May 19

PTAB Finalizes “Quick Fix” Changes to IPR/PGR Procedure

USPTOThe PTAB issued its revised IPR Rules today, finalizing the “quick fix” changes it forecasted in late-March. There are numerous changes that have been made to IPR practice, many of them ministerial in nature. We focus here on the four most significant changes contained in this rule set:

1. Changes to Page Limits in Patent Owner’s Motion to Amend. The requirements for a Patent Owner Motion to Amend have been changed such that the motion may now be up to 25 pages in length (up from 15 pages). An opposition to a Motion to Amend now has a 25-page limit, too. Also, it is no longer a requirement that the amended claims be set forth as part of the motion itself, eating into the page limit. Instead, the proposed amended claims may be presented as a claims appendix and the listing is not subject to the 25-page limit.

2. Changes to Petitioner Reply Brief Page Limit.  The page limit for a Petitioner Reply Brief has been extended to 25 pages (from 15 pages). In the past, it had been difficult to respond to a full 60-page Patent Owner Response brief in merely 15 pages.

3. Required Font Changes. Parties must use Times New Roman font in all PTAB filings from this point forward. The type of font to be used in filings to the Board had been fairly open-ended in the original rules. Over the course of a 60-page brief, though, one type of compliant font might result in a brief that is up to several pages shorter than other compliant fonts. Those fonts were, however, difficult to read at times. More uniformity, through the use of Times New Roman, will address this issue.

4. Multiple Back-Up Counsel Allowed. The IPR/PGR Rules as initially enacted, seemed to suggest that only one back-up counsel was allowed. In practice, the Board never limited the parties to merely one counsel and this amendment codifies that practice.

The other, less significant changes to the Rules can be reviewed in the 6-page notice published today in the Federal Register.

May 18

Doctrine of Inurement Does Not Save Design Patent in IPR Proceeding

6686163_sThere are precious few opportunities to be able to write about the Doctrine of Inurement in inter partes review proceedings (or otherwise, for that matter). So, we take the opportunity here to consider the doctrine, in a design patent context, with the Board’s decision in Sensio, Inc. v. Select Brands, Inc., IPR2013-00580. In Sensio, the Board rejected Patent Owner’s attempt to antedate 102(a) prior art under the Doctrine of Inurement, finding that insufficient evidence supported a finding that the work of a third party inured to the benefit of Patent Owner.

More specifically, Patent Owner argued that it had communicated the design of the subject matter later claimed in the subject patent (design for a multiple-crock buffet server) to a third party for manufacture of a prototype. The first prototype was then manufactured and sent to Patent Owner by the third party months prior to the date of the prior art references relied upon in this challenge. There were no design changes in taking the prototype to the present day commercial model. Decision at 6-7. Patent Owner, assuming conception was established by photographs of the prototype and business records, argued that reduction to practice was achieved prior to the date of the prior art, as evidenced by several commercial product description documents which antedate the prior art by a few months. Id. at 7-8.

Petitioner responded by rebutting Patent Owner’s argument the doctrine of inurement applied (that acts by others working explicitly or implicitly at the inventor’s request will inure to the inventor’s benefit). The first requirement of inurement is that the inventor must have conceived of the invention prior to involving the third party. Petitioner argued: (1) because a third party (rather than the inventors) built the prototypes, there was no reduction to practice; (2) Patent Owner did not show that the third party building the prototypes inures to Patent Owner’s benefit; and (3) the photographs of the prototype produced by the third party were insufficiently clear to establish conception of the design by the inventors prior to involvement of the third party. Id. at 8-9.

After rejecting Patent Owner’s argument that the foundational case law of the doctrine of inurement does not apply to design patents (only to utility patents), the Board narrowed the key issue to whether the third-party-built prototypes inure to Patent Owner’s benefit.  Id. at 10.  The Board began by rejecting Patent Owner’s assumption that conception had taken place, and stated that Patent Owner had not, in fact, shown that conception of the claim design happened before the prior art date. The Board based this finding on a lack of corroboration of the inventor’s testimony regarding conception. 12-13.  Patent Owner’s submission of various business records and product descriptions were inadequate, as they did not address the claimed ornamental design and focused more on the commercial product and its technical specifications.  Further, the Board weighed the fact there was no evidence of record which showed correspondence between Patent Owner and third party prior to production of the design prototype.  Id.  at 14.

Accordingly, the Board found that Patent Owner had not adequately shown that it invented the claimed design prior to the prior art date, and allowed the references at issue as prior art under 102(a).  Id. at 14.

May 17

PTAB Issues Subpoenas in Two IPR Proceedings

19694784_sTo date, the PTAB has sparingly used its power to issue subpoenas in inter partes review proceedings. In two recent cases, Marvell Semiconductor, Inc. v. Intellectual Ventures I LLC, (IPR2014-00553) and LG Chem, Ltd. v. Celgard, LLC (IPR2014-00692), the Board granted requests to compel depositions of third party witnesses. Here, we take a look at the fact patterns that gave rise to this unusual IPR event.

The proper procedure for obtaining a subpoena in inter partes review is to make a “Motion for Authorization” to seek a subpoena the Patent Trial and Appeal Board (PTAB) which identifies the witness and explains the relevance of the testimony.  If the request is granted, the PTAB proceeds to issue an order permitting the moving party to apply for a subpoena pursuant to 35 U.S.C. § 24.

In the Marvell case, Petitioner filed declarations by two experts to support its contention that certain references qualified as prior art, one a librarian and the other from a publishing company. Neither of the witnesses, however, were willing to voluntarily appear for a deposition. Patent Owner disputed that the references were prior art and requested the Board to compel depositions of the two witnesses to allow relevant cross-examination.  ‘553 Order at 2.  Petitioner argued that cross-examination was unnecessary since the declarations were merely limited to authentication of documents.  Id. at 3.  The Board disagreed, finding that the publication date for the references was in dispute.  Accordingly, the Board granted Patent Owner’s request to compel depositions of the two witnesses and permitted Patent Owner to seek a subpoena under 35 U.S.C. § 24. Id. at 3.

In the LG Chem case, Patent Owner submitted testimony with its Response, and Petitioner sought to cross-examine the witness.  ‘692 Order at 2.  The witness was an employee of Patent Owner when the declaration was filed, but had since left and refused to attend the deposition voluntarily. The Board noted three key facts.  First, the deposition of the witness would be considered routine discovery since his original testimony was via declaration.  Second, there was little time remaining for Patent Challenger to submit its reply.  Third, Patent Owner did not oppose compelling a deposition. Id. at 2-3.  Given these three points, the Board waived the requirement that Petitioner file a motion for authorization under 37 C.F.R. § 42.52(a), and granted what the Board deemed to be an oral motion for authorization to compel testimony.  Id. at 3. Authority to serve the subpoena was also granted by the Board.

May 08

Board Clarifies When Expanded Panel Can Consider an IPR Issue

21909836_sIn the aftermath of the decision by an expanded panel of PTAB judges in Target Corp. v. Destination Maternity Corp. (deciding, in a 4-3 decision, that both joinder of issues and joinder of parties is allowed in inter partes review proceedings), several parties have pushed various panels of PTAB judges to submit one issue or another to an expanded panel. Today, the PTAB designated two decisions as “Informative Decisions” – each clarifying the circumstances under which an expanded panel may be employed in an IPR proceeding.

In the first decision, AOL Inc. v. Coho Licensing LLC, IPR2014-00771, Petitioner sought rehearing by an expanded panel in view of a dissent that was filed in the Board’s decision to institute. In the second decision, Conopco, Inc. v. Procter & Gamble Co., IPR2014-00506, Petitioner sought an expanded panel to rehear the Decision to Institute, including the attendance of the Chief Administrative Patent Judge on the expanded panel.

In both decisions, the respective panels denied the requests for an expanded panel and explained the circumstances under which an expanded panel may be used in IPR proceedings. More specifically, the panel members from the Board do not have the authority to refer an issue to an expanded panel, by request of a party to the proceeding, or otherwise. “The members of the Board deciding an institution matter are not authorized to select themselves or, of their own accord, select other Board members to decide the matter, upon request of a party or otherwise.” Conopco, at 6. Instead, the Board explained, the Standard Operating Procedures indicate that the Chief Judge, acting on behalf of the Director, is given the sole authority to expand a panel “on a suggestion from a judge or panel.” Id.


Apr 24

“Indirect” Common Inventorship Not Sufficient To Support Priority Claim Under 35 U.S.C. §120

PriorityThe PTAB recently took up the issue of whether, in a family of patents and applications, a later patent in the family is entitled to the benefit of the filing date of an earlier-filed application in the family where the later patent and the earlier application do not themselves share a common inventor, but each application in the chain share a common inventor with at least the immediately preceding application.  Without Federal Circuit precedent directly on point, the PTAB construed the statutory language of 35 U.S.C. §120 to require at least one common inventor between the later patent and the earlier-filed application to which priority is being claimed. Common inventorship between immediately-preceding applications in the chain alone is not sufficient.

In Polaris Wireless, Inc. v. True Position, Inc., IPR2013-00323, the Patent Owner attempted to disqualify an asserted prior art reference by claiming priority to the filing date of an application filed before the publication date of the prior art reference.  The priority application was linked to the patent challenged in the IPR through a series of intermediary continuation applications.  While each of the applications and patents in the family shared a common inventor with at least the application that immediately preceded it, the challenged patent did not share a common inventor with the priority application itself.

Without Federal Circuit precedent directly on point, the PTAB turned directly to the language of  35 U.S.C. §120, and particularly the provision that “…a patent is entitled to the priority date of an earlier filed application if…the applications have at least one common inventor.”  The PTAB concluded that the “earlier filed application” properly refers to the prior filed application with the accordable filing date.  The PTAB further concluded that its interpretation of the statute is “consistent with” (though not directly addressed by) Federal Circuit precedent on 35 U.S.C. §120.

Therefore, under Polaris Wireless, Inc. v. True Position, Inc., a patent is entitled to the priority date of an earlier-filed application only if the patent and the earlier-filed application themselves share a common inventor.

Apr 22

Strategies for Pharma Companies Facing Bass-Like Challenges in IPR Proceedings

18095113_sKyle Bass is at it again. On April 20, 2015, Bass filed his sixth inter partes review (IPR) Petition against a patent covering Pharmacyclics, Inc.’s cancer drug, IMBRUVICA®. Then, on April 22, 2015, Bass filed his seventh IPR Petition against a patent covering Biogen’s multiple sclerosis drug, TECFIDERA®. These IPR filings follow a typical strategy for Mr. Bass – identify companies with a limited number of products (in the case of Pharmacyclics, its website seems to indicate that IMBRUVICA® is its only product) – and attack the core patent(s) covering one or more of those products. By attacking patents on a company’s core products, Mr. Bass is likely best able to negatively affect the company’s stock price in a short-sale strategy.

What should you do if you find yourself in the sights of Bass, or some other IPR challenger? The BIO IP Counsels meeting in St. Louis last week featured a robust discussion of IPR practice and the important steps a company can and should take when facing an IPR challenge to one or more core patents. The following insights and strategy were gleaned from comments made at the BIO meeting:

  • Immediately convene a meeting of the CEO, CFO, government relations, investor relations, internal and external general and IP counsel to develop a coordinated strategy.
  • Get out in front of the issue with your general counsel and/or patent counsel. IPR issues are nuanced and complicated, internal and/or external patent counsel should be made available to analysts to answer specific questions about the IPR process in general, and specific questions about the particular IPR filing in question. Your CEO and/or CFO can be available to comment on more general issues. With a precipitous stock price drop, there will be internal pressure to immediately respond, but if your company representative is unprepared or unknowledgeable about IPR proceedings, it will result in more harm than good.
  • In communications with analysts, focus on educating about the IPR process and positive points. For example:
    • Were only some of the claims of the patent-at-issue challenged?
    • Is regulatory approval a high hurdle that makes patent protection less important?
    • An IPR filing is only a request to re-evaluate the patentability of a patent – are there problems with the IPR petition that will make it easy to defend?
    • An IPR proceeding, with appeals, will take over 2.5 years, so there is no immediate threat to the patents-at-issue.
    • IPR filers, like Bass, DO NOT file Abbreviated New Drug Applications (ANDA) or BLA; therefore, even if they invalidate the patents, they do not have a competitive drug application to be approved.
    • Issued, US patents carry a presumption of validity (35 USC 282(a)) and the IPR filer carries the burden of overcoming this presumption by a preponderance of the evidence.
  • Meet with Congress and be proactive to change the process. Many Representatives and Senators are unfamiliar with the IPR process and the effects it is having on pharmaceutical companies, including by the manipulation of the proceedings by individuals like Bass. For example, Mr. James Harrington, Chief IP Counsel for Shire Pharmaceuticals (another Bass target) elaborated on this point: “Shire Pharmaceuticals is working with BIO, Pharma and Congress to help draft proposed amendments to the IPR process to make the procedure equitable for all industries.  It is important that the pharmaceutical and Biotechnology industries can rely on a strong patent system.”

The message from BIO is clear – the IPR process, and specifically the attacks against chemical/bio patents, is a threat to the patent portfolios of pharma companies. As such, it is important to prepare for further Bass-type challenges. Also, more patent reform seems to be on the horizon, so outreach to members of Congress at this critical stage is essential.

Apr 20

30 Months of IPR Practice – By the Numbers

UntitledWelcome to Volume 9 of our IPR-PGR Report. Please send us an email if you would like a hard copy. After 30 months of IPR practice, some trends are taking shape. Overall, the percentage of petitions put into trial has gradually decreased, down to 76% this quarter, from a high of 96% at the early stages of IPR practice. Despite that decrease, we are finding that the claims that are put into an IPR trial, after a decision to institute, are increasingly not surviving. About 85% of those claims are canceled in a Final Written Decision. Motions to Amend continue to be difficult to obtain, with only a total of 3 such motions having been granted to date. This trend has led many Petitioners to abandon any effort to obtain new claims at all, turning instead to reissue or ex parte reexamination to present fuller claim sets to the Patent Office. The always-interesting stay data from the district courts indicates that the Eastern District of Texas remains an outlier for denying motions to stay. Although motions to stay are granted, on average, 62% of the time, the EDTX has only granted about 15% of the motions brought in that district. We also note that some of these trends have triggered the Patent Office to make certain tweaks to IPR practice, with other major changes on the horizon. You can read about those changes HERE.

Lastly, by way of a practice tip, we note the increasing frequency with which IPR petitions are being filed by companies before they enter the marketplace, to eliminate blocking patents. This technique was used recently, and with great success, by one of our clients, as discussed in this IP Law360 article. Additionally, this technique was recently discussed in a Wall Street Journal article, in which we were quoted, discussing the pharmaceutical industry. Please let us know if you have any questions about this growing strategy.

Apr 15

Live Testimony for Fact Witness Can Be Appropriate at IPR Oral Hearing


With the Patent Office considering changes to inter partes review practice to potentially increase the use of live testimony at oral hearings, it is worth reviewing the first case in which the Board allowed such live testimony.  In K-40 Electronics v. Escort, IPR2013-00203, the PTAB granted Patent Owner’s request to present live testimony from the inventor at the oral hearing. Paper 34 at 2. The Board noted its default position that live testimony is often not necessary, but under very limited circumstances, cross examination may be ordered to take place in the presence of an administrative patent judge. See Office Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012). Paper 34 at 2.

Key to this case was Patent Owner’s attempts to antedate the only references relied upon by Petitioner. The Board found, therefore, that the testimony of the inventor was critical to the determination and the inventor’s credibility could be best judged live. Id. at 2. The Board also discussed that, because the inventor is a fact witness, this favors live testimony, versus a typical expert witness wherein credibility turns on the plausibility of their theories, and not their demeanor. Id. at 3. The Board continued by stating that should Petitioner suspect that the inventor is changing his testimony, he may be impeached with his prior testimony. Id. at 3.

Apr 13

Toward a Bullet-Proof Petition – Motivation to Combine

white puzzle with one piece missing, on blueWhile 8 out of 10 Petitions seeking inter partes review are granted by the PTAB, there remain several key errors that unsuccessful Petitioners make. Among them is the failure to provide sufficient factual basis for a rationale to combine prior art references in an obviousness analysis. That issue arose, in an unsuccessful petition, in Kinetic Technologies, Inc. v. Skyworks Solutions, Inc., IPR2014-00529, where the Board found Petitioner’s motivation to combine arguments inadequate. The case involved US Pat. No. 7,921,320, directed to a single wire serial interface that may be used to control stand-alone power integrated circuits and other devices.  Decision at 3.

Petitioner, in arguing obviousness of the challenged claims, asserted that combining to two prior art references was a matter of combining know elements to yield predictable results, among other conclusory remarks. Petitioner did list several similarities in the circuits of the two references, and provided expert testimony, but did not provide much in the way of details. Id. at 14.

As such, the Board was unpersuaded by Petitioner’s argument for motivation to combine. First, the Board gave little or no weight to the expert testimony, since it was virtually identical in content to the arguments presented in the petition, and lacked facts or data to support the opinion of the expert. Specifically, the Board criticized the expert declaration as filing to “expain the ‘how,’ ‘what,’ and ‘why’ of the proposed combination of references.” Id. at 15. To that end, the Board found that the expert did not explain how the references could be combined, or how such combination would yield a predictable result.  In the final criticism of the expert testimony, the Board noted that the expert failed to explain why the ordinary artisan would have combined elements from the two references in the specific way the ‘320 invention does.

Accordingly, the Board reminded Petitioner that there must be reasoning supporting combination of references in an obviousness challenge, and rejected Petitioner’s argument for motivation to combine references, stating that the argument lacked articulated reasoning with rational underpinning. Id. at 16. As such, the Board determined that Petitioner failed to demonstrate a reasonable likelihood that it would prevail in establishing the challenged claims as unpatentable.

Apr 10

Which Party Should File Motion to Seal in Inter Partes Review?

7629450_sThe PTAB has taken seriously the importance of public accessibility to information underlying an inter partes review proceeding. As such, motions to seal have been trickier to navigate than might have been expected. One aspect of these motions that has caused some confusion is: Who is the proper party to file a motion to seal? In Clio USA, Inc. v. The Procter and Gamble Company, IPR2013-00438, IPR2013-00448, and IPR2013-00450, the Board denied Petitioner’s Motion to Seal because, while Petitioner sought to enter certain evidence into the record, it was Patent Owner’s information and Patent Owner that wanted the information sealed. As such, it was Patent Owner who should have filed the motion to seal.

In the subject proceedings, Petitioner sought to file deposition testimony as an exhibit to the proceeding. Patent Owner asserted, however, that portions of the subject testimony contained confidential information. To protect the confidentiality of that information, Petitioner filed Motions to Seal in each proceeding.  Decision at 2.

The Board denied the motions, noting that the moving party bears the burden of showing good cause that the subject information should be sealed. To that end, because it was Patent Owner who was asserting that deposition testimony was confidential, it was Patent Owner who should have moved to seal, not Petitioner. Accordingly, Petitioner’s Motion to Seal in each proceeding was dismissed.

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