April 4, 2024

Issue 44: 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 periodic 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.

Expert Opinion Contradicting PTAB Factual Findings Excluded Under Daubert

In Centripetal Networks, LLC v. Palo Alto Networks, Inc., 2:21-cv-00137 (E.D. Va. Jan. 9, 2024), the parties were litigating patents in the same family as a patent found invalid in a prior IPR.  In the litigation, Defendant Palo Alto Networks, Inc. (“PAN”) relied on prior art that was also considered during the IPR, and Plaintiff Centripetal Networks, LLC (“Centripetal”) asserted similar arguments to those it raised in the prior IPR.  Memorandum Opinion and Order at 10–11.  PAN moved to exclude portions of Centripetal’s technical expert’s report and testimony, particularly those that conflicted with the Board’s factual findings regarding that prior art in its Final Written Decision, which were affirmed on appeal to the Federal Circuit.  Id. at 11.  PAN argued, in part, that Centripetal’s expert’s assertions that contradicted the PTAB’s factual findings were barred by collateral estoppel.  Id.  The district court agreed and granted the motion to strike the opinions that contradicted the appellate-affirmed findings of fact.  Id.

The Court rejected Centripetal’s argument that PAN’s motion sought issue preclusion on the issue of invalidity.  Id.  The Court clarified that PAN was seeking “preclusion of the specific teachings that [the expert] cites, which contradict factual findings made in the PTAB proceeding. . . . [The relevant] statements are factual contentions, not invalidity opinions. . . . [Plaintiff], having participated in the prior action before the PTAB, is now collaterally estopped from challenging the factual findings made there.  While [the expert] can certainly opine that the prior art is not applicable to the claim limitations here, he may not opine that the prior art operates in a way that contradicts the PTAB's findings.”  Id. at 11–13.

The Court also rejected Centripetal’s arguments related to the differences in burdens of proof and differences in the asserted claims.  The Court found that the different burdens of proof to establish invalidity in the PTAB and in the district court was not pertinent to the question of whether the factual findings may be relitigated.  Id. at 12.  The Court similarly rejected Centripetal’s argument regarding differences in the claims of the asserted patents in the two proceedings.  Although the claims of the related patents were not identical, the court found that any such differences were irrelevant to the specific factual findings made about the operation of the prior art.  Id. at 13.

Takeaway: A party who participated in a prior action at the PTAB may be collaterally estopped from challenging the Board’s factual findings regarding prior art in a subsequent proceeding.  While an expert may opine that the prior art is not applicable to the claim limitations, they may not opine that the prior art operates in a way that contradicts the PTAB’s findings.

“Understudy” IPR Petitioner Invalidates Amended Claims Using Reference Not Cited By Original Petitioner

In CyWee Group Ltd. v. ZTE (USA), Inc., 90 F.4th 1358 (Fed. Cir. 2024) (precedential), the Federal Circuit affirmed the Board’s denial of CyWee’s motion to amend based, in large part, on arguments raised by joined petitioner LG Electronics (“LG”).

As brief procedural background, ZTE filed an IPR petition against CyWee’s patents. Id. at 1362. After the Board instituted the IPR, it granted LG’s motion to join the proceeding in an understudy role.  Id.  After LG joined, CyWee filed a revised motion to amend that added five additional claims, one of which was identical to a claim proposed in the original motion to amend.  Id.  The Board agreed to allow LG to oppose the revised motion to amend without ZTE, finding that ZTE “‘no longer appear[ed] to be meaningfully adversarial’ to CyWee’s revised motion to amend.”  Id. at 1362–63.  The Board held that CyWee’s revised claims “would have been obvious over, among other things, a combination of three references,” including a prior art reference cited by LG that ZTE had not cited in its original opposition.  Id. at 1363.

On appeal, CyWee argued that the Board erred by allowing LG to oppose its revised motion to amend without original petitioner ZTE and to cite a prior art reference not relied on by ZTE.  Id.  The Federal Circuit rejected CyWee’s argument.  Id. at 1364.  The Federal Circuit stated that “given the substantive importance of a motion to amend in the context of an IPR (in that it can lead to the issuance of new, otherwise unexamined claims),” and ZTE’s inactivity, the Board did not err.  Id.  The Federal Circuit also stated that 35 U.S.C. § 315(c), which “does not authorize the joined party to bring new issues . . . into the existing proceeding,” does not apply to motions to amend “where the patent owner has introduced new claims into the proceeding.”  Id. at 1364–66 (internal citations omitted).  Finally, the Federal Circuit noted that “CyWee has identified nothing in the Board’s current procedures prohibiting LG from raising [the prior art] in opposition to the revised motion to amend.”  Id. at 1365.

Takeaway: Joined petitioners in PTAB proceedings may be able to play a more active role in the proceeding if the original petitioner chooses not to oppose positions taken by patent owner.

The Board’s Reconsideration of the Fintiv Factors Leads to Invalidity of Seagen’s Patent

In Daiichi Sankyo, Inc. v. Seagen Inc., PGR2021-00030, Paper 57 (PTAB Jan. 16, 2024), the Board found the challenged claims invalid.  Notably, however, the proceeding was instituted after reconsideration, and particularly in view of the Guidance Memo issued by Director Vidal (“Guidance Memo”) on June 21, 2022, indicating that “the PTAB will not rely on the Fintiv factors to discretionarily deny institution in view of parallel district court litigation where a petition presents compelling evidence of unpatentability.”  Paper 36 at 12 (quoting Guidance Memo at 2).

In June 2021, the Board initially exercised its discretion under 35 U.S.C. § 324(a) to deny institution based largely on related district court litigation that had a trial date scheduled “nearly four months before [the Board’s] projected statutory deadline for issuing a final written decision.”  Id. at 2.  Petitioner filed a rehearing request in July 2021 and successfully convinced the Board to institute post-grant review on reconsideration.  See Paper 17.  However, Patent Owner then filed its own request for rehearing in light of changed circumstances in the parallel district court proceeding and related PTAB proceeding.  Paper 20.  That too was successful, resulting in the Board, again, exercising its discretion to deny institution.  Paper 31.

In August of 2022, Petitioner again filed a rehearing request, the second in the case, arguing that the Second Denial Decision did not accord with the guidance provided by the Director in the Guidance Memo regarding discretionary denials in light of parallel district court proceedings.  Paper 32.  The guidance provided that the Board should not exercise its discretion to deny institution when the merits of the Petition are “compelling.”  This standard was further clarified in the precedential decision in OpenSky Industries, LLC v. VLSI Technology, LLC, indicating that this standard is met when “it is highly likely that the petitioner would prevail with respect to at least one challenged claim.”  IPR2021-01064, Paper 102 at 49–50 (PTAB Oct. 3, 2022) (Decision by the Director) (precedential).  As a result, the Board instituted the proceeding, and found all challenged claims invalid in the Final Written Decision.

Takeaway: While the “compelling merits” standard will continue to be debated, the Director’s Guidance Memo will play a key role in discretionary denial determinations concerning related proceedings and the Fintiv factors.

Operating Manuals Deemed Prior Art Printed Publications Despite Confidentiality Restrictions

In Weber Inc. v. Provisur Technologies, Inc., No. 2022-1751 (Fed. Cir. Feb. 8, 2024), the Federal Circuit found that Weber’s operating manuals were not prior art printed publications, reversing the Board’s determination otherwise.  The Court concluded that the Board erred in determining that Weber’s operating manuals were not sufficiently publicly accessible to constitute printed publications, finding, “[t]he record evidence shows that Weber’s operating manuals were accessible to interested members of the relevant public by reasonable diligence.  For instance, Weber employees testified that the operating manuals could be obtained either upon purchase of the Weber food slicer or upon request directed to a Weber employee.”  Id. at 11.

The Federal Circuit explained that “[t]he Board’s contrary conclusions on public accessibility were based in part on the Board’s inordinate emphasis on alleged confidentiality restrictions associated with the operating manuals.”  Id. at 12.  The Court explained that Weber’s “assertion of copyright ownership does not negate its own ability to make the reference publicly accessible” and that “[t]he intellectual property rights clause from Weber’s terms and conditions covering sales, likewise, has no dispositive bearing on Weber’s public dissemination of operating manuals to owners after a sale has been consummated.”  Id. at 13.

Takeaway: “Public accessibility” sufficient to constitute printed publication prior art status may be found even where disclosure is limited by confidentiality restrictions.  Parties should keep in mind this issue and consider the audiences its publications are intended and reasonably able to reach.

USPTO Publishes Enablement Guidelines in view of Amgen v. Sanofi

On January 10, 2024, the USPTO published Guidelines for Assessing Enablement in Utility Applications and Patents in View of the Supreme Court Decision in Amgen Inc. et al. v. Sanofi et al. (“Guidelines”).  The Guidelines are applicable “regardless of the technology, for ascertaining compliance with the enablement requirement of the patent laws during the examination of utility patent applications and the review of utility patents.”  The Guidelines state that they “are not intended to announce any major changes to USPTO practice or procedure, and are incorporating guidance from the Amgen decision and several post-Amgen enablement court decisions that are consistent with current USPTO policy.”  Id.

The Guidelines recognize that the “Supreme Court did not explicitly address the Wands factors in Amgen,” but note that “[t]he Wands factors are probative of the essential inquiry in determining whether one must engage in more than a reasonable amount of experimentation.”  Id.  The Guidelines provide that an enablement assessment during prosecution still requires use of the Wands factors, including: “(A) the breadth of the claims, (B) the nature of the invention, (C) the state of the prior art, (D) the level of one of ordinary skill, (E) the level of predictability in the art, (F) the amount of direction provided by the inventor, (G) the existence of working examples, and (H) the quantity of experimentation needed to make and use the invention based on the content of the disclosure.”  Id.  Per the Guidelines, use of the Wands factors is consistent with Amgen and several of the Federal Circuit’s post-Amgen decisions, including BaxaltaId.

USPTO Proposes Expanding Opportunities to Appear Before the PTAB

On February 21, 2024, the USPTO issued a Notice of Proposed Rulemaking to amend the criteria individuals must meet to practice before the PTAB.  The proposed amendments are intended to “expand opportunities to practice before the [USPTO],” and includes proposed amendments to: “give parties the option to designate non-registered practitioners who are recognized pro hac vice (i.e., granted recognition in a specific PTAB proceeding) as lead counsel; excuse parties from the requirement to designate back-up counsel upon a showing of good cause such as a lack of resources to hire two counsel; establish a streamlined alternative procedure for recognizing counsel pro hac vice that is available when counsel has previously been recognized pro hac vice in a different PTAB proceeding; and clarify that those recognized pro hac vice have a duty to inform the Board of subsequent events that render inaccurate or incomplete representations they made to obtain pro hac vice recognition.”

Written comments must be received on or before May 21, 2024.

USPTO Proposes Permanent MTA Pilot Program Rules

On March 4, 2024, the USPTO issued a Notice of Proposed Rulemaking regarding Motion to Amend (MTA) practice and trial proceedings before the PTAB.  The USPTO proposes to revise its rules of practice to permanently incorporate the procedures of the MTA Pilot Program.  Under the MTA Pilot Program, patent owners who file an MTA have the opportunity to request preliminary guidance—which is non-binding on the Board—and to file a revised MTA.  The program also provides timelines for briefing to accommodate these options.

The USPTO further proposes to “revise the rules to clarify that a preponderance of evidence standard applies to any new ground of unpatentability raised by the Board and to clarify that when exercising the discretion to grant or deny an MTA or to raise a new ground of unpatentability, the Board may consider all evidence of record in the proceeding, including evidence identified through a prior art search conducted by the Office at the Board's request and added to the record.”

The deadline to submit written comments is May 3, 2024.


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