Disclaiming Patent Claims Leads PTAB to Grant a Request for Adverse Judgment

In Arsus, LLC v. Unified Patents, LLC, (Fed. Cir. Nov. 16, 2021), the Federal Circuit affirmed, through a Rule 36 judgment, the PTAB’s ruling granting a Request for Adverse Judgment After Institution of Trial.

Arsus initially sued Tesla Motors, Inc. for patent infringement in the Northern District of California asserting U.S. Patent No. 10,259,494. The ’494 patent is directed to a “rollover prevention apparatus.” The patent describes an “adaptive steering range limiting device,” which “prevents the steering wheel of the vehicle from being turned beyond the threshold of vehicle rollover, but otherwise does not restrict the rotational range of motion of the steering wheel of the vehicle.”

Unified Patents filed for inter partes review, challenging Arsus’ claims as being unpatentable under 35 U.S.C. § 103. Arsus then filed for statutory disclaimer of all challenged claims with the USPTO under 37 C.F.R. 1.321(a), and subsequently filed a Motion to Dismiss with the Board. In doing so, Arsus argued that because all of the claims at issue were disclaimed, there was no longer any case or controversy, and thus the Board had no jurisdiction to do anything other than to dismiss the IPR. However, the Board construed Arsus’s disclaimer as a Request for Adverse Judgment under 37 C.F.R. § 42.73(b), and terminated the IPR in favor of Unified Patents.

Arsus responded by filing a Motion to Vacate Judgment and, relying on Federal Circuit precedent from Sanofi-Aventis U.S. v. Dr. Reddy’s Laboratories, Inc., 933 F.3d 1367, 1373-75 (Fed. Cir. 2019), argued that the Board did not have jurisdiction to enter the Judgment because the disclaimer mooted the IPR petition and “deprived the Board of subject matter jurisdiction.”  Unified Patents, LLC v. Arsus, LLC, IPR2020-00948, Paper 19, 3 (PTAB Jan. 29, 2021). The Board, however, pointed out that Sanofi-Aventis concerned a district court’s jurisdiction under Article III of the Constitution, and determined that Arsus failed to show that the same requirements applied to administrative proceedings.

Arsus subsequently appealed to the Federal Circuit, which affirmed without opinion by issuing a Rule 36 judgment.