August 19, 2021

Issue 34: PTAB Trial Tracker

The availability of post-grant proceedings at the Patent Trial and Appeal Board (PTAB) has changed the face of patent litigation. This monthly digest is designed to keep you up-to-date by highlighting interesting PTAB, district court, and Federal Circuit decisions relating to emerging post-grant issues.

Post-Arthrex, USPTO Implements Interim Director Review Procedures

The U.S. Supreme Court issued its decision in United States v. Arthrex, Inc., agreeing with the U.S. Court of Appeals for the Federal Circuit that the Administrative Patent Judges were unconstitutionally appointed, but limited the remedy to giving the Director of the USPTO the power to review a panel’s decision. For more in depth summary, see our team’s analysis here.

To align PTAB practices with the Arthrex decision, the USPTO has implemented an interim procedure for Director review. According to this interim procedure, either the USPTO Director may sua sponte initiate review of a final written decision, or a party to the PTAB proceeding may request Director review. The party’s request would be initiated by concurrently (1) entering a Request for Rehearing by the Director into PTAB E2E and (2) submitting a notification of the Request for Rehearing by the Director to the Office by email to, copying counsel for all parties by email. The USPTO has further provided a Q&A page to address Arthrex and this interim procedure.

The Director has reviewed and decided requests for Director review in two cases: Samsung Display Co., Ltd., v. Solas OLED Ltd., IPR2020-00320 (PTAB Aug. 2, 2021) and Google LLC v. Hammond Dev. Int’l, PTAB2020-00081 (PTAB Aug. 2, 2021). In both cases, the requests for Director review were denied, without any substantive discussion, and the PTAB’s Final Written Decision “is the final decision of the agency.”

District Court Excludes Evidence of PTAB’s Decision on Institution

In Plexxikon Inc. v. Novartis Pharmaceuticals Corporation, No. 4:17-cv-04405, the district court granted defendant’s motion in limine to exclude evidence that the PTAB declined to institute review of defendant’s IPR and PGR petitions. The court explained that non-institution decisions are not decisions on the merits and that “introduction of such decisions often poses a substantial risk of confusing the issues, prejudicing the opposing party, and otherwise unduly consuming trial time.” Id. at 2. The court concluded that such evidence was substantially more prejudicial than probative. Id. at 3. The court also rejected plaintiff’s arguments that the institution denial was proper for impeachment, stating that whether a witnesses ‘took into consideration’ or ‘engaged with’ the PTAB’s reasoning is irrelevant “because the PTAB’s views are not binding in this proceeding.” Id.

Takeaway: Given the discretionary nature of institution decisions and the different records before a district court and the Board, a denial of institution will likely not be probative of issues in a district court. While not specifically addressed in this decision and in view of the different burden of proof standard for invalidity in district court (clear and convincing evidence) versus the PTAB (preponderance of the evidence), it is likely that a court would come to the same conclusion regarding the PTAB’s grant of institution. 

Shifting Trial Dates Undermine Argument for Denial Under Fintiv

In Apple Inc. v. Koss Corp., IPR2021-00255 (Paper 22), the Board granted institution despite a co-pending litigation in the Western District of Texas. The Board noted that the court entered a scheduling order setting a trial date for two months prior to the deadline for the Board’s Final Written Decision. While this would ordinarily weigh in favor of denial under the Fintiv factors, the Board relied on an article showing the likelihood that the trial date would be delayed in light of docket congestion and the global pandemic to find that this weighed only minimally in favor of denial.

Takeaway: Since Fintiv, the Board has increasingly denied institution where there is a trial scheduled before the Board’s deadline for a Final Written Decision. With this decision, the Board seems to recognize the realities of shifting litigation schedules.

Invalid Patent Remains Prior Art Under Section 102(e)(2)

In Becton v. Baxter, No. 2020-1937 (Fed. Cir. 2021), the Federal Circuit addressed whether an invalidated patent could serve as a prior art reference under Section 102(e)(2). Becton petitioned for IPR of a patent owned by Baxter directed to telepharmacy systems and methods. After the Board determined that the challenged claims were not invalid as obvious, petitioner appealed. The Federal Circuit reversed, rejecting Baxter’s argument that one of the references was not available as prior art under Section 102(e)(2) because all claims of that patent had been cancelled in 2018 following inter partes review. The Federal Circuit held that Section 102(e)(2) requires only that a patent “grant has occurred,” but there is no statutory requirement that the patent be currently valid.

Takeaway: A patent reference is eligible as prior art under 35 USC § 102(e)(2) once the patent is granted, even if later found invalid.

Additional Discovery Available When Relevant to Issues Before the PTAB

In Brunswick Corp. v. AB Volvo Penta, IPR2020-01512 (PTAB May 12, 2021), the Board granted Patent Owner's motion for additional discovery, including two requests for production directed to alleged commercial success and copying. Analyzing the Garmin factors, the Board granted Patent Owner’s requests for Petitioner’s sale figures and evidence of alleged copying, determining that Patent Owner’s requests were likely to lead to information relevant to issues in the petition. The Board found that Patent Owner made a sufficient showing that: (1) the information sought was likely relevant to issues before the Board; and (2) information in public documents made the existence of such evidence not speculative. Notably, the Board rejected Petitioners argument that similar discovery in parallel litigation was an alternative that should weigh against additional discovery in the IPR.

Takeaway: While additional discovery is uncommon in IPR proceedings, when granted the Board has taken a broad view of what is useful in IPR proceedings. That similar discovery is also available in a parallel litigation does not impact the Board’s consideration of a request for additional discovery.

Service by FedEx Satisfies the Service Requirement Under § 42.205(b)

In TIZ, Inc. v. Jason K. Smith, CBM2020-00029, Paper 17 at 12 (Mar. 25, 2021), the Board made clear that using FedEx with next-day delivery is “sufficiently akin to Priority Mail Express to satisfy the service requirement of § 42.205(b).”

On September 15, 2020, the last day to file CBM petitions, Petitioner served its CBM Petition via FedEx and emailed a courtesy copy of the papers to Patent Owner’s counsel. At the time of service, the parties had not agreed to service by email, and Petitioner’s filing date was dependent on its service via FedEx. Patent Owner argued that the Petition was not entitled to the September 15, 2020 filing date because it did not receive the Petition until September 16. Patent Owner also argued that the “mail box rule” – wherein papers are deemed served when they are put in the mail, not when they are received – should not apply. The Board was not persuaded, noting that “that 37 C.F.R. § 42.205(b) indicates that “’[s]ervice may be by Priority Mail Express® or by means at least as fast and reliable as Priority Mail Express®. Personal service is not required.’” Id. at 13. (emphasis in original). The Board found that Petitioner’s method of service was comparable to Priority Mail Express.

Takeaway: Although CBM review is no longer available, the Board’s view that service via next-day delivery by FedEx is comparable to service by Priority Mail Express is likely applicable to all service requirements at the PTAB.