December 18, 2014

PTAB Will Not Review Contract Issues Even if They Relate to Standing

By Matthew L. Cutler, Principal

Whether a Petitioner breached a contract, that limited its ability to challenge a patent, is an issue outside the purview of the PTAB, per a recent decision in Ford Motor Company v. Paice LLC & The Abell Foundation, Inc., IPR2014-00570, involving US Pat. No. 8,214,097. Patent Owner had sought the denial of an IPR petition based on lack of standing.

Patent Owner argued that Petitioner was barred from filing the subject Petition because such action breached an arbitration agreement between the parties which limited Petitioner’s ability to challenge the claims of the ‘097 patent.  Patent Owner argued that, because Petitioner was in breach of the contract by filing for inter partes review, Petitioner lacked standing to file the instant Petition. Decision at 5.

The Board’s hands were tied, however, because the disputed contractual matter raised by Patent Owner was outside the purview of the PTAB under authority granted by the AIA. Whether Petitioner had breached the arbitration agreement by filing for inter partes review of the ‘097 patent is for the district courts to decide (indeed, there was a co-pending action that will decide this issue). Since this question of breach had not been settled at the time of the Board’s decision, the Board rejected Patent Owner’s argument that Petitioner should be barred or estopped from filing the instant petition.  Id. at 6.