Nov 25

Proposed Claims in IPR Motions to Amend Can Now Be Placed in Appendix

iStock_000017878764XSmallThe PTAB recently sent out an email alert, directing practitioners to its order providing guidance on Motions to Amend in Corning Optical Comm. RF, LLC v. PPC Broadband, Inc., IPR2014-00441, Paper 19. The Order stemmed from the required “conferral” with the Board regarding a motion to amend, 37 CFR § 42.121(a), and is surely another response from the Board in response to criticism that only one Motion to Amend has been granted to date.

In general, the Board set forth, again, a listing of all the many requirements of a Motion to Amend. Those requirements are reviewed below. What is unique about this Order, and surely the reason it was set forth separately in the PTO alert, is the fact that the Board authorized Patent Owner to place its proposed substitute claims in an appendix, such that it did not count against the 15-page limit for motions to amend. This has been a sore subject with Patent Owners who were otherwise forced to cram all the requirements of the Idle Free decision, and its progeny, along with a listing of the proposed claims, within the 15-page motion to amend. Assuming this is a trend by the Board, this will be welcome to Patent Owners who are have been clambering for a more fair opportunity to address all the many requirements of these motions.

By way of review, we set forth the other requirements of a Motion to Amend that were reiterated in the Order:

  • Proposed substitute claim should be responsive to the ground of unpatentability applicable to the original claim for which it is a substitute;
  • A claim listing is required, including each proposed substitute claim (with any claim having a changed scope included);
  • The proposed substitute claim must be traceable back to the original claim it is intended to replace;
  • If more than one substitute claim is required for a particular claim, the motion should articulate a special circumstance to justify the request;
  • The motion must show clearly the changes of the proposed substitute claim vis-a-vis the original claim (i.e., brackets for deleted text; underlining for inserted text);
  • Patentability must be shown, in general, not merely over the references applied against the original claims;
  • Written description support must be shown for each proposed substitute claim (citing to the original disclosure and showing support for the entire claim, including demonstrating disclosure in any intervening applications);
  • If a new term is proposed, the meaning of which reasonably can be anticipated as subject to dispute, the Patent Owner must provide a proposed claim construction (citation to “plain and ordinary meaning” is viewed as unhelpful – what that meaning is must be provided);
  • Sufficient underlying facts should be provided regarding the proposed added feature, including whether it was previously known anywhere, in whatever setting, and whether it was known in combination with any other elements of the claim (if known, the motion must show why it was not obvious);
  • Patent Owner must reveal what it knows about the new feature (i.e., including a discussion of the ordinary skill in the art, with a particular focus on the feature added, such as a specific discussion about the technical knowledge pertaining to the added feature, whether there are textbooks or conventional practices relating to the feature, and what basic skill set would be possessed by one of skill); and
  • Make a showing regarding the co-pendency and common-inventor requirements of 35 USC § 120 with respect to each ancestral application in the chain of priority applications.

Nov 24

Draft IEEE Standard Not a Printed Publication in IPR

18456950_sWhether the art presented in an inter partes review petition is a printed publication has arisen more frequently as Petitioners push the envelope to take advantage of the benefits of IPR proceedings. To that end, the PTAB was given the opportunity to decide the issue of whether a draft IEEE standard could be considered a printed publication in Samsung Elec. Co. v. Rembrandt Wireless Techs., IPR2014-00514. Finding that the placement of the draft standard on a “Working Group” server was akin to placing the file on a server to facilitate peer review, which the Federal Circuit has held is not publication, the Board denied the Petition.

To qualify as a printed publication, a document “must have been sufficiently accessible to the public interested in the art.” In re Lister, 583 F.3d 1307, 1311 (Fed. Cir. 2009). Order at 6-7. In this case, Petitioner presented the draft standard, along with the declaration of an editor of the standard. That editor testified that the standard was available on a Working Group server and that announcements were sent when drafts became available. Further, there were no restrictions on who could attend the Working Group meetings, or could provide an email address to be included in the Working Group. Id. at 5.

Patent Owner argued that posting the draft standard to the Working Group server did not make it a printed publication. Further, the Petition did not set forth any evidence regarding the availability of the document to individuals other than members of the group. Id. at 7. There was also no evidence that the group’s meetings were advertised or even announced to the public. Id. at 7.

The Board found that the storage of the prior art was similar to the placement of a file on a server to facilitate peer review in preparation for later publication, which the Federal Circuit has found does not constitute public accessibility. Id. at 8. SRI Int’l, Inc. v. Internet Sec. Sys., Inc., 511 F.3d 1186, 1194 (Fed. Cir. 2008). Thus, the prior art was determined to not be a printed publication. Because the challenged grounds each relied on this disqualified art, the Petition was denied. Id. at 9, 10.

Nov 21

Federal Circuit Weighs in on Stay in View of Covered Business Method Review

14516149_sThe first few decisions from the Federal Circuit are starting to trickle in and are sure to bring more upheaval to Patent Office post-grant procedures. In Versata Software, Inc., et al. v. Callidus Software, Inc., the Court reversed the District of Delaware’s decision not to stay pending litigation in view of a Covered Business Method Review (CBM). A look at the Court’s analysis is instructive as a guide for successful motions to stay in CBM proceedings.

The underlying litigation was brought by Versata against Callidus on July 19, 2012, asserting infringement of three patents. Soon thereafter, Versata filed a motion to transfer and a motion to dismiss. Seven months later, in May 2013, the district court denied those motions. In response Callidus answered and counterclaimed, and also informed Versata that it would be filing a petition seeking CBM with the Patent Office. In August 2013, Callidus filed a first set of CBM petitions, challenging all of the claims of one of the patents-at-issue, and select claims of the other patents (Versata had not yet identified the asserted claims in the litigation). Simultaneously, Callidus sought a stay of the litigation.

In response, the district court ruled that it would not consider the motion until the PTAB made its decision whether to institute CBM review. In March 2014, the PTAB instituted CBM review finding all challenged claims more likely than not directed to unpatentable subject matter under 35 USC § 101. Callidus renewed its motion to stay, but the court only granted that motion relative to the one patent against which Callidus had challenged all claims, denying the petition relative to the other two patents where only select claims were challenged. Callidus filed a motion for interlocutory appeal.

The Federal Circuit began its analysis by addressing Section 18 of the AIA, wherein four factors are listed that a district court should consider in deciding whether to grant a stay:

(A) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
(B) whether discovery is complete and whether a trial date has been set;
(C) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
(D) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

The Court then noted that, while district court decisions on motions to stay are usually reviewed for an abuse of discretion, the AIA provides the Federal Circuit with authority “to conduct more searching review of decisions to stay pending CBM review.” Decision at 4. In conducting that “more searching review,” the Court considered all four factors listed above:

Simplification: The Court disagreed with the district court’s seeming categorical rule that if any asserted claims are not also challenged in the CBM, the factor weighs against a stay. It is not necessary, however, for the CBM to simplify all issues to warrant a stay. Instead, the Court held that “a proper simplification analysis would look to what would be resolved by CBM review versus what would remain.” Decision at 7.

Discovery: Given that discovery was not complete and the trial date was scheduled for seven months after the PTAB was expected to rule, the Court held that this factor “strongly favors a stay.”

Undue Prejudice: The Court quickly dispatched with the district court’s ruling that Versata would suffer undue prejudice because of Calldus’ “improper tactics.” The Court did not find a basis for a conclusion that the filing of a motion to dismiss and transfer was improper and, further, given that Callidus was willing to stay the entire litigation, including its claims against Versata, there was no undue prejudice.

Reduced Burden of Litigation: While the district court found that Callidus’ filing of preliminary motions increased the burden of litigation, the Court found that this was clear error. “The correct test is one that focuses prospectively on the impact of the stay on the litigation, not on the past actions of the parties.” Decision at 13 (emphasis in original).

In the end, the Federal Circuit reversed the decision not to stay and, at the same time, continued the early flow of valuable guidance regarding post-grant proceedings.

Nov 20

IPR Petition Time-Barred Even Where First Lawsuit “Dismissed” and Folded Into Later Lawsuit

hourglassThe PTAB has been presented, of late, several cases that call upon the Board to consider whether a complaint served on a defendant is sufficient to trigger the a time-bar pursuant to 35 U.S.C. § 315(b). For example, as discussed HERE, a complaint that is served, but then later dismissed without prejudice, does not trigger the § 315(b) time bar. In eBay, Inc. v. Advanced Auctions LLC, IPR2014-00806, the Board addressed a factual situation in which a first lawsuit is later folded into a second lawsuit, purportedly because of a defect in the patent assignment raised an issue of whether standing was appropriate. The Board determined that there was no evidence that the assignment was defective and, as such, Patent Owner had standing to file and serve the first complaint. Even though that first complaint was later “dismissed” and folded into a second lawsuit, such an occurrence does not negate service of the first complaint.

On February 13, 2013, Petitioner was served with a first complaint for infringement, resulting in a first district court action. Thereafter, Patent Owner executed an assignment of the patent rights and, on July 11, 2013, Petitioner was served with a second complaint for infringement, resulting in a second district court action.  On May 23, 2014, more than one year after the first complaint was served, but within one year from when the second complaint was served, Petitioner filed the Petition at issue. On July 14, 2014, the court granted a motion to dismiss the first litigation, and effectively folded that action into the second action, allowing work from the first action to carry over to the second action.  Decision at 3. Because the IPR Petition was filed more than one year after service of the first complaint, if service of the first complaint was effective, such service would result in a time-bar of the instant petition under 35 U.S.C. § 315(b).  Id. at 4.

Petitioner argued that Patent Owner did not have rights in the ‘000 patent as of the filing and service of the first action as a result of a late and defective assignment. As such, per Petitioner, Patent Owner lacked standing to assert the subject patent, the first action had no legal effect, and the time-bar of 35 U.S.C. § 315(b) did not apply.

The Board disagreed, finding that Petitioner failed to identify any specific defects in the assignment documents or provide further explanation why the assignments were defective. Id. at 5. As proof that the assignment was defective, Petitioner relied solely on the fact that Patent Owner executed a second assignment after Petitioner had raised the standing issue in the first action. Patent Owner responded that the second assignment was initiated in response to an unrelated case and further that the second assignment expressly stated the belief that the first assignments were valid.  Id. at 6.

With Petitioner pointing out no specific defects in the assignment and the Board finding none, the Board rejected Petitioner’s argument that Patent Owner lacked standing. The Board agreed with Patent Owner, stating that the mere existence of a second assignment was not enough to convince the Board that the first assignment was defective.  Id. at 6. Accordingly, the Board found that Patent Owner did have standing in the first action, service was effectuated, and the instant Petition was time-barred. Further, despite the fact that the first action was “dismissed” as part of a procedural move to fold it into the second action, because the work from the first action carried over to the second action, this situation is not akin to a dismissal without prejudice, wherein the parties were left in the same legal position as if the underlying complaint had never been served. Order at 6-7. Thus, with the complaint in the first action served more than a year prior to the filing date of the instant petition, the Board denied the petition as time-barred under 35 U.S.C. § 315(b).

Nov 19

Proving Real-Party-In-Interest in IPR Remains Elusive

Concept - businessman who has failedOn difficult-to-prove issues in IPR proceedings, it is interesting to watch parties adapt to PTAB decisions, in the hopes of overcoming the long odds of success. One such issue is proving that a third party, whose involvement in the IPR would result in a time bar, is in privity with a petitioner. Few such motions have been granted, but Patent Owners are getting closer. In Sipnet EU S.R.O v. Straight Path IP Group, Inc., IPR2013-00246, involving US Pat. No. 6,108,704, Patent Owner came close, but failed in its attempt to tie a barred-third party to Petitioner.

Patent Owner’s strategy was to argue that third party, Stalker Software, Inc., was a real-party-in-interest that was not named in the Petition. If Stalker were indeed a real-party-in-interest, the petition would have been time-barred, because Stalker was served with a complaint alleging infringement of the ‘704 patent more than one year prior to Patent Challenger filing the petition. Order at 10. In its attempt to prove privity, Patent Owner argued that Petitioner was a reseller of Stalker’s software and that Stalker provided Petitioner with one of the references relied upon in the IPR.  Patent Owner asserted that these acts meant that Stalker exercised control over the proceeding, qualifying Stalker as a real-party under the precedent of In re Guan, Inter Partes Reexamination Proceeding, Control No. 95/001,045, Decision Vacating Filing Date (Aug. 25, 2008). Id. at 10-11

Specifically, Patent Owner presented two types of evidence to bolster its argument Stalker was a real-party-in-interest (Order at 11):

  • testimony of two witnesses regarding a reference relied upon that allegedly have connections to Software (that was not disclosed in the Petition); and
  • the fact that Petitioner maintains no presence in the US and refused Patent Owner’s offer of a license of the ʼ704 patent to expand in to the U.S. market.

Petitioner offered two main counterarguments (Order at 11):

  • Petitioner had no contact with Stalker other than when it contacted Stalker to obtain a reference relied upon in the Petition; and
  • The vendor-seller relationship with Stalker and other evidence presented by Patent Owner were insufficient (either alone or in combination) to show that Stalker had any control over the instant proceeding.

The Board agreed with Petitioner, finding that there was not enough evidence to support Stalker being a real-party-in-interest. The Board agreed with Petitioner’s arguments, above, and further noted that minor participation by a vendor (Stalker, in this case) is not enough to constitute control over the proceeding and Patent Owner’s other assertions were unsupported by evidence. Id. at 12.

Nov 18

PTAB Orders Halt to “Speaking” Objections in Deposition


The Board continues to strongly enforce its regulations regarding the behavior of attorneys defending depositions in inter partes review proceedings. In an order entered in both Medtronic, Inc., Medtronic Vascular, Inc., and Medtronic Corevalve, LLC, v. Troy R. Norred, M.D., IPR2014-00110 and IPR2014-00111, the Board addressed improper speaking objections during a deposition by Patent Owner’s counsel.

Throughout the deposition, Patent Owner’s counsel interposed allegedly improper objections during deposition of its expert witness. Per the Office Patent Trial Practice Guide, and consistent with the Federal Rules of Civil Procedure, “speaking” objections and coaching of witnesses in proceedings before the Board are prohibited.  Cross-examination testimony should be between the lawyer and witness, with no input on questioning and answering during the testimony from other sources. Order at 2.  Further, an objection must be stated in a concise, non-suggestive manner and limited to a single word or term.  For example, proper objections in a deposition would be “Objection, form”; “Objection, hearsay”; and “Objection, relevance.” Id. at 2

Patent Challenger presented an exemplary objection by Patent Owner’s counsel which began “Objection, misleading…” and continued on to a detailed explanation that the question was misleading because it required the witness to make a conclusion based only on a portion of a patent which supposedly was taken out of context. The Board agreed with Patent Challenger that the objection was improper, as it may have helped the witness formulate an answer or otherwise coached the witness. Id. at 3.

Chatty defending attorneys beware, the Board has been clear that speaking objections will not be tolerated. In this case, the Board cautioned that further violations may warrant sanctions, including exclusion of the primary declaration testimony from the witness being deposed. Order at 3.

Nov 17

PTAB Reiterates Prohibition Against New Arguments at IPR Oral Hearing

15503338_sOne of the most litigated aspects of inter partes review proceedings is the issue of whether an argument presented in a petitioner reply or at oral hearing is “new.” This issue arose in Level 3 Communications, LLC v. AIP Acquisition LLC, IPR2013-00296, Paper 42, at 9-10, wherein the Board discussed what will and will not be allowed in terms of new arguments at oral hearing.

Patent Challenger objected to four arguments asserted by Patent Owner during oral hearing:

  • Reliance on a case not yet of record;
  • A previously-unasserted argument of unpredictable results;
  • A new argument regarding a reference of record; and
  • Reference to a specific page of reference of record.

Order at 9.

The Board began by addressing Patent Owner’s reliance on a case at oral hearing that had not been previously discussed in the trial.  Because Patent Challenger had no opportunity to address the new case, the Board sustained an objection to its use in this proceeding. Id. at 9.

Second, Petitioner objected to Patent Owner’s argument that the patent-at-issue disclosed unpredictable results and a characterization of the claimed invention. Patent Owner countered that its arguments were made in response to a new argument in Patent Challenger’s reply brief and should, therefore, be allowed.  The Board sided with Petitioner, finding that there are no exceptions to the rule that new arguments may not be raised during oral hearing, even if in reply to another new argument.  Accordingly, the Board sustained these objections, as well. Id. at 9-10.

Lastly, the Board addressed the fourth objection, listed above, where Patent Owner referenced a specific page of a reference of record during oral hearing. The Board noted that the specific page of the reference was previously admitted as evidence and Petitioner had access to it.  Further, the reference citation was in support of a previously-asserted argument. Accordingly, the Board overruled this last objection.  Id. at 10.

The Board reiterated its rule that no new arguments can be presented during oral hearing, disallowing arguments which depended on new references or which were not previously advanced. However, if argument or evidence relied upon were previously presented, the Board will allow discussion of it during oral hearing.

Nov 14

Copyright Notice on Prior Art Establishes Priority Date in IPR

12111095_sThe PTAB weighed in on whether a copyright notice can be sufficient to demonstrate the priority date of a printed publication in FLIR Systems, Inc. v. Leak Surveys, Inc., IPR2014-00411, -434, -608, and -609.  In Flir, Petitioner relied in the petition upon a brochure that contained a copyright notice of 2002. Patent Owner argued that the printed publication was an “undated reference.” Order at 18. Given that the document contained the Copyright notice, however, the Board was persuaded that Petitioner had established a priority date of 2002, and allowed the document as prior art. Id. at 19.

Interestingly, the Board also considered another printed publication, a user guide, that failed to contain a publication date or copyright notice. The Board cited, however, to the testimony of a witness who stated that the user guide was distributed with a related product before the priority date of the subject patent. Further, the witness testified that the product and user guide was publicly available prior to the priority date of the patent-at-issue. Is this not an end-around the printed publication requirement by using a prior use to corroborate the publication? That is what a different PTAB panel found HERE when it decided that an undated document was not prior art because it contained no publication date and that panel decided that any testimony from a witness about a prior use of the underlying product disqualified the art as a prior use, not a printed publication.

Nov 13

PTAB Rejects End-Around the IPR Printed Publication Requirement

17502113_sPost Grant Review provides a breath of fresh air to Patent Office patentability challenge procedures by allowing prior sales and prior uses as eligible prior art. But, of course, PGR is only available for post-AIA patents and only within 9 months of their issue date. For inter partes review, only patents or printed publications can be used in patentability challenges. That has not stopped some petitioners from trying to shoehorn prior uses into the proceedings by disguising them as printed publications…without success.

For example, in A.R.M., Inc. v. Cottingham Agencies, Ltd., IPR2014-00671, involving US Pat. No. 7,666,103, in each of the challenge grounds, Petitioner relied on a prior art reference that related to the operation of an amusement park ride.  The petition and expert testimony both failed to identify the precise date of the reference and, instead, only indicated that the amusement park ride of the reference was built and operated well before the effective filing date of the ‘103 patent.  Decision at 6. The Board took issue with the Petitioner’s reliance on this testimony of “prior use” of the invention to establish a date of the printed publication.

Under 35 U.S.C. § 311(b), inter partes review is limited to challenges based only on patents or printed publications.  Prior use challenges are not available in inter partes review.  Id. at 7. In this proceeding, the Board found that Petitioner did not adequately show that the amusement park ride “reference” was in fact a printed publication, as no prior art date was asserted and the “reference” was referred to as a prior use in both the petition and expert testimony.  With all asserted grounds relying upon the disqualified reference, the Board denied the Petition across all grounds. Id. at 8.

Nov 12

A Successful Motion for Additional Discovery in an Inter Partes Review

iStock_000013492145XSmallCountless parties to inter partes review can tell you how to lose a Motion for Additional Discovery. This is especially so for discovery motions seeking evidence to prove privity between the Petitioner and a third party in an attempt to have a Petition denied as time-barred. More valuable is an analysis of the motions that were successful….because they are so rare. In Arris Group, Inc. v. C-Cation Technologies, LLC & Level 3 Communications, IPR2014-00746, the Board granted Patent Owner’s Motion for Additional Discovery relating to an indemnification agreement sought by Patent Owner to bolster a claim that the petition was time-barred.

As is the case in any decision relating to additional discovery, the analysis began with a consideration of factors laid out in seminal case of Garmin Int’l, Inc. et al. v. Cuozzo Speed Techs LLC, Case IPR2012-00001, Paper 20, at 2-3 (PTAB Feb. 14, 2013). Here, some of the factors were undisputed, but the Board was required to determine whether something useful would be found relative to the limited discovery request made by Patent Owner. To that end, Petitioner argued that, for Patent Owner to show it is entitled to the indemnification agreement, it must first prove that Petitioner exercised control over the third party for it to be deemed in privity with Petitioner. The Board determined, however, that Patent Owner was not required to prove the underlying legal point (privity) to be granted the discovery. That would be putting the cart before the horse.

Instead, the Board determined that, under Garmin, sufficient threshold evidence had been provided that supported a finding of allowing additional discovery, including:

(1)    Evidence that the indemnification agreement existed;

(2)    Evidence that the third party had made indemnification claims against Petitioner;

(3)    Evidence that Petitioner had contractual rights with the third party regarding exercising sole control of the litigation; and

(4)    Evidence that Petitioner had resolved the indemnification claims with the third party.

Of course, this type of evidence is not present in most cases (and that is why most motions for additional discovery on the privity issue fail). It is, however, worth noting what type of evidence will be successful in these motions.

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