The Gel Ball IP Battle: Back from the Dead?

This was not something I expected to see on my Gel Ball litigation bingo card. Last we checked, Prime Time Toys had essentially lost their arguments in a United States Patent and Trademark Office investigation, and we were at the tail end of reviewing minor elements of the final decision. While the post-trial decisions and motions were going forth, Prime Time Toys filed for an Inter Partes Review of the patents in question. They were initially denied by the Patent Trial and Appeal Board, but earlier this month, they were successful in getting a Director’s Review on the matter. This overrode the board’s decision, and we’re going to have more hearings!

Admittedly, some things are still confusing for me after several readthroughs. So let’s cover the process first.

What are These Inter Partes Reviews?

The Inter Partes Review is a process for challenging the validity of patents based on obviousness or prior invention. There were previous processes in place for challenging patents, but the current process was established in 2012. This video offers a simplified explanation of the process.

Additionally, the option of filing for Director Review is a recent update, implemented three years ago, serving as an appeal of sorts of the petitioner believes the board abused its discretion (in legal parlance, made decisions that were arbitrary/in error/contrary to the evidence presented). There’s a section of the USPTO website dedicated to these reviews, and the case is even shown on there as a recent decision!

Here’s the resulting Director Review, sending the case back to the appeal board for a hearing. The Director agrees with essentially all of Prime Time Toys’ assertions regarding the Patent Trial and Appeal Board’s decision being incorrect.

Two highlights amused me. First, when criticizing the Board’s decision regarding obviousness, the Director lays out the submitted evidence from the Patent holder and the relevant expert that was ignored by the board when they decided that (to paraphrase) from the airsoft angle, people would want to simulate all firearm aspects including the pain, and that if safety was a concern, making the launchers weaker was the only sensible option, not changing the ammo. Second, Hasbro and Spin Master attempted to argue that there shouldn’t even be a review due to several companies having submitted IPR applications and having a significant relationship concerning their infringing products. That is an actual legal concern – as per a 2019 decision, if companies have signed onto each other’s Inter Partes Review proceedings, they can’t try again separately in an attempt to “try again”. The problem? While Gel Blaster and Splatrball may each have been in various stages of the IPR process (with things ending at their request when settlements were reached), the only significant relationship they had with Prime Time Toys was one forced on them by the USPTO when the investigative court placed them all onto the same side for the sake of simplicity. Since the system forced that cooperation on them, Hasbro and Spin Master can’t claim that Prime Time Toys is unfairly re-litigating the Gel Blaster and Splatrball proceedings.

In any case, we now have several more months of fighting to go. Just because the Director overturned the Board’s decision to not have a review, doesn’t mean that Prime Time Toys will win in that review. In addition, I don’t know how a Prime Time Toys victory invalidating the patents would affect the existing landscape – Splatrball and Gel Blaster could possibly no longer need to pay royalties, since the patents they’re licensing no longer exist…but that’s dependent on the exact wording of those settlements they signed. It’s also possible the patents aren’t invalidated, but simply narrowed in scope, with the end result to be determined.

Legalese: it’s a fun language!