USPTO and Court Coordinate Sanctions for IPR Abuse
The USPTO Director terminated inter partes review proceedings citing petitioner misconduct, with a parallel district court striking the same party's invalidity contentions in litigation.
In a coordinated action underscoring the high-stakes nature of conduct in patent challenges, the Director of the U.S. Patent and Trademark Office terminated multiple inter partes review (IPR) proceedings, and a federal district court struck the petitioner's parallel invalidity contentions. The Director's rare termination order was based on petitioner misconduct that violated the principles of Sotera Wireless, Inc. v. Masimo Corp., which addresses the use of proxies to circumvent statutory bars and other IPR rules. This development is critical for patent litigators and their clients, as it signals the USPTO's low tolerance for abuse of the IPR process. The parallel court order striking the invalidity defenses demonstrates that such misconduct can have severe, case-dispositive consequences in federal court, potentially precluding a defendant from challenging a patent's validity at trial. Patent challengers must now consider the heightened risk that questionable PTAB filing strategies could jeopardize their core defenses in infringement litigation. Conversely, patent owners have a powerful new precedent to cite when facing what they believe to be bad-faith IPRs.