Luv N’ Care, Ltd. v. McGinley

Informative decision only: persuasive authority, not binding precedent. When a petitioner's attempted deposit-account payment of the IPR filing fee fails because the account held insufficient funds, and the petitioner shows no good cause (no persuasive evidence of a system error, no response to a show cause order), the Board will not waive the fee requirement of 35 U.S.C. § 312(a)(1) and will not backdate the petition to the first attempt; the filing date is when full payment is received. Where that later date falls more than one year after service of the complaint, the petition is barred under 35 U.S.C. § 315(b). No prior precedent directly addressed this issue in the text; the Board cites Lumentum Holdings, Inc. v. Capella Photonics, Inc., IPR2015-00739 (precedential), only for the point that § 312(a)(1) is not jurisdictional. For petitioners, a payment attempt is not a filing: the petition gets no filing date until full payment is received, so a deposit account that is underfunded on the last day can make the petition time-barred. Petitioners must also verify the payment receipt, respond to warnings, and answer show cause orders, since silence supports a finding of no good cause. Patent owners can invoke § 315(b) on the later filing date, and here the Board denied institution on that basis. The decision cites no Federal Circuit, CCPA or Supreme Court authority. LEGAL TEST OR STANDARD: A petition is not accorded a filing date until (1) the content complies with 37 C.F.R. § 42.104, (2) the fee to institute has been paid, see 37 C.F.R. §§ 42.15(a), 42.103(b), and (3) the petition and relevant documents have been served on the patent owner. 37 C.F.R. § 42.105(a). Payment must be received, not merely tendered. The statute is not jurisdictional, but absent a showing of good cause the Board will not waive the fee requirement. The movant bears the burden under 37 C.F.R. § 42.20(c). TRIGGERING FACTS: Petitioner uploaded the petition on March 30, 2016-anniversary timing (complaint served March 31, 2016) but the deposit account lacked sufficient funds for the $23,000 fee; funds were added March 31 but no payment was attempted; the receipt bore a bold warning that payment had not cleared, which Petitioner did not address; payment was made April 11, 2017, about 10 days later with no explanation; Petitioner offered no persuasive evidence of a system error and did not respond to the Order to Show Cause. KEY QUOTE: "When a deposit account has insufficient funds to cover the amount of a payment, the system properly processes the tendered payment by not accepting the payment." (Paper 13, p. 6) PRIOR PRECEDENT AFFECTED: Lumentum Holdings, Inc. v. Capella Photonics, Inc., case IPR2015–00739, slip op. at 4–5 (PTAB Mar. 4, 2016) (Paper 38) (precedential), is followed for the point that § 312(a)(1) is not jurisdictional. No other prior precedential or informative decision is named. PRACTICE TIP: Do not wait until the last day of the § 315(b) window: confirm the deposit account is funded and that the payment actually cleared, treat any receipt warning as a red flag, and respond to any show cause order with evidence.