Varentec Dodges Gridco Requests for Inter Partes Review

  • An inter partes review is an administrative proceeding that asks the U.S. Patent and Trademark Office to invalidate a U.S. Patent. These reviews are commonly used by patent litigation defendants to challenge the validity at the U.S. Patent and Trademark Office of patent claims that have been asserted against them in a U.S. District Court.
  • After Varentec sued Gridco for patent infringement, Gridco requested inter partes reviews for the asserted patents. However, Gridco’s requests were denied.

Grid management solutions company Varentec, Inc., dodged a pair of requests by rival Gridco, Inc. to invalidate Varentec’s U.S. patents this week. Gridco had challenged Varentec’s patents at the Patent Trial and Appeal Board (PTAB), an administrative tribunal within the U.S. Patent and Trademark Office (USPTO) that hears claims against the validity of U.S. patents.   The PTAB denied Gridco’s requests for review of U.S. Patent Nos. 9,014,867 and 9,293,922. These related patents are owned by the Santa Clara-based Varentec and are directed to optimizing power delivery to consumers on an electrical grid with significant distributed generation.Gridco’s effort to invalidate these patents stems from a larger dispute between the parties. In April, Varentec sued Gridco in U.S. federal court in Delaware for infringing the patents. Varentec’s lawsuit targeted Gridco’s “Single-Phase Static VAR Compensator” (SVC-20) grid optimization product. Varentec requested that the court enjoin Gridco’s allegedly-infringing activities and grant Varentec unspecified monetary damages.

Varentec’s patents claim inventions that relate to “Grid Edge” power optimization and management. As explained by Varentec, “the electrical grid [ ] is now undergoing a rapid transition from centralized power generation to smaller distributed power generators that are closer to the consumer [such as solar and wind].” Varentec’s products deploy on the consumer-facing side of electrical distribution transformers to help ensure that power is delivered to consumers within narrow performance bands (e.g. for voltage, frequency, and amperage).

Using a common strategy for defendants in a patent infringement lawsuit, Gridco, headquartered outside of Boston, requested that the PTAB invalidate numerous claims of Varentec’s patents. Gridco claimed that the patents were preempted by prior known technology, including earlier patents dating to the mid-1990’s and an Electric Utility Engineering Reference Book from 1965. In reviewing the evidence brought forth by Gridco, the PTAB decided that Gridco had not sufficiently demonstrated that Varentec’s patents should be invalidated, or even that a review was warranted.

Patent validity reviews at the PTAB (called inter partes reviews) are considered by many in the patent industry to be a defendant’s best chance of invalidating a rival’s patent. The PTAB institutes more than 65% of all requests for inter partes review; once instituted, a patent owner faces a greater than 80% chance that it will lose at least one claim of its patent. Varentec’s efforts to successfully evade not one but two requests for inter partes review will certainly buoy its litigation outlook against Gridco. The lawsuit in federal court is ongoing.

 

Originally drafted October 3, 2017.