In IPR2013-00078, the Patent Trial and Appeals Board ("PTAB") (A.P.J.s Medley, Easthom and Siu) issued an order in International Business Systems Corporation ("Petitioner") v. Financial Systems Technology (Intellectual Property) Pty. Ltd. ("Patent Owner") regarding the settlement between the parties and procedure regarding the termination of the procedure. The Petitioner filed its petition on December 12, 2012 and the Patent Owner's preliminary response would have been due on March 17, 2013.
Before the filing of the Patent Owner's preliminary response and any subsequent Board decision on the petition, the parties entered into a written settlement agreement contemplating the dismissal of a co-pending district court lawsuit and the termination of the inter partes review proceeding. As a result, the parties sought guidance regarding the filing the settlement agreement and terminating the IPR proceeding.
The Board explained that they expected that any agreement contemplating the termination of the proceeding should be in writing and filed with the Board:
Generally, the Board expects that a proceeding will terminate after the filing of a settlement agreement. See, e.g., Office Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012). The rule governing settlement indicates that any agreement between the parties made in connection with, or in contemplation of, the termination of a proceeding shall be in writing and filed with the Board. 37 C.F.R. § 42.74.
The Board explained that, in light of the parties' designation of the settlement agreement as business confidential and desire to keep the agreement separate from the patent files, the parties should follow the instructions on the Board's website at http://www.uspto.gov/ip/boards/bpai/prps.jsp for filing the settlement agreement as confidential.
Finally, the Board instructed that the parties should also file a joint motion to terminate the proceeding explaining why termination is appropriate. The parties agreed to file the settlement agreement and joint motion in five days.
This decision addresses the procedure for terminating the IPR proceeding following a written settlement between the parties contemplating the termination of the proceeding, particularly where the termination occurs before any decision on the petition has been made. This highlights a key distinction over the inter partes reexamination proceeding that the IPRs replaced in that IPRs facilitate settlement by permitting the IPR proceeding to be terminated.
International Business Systems Corporation v. Financial Systems Technology (Intellectual Property) Pty. Ltd , Case IPR2013-00078 (J. Medley) (February 8, 2013), Paper 7.
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. The authors represent inventors, patent owners and technology companies in patent licensing and litigation in U.S. District Courts and in the United States Patent and Trademark Office, including numerous IPRs currently pending before the PTAB. Whether pursuing patent violations or defending infringement claims, we are aggressive and effective advocates for our clients. For more information contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.