Fish & Richardson’s Post-Grant Report 2015

Since the enactment of the America Invents Act (AIA) in September 2012, post-grant proceedings have become an important part of litigation strategy, and in some instances are helping to reduce the time and cost associated with patent litigation.

Fish & Richardson’s 2015 Post-Grant Practice Report takes a closer look at the key issues from the past year in post-grant practice, with particular focus on inter partes review (IPR). Throughout this report, we provide insight on trends and offer practical analysis for your business and patent strategy.

Please see full Report below for more information.

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I. Introduction
II. New Rules for Post-Grant Proceedings
III. Real Party-in-Interest
IV. IPR Petitions in BioPharma Grow in Popularity
V. Legislative Developments
VI. Joinder in Post-Grant Proceedings
VII. PTAB Discretion Under 325(d)
VIII. Shifts in Amendments at the PTAB
IX. The First Wave of Post-Grant Appeals
Fish & Richardson’s
Post-Grant Report
2015
Introduction
Since the enactment of the America Invents Act (AIA) in September 2012, post-grant proceedings have
become an important part of litigation strategy, and in some instances are helping to reduce the time
and cost associated with patent litigation.
Fish & Richardson’s 2015 Post-Grant Practice Report takes a closer look at the key issues from the
past year in post-grant practice, with particular focus on inter partes review (IPR). Throughout this
report, we provide insight on trends and offer practical analysis for your business and patent strategy.
Fish is one of the most active firms at the Patent Trial and Appeal Board (PTAB) according to Managing Intellectual Property, and is also
the most active firm representing Petitioners at the PTAB.
For practitioners and those looking to learn more about post-grant proceedings, our team provides a number of practical tools through
our dedicated website, fishpostgrant.com, including:
• Monthly webinars covering post-grant topics, including recent decisions, lessons learned, practice tips, and trends.
• Detailed case summaries and decisions, including articles published by members of our post-grant practice.
• Link to download Fish & Richardson’s post-grant app, which delivers up-to-date post-grant content to your mobile device.
We invite you to contact your Fish attorney or a member of our Post-Grant practice with your questions and comments.
Dorothy Whelan
Principal, Co-Chair
Twin Cities
612-337-2509
whelan@fr.com
Karl Renner
Principal, Co-Chair
Washington, DC
202-626-6447
renner@fr.com
S E C T I O N I
#1 Most Active Law Firm
at the Patent Trial and
Appeal Board for Petitioners
Managing Intellectual Property, 2016
Top Rankings, Patent Prosecution
and Patent Litigation
IAM Patent 1000: The World’s Leading Patent Practitioners, 2015
Busiest Firms at the Patent
Trial and Appeal Board
Lex Machina Patent Trial and Appeal Board 2015 Report
Tier 1 PTAB Litigation Firm
Managing Intellectual Property, IP Stars, 2016
New Rules for
Post-Grant
Proceedings
S E C T I O N I I
The “quick fix” rule package was finalized on May 19, 2015, and was
effective immediately to institute a number of “quick” changes to
post-grant rules. Probably the biggest rule change was in page limits.
The page limit was increased from 15 to 25 in Petitioner’s Reply,
which makes it much easier to respond to the 60-page Patent Owner
response. The page limit was also increased from 15 to 25 in both
the Patent Owner’s Motion to Amend and the Petitioner’s Opposition
to Motion to Amend, as well as from 5 to 15 pages in the Reply to
Opposition. In addition, proposed claim amendments can now be
included in an appendix, which does not count as part of the page
limit. This alleviates one of the big hurdles to amending claims: too
little space to make all the required showings. The quick fix also
required the use of Times New Roman font in response to parties’
use of smaller fonts that allow more words per page.
Additional clarifications and minor procedural changes were made,
including requiring evidence objections to be filed instead of served,
making the statement of material facts optional, allowing more
than one backup counsel to be designated, requiring fees paid for
unchallenged claims from which a challenged claim depends, and
other discovery and procedural rules.
On August 20, 2015, the USPTO issued the “second round” of
proposed rule changes. They include:
• Allow Patent Owners to include expert or other declarations with
the preliminary response. Supporting evidence will be viewed in
the light most favorable to the Petitioner, and the Petitioner may
also seek leave to file a reply.
• Apply the broadest reasonable interpretation (BRI) claim construction
standard in proceedings where the patent will expire after a final
written decision, and apply Phillips claim construction to patents
expiring before a final written decision.
• Require seven days between exchange of exhibits and
the oral hearing.
• Require a word count (not page limit) for briefing. For example,
the 60-page limit would be replaced with a 14,000-word limit.
• Add a Rule 11-type certification for all papers filed, to allow the
Board to sanction noncompliance.
The addition of a declaration with the preliminary response and the
optional reply may prove to be one of the biggest changes. They
have the potential to increase costs for parties pre-institution, and
also complicate the issue of which facts can be relied on by the
PTAB at institution. The move to word count is a small but wise
decision, as it should reduce disputes over formatting and improve
readability. The addition of the Rule 11-type certification is controversial,
but it is not clear how much practical impact it would have. These
proposed rules have not yet been implemented, and time will tell
which rules get implemented as proposed.
The USPTO has proposed and instituted a number of new rules for post-grant
proceedings before the Patent Trial and Appeal Board (“PTAB”). They fall into
two categories: the “quick fix” and the “second round.”
3,578 / 90%
382 / 10%
13 / 0%
3,973 Total AIA Petitions*
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
443 / 23%
1,193 / 63%
90 / 5%
167 / 9%
1,897 Total AIA Petitions in FY2015*
4 / 0%
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
Electrical / Computer
Mechanical / Business Method
Chemical
Bio / Pharma
Design
900
800
700
600
500
400
300
200
100
0
FY2015 Dispositions of Petitions
AIA Petitions Filed in FY2015
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
Instituted Joinders Denials
801
116
426
91
10 43 3 0 0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
FY2015 FY2014 FY2013
1,737
149
11
1,310
177
2
514
48 0
Inter Partes Review (IPR)
Covered Business Method (CBM)
Post-Grant Review (PGR)
l ti i ce 9/16/2012
: tatistics, FY2015, www.uspto.gov
S E C T I O N I I I
Real Party-in-
Interest
There are risks associated with improperly naming RPIs. An IPR may
be denied or terminated for failure to name all RPIs, and the failure
may not be able to be cured if more than one year has passed since
the Petitioner or RPI was served with an infringement complaint.1
The PTAB has considered RPI issues even after institution of trial, and
has terminated the proceedings for failure to name all RPIs, where the
one-year bar is implicated.2 There is also a risk of being over-inclusive
in naming RPIs because estoppel applies to the Petitioner and any
named RPI, barring them from further challenging claims based on
any ground that was or could have been raised during the IPR.
As noted, the RPI analysis is highly fact dependent. Former Chief
Judge James Donald Smith, PTAB, observed that “[c]ourts and
commentators agree … that there is no bright-line test for determining
the necessary quantity or degree of participation to qualify as a real
party-in-interest.”3 The Board generally accepts the Petitioner’s
identification of the RPIs. The Patent Owner, however, may rebut the
Petitioner’s identification of RPIs.4 In its analysis, the Board considers
six “Taylor factors” but has primarily focused on control of and
payment for the proceeding.5 In general, an RPI must have sufficient
opportunity to control the IPR, such as when a parent wholly
owns a Petitioner and authorizes its budget and plans.6 Evidence of
payments for specific challenges may indicate an RPI, but nonspecific
payments by technical/industry organization members have been
found to not be enough.7
Common counsel or participation in related district court proceedings,
by itself, is typically not sufficient to establish a third party as a
RPI.8 Yet common counsel, when combined with other factors may
be sufficient to establish a third party as a RPI8 where it (1) pays
the Petitioner for services, including potential IPR filings, and (2)
discusses the Patent Owner and filing of IPRs with the Petitioner.9
The RPI analysis will continue to be a highly fact-specific inquiry, and
Petitioners must be mindful of the above considerations when filing
an IPR, particularly where a Petitioner is part of a larger corporate
structure or involved in a joint defense group as part of concurrent
district court proceedings. We expect this area of practice to continue
to evolve as more fact patterns are considered by the PTAB.
A party petitioning for inter partes review (IPR) is required to name all real parties-
in-interest (RPIs)—this helps ensure proper application of statutory estoppel
and assists the Patent Trial and Appeal Board (PTAB) in identifying potential
conflicts. The determination of whether a party is an RPI is based on a highly
fact-specific test, and the case law indicates that the analysis largely hinges
on factors such as compensation for filing and control of the IPR proceedings.
3,578 / 90%
382 / 10%
13 / 0%
3,973 Total AIA Petitions*
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
443 / 23%
1,193 / 63%
90 / 5%
167 / 9%
1,897 Total AIA Petitions in FY2015*
4 / 0%
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
Electrical / Computer
Mechanical / Business Method
Chemical
Bio / Pharma
Design
900
800
700
600
500
400
300
200
100
0
FY2015 Dispositions of Petitions
AIA Petitions Filed in FY2015
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
Instituted Joinders Denials
801
116
426
91
10 43 3 0 0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
FY2015 FY2014 FY2013
1,737
149
11
1,310
177
2
514
48 0
Inter Partes Review (IPR)
Covered Business Method (CBM)
Post-Grant Review (PGR) Source: PTAB Statistics, FY2015, www.uspto.gov
IPR Petitions in
BioPharma Grow
in Popularity
S E C T I O N I V
First, statistics published by the PTO suggest IPR petitions are
instituted less often in the biopharma space compared with IPR
petitions in other technological classes. For example, as of September
2015, IPRs were instituted 48.4% of the time in non-biotech fields,
whereas only 40.5% of biopharma IPRs were instituted. Furthermore,
once instituted final decisions are reached in the biopharma context
more often, suggesting biopharma cases are less likely to settle. In
particular, 65.7% of biopharma trials are completed, as compared with
57.7% of all IPR petitions. PTO statistics further reveal that biopharma
claims are less likely to be invalidated by the PTAB in instances in
which a final written decision is reached. Collectively, these numbers
demonstrate that biopharma IPRs as a class evidence unique trends,
of which practitioners in this space should be aware.
Second, review of biopharma IPR petitions reveals that not only are
generic and branded companies filing, but so are nonpracticing
entities—specifically hedge fund managers. In early 2015, Kyle Bass,
founder of Dallas-based hedge fund Hayman Capital Management,
announced plans to challenge 15 drug companies’ patents via IPR.
As of November 30, 2015, Bass and his various real parties-in-
interest, which include Erich Spangenberg, delivered as promised,
filing 35 IPR petitions along the way. In sum, 16 companies were the
subject of the various petitions, including Acorda Therapeutics, Pozen,
Biogen, and Celgene. To date, a decision on institution has been
reached in 15 of the 35 cases, with IPR being instituted in seven
of these cases.
While Bass has publically stated his intention in filing IPRs is to invalidate
weak biopharma patents to clear the way for lower-priced generic
entry, many believe his motives lie in using IPR petitions as part of his
investment strategy in which he attempts to profit from short-selling
the stock of targeted companies. While the PTAB has refused to
dismiss Bass’ petitions as abuse of process, legislative reform that
would prevent hedge funds from filing IPRs is being considered.
In response to allegations that their motives are not altruistic, Bass
and Spangenberg recently filed two IPR petitions—this time as
individuals—against Alpex Pharma and Fresenius. The petitions state
that neither stands to profit financially from these filings. In a similar
vein, Spangenberg recently used his blog to solicit volunteers to file
IPR petitions challenging allegedly “weak” pharma patents, pledging
to provide draft petitions to the volunteers and help offset the costs
associated with the petitions.
It will be interesting to see how the industry reacts to these filings,
and what action, if any, Congress takes in response.
The popularity of IPR petitions in the biopharma space has steadily grown since
2012 when IPRs were first introduced as a means of challenging the validity
of patents. In 2013, 34 IPRs were filed, and the number nearly tripled in 2014
with 97 IPRs filed. With 168 IPRs filed through December 2015, biopharma
cases now represent over 9% of all IPR filings. Given this growing trend, it is
an opportune time to evaluate the IPR activity in this space. 3,578 / 90%
382 / 10%
13 / 0%
3,973 Total AIA Petitions*
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
443 / 23%
1,193 / 63%
90 / 5%
167 / 9%
1,897 Total AIA Petitions in FY2015*
4 / 0%
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
Electrical / Computer
Mechanical / Business Method
Chemical
Bio / Pharma
Design
900
800
700
600
500
400
300
200
100
0
FY2015 Dispositions of Petitions
AIA Petitions Filed in FY2015
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
Instituted Joinders Denials
801
116
426
91
10 43 3 0 0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
FY2015 FY2014 FY2013
1,737
149
11
1,310
177
2
514
48 0
Inter Part s Review (IPR)
Covered Business Method (CBM)
Post-Grant Review (PGR)
Source: PTAB Statistics, FY2015, www.uspto.gov
S E C T I O N V
Legislative
Developments
First, medical device, pharmaceutical, and diagnostic companies
have sought to change two key provisions in the IPR statute: elevat-
ing the burden of proof for invalidity from a preponderance of the
evidence to clear and convincing evidence, and narrowing the claim
construction standard from the “broadest reasonable construction”
of a claim term to its “ordinary and customary meaning,” as used in
district court.
Senator Chris Coons (D-Del.) has pushed for these changes in S. 632,
the STRONG Patents Act, which he introduced in February 2015.
While the Senate has yet to vote on the measure in its entirety, the
Senate Judiciary Committee in June approved a different bill, S. 1137,
the PATENT Act, which incorporated the “ordinary and customary
meaning” change but not the burden of proof provision, and also
empowered the Patent Office director to decline institution if it
“would not serve the interests of justice.”
In parallel, the House Judiciary Committee in June approved H.R.
9, the Innovation Act, by a 24-9 margin, a bill that incorporated the
“ordinary and customary meaning” language from the Coons act
but, like the Senate companion measure, not the burden of proof
provision. The Innovation Act also includes language that impairs the
ability of hedge funds to hold “financial instruments” of the companies
whose patents they challenge.
At the same time, the biopharma industry has trod a second path involving
the exemption of life sciences patents entirely from the IPR system.
In a July letter to Congress, the Biotechnology Industry Association
and the Pharmaceutical Research and Manufacturers of America
wrote that IPR “threatens to disrupt the careful balance that Congress
achieved over 30 years ago, by increasing business uncertainty
for innovative biopharmaceutical companies having to defend
their patents in multiple venues and under differing standards
and procedures.”
Rep. Mimi Walters (R-Calif.) acted on this proposal, introducing an
amendment to the Innovation Act that would have excluded biotech
patents from IPR, but she withdrew the amendment in the face
of opposition.
Meanwhile, a leaked analysis by the Congressional Budget Office
concluded that the BIO/PhRMA proposal would cost the federal
government $1.3 billion over the next 10 years because of the
delayed entry to market of generic drugs. Biotech industry spokes-
people disputed the report, arguing, among other things, that $130
million per year amounted to a very small sum, relatively speaking.
In any event, patent reform in general has stalled in both the House
and Senate, leaving the fate of these IPR amendments and proposed
exemptions highly uncertain. And in an election year, it’s unlikely that
these measures will see much action in Congress.
Amidst a spate of high-profile IPR filings in the life sciences space by hedge fund
financiers, the biotechnology industry has mobilized behind two chief legislative
strategies designed to limit or eliminate its exposure to post-grant challenges.
S E C T I O N V I
Joinder in
Post-Grant
Proceedings
As noted elsewhere in this report, the PTAB often considers joinder
in association with 35 U.S.C. § 325(d) as a way of managing the
complexity imposed by a large number of challenges. Once two
proceedings had been joined, the PTAB often sought to simplify the
proceedings in 2015 by mandating that all correspondence flow
through the senior Petitioner, where the senior Petitioner is typically the
first filer. Thus, the PTAB has seemingly been responsive to concerns
by junior Petitioners that a proceeding could settle and be terminated
without an opportunity for them to avail themselves of the validity
questions raised by the senior Petitioner. In balancing these concerns,
the PTAB has allowed parties to liberally join using nearly identical
petitions with a request for joinder under 35 U.S.C. § 315(c). Of more
than 174 joinder motions filed in 2015, 74% were granted. This rate is
markedly increased from granted joinder motions at a rate of 61% in
2014 and 53% in 2013, and is believed to reflect the PTAB’s increased
reliance on 35 U.S.C § 325(d). The acceptance rate for joinder motions
is below 50% so far in 2016, across 13 requests for joinder.
A brief survey of the reasons for denial of a request for joinder
includes concerns about the impact of ongoing proceedings. In
the case of IPR2015-01053, the PTAB declined to join a Petitioner
filed more than one year after the proceedings where the Petitioner
was previously denied institution and filed after the statutory bar by
including a new ground for rejection. In the case of IPR2015-01091,
the petition was denied for being filed more than three months after
the institution date of the earlier petition in which the junior Petitioner
sought joinder. The Board in this proceeding went to great lengths to
contrast the present proceedings, in which a newly filed petition was
being considered, relative to IPR2013-00495, in which the Petitioner
sought to join an earlier-filed proceeding on identical grounds.
The PTAB has generally vested the senior Petitioner filing the earlier-
considered petition with sole responsibility for preparing a response
in joined proceedings. For example, in a scheduling order involving
CBM2015-00059, the PTAB joined a junior Petitioner involved in a
later-considered petition to earlier-instituted proceedings.
However, the PTAB charged the senior Petitioner involved with the
earlier-instituted petition with sole responsibility for filing all joint
motions and, conducting cross-examinations, and also noted that the
Patent Owner is not required to provide separate discovery responses
or additional deposition time as a result of the consolidation. The
deference to the senior Petitioner also extended to the oral hearing,
where the PTAB allocated time in all proceedings only to the senior
Petitioner, and noted that the senior Petitioner is “free to divide
the time among the cases as they choose.”
The PTAB tried to strike a compromise that balances the desire for
judicial efficiency and prompt resolution of post-grant proceedings
in a way that also serves the public interest function in adjudicating
exclusive rights. The PTAB struck this balance in 2015 by granting
an increased number of joinder motions, albeit often limited to existing
records, while preventing junior parties from presenting additional
evidence and more current briefing on additional case law.
The complex nature of modern patent litigation has meant that multiple
defendants often have interests that align around a single portfolio of patents.
This inevitably results in one or more post-grant challenges. The natural
desire for each party to present its own validity defense can result in a large
number of post-grant petitions.
PTAB
Discretion
Under 325(d)
S E C T I O N V I I
In some of those cases, the Board seems to be concerned about
the Petitioner taking a “second bite at the apple.” For example, the
PTAB has denied a second petition challenging claims which were
unsuccessfully challenged in a first petition, where the Petitioner relied
on the same primary references used in the first petition, and added
new evidence or prior art to specifically address the failings in the first
petition.11 In denying these second petitions, the Board said that it
did not want parties to file inadequate petitions and use the institution
decision as a road map because “a decision to institute review on
some claims should not act as an entry ticket, and a how-to guide,
for the same Petitioner.”12 Thus, it is important that the Petitioner
carefully consider the strength of its case before filing a petition because it
may not be able to correct deficiencies in a second petition. The Patent
Owner, on the other hand, should evaluate and raise any § 325(d) issue
in its preliminary response, especially if it seems that the second petition
is addressing failures identified in an earlier denied petition.
The Board also seems keen to avoid duplicative or prejudicial
proceedings. The PTAB has denied a second petition in which the
Petitioner swapped out the primary reference in a first petition without
explaining how the new reference differed from the original primary
reference,13 and in which two of the three references in a second petition
were the same as in the first petition, and were simply used in different
combinations.14 The Board also denied a petition that impacted the
timing of several related cases in which the Petitioner failed to address
potential prejudice and all of the challenged claims were already the
subject of instituted proceedings on the same grounds.15 Thus a
Petitioner filing a second petition should consider discussing the
reasons necessitating a second petition, the lack of burden, and the
prejudice, if it is denied. Conversely, a Patent Owner raising § 325(d)
under these circumstance should note the lack of prejudice to the
Petitioner if the petition is denied.
At least one case indicates that the Board may also be reluctant to revisit
arguments made in prosecution.16 Although this case may be an outlier,
the Petitioner must remember that grounds that raise similar issues to
those addressed during prosecution carry more risk of outright denial.
A Patent Owner, on the other hand, can point out arguments that are
similar to what was in the original prosecution or reexamination.
The Board, under § 325(d), will likely continue to frown on petitions
that repeat earlier arguments or duplicate the proceedings. Petitioners
should be mindful of these considerations when filing an IPR, particularly
when trying to remedy the deficiency of a previously denied petition
by using the same art or arguments. This area of practice should
continue to evolve as the PTAB considers a wider range of facts
under § 325(d).
The PTAB has interpreted the statutes and rules as giving it broad discretion as
to whether to institute inter partes review. Under 35 U.S.C. § 325(d), the PTAB
may reject a petition because “the same or substantially the same prior art or
arguments previously were presented to the Office.”10 In September 2014, the
PTAB published seven opinions in which it denied a petition for inter partes
review under § 325(d). 3,578 / 90%
382 / 10%
13 / 0%
3,973 Total AIA Petitions*
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
443 / 23%
1,193 / 63%
90 / 5%
167 / 9%
1,897 Total AIA Petitions in FY2015*
4 / 0%
*Cumulative since 9/16/2012
Source: PTAB Statistics, FY2015, www.uspto.gov
Electrical / Computer
Mechanical / Business Method
Chemical
Bio / Pharma
Design
900
800
700
600
500
400
300
200
100
0
FY2015 Dispositions of Petitions
AIA Petitions Filed in FY2015
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
Instituted Joinders Denials
801
116
426
91
10 43 3 0 0
IPR CBM PGR
Source: PTAB Statistics, FY2015, www.uspto.gov
FY2015 FY2014 FY2013
1,737
149
11
1,310
177
2
514
48 0
Inter Partes Review (IPR)
Covered Business Method (CBM)
Post-Grant Review (PGR)
r : t ti ti , 2015, ww.uspto.gov
Shifts in
Amendments
at the PTAB
S E C T I O N V I I I
In the summer of 2015, the PTAB issued its final written decision
in REG Synthetic Fuels LLC v. Neste Oil OYJ, IPR2014-00192, only
the fourth substantive amendment granted since inception of the AIA
post-grant procedures. Perhaps pressured by continued criticism
for its seemingly unattainable bar, the PTAB in REG Synthetic seems
to have shown a slight easing of its stringent requirements.
Just a year prior, in ScentAir Technologies, Inc. v. Prolitec, Inc.,
IPR2013-00179, the PTAB had rejected a motion to amend for failing
to distinguish prior art cited on the face of the patent, but the panel
in REG Synthetic Fuels came to a different conclusion. The panel
distinguished ScentAir and allowed an amendment over several
references from the face of the patent noted by Petitioner. The PTAB
reasoned that, unlike the reference in ScentAir, the references in the
REG Synthetic Fuels IPR were not alleged by the challenger to form
any part of a combination of references rendering the claims obvious.
Rather, these references were relevant only to the question of teaching
away, which had been discussed during, and rendered moot by,
the PTAB’s rejection of the original claims.
Shortly after REG Synthetic Fuels, the PTAB further clarified the
requirements for motions to amend in MasterImage 3D, Inc. v. RealD
Inc., Case IPR2015-00040, slip op. at 1-3 (PTAB July 15, 2015)
(Paper 42). Here the PTAB explained that a Patent Owner need only
argue for the patentability of the proposed substitute claims over
the prior art of record, including any art provided in light of a Patent
Owner’s duty of candor, and any other prior art or arguments
supplied by the Petitioner. In other words, the universe of art the
Patent Owner must distinguish is finite.
The decisions in REG Synthetic Fuels and MasterImage illustrate
how the PTAB is trying to accommodate amendments, but neither
is a big shift.
What’s more, this summer the Federal Circuit effectively gave the
PTAB great freedom in its analysis over amendments. The PTAB’s
reasoning for rejecting the motion to amend in ScentAir, and more
generally the PTAB’s requirements for motions to amend set forth
in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012–00027 (PTAB
June 11, 2013), have since been affirmed at the Federal Circuit.
See Prolitec, Inc. v. ScentAir Technologies, Inc. December 4, 2015;
Microsoft Corp. v. Proxyconn, Inc.
Despite another year of attempts to amend in IPR and CBM,
success is still rare. But is a change coming?
Thank you to the
writers who made
this Report
possible:
Craig Countryman, Principal
John Dragseth, Principal
Tasha Francis, Associate
Kevin Greene, Principal
Joshua Griswold, Principal
Stuart Nelson, Associate
Michael Rosen, Principal
Thomas Rozylowicz, Principal
Ron Vogel, Associate
The First Wave
of Post-Grant
Appeals
S E C T I O N I X
Several parties have challenged the Board’s authority to institute an
IPR or CBM. The Federal Circuit has largely rejected such challenges,
finding that the appeal bar in 35 U.S.C. § 314(d) deprives it of
jurisdiction to consider most of them. For example, In re Cuozzo
Speed Techs., LLC, 793 F.3d 1268 (Fed. Cir. 2015), the Federal
Circuit declined jurisdiction over a challenge to the Board’s decision
to institute based on an obviousness combination that wasn’t precisely
articulated in the IPR petition. Cuozzo held that the § 314(d) appeal
bar applies equally at the final written decision stage and that the
Petitioner’s failure to cite particular prior art against specific claims
wasn’t a basis for upsetting the final decision. But the Federal Circuit
has examined one institution-related issue: Versata Development
Group v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015). It
found jurisdiction to consider whether the PTAB properly determined
a patent was a “covered business method,” because this was a
substantive limit on the PTAB’s invalidation authority.
The Supreme Court may soon resolve the seeming tension between
Cuozzo and Versata, as it has granted certiorari in Cuozzo and will
render a decision there by June 2016.
Most losing parties have framed their appeals as matters of claim
construction, as this gets de novo review when based on the intrinsic
evidence. But this is still a difficult road for Patent Owners, because
Cuozzo held that the “broadest reasonable interpretation” (BRI)
standard governs. That result sparked considerable controversy–five
judges dissented from denial of rehearing en banc, and the Supreme
Court granted certiorari to resolve the issue.
Applying the current BRI standard, the Federal Circuit has reversed
claim constructions in only two IPR appeals: Microsoft v. Proxyconn,
789 F.3d 1292 (Fed. Cir. 2015) and Straight Path IP Group v. Sipnet,
806 F.3d 1356 (Fed. Cir. 2015). The common thread was that the
Board ignored express limitations in the claim language. By contrast,
Patentees are unlikely to succeed in obtaining a narrower construction
if the issue is in any way ambiguous or they are relying heavily on
the specification.
The Federal Circuit has rejected most appeals arguing either side
of obviousness because the Appellant usually reargues underlying
factual findings. The only precedential decision that vacates an
obviousness finding is Ariosa Diagnostics v. Verinata Health, Inc.,
805 F.3d 1359 (Fed. Cir. 2015), where the Board might have
erroneously excluded a prior art document that reflected the skilled
artisan’s knowledge, regardless of whether it was part of a formal
obviousness combination. Another notable decision is Belden Inc.
v. Berk-Tek LLC, 805 F.3d 1064 (Fed. Cir. 2015), which affirmed the
invalidation of the broader claims and reversed on the dependent
claims, finding those invalid too.
Several other post-grant appeals are still pending, including those
addressing the Board’s power to invoke the “redundancy” doctrine
and the Board’s power to “join” additional claims raised in a second
IPR petition filed by the same party. Most Appellants will be hard-pressed
to find a legal issue that makes their case stand out from the wave
of others, while appellees will be content to blend in with the crowd.
2015 brought the first wave of Federal Circuit decisions in appeals from
inter partes review (IPR) and covered business method (CBM) proceedings.
The trend has been deference: in 83 post-grant appeals, the Federal Circuit
has affirmed in 92%, mostly without opinion. There are a few areas, though,
in which the Federal Circuit has addressed interesting new issues.
1Zoll Lifecor Corporation v. Philips Electronics North America Corp. and Koninklijke Philips Electronics N.V. (IPR2013-00606). 2Atlanta Gas Light Company v. Bennett Regulator Guards, Inc., (IPR2013-00453). 3Chief Judge James Donald Smith, USPTO
Discusses Key Aspects of New Administrative Patent Trials, UNITED STATES PATENT AND TRADEMARK OFFICE, Apr. 4, 2012, www.uspto.gov/patent/laws-and-regulations/america-invents-act-aia/message-chief-judge-james-donald-smith-board.
4Atlanta Gas Light Company v. Bennett Regulator Guards, Inc., (IPR2013-00453). 5The Taylor factors include: (1) whether third party agrees to be bound by the Board’s determination; (2) whether a pre-existing relationship with the party named in the proceeding
justifies binding the third party; (3) whether the third party is adequately represented by someone with the same interests; (4) whether the third party exercised or could have exercised control over the proceeding; (5) whether the third party is bound by a prior
decision and is attempting to rehear the matter through a proxy; (6) whether a statutory scheme forecloses successive hearing by third parties. 77 Fed. Reg. 48759 (citing Taylor v. Sturgell, 553 U.S. 880 (2008)). 6Zoll Lifecor Corporation v. Philips Electronics
North America Corp. and Koninklijke Philips Electronics N.V., (IPR2013-00606). 7RPX Corporation v. Virnetx Inc., (IPR2014-00171, IPR2014-00172, IPR2014-00173, IPR2014-00174, IPR2014-00175, IPR2014-00176, IPR2014-00177); Unified Patents Inc.
v. Dragon Intellectual Property, LLC, (IPR2014-01252); 8UUnified Patents Inc. v. Dragon Intellectual Property, LLC, (IPR2014-01252); Petroleum Geo-Services Inc. v. WesternGeco LLC, (IPR2014-00688). 9RPX Corporation v. Virnetx Inc., (IPR2014-00171,
IPR2014-00172, IPR2014-00173, IPR2014-00174, IPR2014-00175, IPR2014-00176, IPR2014-00177).1035 U.S.C. § 325(d). 11ZTE Corp. v. ContentGuard Holdings, Inc., (IPR2013-00454); Unilever, Inc. v. Procter & Gamble Co., (IPR2014-00506);
Medtronic, Inc. v. Nuvasive, Inc., (IPR2014-00487). 12ZTE Corp. v. ContentGuard Holdings, Inc., (IPR2013-00454). 13Intelligent Bio-Systems, Inc. v. Illumina Cambridge Limited, (IPR2013-00324). 14Medtronic, Inc. v. Robert Bosch Healthcare Systems, Inc.,
(IPR2014-00436). 15Unified Patents v Personal Web, (IPR2014-00702). 16Prism Pharma Co., Ltd. v. Choongwae Pharma Corp., (IPR2014-00315).
End Notes
Fish & Richardson is a global patent, intellectual property (IP) litigation, and commercial litigation law firm with more than 400 attorneys and technology specialists
across the U.S. and Europe. Fish is a Tier 1 Patent Law Firm, a “Powerhouse” for complex patent work, top PTAB firm, and has been named the #1 patent litigation
firm for 12 consecutive years. Fish is the leading law firm for the world’s greatest innovators and influential industry leaders and has represented visionaries in
technology, business, and the arts since 1878. For more information, visit www.fr.com.
These materials may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice. The
material contained in this brochure has been gathered by the lawyers at Fish & Richardson P.C. for informational purposes only and is not intended to be legal advice.
Transmission is not intended to create and receipt does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel.
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