A petition for inter-partes review (IPR) will be time barred if it 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.”  35 U.S.C. §315(b).  In St. Jude Medical, Cardiology Division, Inc. v. Volcano Corporation (IPR2013-00258), the Patent Trial and Appeal Board (PTAB) ruled that a counterclaim alleging infringement of a patent is a complaint within the meaning of Section 315(b) and hence starts the clock on the one year time period for filing an IPR to challenge that patent. 

St. Jude filed an IPR petition on April 30, 2013 to challenge U.S. Patent No. 7,134,994 (“ ‘994 patent”) of Volcano.  In an earlier district court litigation (St. Jude Medical, Cardiology Division, Inc., et al. v. Volcano Corp., 1:10-cv-00631 (D. Del.)), in response to allegations of patent infringement by St. Jude, Volcano had filed and served an answer and a counterclaim on September 20, 2010 in which Volcano asserted a claim of infringement of the ‘994 patent against St. Jude.  On October 21, 2012, St. Jude and Volcano stipulated to a dismissal of all asserted claims of the ‘994 patent with prejudice.

In the IPR proceeding, St. Jude argued that a counterclaim is a not a ‘complaint’ as that term is used in Section 315(b).  St. Jude marshaled a number of arguments in support of its position.  First, it argued that the Board should look into the Federal Rules of Civil Procedure (FRCP) for guidance regarding the meaning of ‘complaint’ in the context of an IPR proceeding.  In particular, St. Jude argued that Rule 3 of FRCP defines ‘complaint’ as a filing that commences a civil action and Rule 7 distinguishes a ‘complaint’ from a ‘counterclaim’.”

The PTAB did not find this argument persuasive and countered that Rule 3, which states that “[A] civil action is commenced by filing a complaint with the court,” specifies “merely which filing commences a civil action – a complaint – but does not limit a ‘complaint’ to be that filing and nothing else.”  Further, the PTAB asserted that mere listing of pleadings that are allowed in a civil action under Rule 7 “does not, by itself, draw distinctions among the items in the list insofar as their legal equivalence.”

St. Jude further argued that “a counterclaim should be distinguished from a complaint in 315(b) because that distinction is made in 315(a).”  Section 315(a)(1) states that “[A]n 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.”  Section 315(a)(3) in turn states that “[A] counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of this subsection.”  The PTAB rejected this argument and pointed out that Section 315(a)(3) “states specifically that the exclusion applies to, and is made for purposes of, subsection 315(a) only.”  As such, it is not applicable to Section 315(b).

St. Jude also argued the ‘complaint’ in Section 315(b) should be construed narrowly because Congress used broad language such as “charged with infringement” (for example, in Section 18(a)(1)(B) of AIA) when it “intended to include allegation of infringement beyond those made in a complaint by which a civil action is commenced.”  Again, the PTAB was not persuaded.  Section 18 of AIA is directed to transitional program for review of the validity of covered business method patents.  Section 18(a)(1)(B) states that “[A] person may not file a petition for a transitional proceeding with respect to covered business method patent unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or has been charged with infringement under the patent.”  The PTAB noted that the broad phrase “charged with infringement” in the context of Section 18(a)(1)(B) is intended to confer “petitioning eligibility on parties who had not yet been sued.”

St. Jude finally argued that the dismissal with prejudice of the ‘994 patent infringement claims had made the time bar of Section 315(b) inapplicable. The PTAB again disagreed and emphasized that “[S]ervice of a complaint alleging infringement triggers applicability of 315(b), even if that complaint is later dismissed with prejudice.”

The St. Jude decision makes it clear that a plaintiff in a patent infringement litigation that has been served with a counterclaim of patent infringement should pay attention to the one-year time limit imposed by Section 315(b) to ensure that its right for filing an IPR against patent(s) asserted in the counterclaim is preserved.