The Patent Trial and Appeal Board (PTAB) Advance Opinion Panel (POP) recently issued a ruling clarifying when a wire transfer “payment is received” through the Reserve’s Fedwire system Federal (Fedwire). Often, transferred funds do not “settle” in a recipient’s bank account until several days after a payer initiates the transfer. This delay between initiation and settlement was raised in Toshiba Am. Electr. Components, Inc. v. Monument Peak Ventures, LLC.1 The applicant filed a inter partes petition for review (IPR) and accompanying petition fee by wire transfer to the NYC Treasury (the USPTO’s bank) two days prior to the one-year statutory bar date, but the funds were not settled on the USPTO account only after the blackout date. The POP addressed the question of the proper date, believing that payment was received when the funds were transferred to the NYC Treasury, not when the funds finally settled in the USPTO account.
On December 16, 2020, petitioner filed an IPR petition seeking to invalidate the claims of US 7,583,294 (the ‘294 patent). On the same day, the petitioner wired the petition fee to the NYC Treasury in accordance with guidelines issued by the Board. The petitioner received a payment confirmation receipt from the bank and the attorney forwarded the documentation to the USPTO accounting office. The funds were finally paid into the USPTO’s account on December 18, 2020, and the Board ultimately scheduled the filing date for the petition for the next business day, December 21, 2020. This filing date was after the one-year deadline and condemn the motion. .
The claimant filed a motion to correct the filing date to December 16, arguing that it had complied with the payment obligations by that date and had the payment confirmation to prove it. The patent holder disagreed, arguing that Fedwire’s payment confirmation did not show that the NYC Treasury had accepted the funds or that the funds had been settled and were available to the USPTO. According to the patent holder, the documents showed that the USPTO received payment when the funds were settled on December 18.
In a split decision, the Board denied the motion to correct the filing date. The majority were not persuaded that the payment confirmation from Fedwire could establish the date the charges were paid. The bank (Treasury NYC) and the USPTO are different entities and the Fedwire payment confirmation indicated when the bank received the transfer, but it did not indicate when the USPTO received the funds.
The dissent attributed the delay in the arrival of funds to the USPTO to the government. The dissent felt that the majority view wrongly penalized the petitioner for the government’s backwardness. The dissent also noted that the petitioner sent the funds and the USPTO received payment, pursuant to the USPTO’s express instructions, reinforcing the point that the petitioner was unjustly and unjustly penalized.
POP disagreed with the majority and argued that a Fedwire payment confirmation receipt can establish the date the USPTO receives payment. The POP was persuaded by the petitioner’s adherence to the USPTO wire transfer guidelines. Citing the guidelines, the POP explained that the Council “allows payment of fees by wire transfer via Fedwire and provides instructions for sending wire payment.” The Petitioner’s Fedwire payment confirmation demonstrated that the Petitioner met the wire transfer requirements as of December 16.
In effect, under the ruling, “payment is received” when a wire transfer is initiated, as an applicant will typically receive a Fedwire confirmation receipt very shortly after funds are transferred. Notably, even though the POP has stated that a Fedwire payment confirmation can demonstrate the payment date, there are still additional requirements that must be met for wire transfers. The Fedwire Payment Confirmation establishes the payment date, on condition that a petitioner includes certain details of the transaction on Fedwire documents.
1 IPR2021-00330, Document 20 (January 14, 2022)