Jul 08

Instruction Not to Answer on Relevance Grounds Improper in IPR Depositions

iStock_000001758213XSmallIn Dynamic Drinkware v. National Graphics, IPR 2013-00131, Patent Owner’s counsel prevented Petitioner from questioning a witness by instructing the witness not to answer questions on the ground of relevance. Petitioner contends that such instructions were prohibited, pursuant to the Board’s Testimony Guidelines.  Office Patent Trial Practice Guide, 77 Fed. Reg. at 48,772-73. The panel agreed with Petitioner, finding that counsel should have stated its objections for the record and later moved to exclude the testimony.  Alternatively, if “counsel believed that the examination of [the witness] was being conducted in bad faith, or in a manner that unreasonably annoyed, embarrassed, or oppressed [the witness] or Patent Owner, counsel should have promptly initiated a conference call with the Board.”  Order at 3.  The Board decided not to sanction Patent Owner at this time, but did take Patent Owner up on its offer to produce the witness again for a resumption of the deposition. The panel also stated that Patent Owner should agree to bear the expenses of providing a court reporter for the examination.

Jul 07

Board Allows Rare Motion for Additional Discovery

iStock_000010577451SmallIn a relatively rare grant of a Motion For Additional Discovery, in Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. (IPR2013-00453,, Paper 40), Patent Owner sought additional discovery pertaining to its contention that the real parties-in-interest were not properly identified in the petition, by propounding three requests for production and one interrogatory.

A proponent of additional discovery bears the burden of demonstrating that additional discovery is “in the interest of justice.” Consistent with Congressional intent that inter partes review be a quick and cost-effective alternative to litigation, discovery is less expansive than that typically available in district-court patent litigation.

Citing the seminal discovery decision of Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, (IPR2012-00001, Paper 20), the Board discussed the factors important in determining whether a discovery request meets statutory and regulatory stands of being “in the interest of justice.” The mere possibility of something useful and a mere allegation that something useful will be found are insufficient. Additionally, information a party can reasonably figure out or assemble without a discovery request would not be in the interest of justice.

The Board granted Patent Owner’s request for additional discovery, in part, because Patent Owner identified “evidence tending to show beyond speculation that in fact something useful will be uncovered.” More specifically, in an affidavit submitted in the proceeding, a principal of Petitioner stated that there was a dispute regarding indemnification between Petitioner and a potential real party-in-interest. By limiting Request No. 1 to just documents “regarding the dispute referred to by [Declarant] in paragraph 3 of his declaration…,” Patent Owner’s request provided more than a mere possibility of finding something useful. Order at 6.

Patent Owner’s other discovery requests were, however, denied because Patent Owner was not able to demonstrate that such discovery was unattainable from other means and/or that it was not mere speculation that useful information could be discovered. As such, Patent Owner’s motion was only granted-in-part.

Jul 03

PTAB Grants Rare Motion for Reconsideration

iStock_000019749872SmallIn PNY Tech., Inc. v. Phison Elec. Corp., (IPR2013-00472, Paper 16), Patent Owner filed a request for rehearing of the Decision on Institution contesting the Board misinterpreted the governing law regarding inherency. To date, less than 10% of such Motions for Reconsideration have been granted. Because the Board granted the motion-in-part, such a rarity merits further investigation.

In its decision to institute, the Board found a reasonable likelihood that the challenged claims were unpatentable in view of the Minneman reference. Specifically, the Board found that it was “conceivable” that a limitation of the challenged claims requiring a concave feature was present in Minneman, even though it was not expressly set forth in the reference. Of course, a reference may anticipate inherently if a claim limitation that is not expressly disclosed ‘is necessarily present, or inherent, in the single anticipating reference.’  Further, inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.’ Order at 3.

Because it misapplied the law of inherency, basing its decision on a conceivable notion that a claimed feature was present in a prior art reference, rather than a finding that the feature was necessarily present, the Board agreed that it had abused its discretion and granted the motion-in-part.

Jul 02

Twenty-One Months of Inter Partes Review – By the Numbers

IPR InsertWelcome to Volume 6 of our IPR-PGR Quarterly Report.  This Report brings news of a large spike in Petition filings and some interesting trends that come from a more significant data set derived from Final Written Decisions. Also, we are still waiting on our first PGR filing.

First, after a brief respite last quarter, Petition filings rose to an all time high of about 30/week. This is higher than expected, but a portion of the spike is attributable to an interesting battle playing out between Patent Owner Zond, LLC, and a number of defendants in co-pending litigation. In the last two months, over 60 IPR petitions have been filed against Zond patents!

Second, as more Final Written Decisions have been rendered, the landscape does not look as bad for Patent Owners. The cancelation rate dropped from 96% to about 69%. Also, the last quarter brought our first granted Motions to Amend. It seems the Board has stopped adding requirements to what it takes to succeed in such motions, and Patent Owners have adjusted enough to see some success. These Patent Owner successes are helping change the narrative and establish that IPR proceedings are not only efficient and cost-effective, but also fair.

Thank you for your continued interest in Harness Dickey’s Post Grant Practice. Please email us at IPR-PGR@hdp.com if you have any questions about our Report or any other aspect of IPR proceedings.

Jul 01

Board Addresses Procedure for Making Board Aware of Supplemental Evidence

There has been, to date, much confusion surrounding the propriety and timing of filing “supplemental evidence” with the Board.  In Sealed Air Corporation v. Pergis Innovative Packing, Inc., IPR2013-00554 through IPR2013-00558, the Board clarified the issues upon request of Patent Challenger regarding the proper procedure to file supplemental evidence in response to an evidentiary objection.

37 CFR § 42.64(b):
(b) Other evidence. For evidence other than deposition evidence:
(1) Objection. Any objection to evidence submitted during a preliminary proceeding must be served within ten business days of the institution of the trial. Once a trial has been instituted, any objection must be served within five business days of service of evidence to which the objection is directed. The objection must identify the grounds for the objection with sufficient particularity to allow correction in the form of supplemental evidence.
(2) Supplemental evidence. The party relying on evidence to which an objection is timely served may respond to the objection by serving supplemental evidence within ten business days of service of the objection.

Patent Challenger acknowledged the Rules for service of supplemental evidence on an opposing party in response to an evidentiary objection under 37 CFR § 42.64(b)(2), but noted the Rules are silent as to the filing of such evidence with the Board. The Board instructed that, in situations where a party’s objection to evidence can be overcome by later-served supplemental evidence, the objection would not become the basis of a motion to exclude evidence, and therefore the Board would not be made aware of either the objection or the supplemental evidence Accordingly, the Rules do not provide for filing of evidentiary objections or supplemental evidence during the initial stages of a proceeding.

The Board only becomes aware of supplemental evidence when there is an evidentiary dispute which cannot be resolved. In such situations, the objecting party may file a motion to exclude evidence, which can be opposed by the filing of an opposition to the motion to exclude.  This opposition may be accompanied by exhibits containing previously-served supplemental evidence.  Only at this time will the Board be made aware of the supplemental evidence.

In short, objections to evidence and supplemental evidence served within 10 days of such objections, pursuant to 37 CFR § 42.64(b)(2), should only be filed with the Board at the Motion to Exclude stage of the proceeding.

Jun 30

Sur-Reply Authorized By Board in Response to New Expert Testimony in Petitioner Reply by Patent Owner

iStock_000031776768SmallThe PTAB has, to date, been very strict about the timeline of events in an inter partes review proceeding, as well as ensuring the proceedings are streamlined.  That’s what makes the Board’s decision in Zodiac Pool Systems, Inc. v. Aqua Products, Inc., (IPR2013-00159) unique.  In that case, a sur-reply was allowed in response to an expert declaration that was submitted in a reply brief.

More specifically, Patent Challenger included an expert declaration supporting its arguments refuting Patent Owner’s arguments of secondary considerations of non-obviousness. After noting that the reply exceeded the word limit, Patent Owner (who had been denied discovery on related issues) argued that it had no opportunity to respond to any potential inaccurate statements in the declaration.

Patent Owner also requested permission to file a short sur-reply in response to a review of documents produced by Patent Challenger after filing of the reply. The Board approved Patent Owners request, with the stipulation that sur-reply contain only rebuttal of allegations in Patent Challenger’s expert declaration.

Jun 27

Declaratory Testimony from File History is “Affidavit Testimony” Which Requires Deposition

37 CFR 42.51(b)(1)(ii): (b) Routine discovery.  Except as the Board may otherwise order: …(ii) Cross examination of affidavit testimony is authorized within such time period as the Board may set.”

Most declaration testimony in an inter partes review proceeding is newly developed as part of the IPR.  On occasion, however, parties to an IPR have used previously generated declarations in support their positions.  In Ikaria, Inc. v. GeNO LLC, IPR2013-00253, the PTAB considered the issue of whether, when a Patent Owner includes, in its Response, an expert declaration that was submitted during prosecution of the challenged patent, Petitioner is entitled to cross-examine the expert.

In Ikaria, Petitioner argued that, pursuant to 37 CFR § 42.51(b)(1)(ii), the testimony of an expert cited in a Patent Owner’s response was “affidavit testimony.” Therefore, the Rules required cross examination of the expert as part of routine discovery.  Patent Owner disagreed, arguing that the declaration was not prepared for the purposes of this proceeding and, as such, cross-examination was not required.  The Board disagreed, finding that cross-examination was required.

Further complicating matters was the fact that the expert was unable to be deposed due to medical issues. Since a deposition was unable to be arranged to comply with the Rules, Patent Owner filed a motion to expunge the expert declaration from the record.

Jun 26

Expert Declaration Not Allowed as Supplemental Information Related to Claim Constructions

iStock_000014024761SmallUnhappy with the Board’s claim constructions, Patent Challenger in Rackspace US, Inc. and Rackspace Hosting, Inc. v. PersonalWeb Technologies, LLC and Level 3 Communications, (IPR2014-00057, IPR2014-00058, and IPR2014-00062) sought to file a motion to submit supplemental information (specifically an expert declaration) to address certain claim constructions.  The Board denied the motion because, among other things, allowing such late entry of evidence would compromise the efficient and inexpensive resolution of inter partes reviews.

Patent Challenger argued that allowance of the expert declaration in support of its own claim constructions was proper because the request was made within one month from the institution date and the information would be relevant to the claims at issue. Patent Owner countered that such supplemental information should have been presented at the time of filing the original petition, and that such a late submission of evidence regarding claim construction would negatively affect Patent Owner, who was in the midst of preparing for discovery and response.

The critical factor in the Board’s decision was the goal of having the proceeding completed within one year of institution (35 USC § 316(a)(11)). The Board also looked to 37 CFR § 42.1(b) which stipulates that the Board’s rules are to be construed to secure efficient and inexpensive resolution of each proceeding. Finding that allowing submission of the supplemental expert declaration would inhibit timely filing of Patent Owner’s responses in each proceeding, the Board refused to allow the supplementary evidence.

The Board continued on to state that submission of supplemental evidence is an improper mechanism for challenging claim construction. Rather, if Patent Challenger was dissatisfied with the Board’s claim construction, Patent Challenger should have filed for rehearing within 14 days of the decision on institution. The Board also agreed with Patent Owner that the proper time to submit an expert declaration in support of claim construction was with the filing of the petition. Lastly, the Board noted that Patent Challenger can challenge the claim constructions in its reply, so there was no reason to allow supplemental information.

Patent Challenger’s last argument was based on two past proceedings in which expert testimony related to access and authenticity of prior art references was allowed as supplemental information. However, the Board found that the two cases were not analogous, as they dealt with issues related to the prior art, not claim construction. Therefore, the Board did not allow submission of supplemental information in support of Patent Challenger’s preferred claim construction.

Jun 24

Claim Term of Expired Patent Given non-BRI Construction

hourglassAn interesting argument relative to the construction of claim terms in an inter partes review proceeding has been percolating in recent months.  Namely – what claim construction should be applied when a patent subject to review is expired, or expires during the proceeding?

In Toyota Motor Corp. v. Leroy G. HagenBuch, IPR2013-00483, the subject patent expired following the decision to institute inter partes review, causing the Board to confront the issue of whether to retain the previously-assigned broadest reasonable interpretation (“BRI”) of a claim term for the purposes of the final decision.

More specifically, the term “monitoring” had been defined according to its broadest reasonable interpretation as “watching, keeping track of, or checking.” However, during the period between the decision to institute inter partes review and the drafting of the final decision, the patent at issue (US Pat. No. 8,014,917) expired. As a result, the opposing parties agreed that the BRI should not be applied in the in the final decision. Instead, the claim term in question should be construed using a district court “Phillips” standard.

In the end, though, the Board came to the same conclusion – citing the specification and a conventional dictionary, the Board arrived at the same construction pursuant to Phillips as it did under the BRI, interpreting “monitoring” to mean “watching or keeping track of, or checking.”

Apr 11

18 Months of IPR – By the Numbers

Vol 5Welcome to Volume 5 of our IPR-PGR Quarterly Report.  As you can see in this issue, we have compared IPR data from the 18 month anniversary with data from the 9 month anniversary so you can glean trends in the data.

This Report also brings data from the first Final Written Decisions.  Of interest is the fact that only 10 of 274 challenged claims have survived IPR scrutiny (for a robust 96.4% cancelation rate).  Also of interest is the fact that not a single Motion to Amend has been granted.

We also took note of the dip in filings this quarter.  After ramping up to about 20 filings per week, we only saw about 15 filings per week in the most recent quarter.  This lower number is more in line with estimates from the Patent Office and we anticipate the filings to level out near this lower rate.

Lastly, we want to take the opportunity to note the success Harness Dickey is having in these proceedings.  From the Petitioner side, we have had all of our petitions granted, with all claims being put into trial (though no Final Written Decisions have come from those cases yet).  From the Patent Owner side, of the first 3 cases in which at least one challenged claim survived, we were counsel on two of those cases.

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