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MaxPower loses bid to review PTAB decision despite arbitration clause

3 minute read

The United States Patent and Trademark Office in Alexandria, Virginia. REUTERS/Andrew Kelly

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  • Rohm Semiconductor challenged MaxPower patents during contract dispute
  • PTAB instituted review, setting aside parties' arbitration clause
  • Federal Circuit rejects appeal in split decision

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(Reuters) - The U.S. Court of Appeals for the Federal Circuit on Wednesday denied MaxPower Semiconductor Inc's challenge to a Patent Trial and Appeal Board decision to review its transistor patents at the request of its licensee.

MaxPower and Rohm Semiconductor USA LLC's agreement to arbitrate disputes related to their contract didn't justify disregarding the general rule that PTAB institution decisions can't be appealed, U.S. Circuit Judge Jimmie Reyna wrote for the majority in a two-to-one decision.

In a partial dissent, Circuit Judge Kathleen O'Malley said the decision casts "a shadow over all agreements to arbitrate patent validity" and goes against the strong federal policy in favor of enforcing arbitration agreements.

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MaxPower and its attorney Roger Cook of Roger Cook Law didn't immediately respond to a request for comment, nor did Rohm, which requested the PTAB review, or its attorneys Lisa Kobialka and James Hannah of Kramer Levin Naftalis & Frankel.

San Jose, California-based MaxPower agreed to license patents related to silicon transistors in semiconductors to Japan-based Rohm in 2007. Following a dispute over whether the patents also covered Rohm's silicon carbide transistors, MaxPower notified Rohm last year that it was initiating arbitration under their licensing agreement, which included a clause to arbitrate any disputes arising from or related to it. Rohm then challenged the validity of four MaxPower patents at the PTAB, which granted its petitions for review in April.

MaxPower petitioned the Federal Circuit for a writ of mandamus to review the decision.

Reyna, joined by Circuit Judge Raymond Chen, denied MaxPower's request, citing previous Federal Circuit rulings interpreting federal law to find that a PTAB decision to institute inter partes review can't be appealed. The panel also rejected MaxPower's argument that questions about "whether the Board can institute proceedings that are subject to arbitration" justified court review.

"If MaxPower is truly not raising matters that are absolutely barred from appellate review," it "can meaningfully raise its arbitration-related challenges after the Board’s final written decisions," Reyna said.

Reyna also said MaxPower failed to prove that the petition wasn't "merely a means of avoiding the statutory prohibition on appellate review," and that the board "is not bound by the private contract between MaxPower and Rohm."

In her dissent, O'Malley said the case "provides exactly the sort of extraordinary circumstances under which mandamus review is appropriate," in what she called an important issue of first impression.

The U.S. Supreme Court has said that "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration," but the board "did the opposite," O'Malley said, and federal policy favoring arbitration agreements applies to the PTAB "just as it applies to federal courts."

By forcing MaxPower to defend its patents, the majority "denies MaxPower the benefit of any agreement to arbitrate validity," O'Malley said. And "if the Board finds that any of MaxPower’s claims are invalid, the harm to MaxPower is compounded" – unlike in arbitration, where patent claims can't be canceled.

"At that point, the harm will have been done," and any relief would be "too little, too late," O'Malley said.

The case is In re MaxPower Semiconductor Inc, U.S. Court of Appeals for the Federal Circuit, No. 21-146.

For MaxPower: Roger Cook of Roger Cook Law

For Rohm: Lisa Kobialka and James Hannah of Kramer Levin Naftalis & Frankel

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Washington-based correspondent covering court cases, trends, and other developments in intellectual property law, including patents, trademarks, copyrights, and trade secrets. Previous experience at Bloomberg Law, Thomson Reuters Practical Law and work as an attorney.

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