USPTO Acting Director Coke Morgan Stewart recently vacated and remanded three Final Written Decisions from the PTAB. Semiconductor Components Indus. v. Greenthread, LLC, IPR2023-01242, IPR2023-01243, IPR2023-01244, Paper 94 (P.T.A.B. April 24, 2025). The Acting Director’s decision highlights the importance of scrutinizing the PTAB’s analysis of dispositive procedural matters.
Under 35 U.S.C. § 316(a)(5)(B), discovery in an inter partes review proceeding is limited to “what is otherwise necessary in the interest of justice.” The precedential decision in Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, provides that a party seeking additional discovery must raise more than “the mere possibility of finding something useful” IPR 2012-00001, Paper 26 at 6 (P.T.A.B. Mar. 5, 2013).
Background and Procedural History
In July 2023, Semiconductor Components Industries, LLC (“Petitioner”) filed three requests for inter partes review seeking review of two patents owned by Greenthread, LLC (“Patent Owner”). The patents had previously been subject to district court litigation against several nonparties to the IPRs. Before filing its Preliminary Responses, Patent Owner moved for additional discovery in all three cases because it believed the Petitioners had a privity relationship with the litigants in prior proceedings and that the petitions were time-barred under 35 U.S.C. § 315(b). IPR2023-01242 at Paper 8 (Oct. 17, 2023), IPR2023-01243 at Paper 7 (Oct. 17, 2023), IPR2023-01244 at Paper 8 (Oct. 17, 2023). Accordingly, Patent Owner sought discovery as to the status of these prior litigants determine if they were privies of Petitioner, potentially including licenses, indemnification agreements, and other documents.
Petitioner opposed Patent Owner’s motion, arguing that it had no real party-in-interest or privity relationships with the entities Patent Owner named in its motion. Instead, at best, Petitioner had a standard manufacturer/customer relationship with the alleged privies. Petitioner also emphasized that the other parties had already settled with petitioner and had not interest in the present IPRs.
The PTAB agreed, noting that there was no suggestion on the record that Petitioner had any role in prior infringement litigation or IPRs. Moreover, Patent Owner did not suggest that Petitioner was acting as a proxy for the alleged privies. In its institution decision, the PTAB determined that Patent Owner had not provided a sufficient factual basis to support the existence of a privity relationship. When the PTAB later issued its Final Written Decisions in each of the cases, it concluded that the challenged claims in each case were unpatentable and the PTAB incorporated its analysis on the privity issue by reference. The PTAB also declined to consider certain arguments in Patent Owner’s Response and Sur-Reply, and excluded district court claim construction orders submitted by Patent Owner.
Director Review
Patent Owner requested Director Review of the Final Written decisions. According to Patent Owner, the PTAB improperly shifted the burden of establishing privity to Patent Owner. Patent Owner also argued that the PTAB improperly excluded (by granting a motion to strike) claim construction orders that Patent Owner had cited in a sur-reply to rebut an allegedly new claim construction by Petitioner and that the PTAB improperly refused to consider arguments as untimely that Patent Owner had presented in its reply.
Petitioner argued in response that Patent Owner did not put privity in dispute because Patent Owner’s theory ignored the purpose of privity, Patent Owner’s discovery requests were overbroad, and the PTAB had addressed all of Patent Owner’s timely arguments. IPR2023-01242 at Paper 91 at 1, 3, 5 (Mar. 20, 2025). Petitioner further argued that privity is based on relationships that warrant an exception to due process and that its customer relationships were insufficient to support a theory of privity. Petitioner also argued that Patent Owner had taken certain factual arguments that Petitioner had made regarding electric fields out of context and that Petitioner had not raised any new claim construction arguments not previously raised.
The Acting Director granted Director Review and remanded the case to the PTAB with instructions to allow narrow discovery on the privity issue. Under the circumstances, the PTAB should have allowed narrower discovery as appropriate. Instead, the PTAB had denied Patent Owner’s motions only to later cite the lack of evidence as a basis for finding no privity relationship. On remand, the PTAB was instructed to determine whether, on the full record, Petitioner had met its burden of demonstrating that it was not time-barred under § 315(b). If the petitions were not time-barred, the Director also instructed the PTAB to fully address Patent Owner’s arguments because those arguments had been timely included in its Patent Owner Response. And Patent Owner’s sur-reply that included the claim construction determination was not time barred because “a legal ruling by another tribunal is not evidentiary in nature,” and is therefore not barred by the rule prohibiting the filing of new evidence with a sur-reply (other than deposition transcripts of the cross-examination of a reply witness).
Takeaway:
Dispositive discovery issues may warrant additional narrow discovery in some circumstances. The Garmin factors remain the standard for evaluating such requests. The PTAB has a duty to address all arguments timely raised and legally appropriate arguments. Refusal to admit claim construction orders from a prior district court claim construction determination as evidence is legal erroneous.
