USPTO director Kathi Vidal slapped down patent challenger OpenSky today, October 4, for abusing the inter partes review process at the Patent Trial and Appeal Board in a case worth more than $2 billion.
In her director review decision, Vidal said OpenSky violated the process by attempting to extract payment from patent owner VLSI and joint petitioner Intel and offering to undermine proceedings in exchange.
“Taken together, the behaviour warrants sanctions to the fullest extent of my power,” Vidal wrote. “Not only are such sanctions proportional to the conduct here, but they are necessary to deter such conduct by OpenSky or others in the future.”
She sanctioned the patent challenger by blocking it from actively participating in the IPR and temporarily elevating Intel to the position of lead petitioner in the OpenSky v VLSI dispute.
Vidal also demanded that OpenSky make a case for why it shouldn’t be ordered to pay compensatory damages to VLSI, including attorney fees.
The director didn’t dismiss the proceeding but ordered, in an effort to balance the competing interests at issue, that the case be remanded to the PTAB to determine whether the petition presented a compelling and meritorious challenge.
The board should make the decision within the next two weeks, she said, based only on the record before the PTAB prior to institution.
Vidal accepted the case for director review after VLSI, a non-practising entity owned by investment funds managed by the Fortress Investment Group, alerted the PTAB to an email it received from OpenSky last March.
The email suggested that the two “work together to secure dismissal or defeat” and that OpenSky might agree not to pay its expert to appear at a deposition as part of the deal, according to VLSI.
OpenSky, which was incorporated in April 2021, challenged VLSI’s patent at the PTAB shortly after the NPE won a $2.18 billion jury verdict against Intel at the District Court for the Western District of Texas in March 2021.
The PTAB instituted the challenge in December 2021, having previously denied a similar petition brought by Intel on discretionary grounds.
