Source: https://www.patentchallenges.com/page/2/
Timestamp: 2019-04-18 19:21:57+00:00

Document:
A Federal Circuit panel recently confirmed that 35 U.S.C. § 314(d) does not permit appeal of a decision by the PTAB that an IPR petitioner is not time-barred under 35 U.S.C. § 315(b). Wi-Fi One, LLC v. Broadcom Corporation, No. 2015-1944 (Fed. Cir. Sep. 16, 2016).
Patent Owner argued that the Supreme Court’s decision in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), implicitly overruled Achates. Specifically, Cuozzo “tied the limitation of judicial review to the Patent Office’s ability to make its substantive patentability determination as embodied in § 314(a)” and left open “the precise effect of § 314(d) on appeals . . . that depend on other less closely related statutes,” such as the time-bar of Section 315(b).
The Federal Circuit rejected Patent Owner’s argument, as Cuozzo stated that the prohibition against reviewability applies to “questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review,” and that Section 315 “is just such a statute.” In fact, Cuozzo addressed Section 312, which governs what form a petition must take and is not related to substantive patentability.
Patent Owner also argued that time-bar issues should be reviewable because parties may argue those issues at trial. However, the Court noted that Achates also rejected this argument, and was not overruled by Cuozzo.
The Federal Circuit has now made clear that decisions under Section 315(b) are not appealable, and that the reviewability ban under Section 314(d) is not limited to issues arising under section 314. Thus, although it was the Patent Owner that was denied appellate review in Wi-Fi One, it is even more critical in the wake of that decision that parties wishing to file an IPR address potential privity issues as early as possible and account for any potential time-bar issues in deciding when to file their IPR.
In Veritas Technologies LLC v. Veeam Software Corporation, the Federal Circuit concluded that the PTAB erred in denying Patent Owner’s motion to amend claims in an IPR proceeding and remanded to the PTAB for further consideration of the substitute claims submitted in the motion. No. 2014-00090 (Fed. Cir. Aug. 30, 2016).
In the IPR, the Board applied the broadest reasonable interpretation standard of claim interpretation and invalidated the challenged claims as obvious over prior art. The Board also denied Patent Owner’s motion to amend, concluding only that Patent Owner and its expert declarant had failed to address whether each newly added feature in each proposed claim, as distinct from the claimed combination of features, was independently known in the prior art. Notably, the Board did not make an evidentiary determination of patentability of the proposed new claims.
The Federal Circuit panel found no error with the Board’s claim construction and affirmed the obviousness determination of the patent claims, but the panel took issue with the Board’s denial of the motion to amend. Applying the Administrative Procedure Act and reviewing the Board’s denial to see if it was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law,” the Federal Circuit noted that Patent Owner did not contest Petitioner’s argument that the substitute claims address the parties’ claim-construction dispute. But rather than determine whether the substitute claims should be construed as Patent Owner argued, the Federal Circuit focused on the inadequacies of the Board’s reasons for denying the motion to amend.
More specifically, the Federal Circuit focused on the fact that the Board denied the motion to amend based on its insistence that the Patent Owner discuss whether each newly added feature was separately known in the prior art. The Board concluded that the motion and accompanying expert declaration were insufficient because they did not discuss the features separately but discussed only “the newly added feature in combination with other known features.” The Federal Circuit held that this analysis and conclusion by the Board, which was the sole basis for denying the motion to amend, was unreasonable and must be set aside as arbitrary and capricious.
No statute or rule establishes a time limit for the Board to decide a request for rehearing. However, the Trial Practice Guide states that the Board “envisions” that decisions will be made within approximately one month unless additional briefing is required. An analysis of recent decisions shows that the Board is not meeting this stated goal in most cases, even when no additional briefing is requested.
For this analysis, the 21 Board decisions on requests for rehearing that issued in the month of August 2016 were considered. Of these, sixteen were requests for rehearing of institution decisions and five were requests for rehearing of final written decisions. None of the requests resulted in a reversal of the Board’s earlier decision.
The chart below shows the length of time from request to decision for the 21 August decisions.
The average pendency of all the requests was 71 days from the date of the request to the date of the decision, with a median of 58 days and a range of 10 days to 204 days. Thus, the majority of requests are taking around two months or longer to decide, with some taking several months. The long-pending requests are not limited to any particular type of request: requests for rehearing of institution decisions (n=16) had a median pendency of 44.5 days and a range of 10 days to 204 days, while requests for rehearing of final written decisions (n=5) had a median pendency of 108 days and a range of 28 days to 160 days.
The long pendency of the requests cannot be explained by delays caused by additional briefing. None of the five requests that pended for more than 100 days involved additional briefing on the request. The two cases that did involve additional briefing pended for 58 and 70 days, respectively.
While these data represent only a snapshot, they do show that the Board is often missing its one-month goal, sometimes by several months. This may indicate that the PTAB judges have heavy workloads and are giving priority to meeting statutory deadlines.
Based on these limited data, parties in post-grant proceedings can expect that a decision on a request for rehearing will probably take more than one month and may take several months. This is significant because it can cause a substantial delay in the ultimate resolution of an underlying patent dispute.
 Note that two of the six decisions on requests for rehearing decided between September 1 and September 14 pended for more than five months (169 days and 223 days).
In Arendi S.A.R.I. v. Apple Inc., et al., the Federal Circuit reversed a PTAB decision finding all instituted claims in an IPR invalid as obvious based on the prior art and “common sense.” No. 2015-2073 (Fed. Cir. Aug. 10, 2016).
The challenged patent claimed, in part, a method for accessing a document and searching for information outside the document using a second computer program based on certain types of information contained in the document as identified by a first computer program. The only reference cited as prior art disclosed a computer program that recognizes a telephone number as a class of text in a document and includes an “Add to address book” option.
Relying on expert testimony, the Board found that it would have been “common sense” to search for the recognized telephone number when selecting the option to “Add to address book,” in order to avoid duplicate entries.
Second, the Court found that the Board relied “precisely” on “conclusory statements and unspecific expert testimony” in finding it would have been common sense to supply the missing claim limitation. Accordingly, the Court reversed the Board’s decision.
In SAS Institute, Inc. v. ComplementSoft, LLC, the Federal Circuit criticized the PTAB for changing its claim construction “midstream” and vacated the Board’s finding that, under the newly adopted construction, one of the claims in the Patent Owner’s software patent was valid. Nos. 2015-1346, 2015-1347 (Fed. Cir. Jun. 10, 2016).
In its institution decision, the Board construed the term “graphical representations of data flows” as “a map of the path of data through the executing source code,” and relied on its construction of that term in denying institution on one of the grounds included in the petition.
In the post-institution briefing, neither party advocated for a revised construction of the term, instead relying on the construction in the Board’s institution decision. Nonetheless, in its final written decision, the Board changed its construction to “a graphical representation comprised of icons depicting data processing steps and arrows to depict the movement of data through source code,” and under that construction it found the claim at issue patentable over the prior art.
This decision provides an important vehicle for parties to an IPR proceeding to challenge the ultimate determination on patentability if it is based on a claim construction that differs from the one the Board adopted in the institution decision.
In In Re Magnum Oil Tools Int’l, Ltd., the Federal Circuit found that the PTAB had improperly used its IPR institution standard—a reasonable likelihood that the petitioner would prevail as to at least one of the claims challenged in the petition—as justification for shifting the burden of persuasion and burden or production onto the Patent Owner after institution. No. 2015-1300 (Fed Cir. Jul. 25, 2016).
The IPR petition challenged claims as obvious based on two different groups of prior art combinations: Alpha and Lehr. The Board instituted review based on the Lehr combinations but not the Alpha combinations, which ultimately led to the unraveling of the Lehr combinations at the Federal Circuit.
Interestingly, the lack of a prima facie case of obviousness was a result of the Board’s improper burden shifting, in that the Board never required Petitioner to fix the deficiencies of its petition by further explaining its motivation to combine Lehr. From the outset, the Board improperly adopted the Petitioner’s proposed motivation to combine the Lehr combinations based upon the rationale incorporated from Alpha. Following institution, the Board improperly shifted the burden of disproving the Lehr combination onto the Patent Owner, and as such, never required Petitioner to bolster its motivation to combine Lehr with the secondary references.

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