purports to be timely because it was filed within one month of the institution
`date of the -1241 IPR and “[f]urther, the one-year time bar does not apply to
`the present Motion for Joinder. 35 U.S.C. § 315(b) (last sentence); 37 C.F.R.
`§ 42.122(b).” Mot. 2.
`Patent Owner argues that the Petition and the Motion for Joinder
`should be denied “because the Petition is statutorily barred under 35 U.S.C.
`§ 315(a)(1)” based on Colas’s filing of the DJ Action on May 13, 2016.
`Opp. 1. According to Patent Owner, “[u]nlike the exception for the one-year
`bar [of § 315(b)], no exception permits joinder where the declaratory
`judgment bar [of § 315(a)(1)] applies.” Id. at 2.
`In Reply, Colas counters that Patent Owner’s argument regarding
`§ 315(a)(1) “ignores prior decisions in which the Board declined to exercise
`such a rigid application of § 315(a)(1).” Reply 2 (citing Clio USA, Inc. v.
`Procter & Gamble Co., Case IPR2013-00438, slip op. at 7 (PTAB Jan. 9,
`2014) (Paper 9)). Colas interprets the language of § 315(c) to mean that “the
`Director is commanded by statute to consider only Sections 311 and 314
`when deciding a request for joinder.” Id. at 2–3 (citing Zhongshan Broad
`Ocean Motor Co. v. Nidec Motor Corp., Case IPR2015-00762, slip op. at 5
`(PTAB Oct. 5, 2015) (Paper 16)). Colas argues that it met those
`
`5
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`requirements because it paid the necessary fees and because our decision to
`institute trial in the -1241 IPR shows a reasonable likelihood that its
`challenges will prevail. Id. at 3. Colas’s understanding of § 315(a)(1) is that
`it “prohibits, at most, the institution of a new IPR. Joinder to an already-
`instituted IPR, on the other hand, falls squarely within § 315(c), under which
`the Director has broad discretion to permit joinder.” Id.
`Patent Owner responds that in Clio, the Board “did not rely on an
`exception to the statutory bar or its discretion under Section 314” but instead
`“determined that dismissal without prejudice meant that the declaratory
`judgment action was ‘something that de jure never existed.’” Sur-Reply 1
`(quoting Clio, slip op. at 7). Here, because “Petitioner’s declaratory
`judgment action is still pending,” Clio does not apply and the Petition is
`barred. Id. at 2.
`We agree with Patent Owner that § 315(a)(1) bars institution of inter
`partes review in this case because Colas filed its DJ Action challenging the
`’724 patent before it filed its Petition. Colas’s argument to the contrary
`based on Clio is unpersuasive. See Reply 2. In Clio, the petitioner filed a
`declaratory judgment action for invalidity and voluntarily dismissed that suit
`without prejudice a few months later. Clio, slip op. at 2–3. Six months after
`the dismissal of the declaratory judgment action, the petitioner filed its
`petition for inter partes review. Id. at 2. The Board determined that
`§ 315(a)(1) did not bar institution because case law from the Federal Circuit
`and other courts treat a civil action dismissed without prejudice as “a
`
`6
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`nullity” that leaves the parties “in the same legal position as if the civil
`action had never been filed.” Id. at 7–8 (citations omitted).2
`We note that the Board’s application of that case law in the § 315(b)
`context is currently being reviewed by the Federal Circuit. See Oracle Corp.
`v. Click-to-Call Tech. LP, 2013 WL 11311788, at *6–7 (PTAB Oct. 30,
`2013); Click-to-Call Tech. LP v. Oracle Corp., 2018 WL 480499, at *1 (Fed.
`Cir. 2018) (granting rehearing to consider § 315(b) issues). Regardless of
`the Federal Circuit’s ultimate decision in Click-to-Call, that case law plainly
`has no applicability here because Colas’s DJ Action has not been dismissed.
`Nor does Clio stand for the broad proposition, as Colas contends, that
`the Board has discretion or flexibility regarding whether to apply the
`statutory prohibition in § 315(a)(1). See Reply 2. Clio represents a
`determination that, under governing case law, a civil action that was
`dismissed without prejudice is not subject to the statutory bar of § 315(a)(1).
`That determination was not an exercise of discretion; it was based on an
`analysis of the legal effect of a voluntary dismissal without prejudice.
`We also find unpersuasive Colas’s argument that its Motion for
`Joinder exempts the Petition from the statutory bar of § 315(a)(1). See
`Reply 2–3. The language of the statute does not support Colas’s
`interpretation. In contrast to the time bar of § 315(b), which expressly states
`
`
`2 The Federal Circuit denied a petition for mandamus relief challenging the
`Board’s ruling in Clio. See In re Procter & Gamble Co., 749 F.3d 1376,
`1377–78 (Fed. Cir. 2014); see also In re Board of Trustees of the University
`of Illinois, 561 Fed.Appx. 1021 (Fed. Cir. 2014) (denying a similar
`mandamus petition). Procter & Gamble and University of Illinois appear to
`be the only cases in which the Federal Circuit has been presented with a
`challenge to the Board’s application of the post-AIA version of § 315(a)(1).
`
`7
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`that it “shall not apply to a request for joinder under subsection (c),” the
`prohibition set forth in § 315(a)(1) makes no reference to requests for
`joinder. This difference in the language of consecutive subsections of the
`same statute indicates that in cases requesting joinder under § 315(c),
`§ 315(b) is not applicable, but § 315(a)(1) is applicable.
`Colas cites the Board’s decision in Zhongshan to support its argument
`that “the Director is commanded by statute to consider only Sections 311
`and 314 when deciding a request for joinder.” Reply 2–3. Colas’s reliance
`on Zhongshan is misplaced. Zhongshan addressed joinder when the petition
`would be “otherwise time barred under 35 U.S.C. § 315(b).” Zhongshan,
`slip op. at 2. There was no § 315(a)(1) bar at issue in Zhongshan. This
`distinction is significant because, as discussed above, § 315(b) does not
`apply in cases requesting joinder but § 315(a)(1) does. Further, the central
`issue in Zhongshan was whether § 315(c) permits same-party joinder—that
`is, joinder of a party that is also a party in the proceeding sought to be
`joined. Id. at 5. In the majority opinion, the panel “conclude[d] that
`§ 315(c) permits the joinder of any person who properly files a petition
`under § 311, including a petitioner who is already a party to the earlier
`instituted inter partes review.” Id. No same-party joinder issue is presented
`here because Colas is not a party in the -1241 IPR it seeks to join.
`Moreover, under § 315(c), “joinder is only permissible if the Director
`determines that a petition ‘warrants the institution of an inter partes
`review.’” Nidec Motor Corp. v. Zhongshan Broad Ocean Motor Co., 868
`F.3d 1013, 1019 (Fed. Cir. 2017) (Dyk, J., concurring) (quoting 35 U.S.C.
`§ 315(c)). Here, Colas’s Petition does not warrant institution because it is
`barred by § 315(a)(1), which sets forth a limit on the Director’s authority to
`
`8
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`institute inter partes review. See Wi-Fi One, LLC v. Broadcom Corp., 878
`F.3d 1364, 1374 (Fed. Cir. 2018) (en banc). (“The timely filing of a petition
`under § 315(b) is a condition precedent to the Director’s authority to act. It
`sets limits on the Director’s statutory authority to institute, balancing various
`public interests. And like § 315 as a whole, it governs the relation of IPRs to
`other proceedings. . . .”); see also id. at 1377 (O’Malley, J., concurring)
`(concluding that introductory phrase of § 315(b), “[a]n [IPR] may not be
`instituted if . . .”, which is also present in § 315(a)(1), limits the PTO’s
`authority to institute IPRs).
`Colas argues that the only institution requirements applicable in a case
`requesting joinder are those set forth in §§ 311 and 314, but if that were the
`case, there would be no need for the sentence in § 315(b) stating that the
`time bar does not apply to a request for joinder. The canon against
`superfluity counsels against Colas’s interpretation. See Nielson v. Shinseki,
`607 F.3d 802, 806–07 (Fed. Cir. 2010) (“[O]ne of the most basic interpretive
`canons [is] that [a] statute should be construed so that effect is given to all its
`provisions, so that no part will be inoperative or superfluous, void, or
`insignificant . . . .”) (quoting Corley v. United States, 556 U.S. 303, 314
`(2009)).
`For the foregoing reasons, we conclude that Colas’s Petition does not
`warrant institution because it is barred under § 315(a)(1). Because, under
`§ 315(c), the Director may only join a party that files a petition that
`“warrants institution,” we also deny Colas’s Motion for Joinder.
`
`9
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`
`V. ORDER
`For the reasons given, it is:
`ORDERED that the Petition to institute inter partes review is denied;
`
`and
`
`FURTHER ORDERED that the Motion for Joinder is denied.
`
`10
`
`
`
`IPR2018-00243
`Patent 7,503,724 B2
`PETITIONER:
`David A. Mancino
`Kevin K. Kirsch
`John M. Mueller
`BAKER & HOSTETLER LLP
`dmancino@bakerlaw.com
`kkirsch@bakerlaw.com
`jmueller@bakerlaw.com
`
`PATENT OWNER:
`John F. Triggs
`Ryan D. Levy
`Seth R. Ogden
`William E. Sekyi
`PATTERSON INTELLECTUAL PROPERTY LAW, P.C.
`jft@iplawgroup.com
`rdl@iplawgroup.com
`sro@iplawgroup.com
`wes@iplawgroup.com
`
`11
`
`