For our BioPharma audience, you might be interested in Harness Dickey’s Quarterly BiioPharma Newsletter, which reports on the impact of the Akamai v. Limelight, Suprema v. ITC, and Amgen v. Sandoz cases on the BioPharma industry.
Our apologies for our slightly delayed public dissemination of our Quarterly IPR Report. Please click HERE for the report or email us for a hard copy. It’s hard to believe IPR has grown up so quickly. We look forward to celebrating its 3-year-old birthday next month. Let us know if you have any questions or …View full post
Originally posted on January 8, 2013 on IP Law360. Inter partes review (IPR) and post-grant review (PGR) “trials” at the U.S. Patent and Trademark Office have the potential to be game-changers in the way patents are challenged in the future. After several attempts at creating USPTO-based proceedings that are efficient and effective, there is much in …View full post
We welcome the arrival of Inter Partes Review (IPR), as of September 16, 2012, and Post Grant Review (PGR) as of March 16, 2012. It is open for debate as to whether the America Invents Act (AIA) is true patent reform, but what is absolutely clear is that the AIA has changed patent practice forever. …View full post
When a party submits declaration testimony and the opposing party is not entitled to another brief, “observations on cross-examination” are the opposing party’s mechanism for introducing declaration testimony from that witness. Early on, the PTAB determined a party generally is not allowed to submit such observations for its own witnesses. A PTAB panel has now eased this restriction, in Zhongshan Broad Ocean Motor Co. et al. v. NIDEC Motor Corp., IPR2014-01121,-01122 (Sept. 10, 2015) (Paper 34).
There, the Petitioner’s reply briefs cited declaration testimony from Patent Owner’s witness. Patent Owner was not entitled to another brief, so sought to submit observations on cross examination to provide “context” for the deposition testimony. A similar request had been made in Schott Gemtron Corp. v. SSW Holding Co. Inc., IRP2013-00358 (May 16, 2014) (Paper77). In Schott, the panel allowed only very limited observations—e.g., where Petitioner cited the transcript where a witness made a particular statement, but the witness later corrected his testimony and said the opposite.
The Zhongshan panel’s decision was much more favorable to the Patent Owner. The PTAB first noted the Federal Rules of Evidence apply to inter partes reviews. 37 C.F.R. § 42.62(a). FRE 106 directs “[w]hen a writing or recorded statement or part thereof is introduced by a party, an adverse party may require the introduction at that time of any other part or any other writing or recorded statement which ought in fairness to be considered contemporaneously with it.” The Schott decision did not discuss or cite FRE 106. Here, though the Board found FRE 106 requires the context of a witness’s statements ought in fairness to be considered “contemporaneously” when evaluating the witness’s testimony (i.e., when the Board prepares for the oral argument). Based on FRE 106, the Board allowed Patent Owner to file, as an exhibit, a chart identifying portions of the transcript that provide the needed context. The chart could only include page and line numbers—no additional statements or explanations were authorized.
Parties to inter partes review and post grant review proceedings have continued to struggle to find the right formula in successfully navigating the PTAB’s requirements for a motion for additional discovery. In American Simmental Assoc. v. Leachman Cattle of CO, LLC, PGR2015-00003, the Board addressed a number of discovery requests in considerable detail, including addressing the Garmin factors. The following provides examples of document requests and interrogatories that were successful…and unsuccessful.
Discovery requests that were granted by the Board:
Relating to Real-Party-In-Interest Issues:
Request for Production No. 2: A copy of any invoice, requests for reimbursement, or the like received or provided by or on behalf of Petitioner or either Petitioner Principal requesting payment of or reimbursement for the post-grant review filing (including request fees and post-institution fees) paid in the PGR Proceedings.
Request for Production No. 3: A copy of the email(s) sent by Petitioner to “ASA membership and the industry” referenced in Exhibit 2011 and a copy of each “response” received by Petitioner.
Request for Production No. 5: Agreements and proposals for agreements, and documents reflecting discussions of either, to which Petitioner is or was a party, that concern the PGR Proceedings or the Challenged Patents.
Request for Production No. 6: Documents constituting or relating to communications (e.g., calendar entries, transcripts, notes, invoices, summaries) involving, on the one hand, Petitioner or either Petitioner Principal and, on the other hand, an Interested Party that concern the PGR Proceedings, including (a) communications relating to an Interested Party’s funding of or involvement (including the preparation or filing of the petition) in the PGR Proceedings and (b) communications relating to the retention or destruction of documents or communications concerning an Interested Party’s funding of or control or direction over any aspect of the PGR Proceedings.
Interrogatory No. 2: Identify all Person(s) to whom Petitioner Counsel-of-Record submits its invoices or bills to, other than to Petitioner but including, without limitation, IGS.
Interrogatory No. 3: Identify all Person(s) (excluding Petitioner and Petitioner Counsel-of Record) that have provided support in the form of drafting or reviewing and commenting on the petitions filed in the PGR Proceedings. For each such Person, identify the Person by name and last known address and the date(s) and description(s) of any such assistance such Person provided.
Interrogatory No. 4: Identify any communication between Petitioner and an Interested Party not reduced to a tangible form and not otherwise identified in any document produced in response to Request for Production No. 6, in which such Interested Party discusses with Petitioner the funding, preparation, or filing of the PGR Proceedings. For any such communication, describe the topic, the individuals between whom the communications occurred, and the approximate date of communication.
Relating to Secondary Considerations:
Request for Production No. 9: Documents constituting or relating to (a) evaluations of Reputation Feeder Cattle (including its benefits) by Petitioner or any Interested Party or (b) communications between Petitioner and any Interested Party describing or discussing the benefits of or otherwise evaluating Reputation Feeder Cattle.
Request for Production No. 11: Documents constituting or relating to (a) comparisons of Feeder Profit Calculator to Reputation Feeder Cattle (including their respective benefits) and (b) communications between Petitioner and any Interested Party concerning how Feeder Profit Calculator improves upon existing calculators.
Interrogatory No. 5: Identify any communication between Petitioner and an Interested Party not reduced to a tangible form and not otherwise identified in any document produced in response to Request for Production No. 9 or 11 relating to any comparison between Feeder Profit Calculator and Reputation Feeder Cattle. For any such communication, describe the topic, the individuals between whom the communications occurred, and the approximate date of communication.
Relating to Bias of Petitioner’s Expert:
Request for Production No. 14: A copy of the 2013 Membership Directory identified by Mr. Schafer in Paragraph 3 of Exhibit 2005.
Interrogatory No. 6: Identify the total compensation received by Dr. Spangler from Petitioner, on an annual, agreement-by-agreement basis, since January 1, 2010.
Interrogatory No. 7: Identify whether Dr. Spangler is a member of Petitioner, the approximate date he became a member, any roles and capacities he has served or acted in while a member of Petitioner (e.g., treasurer, board member), and the approximate date of each such role or capacity.
Discovery requests that were NOT granted by the Board:
Request for Production No. 1: Documents (e.g., invoices, requests for reimbursement) sufficient to show all “support” received by Petitioner in the form of (a) funds, reimbursements, and other consideration in relation to the funding of the PGR Proceedings (including for payment of attorneys’ fees) or (b) drafting or reviewing and commenting on the petitions filed in the PGR Proceedings.
Request for Production No. 4: Documents relating to the deliberations leading to and reasons why Petitioner filed the petitions in the PGR Proceedings. Excluded from the scope of this request are privileged communications and drafts between Petitioner and Petitioner Counsel-of-Record found in such counsel’s files, except insofar as they reflect communications involving a Person other than Petitioner.
Request for Production No. 7: Documents identifying and describing any feeder profit calculator or similar system that Petitioner had developed or otherwise worked on before May 10, 2013, including the feeder profit calculator or similar system that Wade Schafer represented to Patent Owner on or around May 10, 2013, had been “shelved” by Petitioner.
Request for Production No. 8: Documents describing the deliberations leading to and reasons why Petitioner stopped work on or “shelved” any feeder profit calculator or similar system identified in Request for Production No. 7.
Request for Production No. 10: Documents describing the deliberations leading to and reasons why Petitioner started work on Feeder Profit Calculator on or around May 10, 2013.
Request for Production No. 12: Documents describing the expected financial benefit to Petitioner or Petitioner’s members from the Feeder Profit Calculator, including documents describing the monetary subsidies offered to users of the Feeder Profit Calculator and the amount of such monetary subsidies.
Request for Production No. 13: Agreements and proposals for agreements, and documents reflecting discussions of either, to which Petitioner, on the one hand, and Dr. Spangler, on the other hand, are or were parties pursuant to which Dr. Spangler received or expects to receive compensation or other consideration, including (a) any employee, contractor, or consulting agreements with Dr. Spangler and (b) any expert retention agreement with Dr. Spangler relating to the PGR Proceedings.
Interrogatory No. 1: Identify all Person(s) (excluding Petitioner) that have provided support in the form of funds, reimbursements, or other consideration to Petitioner or Petitioner Counsel-of-Record in connection with the PGR Proceedings. For each such Person, identify the Person by name and last known address and the date(s) and amount(s) of any such funds, reimbursements, or other consideration such Person provided.
Looking for more examples of successful discovery requests, check out these cases:
Parkervision, IPR2014-00946, Paper 25; Medtronic, Inc., IPR2014-00488, Paper 25.
From the very outset of inter partes review proceedings, the Board has helped to manage its docket by rejecting challenge grounds in petitions that are redundant to other grounds in the petition. See Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM2012-00003 (explaining vertical and horizontal redundancy). As a strategy to avoid this type of redundancy finding, Petitioners began to file multiple petitions directed to the same patent, hoping that by paying an extra $23,000+ filing fee, the Board would consider additional grounds against the same patent. That strategy is facing headwinds, however, as demonstrated in the case of LG Elec., Inc. v. ATI Techs., ULC, IPR2015-00327, Paper 15 (Sept. 2, 2015) (denying request for rehearing). In that case, the Board (once again) denied a petition relying in part on 35 U.S.C. § 325(d), finding that the overlapping of arguments between two related petitions, and the institution of an IPR of the same claims in the related case, warranted a denial of the petition.
Of the reasons given by the Board for its decision, the one factor that might have tipped the Board’s decision in Petitioner’s favor relates to the purported overlap between the primary references cited in each of the two petitions at issue. If Petitioner had provided some rationale regarding why the primary references do not disclose substantially the same subject matter, the decision might have come out differently. And, of course, if the references really did disclose the same subject matter, a second petition was likely not necessary in the first place.
Regardless, a denial of a decision to institute is non-appealable, so this type of decision by the Board is, effectively, immune from challenge. 35 U.S.C. § 314(d).
Different panels of the Patent Trial and Appeal Board have, for the most part, agreed with each other on many of the key issues that arise in inter partes review proceedings. There are, however, instances of disagreement and an example of this type of disagreement arose in ServiceNow, Inc. v. Hewlett-Packard, Inc., IPR2015-00707, wherein this particular panel of PTAB judges decided that a copyright notice on a prior art reference did not suffice to establish that the reference was publicly available as of the date of the notice.
The prior art at issue included the date “July 2001″ on their face and also included a copyright date of “2001.” The Board agreed with Patent Owner that the indications of the availability of the references is inadmissible hearsay to the extent Petitioner relies on the date for the truth of that information. Order at 16. Notable in the Board’s analysis was the fact that the references included a statement that restricted the use and dissemination of the references.
The Board noted that at least one other panel agreed that a copyright notice as evidence that a reference was a printed publication as of a particular date is inadmissible hearsay. Standard Innovation Corp. v. Lelo, Inc., IPR201400148, Paper 41, at 13-16. The Board also noted, however, that other panels have determined that a copyright notice is prima facie evidence of publication. Ford Motor Co. v. Cruise Control Techs. LLC, IPR2014-00291, Paper 44, at 7-8; FLIR Sys., Inc. v. Leak Surveys, Inc., IPR2014-00411, Paper 9, at 18-19.
Ultimately, on the basis of the facts mentioned above, the Board decided that Petitioner had failed to establish that the exhibits at issue were publicly available more than one year prior to the priority date of the patent-at-issue. Order at 17.
Many in the pharmaceutical industry have been concerned about becoming a target of the Coalition for Affordable Drugs, the group backed by hedge fund manager Kyle Bass. But yesterday the first target of Bass’s strategy, Acorda Therapeutics, scored a big win when the PTAB declined to institute review in the first two IPRs filed by Bass’s group.
In February Bass’s group filed IPR petitions against two Acorda patents, 8,007,826 and 8,663,685. Both are listed in the Orange Book for Acorda’s Ampyra tablets used to treat walking difficulty in patients with MS; they are the last-expiring patents listed for that product.
The Board found that both petitions failed to established that the relied-upon art was in fact prior art. In each IPR petition, the Coalition relied on two poster presentations, one from a conference in September/October 2001, and another from a conference in September 2002. Each was before the priority date, but the Board agreed with Acorda that neither was established as a “printed publication.” Because the Coalition did not show that the posters were distributed (rather than presented) or otherwise indexed, the Board considered the factors from In re Klopfenstein, 380 F.3d 1345, 1349 n.4 (Fed. Cir. 2004) to determine whether the presentations nonetheless qualified. Those factors are:  the length of time the display was exhibited,  the expertise of the target audience,  the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and  the simplicity or ease with which the material displayed could have been copied. According to the Board, the Petitioner failed to make a sufficient showing that these factors were met.
So, the first decisions in the Bass-filed applications did not succeed, but it may not matter. If the speculation is correct, the Coalition already made its money in the stock market.
Patent Owners get frustrated when they believe a petition fails to identify all real parties-in-interest. This is understandable, given the difficulties in obtaining additional discovery on the issue. However, sometimes Patent Owners get that discovery, and when a Patent Owner does get the evidence it needs, it has a kill shot. This is again reflected in Corning Optical Comm’ns RF, LLC v. PPC Broadband, Inc., IPRs2014-00440, -00441, and 00736.
There, the Board instituted review of three patents. The petitions were filed less than a year after a lawsuit was service against Petitioner. Patent Owner’s argument, though, was that the petition was not entitled to the original filing date because not all real parties-in-interest were named. Rather, Patent Owner argued, a new filing date would be set only upon submission of updated mandatory notices. Because the one-year deadline (from service of the complaint) had passed, that would mean that the petitions would be barred under § 315(b).
After institution, the Board authorized a motion for additional discovery directed to whether the Petitioner (Corning) should have identified its parent (Corning Inc.) and sister (Corning Optical Comm. LLC) companies. The issue was whether those companies funded or controlled the IPRs. The Board first addressed the issue of whether Patent Owner waited too long in raising the issue. The Board decided that Patent Owner’s argument was timely, because Patent Owner only gained notice of the issue shortly before alerting the Board, based on discovery in an underlying ITC investigation. As to the substance of the issue, the Board noted the highly fact-specific nature of the real-party-in-interest analysis. Here, there was evidence of commingling between the three Corning entities, including because common employees of each were involved in the IPR and because Corning Inc. payed the attorneys’ fees. As the result, the Board found that “Petitioner’s actions have blurred sufficiently the lines of corporate separation” with Corning NC, such that Corning NC ‘could have controlled the filing and participation of the IPRs.’ Zoll, Case IPR2013-00606, slip op. at 10 (Paper 13). Furthermore, we determine that evidence sufficiently establishes that Corning Inc. funded these IPR proceedings, and also exercised or could have exercised control over Petitioner’s participation in these proceedings. Trial Practice Guide, 77 Fed. Reg. at 48,759–60; Atlanta Gas, Case IPR2013-00453, slip op. at 8–9 (Paper 88).”
The Board then determined that the petitions could not be afforded their original filing date because of the failure to name all real parties-in-interest. Because it was then a year past service of the complaint, any new filing date would result in a bar under § 315(b). The Board thus dismissed the petitions.
The Board has earned a reputation for rigidly following the procedural rules for IPR proceedings, for good reason. Early on, the Board was likely concerned that an ad hoc web of decisions that granted relief from the variety of rules that govern IPR would create an unwieldly body of decisions. As IPR approaches its 3-year old birthday, however, there are ever growing signs that the Board is willing to consider deviations from core procedural rules, in the right circumstances. For example, in Daicci Sankyo Co., Ltd., v. Alethia Biotherapeutics, Inc., IPR2015-00291, the Board granted Patent Owner’s request for 25 additional pages to argue the prior art status of certain references relied upon by Petitioner. Order at 3. Finding that the particular facts of the case favored an exception to the rules, the Board granted Patent Owner an additional 25 pages “to be used solely for the purposes of addressing the prior art status of references relied on by Petitioner based on prior conception plus reasonable diligence and/or prior actual reduction to practice.” Id. Similarly, Petitioner was granted an additional 12 pages to its reply brief to respond to these arguments.
Also interesting in this decision is the Board’s recitation of what should be addressed relative to this conception issues. Specifically, Patent Owner was instructed to present a “diligence chart” that includes: “1) list all days from the beginning of diligence through the end of diligence, 2) briefly state what happened on each day, and 3) cite the page and line of the motion on which the listed day is discussed; every date gap in the diligence showing must be explained…” Order at 4.
So, the Board demonstrates some leniency in the procedural rules, and also provides interesting guidance regarding what should be provided to the Board to prove diligence.
Today, USPTO Director, Michelle Lee, explained the anticipated, second set of proposed changes to be made to IPR proceedings as inter partes review approaches its 3rd birthday. The first set of changes was discussed HERE. We set forth below a brief summary of the changes that have arrived. The proposed rule package will now be subject to a round of comments (due before October 19, 2015).
- In general, the Board shied away from adopting bright-line rules, and instead focused on the need for considering issues on a case-by-case basis. Highlights of the new regulations include:
- The Board will continue to apply the broadest reasonable interpretation standard for claim construction of unexpired claims, rather than the Phillips standard;
- However, the Board will apply Phillips-type claim construction to claims what will expire before a final written decision;
- Concerning motions to amend, the Office confirmed that the patent owner must show patentability of substitute claims over the prior art of record (including art provided in light of the patent owner’s duty of candor);
- Patent Owners will be allowed to file testimonial evidence with its preliminary response, but there will be no depositions until trial is instituted, and, for purposes of deciding whether to institute trial, factual disputes will be resolved in favor of petitioner;
- Regarding additional discovery, the Board will continue to apply the Garmin factors, subject to additional guidance reflected at http://www.uspto.gov/blog/aia/entry/message_from_administrative_patent_judges. The Board’s discussion of this issue implicitly forecasts more flexibility from the Board in applying these factors going forward;
- Concerning the specific issue of additional discovery geared towards Patent Owner’s attempt to develop evidence concerning secondary considerations (e.g., regarding sales of Petitioner’s product), the Board maintains that the Garmin factors are applicable, but did give the Patent Owners the concession that an absolute showing of nexus is not required to obtain additional discovery;
- Patent Owners will be allowed to raise real-party-in-interest or privity challenges at any point in a proceedings;
- The Board reiterated its discretion to stay, transfer, consolidated, or terminate multiple proceedings involving the same claims;
- Despite some requests for more lax adherence to the one-year time limit for IPRs, the “Office will continue to strive” to meet that deadline;
- Concerning live testimony at hearings, the Board will continue its practice of considering requests for oral testimony on a case-by-case basis;
- The Board also signaled that it will provide more guidance on whether parties are limited to certain issues at oral argument, that it plans to upgrade its technology so that hearings can be held in regional offices, and will allow exchange of demonstratives 7 days before a hearing; however, the Board declined to relax the rules concerning content of demonstratives;
- The Board will be switching to word-count limits, rather than page count limits, for the petition, preliminary response, patent owner response, and petitioner’s reply brief (14,000 words instead of 60 pages for petition, patent owner preliminary response, and patent owner response, and 5,600 words instead of 25 pages for replies). As a result, the Board will no longer review claim charts in petitions for argument. For all other briefing, a page limitation will be maintained;
- The Board states that it is working to upgrade its filing system to allow easier access to docket information;
- The Board intends to include a Rule 11-type certification requirement for all filed papers
- With the final version of these proposed rules, the Office will also issue an updated Office Patent Trial Practice Guide.
Lastly, we are very focused on the statistics that underlie IPR proceedings. In introducing the above changes, Director Lee explained some of the reasons why the Office believes IPR practice has been successful to date. That may be the case, but we were surprised by Director Lee’s citation to statistics regarding the results of IPR proceedings. Specifically, the Director stated that only “12 percent of total claims available to be challenged (4,496 of 38,462) were determined by the PTAB to be unpatentable in a final written decision.” Statistics can, of course, be manipulated and here, we fear, the USPTO may lose credibility. Including claims that were not challenged and claims that were resolved by settlement has a clear effect in raising the survival rate of claims subjected to IPR, without a strong basis for doing so. That is helpful for the Director’s narrative, but in our opinion, is unhelpful to ascertain the true effect of IPR and the Director’s reliance on that skewed stat undermines the other arguments made in favor the success of IPR.
Like every en banc Federal Circuit decision, the Court’s decision in Williamson v. Citrix Online, LLC, No. 2013-1130 (Fed. Cir. June 16, 2015) (en banc) made big headlines. It is, therefore, worth reviewing one of the first PTAB decisions to address the contours of that case in an inter partes review context in Toyota Motor Corp. v. Cellport Sys., Inc., IPR2015-00633, where the Board granted an IPR trial with respect to some claims, but denied as to others.
The first means-plus-function issue related to the claim limitation: “controller means including processing means in the vehicle for controlling the sending and receiving of said information using said wireless device between said first remote station and the vehicle.” More specifically, the Board had to decide the scope of both “controller means” and “processing means.”
The Board recognized that both terms were presumptively means-plus-function limitations pursuant to the Williamson decision. In rendering its claim construction determination, however, the Board agreed with Patent Owner that “controlling means” was not subject to 35 USC § 112, paragraph 6 because: 1) the language of the claim did not link the “controller means” to a specific recited function, and 2) the claim specifies detailed structure sufficient to overcome any recited or implicit function, e.g., controlling. Order at 13. Instead, the Board concluded that the recited function was associated with the “processing means” and “controller means” was simply a controller.
The Board also agreed with Patent Owner relative to the second means-plus-function issue related to limitation: “first standard network communication means.” In evaluating this limitation, the Board first instructed that the proper function for a means-plus-function limitation is the function recited in the claim. As such, the Board accepted Patent Owner’s articulation of the proper function. Then, using this function, the Board evaluated Petitioner’s proposal for corresponding structure and found that the structure identified by Petitioner was not “clearly associated or linked in the Specification to the recited function…” Order at 16.
In view of these claim construction determinations, Petitioner faced an uphill battle in having all claims put into the trial. For example, the Board explained that, for means-plus-function limitations, Petitioner is required to show that both the recited function and the corresponding structure are present in the applied references. Id. at 19. Losing the claim construction ruling made it impossible for Petitioner to win the issue of showing that the “first standard network communication means” was discussed in the Petition.