Last week we reported on a case (Blackberry v. MobileMedia Ideas) in which a PTAB panel refused to terminate an inter partes review proceeding with respect to the patent owner despite a settlement reached by the parties.  This was not the first instance of the PTAB deciding to continue a review on its own.  Back in November 2013, another PTAB panel had reached a similar decision in a covered business method (CBM) patent review proceeding despite a similar settlement and a joint petition to terminate.  The PTAB decision on the merits of the CBM case was handed down on January 30, 2014, finding all four contested claims patent ineligible and invalid – despite a federal district court’s judgment in favor of patent owner on these same issues and the expiration of the patent in the interim.

Interthinx, Inc. v. CoreLogic Solutions, LLC, (CBM2012-00007, U.S. Patent No. 5,361,201) was filed on September 19, 2012, just a few days after the new AIA provisions for challenging patent went into effect.  Interthinx had previously been sued by CoreLogix for patent infringement of the ‘201 patent (on computer-implemented methods for appraising real estate properties) in the U.S. District Court for the Eastern District of Texas.  The PTAB instituted CBM proceedings in January 2013.  Corelogic, the patent owner, filed its response in May 2013 and Interthinx, the petitioner, filed its reply in August 2013.

Meanwhile, Corelogic’s district court litigation against Interthinx continued on a parallel track.  The patent expired during the litigation but Corelogic’s claim for past damages remained.  After a jury trial in September 2013 found the patent valid but not infringed by Interthinx and post-trial motions to the presiding judge to find the patent invalid (under 35 U.S.C. sections 101, 102 and 103) as a matter of law were denied, the parties settled.

In October 2013, shortly before oral arguments, Interthinx and CoreLogix jointly petitioned to terminate the CBM proceeding based on their settlement.  In a decision dated November 12, 2013 (Paper 47), the PTAB panel decided that “in view of the advanced stage of the proceedings, rather than terminate the proceeding the Board would proceed to a final written decision.”

Following an oral argument in which only Corelogic participated, the PTAB handed down a decision on January 30, 2014, finding the patent’s claims both ineligible for patent protection under 35 U.S.C. 101 and invalid for anticipation or obviousness under 35 U.S.C. 102 or 103 in view of a prior art publication that was also before the district court.

Administrative Patent Judge Brian J. McNamara wrote the PTAB panel’s final written decision, explaining how the Board came to a diametrically opposite conclusions than the district court.  He noted that the PTAB’s standard of review was based on a preponderance of the evidence rather than the clear-and-convincing standard of review applied by the district court.

The board in this case also found that the fact that the patent had expired did not render the issues moot, especially because Corelogic was still pursuing claims for past damages against others in another district court suit still pending in the Eastern District of Texas.

Judge McNamara also addressed the issues of res judicata and collateral estoppel and found that the district court holding did not bar review under any theory of issue preclusion.  He noted that Interthinx, not USPTO contested the issue in district court. Because the USPTO was not a party to the civil suit, it did not have “a full and fair opportunity to litigate the patentability issues in the prior court proceeding” and, hence, the doctrines of res judicata and collateral estoppel did not prevent the PTAB from reaching its own conclusions.