Justice O’Malley Disagrees with Majority on Applicability of Arbitration Agreements in IPR Proceedings | Rothwell, Figg, Ernst & Manbeck, CP

Last month, in the case In re: MaxPower Semiconductor, Inc., the Federal Circuit Court of Appeal (“the CAFC”) dismissed an appeal by MaxPower Semiconductor, Inc. (“MaxPower”) from four decisions to institute between the parties examination (“IPR”) of four of MaxPower’s patents. The majority’s brief opinion states that a decision to institute an IPR is “final” under 35 USC 314 (d) and rejects MaxPower’s invocation of the collateral order doctrine. The CAFC also denied MaxPower’s motion for a writ of mandamus because “MaxPower has failed to demonstrate that the facts of this case support an exception to the non-appealability of the institution’s decisions and the unavailability of a measure of mandamus ”. However, O’Malley J.’s partial dissent raises questions about the applicability of arbitration agreements before the Patent Trial and Appeal Board (“the Board”).


In 2007, ROHM Japan and MaxPower entered into a Technology License Agreement (“TLA”). The TLA was amended in 2011 to include an arbitration agreement “[a]any dispute, controversy or claim arising out of or in connection with this Agreement or at law, or the violation, termination or validity thereof. Following a dispute between the parties, MaxPower notified ROHM Japan of its intention to initiate arbitration. ROHM Semiconductor USA (“ROHM USA”), a wholly-owned subsidiary of ROHM Japan, responded by filing a lawsuit in the Northern District of California for a declaration of non-infringement of four MaxPower patents, and further filed four claims. IPR relating to these same patents.

The Northern California District, in a one-page order, dismissed the case and forced ROHM USA to arbitrate. On the other hand, the Council instituted the four requests relating to the IPR, considering that “the arbitration clause is not a reason to refuse the institution”. MaxPower appealed and also requested a writ of mandamus, asking the CAFC to suspend or terminate the IPR review without prejudice if an arbitrator determines that the IPR procedures are appropriate.

Justice O’Malley agreed with the dismissal of the IPR appeals. However, on the issue of the writ of mandamus, she dissented.

The partial dissent of Justice O’Malley

A mandamus writ requires that MaxPower:

  1. show that he has a clear and indisputable legal right;
  2. show that he has no other adequate means of obtaining redress; and
  3. convince the court that the writ is appropriate in the circumstances.

1) “A clear and indisputable legal right”

On this point, O’Malley J. referred to 35 USC 294 (a), which states that arbitration provisions relating to the validity of patents “shall be valid, irrevocable and enforceable, except for any existing grounds. in law or in equity for the revocation of a contract. “The partial dissent cites the” repeated statements “of the Supreme Court which favor a” liberal federal policy “on arbitration agreements under the Federal Arbitration Act (” the FAA “). Justice O’Malley noted that the Council resolved doubts as to the applicability of the arbitration provisions against arbitration, and not in its favor. dealing with the application of Section 294 to IPRs, Justice O’Malley finds cases involving the FAA indicate that Section 294 should apply to IPR proceedings. supreme, EEOC c. Waffle House, Inc., 534 US 279 (2002) and Preston v. Shoeing, 552 US 3466 (2008) as stating that the FAA (and therefore Section 294) apply to prevent the initiation of agency proceedings initiated by a party to an arbitration agreement.

2) “No other avenue for adequate relief”

A writ of mandamus is “the only way to prevent reviews from proceeding” because the CAFC has determined that section 314 (d) excludes an appeal from the grant of establishment by the Commission. Forcing MaxPower to defend its patents through multiple IPRs “deprives MaxPower of the benefit of any valid arbitration agreement”. While the arbitrator’s determinations of disability are binding only on the parties to the arbitration, the Board’s conclusion of a claim voids the claim for all parties. Justice O’Malley reflects on Congress’ intention in enacting Section 294, which was to assure contracting parties “that they could avail themselves of the many advantages of arbitration without having to take the dispute to court. court ”. While ROHM USA argues that MaxPower may still raise its Section 294 arguments after the IPR reviews, Justice O’Malley retorts that the damage will already have been done by this point. “Any writ issued by this court after a final decision would be too small, too late. “

3) “Mandamus is appropriate”

On the last point, Justice O’Malley said: “Allowing ROHM to avoid arbitration vitiates almost any agreement to arbitrate patent validity disputes.” The dissent further notes the bizarre case of a patent applicant being able to bring in an IPR that raises the same validity issues that a district court would reject in light of an arbitration clause.

The partial dissent concludes that the majority decision goes against what Congress and the Supreme Court have made clear regarding the applicability of arbitration agreements, and that the majority decision puts MaxPower in the position of ” having to plead for the execution of its arbitration agreement and the validity of its patents before several courts. While Justice O’Malley’s partial dissent did not sway the majority, patent owners and patent contestants should take note of the differing views in the CAFC on the applicability of arbitration agreements.

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