Alert May 15, 2020

Issue Twenty-Six: 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.

Supreme Court Narrows Scope of Judicial Review before the PTAB

In Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020), the Supreme Court held that a PTAB panel’s determination of whether a petition is timely under 35 U.S.C. § 315(b) cannot be judicially reviewed.

In the underlying IPR, the Board found that Thryv’s petition was timely and instituted review. Click-To-Call appealed the timeliness determination, and the Federal Circuit reversed the Board’s § 315(b) determination. Thryv then petitioned for certiorari at the Supreme Court.

The Supreme Court, in a majority opinion by Justice Ginsburg, disagreed with the Federal Circuit and held that the PTAB’s decision on whether a petition for IPR is timely is not judicially reviewable. The Court held that timeliness decisions fall within the bar of judicial review of an institution decision, and noted that the “time limitation is integral to, indeed a condition on, institution.” Id. at 1373. Indeed, the relevant statute “expressly governs institution and nothing more.” Id.Therefore, the Court concluded that a contention that the IPR petition was untimely “is a contention that the agency should have refused ‘to institute an inter partes review,’” and such a contention is not reviewable on appeal. Id. A more detailed analysis of the Thryv decision can be found here.

At least one Federal Circuit decision after Thryv applies a similar reasoning. In Apple Inc. v. Universal Secure Registry LLC, No. 20-1394 (Fed. Cir. Apr. 30, 2020), the Federal Circuit dismissed Apple’s appeal of the Board’s decision to terminate Covered Business Method (CBM) reviews of Universal Secure Registry’s patent. The Board terminated CBM proceedings, finding that the patent did not qualify for CBM review. Apple appealed the Board’s termination decisions, challenging the determination of eligibility for a CBM review. The Federal Circuit dismissed Apple’s case, concluding that institution decisions from the PTAB cannot be appealed. The Order states: “The scheme that governs judicial review of CBM proceedings clearly differentiates between the board’s final written decision after institution, which is appealable, and the director’s discretionary determination not to institute review proceedings, which is ‘final and nonappealable.’” Apple, Slip. Op at 2.

TAKEAWAY: PTAB institution decisions based on the analysis of a time bar cannot be appealed, but this reasoning may apply to other threshold determinations from the Board.

Will the Injured Party Please Stand Up

The Federal Circuit recently examined the issue of standing to appeal decisions from the PTAB in a series of opinions.

First, the Federal Circuit in Pfizer Inc. v. Chugai Pharm. Co., No. 2019-1513, 2020 WL 1983197 (Fed. Cir. Apr. 27, 2020) found that Pfizer failed to establish Article III standing in a pair of IPR appeals. Pfizer filed two IPR petitions, challenging the validity of Chugai’s patents covering processes related to Protein A chromatography. The Board found that Pfizer did not prove that any challenged claim was unpatentable, and Pfizer appealed.

The Federal Circuit held that Pfizer lacked standing to appeal. Pfizer asserted that it had standing to appeal based on FDA approval of its rituximab biosimilar, Ruxience®, in July 2019 and an announcement in October 2019 that it planned to launch Ruxience® in January 2020. The Court concluded that this record was insufficient to establish standing because Pfizer filed its notice of appeal on January 30, 2019, but did not present any evidence of activities related to Ruxience® prior to July 2019. The court also noted that Pfizer did not present any evidence that established “with sufficient likelihood that the processes used to prepare Pfizer’s product would infringe Chugai’s patents.” Id. at *3. Pfizer’s assertion that Chugai was likely to assert the challenged patents against Pfizer because it uses chromatography technique to manufacture Ruxience® which is arguably claimed in Chugai’s patents was not enough to establish standing. The court additionally noted that the statutory estoppel effect of 35 U.S.C. § 315(e) alone does not constitute an injury in fact to establish standing.

Similarly, in Argentum Pharm. LLC v. Novartis Pharm. Corp., 956 F.3d 1374 (Fed. Cir. 2020), the Federal Circuit held that Argentum lacked standing to appeal the Board’s decision that petitioners failed to demonstrate unpatentability of the challenged claims. At the PTAB, a number of petitioners were joined in a single proceeding, including Argentum, even though Argentum had not yet filed its ANDA seeking approval to market a generic version of Novartis’s product.; Before the opening appeal brief was filed at the Federal Circuit, all petitioners except for Argentum settled. Consequently, Novartis challenged Argentum’s standing to appeal.

Argentum argued that it had standing because: (1) Novartis would sue Argentum and its partner KVK-Tech, Inc. upon the filing of an ANDA; (2) Argentum would suffer economic injury since a lawsuit would be “looming” over Argentum; and (3) Argentum faces an estoppel due to 35 U.S.C. §315. The court disagreed, noting, “[n]o ANDA has been filed here, and Argentum has not provided evidence showing that it would bear the risk of any infringement suit or anything related to its involvement in the ANDA process beyond generic statements.” Id. at 1374. Moreover, just as in Pfizer, the court found that the estoppel in a subsequent district court proceeding was insufficient to confer standing. Ultimately, the Court found Argentum’s allegations of economic injury was both conclusory and speculative and therefore “cannot suffice to establish an injury in fact that is “‘concrete and particularized’ and ‘actual or imminent, not conjectural or hypothetical.’” Id. (citing Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1543 (2016))

Finally, the Federal Circuit in Grit Energy Sols., LLC v. Oren Techs., LLC, No. 2019-1063, 2020 WL 2078397 (Fed. Cir. Apr. 30, 2020) found that Grit Energy had standing to appeal its failed challenge of patents related to fracking technologies at the PTAB. Importantly here, Oren Technologies previously asserted infringement of the challenged patent against Grit Energy, but the case was ultimately dismissed without prejudice.The issue before the Federal Circuit in Grit Energy was whether Grit Energy lost standing to appeal when it transferred ownership over the allegedly infringing products. Unlike Pfizer and Argentum, the court found that “Grit Energy has engaged in acts that not only could give rise to a possible infringement suit, but did give rise to an infringement suit.” Id. at *5 (emphasis in original). The Federal Circuit held that past activities, like present and potential future activities, can create a controversy between two parties. The Court noted that, “disputes between parties frequently relate to actions that occurred in the past, and the mere fact that such actions have not continued to the present does not necessarily dissipate a controversy over those actions.” Id. at *6.

TAKEAWAY: The Federal Circuit’s recent decisions highlight the importance of considering standing to appeal when determining strategy at the PTAB. Unsuccessful petitioners bear the burden of establishing their injury concretely and with specificity, and the threat of estoppel in future proceedings will not be sufficient to support standing to appeal. Notably, past actions and disputes can establish standing, but it will be more challenging to prove the required controversy with sufficient immediacy and reality when relying on future plans.

District Court Declines to Apply Estoppel Based on Possibility That Pre-IPR Search for Prior Art Was Reasonable

In Acceleron, LLC v. Dell, Inc., the district court adopted the special master’s recommendations and denied plaintiff’s motion to strike portions of defendant’s invalidity contentions due to judicial and statutory estoppel. No. 1:12-cv-4123-TCB (N.D. Ga. Mar. 30, 2020). The court found that statutory estoppel should not apply to the invalidity positions currently asserted. The court noted that the prior art systems relied on by defendant in the litigation could not have been raised in the IPR and were not entirely cumulative of the arguments made to the PTAB. The court distinguished Wasica (discussed in Issue 23) because the defendant there did not dispute that the printed publication disclosed the relevant features of the physical system or that it could have been raised during the IPR. Additionally, in evaluating a printed publication that defendants admittedly did not find until after the IPR, the court stated that it was found post-IPR based on “a skilled searcher conducting a diligent search,” but that “does not necessarily mean [defendant’s] pre-IPR search was any less diligent.” Id. at 12 In light of Plaintiff’s burden of proving estoppel and its failure to demonstrate a search string and source that would have identified the manual, the court allowed defendant to rely on the new reference.

TAKEAWAY: District courts have been inconsistent regarding the scope of statutory estoppel. Parties should bear in mind that failure to previously raise a prior art publication alone may not automatically trigger estoppel. Plaintiffs looking to enforce estoppel should present evidence that demonstrates that the petitioner reasonably should have found and raised the prior art reference in the PTAB proceeding.

Declaratory Judgment Claimant Not Estopped from Raising Invalidity Counterclaims

In Epic v. Acceleration Bay, the Court denied defendant's motion to strike plaintiff's invalidity counterclaims-in-reply or reclassify the claims as amendments to the complaint. No. 4:19-CV-04133-YGR, 2020 WL 1557436 (N.D. Cal. Apr. 1, 2020). The complaint sought only a declaratory judgment of non-infringement, but plaintiffs raised counterclaims-in-reply of invalidity. In denying defendant’s motion to strike, the Court recognized an “apparent loophole” in the statutory scheme for inter partes review. Id. at *3. The Court explained that under this loophole the declaratory judgment plaintiff here, with invalidity counterclaims-in-reply, may theoretically seek a “redo” before the PTAB while being subject to no estoppel or time limit. The court did not strike the counterclaims-in-reply because they were duplicative of plaintiff’s affirmative defenses and therefore did not further burden the court. The court noted, however, that it doubted the PTAB would be concerned with the form of plaintiff’s invalidity counterclaims when analyzing statutory bars. See id. at *3 n.2.

TAKEAWAY: While 35 U.S.C. §315 may not explicitly prevent parties who assert invalidity arguments in the form of counterclaims-in-reply, there is risk that the PTAB will see this as gamesmanship and deny institution of challenges brought by petitioners who try to find loop-holes in the statutes.

PTAB Encourages Development of Young Practitioners

The PTAB launched its Legal Experience and Advancement Program (LEAP), which aims to increase opportunities for oral advocacy before the PTAB. Under this program, a “LEAP practitioner” is one who has:

  1. Three or fewer substantive oral arguments in any federal tribunal, including the PTAB; and
  2. Seven or fewer years of experience as a licensed attorney or agent.

The PTAB will grant a party represented by a LEAP practitioner up to 15 minutes of additional argument time. More information can be found here.

Precedential/Informative Decisions: Printed Publications and Secondary Considerations

Last month, the Precedential Opinion Panel designated several new decisions related to issues of printed publications and secondary considerations as precedential or informative.

Printed Publications

  • Argentum Pharmaceuticals LLC v. Research Corp. Techs., Inc., IPR2016-00204, Paper 19 (May 23, 2016) (informative as to section II.B) – The Board determined that the petitioner had failed to show a thesis was publicly available, where the petitioner offered evidence of a joint statement with patent owner from a prior litigation of the thesis’s prior art status and where the thesis was cited in contemporary articles by the thesis advisor.
  • Seabery N. Am. Inc. v. Lincoln Global, Inc., IPR2016-00840, Paper 11 (Oct. 6, 2016) (informative as to section II.A.i) – The Board found that petitioner provided sufficient evidence that a thesis was publicly available by providing a declaration from the thesis advisor about the library and indexing practices at the time it was written.
  • Sandoz Inc. v. AbbVie Biotechnology Ltd., IPR2018-00156, Paper 11 (June 5, 2018) (informative as to section III.C.1) – The Board found that a drug package insert was a printed publication.
  • In-Depth Geophysical, Inc. v. ConocoPhillips Co., IPR2019-00849, Paper 14 (Sept. 6, 2019) (informative as to section I.E) – The Board found that a conference paper was not a printed publication, noting that its publication date was not established by reliance on citations from Researchgate and of record in European Patent Office proceedings.

Secondary Considerations

  • Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, Paper 33 (Jan. 24, 2020) (precedential) – The Board found that there was not a sufficient nexus between the Patent Owner’s proffered secondary considerations and the patent’s issued claims, but recognized that the proposed amended claims demonstrated an appropriate nexus. The substitute claims were therefore found patentable based on industry praise and satisfaction of a long-felt need.
  • Ex parte Whirlpool Corp., Appeal No. 2013-008232 (Oct. 30, 2013) (informative) – The Board found that the examiner erred in disregarding the fact that no solution to the asserted long-felt need had been commercialized where said solution had previously been described in the prior art. The Board found it to be relevant to nonobviousness that no such solution had been commercialized after the description in the prior art and before the claimed invention.

Ex parte Thompson, Appeal No. 2011-011620 (Mar. 21, 2014) (informative) – The Board discussed the sufficiency of declarations asserting satisfaction of a long-felt need that provided data that were relatively limited in time and scope. While noting the limitations of these data, the Board found that they were at least somewhat probative of satisfaction of a long-felt need, and found that the examiner erred in failing to consider them. On remand, the relevant claims were allowed.