Alert June 04, 2020

Issue Twenty-Seven: PTAB Trial Tracker

Summary

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.

PTAB is Not Required to Dig Into the Record to Uncover Parties’ Arguments

In Gen. Access Sols., Ltd. v. Sprint Spectrum L.P., No. 2019-1856, 2020 WL 2312494 (Fed. Cir. May 11, 2020), the Federal Circuit affirmed the Board’s decision finding claims of the challenged patent invalid as obvious. The Federal Circuit confirmed that the Board is not required to consider substantive arguments not set forth in the parties’ briefing. Here, Patent Owner submitted a twenty-nine page claim chart attached as an exhibit to a declaration setting forth evidence of conception. Even though patent owner’s briefing was within allowed page limits, the Federal Circuit explained that this is precisely what the rule against incorporation by reference was intended to prevent. Otherwise, the Board would be forced to “play archeologist with the record.” Id. at *3.

Takeaway: The rule against incorporation by reference, set forth in 37 C.F.R. § 42.6(a)(3), provides that “[a]rguments must not be incorporated by reference from one document into another document.” Arguments that are not clearly set forth in the body of the briefing risk exclusion by the Board.

Board Declined Discretionary Denial Under § 325(d) Where the Examiner Had Overlooked a Key Teaching of the Prior Art

In Mylan v. Merck, IPR2020-00040, Paper 21 (PTAB May 12, 2020), the Board rejected Merck’s arguments for discretionary denial and instituted the petition. The Board analyzed the two-part framework set forth in the precedential decision in Advanced Bionics (discussed in Issue 25) to determine whether the challenge brought had already been considered and rejected by the patent examiner,providing a basis for discretionary denial under § 325(d). While the Board concluded that cumulative prior art had been presented to the examiner, the Board found that the examiner made a material error by overlooking a teaching in the prior art. The Board explained that “[t]he examiner’s apparent oversight with respect to the highly material teachings . . . along with [an expert’s] testimony about the significance of those teachings, which was not before the examiner, convinces us that the office’s reconsideration of the prior art or arguments is justified.&rdquo Id. at 20.

Takeaway: While discretionary denial of institution is possible where prior art is cumulative to art that was before the Examiner, where Petitioner points to specific oversight by the examiner of material teachings of the prior art coupled with an expert declaration, discretionary denial may be avoided.

Board’s Determination of Real Party in Interest Not Appealable

In ESIP Series 2, LLC v. Puzhen Life USA, LLC, No. 2019-1659, 2020 WL 2529769 (Fed. Cir. May 19, 2020) (precedential), the Federal Circuit held that § 314(d) precludes review of the Board’s “real party in interest” determination. The Court relied on previous Supreme Court precedent regarding preclusion under 35 U.S.C. § 314(d) and found “no principled reason why preclusion of judicial review under § 314(d) would not extend to . . . ‘real parties in interest’”. Id. at *5.

In particular the Court relied on the Supreme Court’s holdings in Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016), that Board decisions concerning the “particularity” requirement under § 312(a)(3) are not subject to appeal, and in Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020), that § 314(d) precludes judicial review of the Board’s analysis of § 315(b)’s one-year time bar, discussed in Issue 26.

Takeaway: Since the Supreme Court’s Thryv decision, the Federal Circuit continues to hold that additional aspects of the Board’s decision on institution are unreviewable on appeal.

POP Precedential Opinion: Analysis of Co-Pending Litigation

The POP designated the Board’s order in Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB March 20, 2020) as precedential. The Board’s outlined six factors to analyze whether to apply its discretion under 35 U.S.C. § 314(a) to deny institution in light of a parallel, co-pending litigation. The factors relate to whether the “efficiency, fairness, and the merits support the exercise of authority to deny institution in view of an earlier trial date in the parallel proceeding.” Id. at 6. The factors are:

  1. Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
  2. Proximity of the court’s trial date to the Board’s projected statutory deadline for a final written decision;
  3. Investment in the parallel proceeding by the court and the parties;
  4. Overlap between issues raised in the petition and in the parallel proceeding;
  5. Whether the petitioner and the defendant in the parallel proceeding are the same party; and
  6. Other circumstances that impact the Board’s exercise of discretion, including the merits.

Takeaway: Petitioners should consider and analyze these six factors when filing a petition where the patent is asserted in co-pending litigation. Patent Owners can use these factors to argue that the Board should not institute a parallel proceeding.

Uncertainty In Claim Construction Does Not Justify Multiple Petitions

In RSB Spine, LLC v. Medacta USA, Inc., IPR2020-00275, Paper 22 (PTAB May 22, 2020), the Board denied institution, finding that uncertainty in claim construction does not justify multiple petitions. Petitioner filed two petitions requesting inter partes review of the “same challenged claims based on a combination of the same three references.” Id. at 8 (emphasis in original). The arguments in the petitions were based on different interpretations of particular claim terms. The Board disagreed with the Petitioner’s argument that Patent Owner’s uncertain claim construction position warranted multiple petitions. The Board reasoned, “Because Petitioner was able to present an alternative challenge contingent upon Patent Owner’s alternative claim construction in [another] Petition, we fail to see how uncertainty regarding claim construction justifies two petitions.” Id. at 10.

Takeaway: Petitioners requesting multiple petitions for the same patent should carefully craft the identification and explanations for the ranking of multiple petitions, as the Board will consider how the explanations and challenges across the multiple petitions compare with one another. Petitioners should consider addressing all aspects of claim construction in a single petition since uncertainty regarding claim construction positions may not warrant institution of multiple petitions.

PTAB Proposes Rule Changes

The USPTO has proposed amendments to several rules governing proceedings before the Patent Trials and Appeal Board (PTAB). The proposed rule changes published in the Federal Register and are summarized in our recent client alert.

Arthrex Update

Decisions and orders related to Arthrex continue to issue, both from the PTAB and the Federal Circuit.

The Chief Administrative Patent Judge issued a General Order staying all remands from the Federal Circuit based on Arthrex, stating:

I exercise my discretion to: (1) suspend the requirements in SOP 9 in cases remanded by the Federal Circuit under Arthrex; and (2) hold all such cases in administrative abeyance until the Supreme Court acts on a petition for certiorari or the time for filing such petitions expires.

As a result, all of the cases remanded as a result of Arthex will await the Supreme Court’s decision on cert.

The Federal Circuit also issued a precedential order in Ciena Corp. v. Oyster Optics, LLC, No. 2019-2117, D. I. 48 (Fed. Cir. May 5, 2020) confirming that petitioners cannot seek a remand based on Arthrex. The Federal Circuit denied the petitioner’s request for remand because it had waived or forfeited its challenge to the Appointments Clause because it consented to jurisdiction at the PTAB. Id. at 6-7. This follows a nonprecedential decision with the same holding.

The Federal Circuit also addressed Arthrex remands in the context of inter partes reexaminations. In Virnetx Inc. v. Cisco Sys., Inc., No. 2019-1671, D.I. 50 (Fed. Cir. May 13, 2020), the Federal Circuit denied petitions by the Director of the USPTO and Cisco for panel rehearing, rejecting the argument that Administrative Patent Judges should be deemed constitutionally appointed officers for purposes of reviewing appeals of inter partes reexamination. The Court held that the Arthrex “precedent compels that we reach the same conclusion in the context of inter partes reexaminations.” Id. at 6.