Addressing the effect of disclaimed claims challenged in an inter partes review (IPR) petition, a panel of the Patent Trial and Appeal Board (the PTAB or Board) determined that challenged claims disclaimed prior to IPR institution warrant institution denial and are not to be construed as a request for adverse judgment. FCA US LLC v. Jacobs Vehicle Systems, Inc., Case IPR2015-01234 (PTAB, Oct. 23, 2015) (Rice, APJ.).

Jacobs Vehicle Systems (the petitioner) filed an IPR petition challenging certain claims of FCA’s patent directed to systems and methods for providing variable actuation of intake, exhaust and auxiliary valves in an internal combustion engine. Each of challenged dependent claims depends from a single independent claim.

After the IPR petition was filed, the patent owner disclaimed the independent claim pursuant to 37 C.F.R. § 1.321(a). One day later, the patent owner filed its preliminary response in the IPR, arguing that institution should be denied because the independent claim was no longer in controversy. Additionally, the patent owner presented reasons why institution should be denied as to the remaining challenged (dependent) claims, which had also been disclaimed.

Pursuant to 37 C.F.R. § 42.107(e), which states that no IPR will be instituted based on disclaimed claims, the patent owner argued that there were no longer any challenged claims requiring resolution by the Board and that institution should therefore be denied. In response, the Board authorized the patent owner to file a motion for adverse judgment pursuant to § 42.73(b)(2), which allows a party to request judgment against itself upon cancellation or disclaimer of a claim such that the party has no remaining claim in the trial. After the patent owner declined, the petitioner urged the Board to require an adverse judgment request from the patent owner.

The Board subsequently issued a non-institution decision. In that decision the Board rejected the patent owner’s assertion that it lacked jurisdiction to consider the IPR petition, explaining that the post-petition disclaimers were not jurisdictionally determinative. Rather, the Board explained that it retained jurisdiction pursuant to 35 U.S.C. § 314, which provides only that an IPR may not be instituted unless there is a reasonable likelihood that the petitioner would prevail with respect to at least one challenged claim. However, the Board denied institution because the challenged claims had been disclaimed, explaining that the patent owner was not required to request adverse judgment because the claims at issue were disclaimed prior to an institution decision. The Board reasoned that § 42.73(b)(2) allowed a request for adverse judgment only upon disclaimer of a claim such that the party has no remaining claim in the trial and the term “trial” meant a contested case instituted by the Board.

Practice Note: A similar scenario came before the Board two years earlier in Hospira, Inc. v. Janssen Pharmaceuticals, Inc., Case IPR2013-00365, (PTAB, Oct. 24, 2013) (Green, APJ.), where a different panel concluded that a patent owner disclaimed, prior to an institution decision, all of the claims challenged in a pending IPR petition required it to enter adverse judgment and terminate the proceeding. That panel explicitly recognized that although there was no institution of a trial, the disclaimer of all challenged claims was to be construed as a request for adverse judgment pursuant to § 42.73(b). That the disclaimers were made prior to a decision on institution was apparently of no import. 
Such contrasting decisions are a reminder that panel decisions are not binding, unless designated “precedential.”