Source: https://armstrongteasdale.typepad.com/at_post_grant/inter-partes/
Timestamp: 2019-02-23 09:43:53
Document Index: 79064006

Matched Legal Cases: ['§42', '§42', '§ 103', '§ 103', '§ 312', '§ 42', '§ 103']

Post Grant AdvocATor: Inter Partes
“Very Extraordinary Animal” Argued at the Supreme Court in Patent Case under AIA Review
The U.S. Supreme Court heard oral arguments in the case of Cuozzo Speed v. Lee on April 25, 2016. Cuozzo involves a patent that was invalidated by the Patent Trial and Appeal Board (PTAB) under Inter Partes Review (IPR). At issue in the case is: (1) the standard by which claims are construed at the PTAB in AIA reviews; and (2) whether and when AIA reviews are subject to judicial review.
On the first question, despite near unanimity among the 24 amicus briefs that the PTAB should use the same “plain and ordinary meaning” claim construction as U.S. district courts, Chief Justice Roberts appeared essentially alone on the bench in challenging the Respondent, the United States Patent and Trademark Office (USPTO), in its use of the different “broadest reasonable interpretation" claim construction standard. Cuozzo argued that its patent would have survived IPR if the district court standard had been applied. Chief Justice Roberts characterized the controversy as “a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results.”
However, even if the Court were to decide in favor of Cuozzo, it is unlikely that a uniform claim construction standard would resolve the issue most concerning the Chief Justice. U.S. district courts are required to give issued patent claims the presumption of validity, whereas the PTAB has no such requirement. Without this presumption of validity, the threshold to invalidate a patent claim will remain significantly lower at the PTAB, irrespective of the claim construction standard. Questions by Justices Sotamayor and Alito indicated skepticism that the two different claim construction standards account for differing outcomes between the tribunals. Justice Ginsburg further noted that, even in such cases, the USPTO still gets "the last word."
Additional questions to Cuozzo by Justices Sotamayor, Breyer, Kennedy, and Kagan implied deference to both the USPTO, and also to the public policy behind the AIA which made it easier and less expensive to invalidate patents considered "weak." With respect to invalidity rulings made by the PTAB under the broader standard, Justice Kennedy asked Cuozzo “doesn’t that mean the USPTO should never have issued the patent in the first place?”
Probably the most difficult question to Cuozzo though, came from Justice Ginsburg, who asked how, if a universal “ordinary meaning” standard for claim construction was adopted, would it “determine who’s going to win or lose this case?” Counself for Cuozzo admitted that a verdict in its favor would only result in a remand to the PTAB for further review. The case history, however, does not indicate that such further review will automatically result in a different final ruling by the PTAB.
The second question before the Court received little attention at oral arguments. Only Justices Ginsburg and Sotamayor questioned the parties about judicial review, and both parties acknowledged that some level of judicial review is available. The parties only disagreed about what level of judicial review was available, and when.
Judging by the Justices’ questions, it appears that Chief Justice Roberts’ “extraordinary animal” will not be tamed by this case.
Posted by Josh Snider in Inter Partes, Post Grant | Permalink | Comments (0)
In Rare Move, PTAB Grants Motion to Amend in IPR Proceeding
The Patent Trial and Appeal Board (PTAB) recently granted a patent owner’s motion to amend its claims in an inter partes review (IPR) proceeding. A patent owner’s motion to amend has typically only been granted on rare occasions since enactment of the America Invents Act, and thus the IPR review process, on September 16, 2012. The PTAB’s decision gave the patent owner, Tire Hanger Corporation (“Tire Hanger”), a much needed win in the IPR proceeding petitioned for and instituted by the challenger, Shinn Fu Corporation (“Shinn Fu”).
While guidelines for amending claims of a granted patent are provided in 37 C.F.R. §42.121, patent owners have historically found it difficult to successfully persuade the PTAB to grant entry of amended claims in an IPR proceeding. In short, 37 C.F.R. §42.121 provides two grounds for denying a patent owner’s motion to amend. For example, a motion to amend may be denied where the amendment does not respond to a ground of unpatentability involved in the trial, or if the amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter. However, it has been held that patent owners must also demonstrate the patentability of proposed substitute and/or amended claims over the prior art of record for grant of a contingent motion to amend to be warranted. See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1307-1308 (Fed. Cir. 2015). In doing so, the patent owner is required to explain why the claims are patentable over the prior art of record. Id.
In the instant case, Tire Hanger did not file a Patent Owner Response to Shinn Fu’s petition, thereby waiving Tire Hanger’s available arguments in defense of the patentability of the challenged Claims 1-5 of U.S. Patent No. 6,681,897 (“’897 Patent”). In fact, at oral argument, Tire Hanger acknowledged that Claims 1-5 were not patentable. Instead, Tire Hanger proposed substitute Claims 6-10, which essentially included the same five steps as Claims 1-5, but also added greater detail to several steps of the independent claim.
In deciding whether to grant Tire Hanger’s motion to amend, the PTAB focused on the purpose of the claimed method relative to the teachings of the prior art of record. More specifically, the method of the ‘897 Patent described the removal and replacement of a wheel of a vehicle without requiring a person to bend over while doing so. The PTAB stated that none of the prior art of record recognized the desire to reduce bending while handling a heavy object. Rather, the prior art of record merely described hanging a wheel somewhere on a wall or rail. While simple, the PTAB declined to deprecate the claimed method, which utilized a known hanger for a tire/wheel assembly on a specific structure (an automotive hoist), in a specific manner (in proximity to the height of a wheel on an elevated vehicle), and for a specific purpose (to reduce bending).
As such, the PTAB found that the substitute claims rose to the level of a novel and non-obvious method over the prior art, and granted Tire Hanger’s motion to amend.
Petition for Inter Partes Review by Shinn Fu Company of America, Inc., IPR2015-00208 (PTAB April 22, 2016, Order) (DeFranco, APJ)
Posted by Jesse Harper in Inter Partes, Post Grant | Permalink | Comments (0)
Posted by Josh Snider in Inter Partes, Post Grant | Permalink | Comments (1)
Constitutionality of AIA Reviews Challenged Under Article III
Earlier this month, in MCM Portfolio LLC v. Hewlett-Packard Company (case number 15-1091), the Federal Circuit heard arguments challenging whether or not AIA reviews are constitutional under Article III of the Constitution. In January, MCM Portfolio LLC (MCM) appealed the final written decision of the Patent Trial and Appeal Board (PTAB) of the inter partes review (IPR) of U.S. patent number 7,162,549 (directed to controller chips for coupling a computer system with a flash storage system).
In the appeal brief, MCM argued, among other things, that any action to cancel or revoke a patent must be tried in an Article III court with access to a jury under the Seventh Amendment to the Constitution. MCM alleged that patents are the property of their owners and even the government must resort to the Courts if there is an issue related to the patent - regardless of who is to blame for any issue. MCM believes that by allowing AIA reviews to decide the validity of patents, Congress has denied patent owners their rightful access to a jury trial in violation of the Seventh Amendment.
The USPTO responded by arguing that Congress has not taken away any rights, but, rather, has merely offered a different path to determine the validity of a patent. The USPTO’s position is that a patent is a public right that can only be granted by the USPTO and thus the PTAB is an appropriate agency to determine the validity of a patent.
The MCM case is another example of a patent owner seeking to find a way to remove adjudicative authority from the PTAB, as the AIA process continues to invalidate patents at an alarming rate. The Court’s decision with respect to this matter could potentially have a huge impact on this process, as a favorable ruling for MCM could essentially strip the PTAB of any AIA petition review power.
IPR Institution Can Be Denied Based on Petition Length or Failure to Identify Related Matters
IPR Petitioners often wrestle with determining how much content to put into a petition (and related declarations and exhibits) before considering breaking a petition into multiple filings. On the one hand, insufficient detail of anticipation or obviousness can cause a failure of institution of proceedings. On the other hand, at some point an overly lengthy filing can prevent institution of an IPR on its own. Further, the cost of each petition may drive clients to seek to maximize the information in any particular filing.
This question came to a head in a recent decision in which the PTAB denied institution for a variety of reasons, but most notably because the petition was unduly lengthy. See Apple, Inc. v. ContentGuard Holdings, Inc., IPR2015-00356. In the underlying Petition, Apple filed an IPR challenging the validity of ContentGuard’s patent, U.S. Patent No. 8,001,053 (the ‘053 patent) related to digital rights management (DRM). The petition was filed based on two separate 35 U.S.C. § 103 grounds, both based on U.S. Patent No. 6,389,538 to Gruse. The PTAB determined that the Petitioner did not demonstrate a reasonable likelihood of prevailing based on either ground because the ‘053 patent “describes and claims a particular scheme among the many possible schemes” of DRM and the Gruse reference showed general schemes of DRM without disclosing the particular scheme of the ‘053 patent.
Yet, the PTAB’s other bases for denial of institution are more important than the defects of the § 103 grounds. First, the PTAB took significant exception to the unnecessarily lengthy nature of the Petition, and particularly to the fact that the Petition included excessive irrelevant content.
The PTAB noted that the Expert Declaration used by Petitioner was an “omnibus declaration” that was used in multiple other petitions. As a result, the Expert Declaration included significant information not pertinent to the challenge of the ‘053 patent. Similarly, the PTAB noted that while the Petition included sixty-one exhibits totaling 30,298 pages, fifty-one exhibits were not cited in the Petition, ostensibly because they were related to other petitions. Elaborating on the problem posed by this extraneous content, the PTAB stated, “petitioners, ‘should avoid submitting a repository of all the information that a judge could possibly consider, and instead focus on concise, well-organized, easy-to-follow arguments supported by readily identifiable evidence of record.’ (citing to 77 Fed. Reg. at 48,763) The Petition widely misses that mark.” IPR2015-00356 at 18-19.
Based on the PTAB’s final written decision, it appears that a large part of the problem was the Petition’s reliance on information that the Board did not need, whatsoever. Although finding the magic length of a Petition may be difficult, a clear lesson from this decision is to strike any extraneous content and avoid omnibus declarations like the one used by Petitioner.
This written decision includes one final lesson – always fully comply with all mandatory Petition requirements. The Petitioner failed to completely disclose all matters related to the ‘053 patent. Citing to 35 U.S.C. § 312(a)(4), the PTAB noted that mandatory requirement of “any other judicial or administrative matter that would affect, or be affected by, a decision in the proceeding.” (quoting 35 C.F.R. § 42.8(b)(2)) Apparently, Petitioner failed to cite several litigation matters directly related to the ‘053 patent and also failed to cite to litigation matters related to other patent applications related to the ‘826 matter. The PTAB determined that, although the institution would not be granted on § 103 grounds, the institution could have been denied by the failure to provide mandatory notices.
When filing a Petition (or any filings before the PTAB), be mindful of the discretion and power of the Board. This decision suggests that taking shortcuts may be severely sanctioned and lead to adverse outcomes for a party.
Posted by Samir Mehta in Inter Partes, Post Grant | Permalink | Comments (0)
Proposed Bill May Improve Patent Owner Chances in AIA Reviews
Since the inception of post-grant proceedings (e.g., inter partes reviews (IPRs), post-grant reviews (PGRs)) under the America Invents Act (AIA), many patent owners have viewed the Patent Trial and Appeals Board (PTAB) as somewhat of a slaughterhouse for patents. In particular, as the number of granted IPR petitions rises, so does the number of patents invalidated by the PTAB. Many, in fact, view the entire process as heavily tilted in view of the IPR petitioners. There may be hope on the horizon, however, for patent owners’ chances in future proceedings.
The Senate Judiciary Committee recently released amendments to a bill known as the Protecting American Talent and Entrepreneurship Act (PATENT Act, S. 1137) that could potentially improve patent owners’ chances in post-grant AIA reviews. The following items are examples of the several items discussed in the bill that could favor patent owners:
- Requiring the PTAB to use the claim construction standard used in district courts as opposed to the “broadest reasonable interpretation” standard currently used.
- Limiting multiple challenges to the same patent.
- Limiting the number of PTAB members of a panel that granted the review to be allowed to take part in the final decision of the review (i.e., to avoid the instance of a decision-making panel viewing the patent unfairly based upon the decision to grant the review).
- Requiring the party filing a petition to do so under an obligation similar to the Rule 11 obligations of the Federal Rules of Civil Procedure (which allows sanctions to be imposed on attorneys who file frivolous suits).
- Amending the estoppel rules in PGRs to only estop a patent owner from raising issues in later court proceedings that the patent owner actually did raise in the PGR (as opposed to also including estoppel for issues that “could have been raised” during the PGR).
By drafting this bill, the senate appears to empathize with the plight that many patent owners have experienced during the AIA review process. As such, the PATENT Act is something for patent owners to keep an eye on because if it eventually passes, then the idea of successfully overcoming an AIA review may not be as daunting.
USPTO Amends Rules of Practice Before the Patent Trial and Appeal Board
In April and May of 2014, the USPTO conducted a nationwide “listening tour” seeking public feedback regarding trial proceedings under the America Invents Act. On May 19, 2015, in response to that feedback, the USPTO published a package of amendments to the rules of practice in post-grant proceedings, which include Inter Partes Review (IPR), Post-Grant Review (PGR), and review of Covered Business Methods (CBM).
The amendments, which go into effect immediately, are characterized by the Patent Office as “ministerial.” Some of the more noteworthy amendments include:
Motion to amend: Ten additional pages and a claims appendix allowed in Patent Owner’s Motion; ten additional pages allowed for Petitioner’ opposition; and seven additional pages allowed for Patent Owner’s reply brief.
Petitioner’s reply: Ten additional pages allowed in Petitioner’s reply to Patent Owner’s response to Petition.
Evidentiary objections: No motions in limine are permitted; evidentiary objections must be filed.
Discovery: Routine discovery contemplates only cross-examination of affidavit testimony prepared for the proceeding; uncompelled direct testimony must be in the form of an affidavit (not a deposition).
Form of Briefs: Statement of material facts is optional; Times New Roman font must be used.
CBM: Reviews may be extended in the case of joinder; no CBM petition may be filed if Petitioner (or real party-in-interest) file a civil action challenging the validity of a patent claim.
Parties can name more than one back-up counsel.
Only a single request for rehearing may be filed as of right.
The USPTO explained that this “ministerial” amendment package will be followed by a second rule package to address “more involved changes to the rules and the Office Patent Trial Practice Guide.” The amendments and accompanying explanations are available in the Federal Register (80 FR 28561-28566, May 19, 2015).
Posted by Mark Thomas in Covered Business Method, Inter Partes, Post Grant | Permalink | Comments (0)
Beware Of Petitions And Claim Charts Having Conclusory Statements On The Teachings Of The Prior Art
In Debasish Mukhopadhyay v. Veolia Water Solutions & Technology Support (Case IPR2014-01563), the Patent Trial and Appeal Board (PTAB) denied a petition for inter partes review of U.S. Patent No. 7,815,804 (the ‘804 Patent) finding that the petitioner failed to establish a reasonable likelihood that the claims are unpatentable over the cited prior art.
The ‘804 Patent is directed to water treatment processes and has two independent claims, each of which is a method claim having thirteen steps. The petition alleged that each of the independent claims is obvious over a combination of prior art references, and the petitioner submitted, along with the petition, a claim chart identifying which prior art references relate to each of the method steps.
One of the thirteen method steps, which appears in both of the independent claims, recites “recycling at least a portion of first waste stream to at least one of the reactors.” With respect to this “recycling” step in the claim chart, the petitioner merely made a conclusory statement to the effect that “[t]he [Prior Art] discloses recycling at least a portion of first waste stream to at least one of the reactors.” Notably, the claim chart did not specify which portions of the cited references allegedly disclose the “recycling” step, nor did the petition. On this basis, the PTAB denied the petition as failing to “specify or explain adequately which parts of these references teach or render obvious the claimed recycling step.”
As a takeaway, it is insufficient for a petitioner to make a conclusory statement as to a prior art reference’s alleged teaching of a claimed method step. Rather, the petitioner must specifically identify which portion of the reference allegedly discloses the claimed method step, otherwise the petition is at risk of being denied for not having established a reasonable likelihood that the claims are unpatentable over the cited reference.
Posted by Salvatore B. Gianino in Inter Partes | Permalink | Comments (0)
Patent Prosecution Tips for PTAB Preparation
Over the past three years, the number of Post-Grant Proceedings continues to rise. In 2012, the number of AIA post-grant petitions filed – including IPRs, PGRs and CBMs - was less than 50 per month. During 2013, that number grew to about 100 filings per month. In 2014, almost every month had over 150 petitions filed and that number reached almost 200 filings in several months.
Not only is the number of post-grant petitions rising, but the PTAB rate of granting these petitions has been very high. For example, in 2014, the PTAB instituted trials on 75% of the IPR petitions filed. Thus far in 2015, the PTAB has instituted trials on 74% of the IPR petitions filed. As such, patent applicants are learning that not only do they need to overcome the obstacles put forth in their way during prosecution with the USPTO, but they must also prepare for third parties potentially attacking a granted patent in a post-grant proceeding. Accordingly, patent practitioners should draft and prosecute their applications to better position themselves from any post-grant attacks.
For example, if the PTAB is using the broadest reasonable interpretation in light of the specification for claim construction, there is the chance that a broader construction can trigger prior art references that otherwise would not have been used. Practitioners should make every effort while drafting a patent application to clearly define, without any ambiguity, terms of the claim language in the specification. Practitioners should also make sure to consistently use terms according to their definition. While drafting the application, practitioners have the opportunity to mold and direct the claim language and meanings before a post-grant petitioner attempts to counter a term’s meaning using the broadest reasonable interpretation during a post-grant proceeding. Practitioners should thus take advantage of this during drafting of the application to either defeat post-grant petitions or to put themselves in a better position to counter-attack any post-grant petitions that may be filed against a granted patent.
Further, because there are various strategical advantages for post-grant petitioners, patent practitioners should consider strengthening their patentability positions through the use of declarations during prosecution. That is, a party challenging a granted patent in a post-grant proceeding has the advantage of planning an attack through the use of expert witnesses. Once a petition is filed by a party challenging a patent, the patent owner only has three months to file a preliminary response and is not allowed to provide new testimonial evidence prior to post-grant institution. If the patent owner has filed a declaration during prosecution of the application, however, then the patent owner may use this evidence in order to persuade the PTAB that there is not a substantial likelihood that at least one claim of the patent will be unpatentable. For example, if a patent owner has filed a declaration to overcome a section 112 or section 103 rejection, the patent owner may rely on such a declaration to convince the PTAB to avoid instituting a post-grant proceeding. Thus, the patent owner can better position themselves to avoid the post-grant proceeding whereas in the absence of a declaration, the patent owner may not be afforded such an opportunity. It is important to keep in mind, however, that any declarations submitted during prosecution are valid and are not defective in any manner, as this could lead to a basis for instituting an IPR.
As the post-grant proceeding process currently favors institution of PTAB trials, it is important for patent practitioners to draft and prosecute patent applications with long-term objectives in mind in order to better place themselves in a position to either avoid institution of a post-grant proceeding or to be successful in defending their patents should a PTAB trial arise.