First Claims Survive Inter Partes Review Proceedings

HTML web codePatent Owners finally received some good news after a string of pro-Petitioner rulings by the PTAB that saw all challenged claims wiped out in the first 8 Final Written Decisions by the Board.  In Microsoft Corp. v. Proxyconn, Inc., IPR 2012-00026 and 2013-00109, Paper 73, and Synopsis, Inc. v. Mentor Graphics Corp., IPR2012-00042, Paper 60, the Board let the first claims stand after an IPR challenge.  Harness Dickey represented Patent Owner in the Microsoft case, so we will not comment further on that proceeding, but instead, we take a deeper look at what went right for Patent Owner in the Synopsis case.

The first interesting issues from the Synopsis decision were procedural in nature.  First, the Board considered Patent Owner’s argument that the petition was barred because, after the filing of the Petition, Petitioner purchased a company that had been sued by Mentor Graphics more than one year prior to the filing of the Petition. The Board denied this argument, finding that privity is only relevant up until the time a petition is filed — later-acquired privities are irrelevant.  Order at 12.

The second procedural issue of interest relates to the doctrine of assignor estoppel.  This panel of the PTAB agreed with previous panels who have found that the equitable doctrine of assignor estoppel does not provide an exception to the statutory mandate that any person, not the owner of a patent, may file a petition seeking inter partes review.

After those procedural setbacks, however, Patent Owner ultimately prevailed on nine out of 12 challenged claims.   Regarding the Board’s substantive analysis, it is interesting to note that the Board switched in its position regarding the construction of a relevant claim term.  The term, “instrumentation signal,” was not addressed in either Petition or Preliminary Response from a claim construction perspective.  The Board adopted a construction in its Decision to Institute of the term, but then changed its mind in view of Patent Owner’s arguments in its Patent Owner Response.  Order at 18-27.

Ultimately, however, key to the Board’s decision was the fact that Mentor Graphics provided persuasive expert testimony in its Patent Owner Response, and Petitioner had not provided expert testimony.  That imbalance in evidence was a deciding factor in the Board finding that the claims that contained “instrumentation signal” were confirmed as patentable.

As a final note, Patent Owner’s Motion to Amend was denied by the Board because Patent Owner “had not met its burden.”  We will stay tuned to learn whether a Patent Owner can successfully navigate the seemingly insurmountable hurdles to a successful Motion to Amend.

Obtaining Additional Discovery in an Inter Partes Review Remains Difficult

The provision for “additional discovery” in inter partes review proceedings has consistently fallen victim to the PTAB’s steadfast resolve to ensure just, speedy, and inexpensive inter partes review proceedings.  With one notable exception, each request for additional discovery has been denied by the Board, typically with a holding that the movant has failed to meet the requirement that such discovery is “necessary in the interest of justice.”  37 CFR § 42.51(b)(2). Below, we summarize the most recent decisions relating to Motions for Additional Discovery and the key guidance from the Board that can be learned from each such decision.

Motions Denied

Smith & Nephew, Inc. v. Convatec Tech., Inc., IPR2013-00097, Paper 27 (August 21, 2013).  ConvaTec sought discovery into certain submissions made by Smith & Nephew to the FDA that related to a commercial product ConvaTec alleged was covered by its patent-at-issue.  Briefly, ConvaTec alleged that, during a UK proceeding, Smith & Nephew made confidential statements that suggested that it had failed to make the product by its own method and was forced to use methods claimed in ConvaTec’s patent.  This evidence would, per ConvaTec, be relevant secondary considerations of non-obviousness relating to copying and failure of others.  The Board denied the request, finding that ConvaTec failed to provide sufficient explanation and evidence that something useful would be uncovered if discovery were granted.  More specifically, the Board found that, even if the FDA had found that Smith & Nephew’s product was “substantially equivalent,” such a statement would be insufficient evidence of copying.  Order at 5.  Further, the “failure of others” argument was not deemed sufficient to allow discovery because, to establish that factor, there must be evidence of widespread efforts of skilled workers, having knowledge of the prior art, that failed to find a solution to the problem.  This single incident of failure, if proven, would not demonstrate such widespread efforts and failure.  Order at 7.

Blackberry Corp. v. Wi-Lan USA Inc., IPR2013-00126, Paper 15 (August 19, 2013).  Wi-Lan served a “First Request for Production of Documents and Things,” and Blackberry requested a conference call with the Board for guidance on whether it needed to respond to the requests.  In short, the Board said Blackberry need not respond to the requests.  The requests were based on the Routine Discovery provisions of the Patent Office regulations, but with some broadening caveats.  For example, Wi-Lan sought documents “relating to information inconsistent with…,” instead of “information inconsistent with…” as required by the Rules.  Even had the requests identically mirrored the Rules, however, the Board would still have ruled that they need not be responded to.  In short, Routine Discovery is self-executing and self-enforcing and, thus, there is no need for the service of discovery requests to get that information.  Order at 2.

St. Jude Medical, Cardiology Division, Inc. v. Board of Regents of the University of Michigan, IPR2013-00041, Paper 20 (July 31, 2013).  The University of Michigan sought documents St. Jude exchanged with the FDA in obtaining approval to market products covered by the patent-at-issue.  This information was sought for the purpose of seeing if it contained secondary considerations evidence, among other reasons.  St. Jude opposed given the magnitude of the burden on St. Jude to review and produce the documents.  Because Michigan only identified a “possibility” of finding useful information, the request for additional discovery was deemed insufficient by the Board.  Order at 3. University of Michigan was also deemed not to have acted timely in making the request (it having been made only shortly before the Patent Owner Response was due).

Illumina, Inc. v. The Trustees of Columbia University in the City of New York, IPR2012-00006, Paper 42 (May 7, 2013).   Columbia University sought to file a motion for additional discovery to use evidence obtained from Illumina in co-pending litigation.  The Board held that permission to use such evidence was unnecessary – simply, Columbia did not need to take any discovery at all, such discovery had already occurred.  The request for authorization to file the motion was denied, therefore, as moot.

Synopsis, Inc. v. Mentor Graphics Corp., IPR2012-00042, Paper 24 (April 25, 2013).  Mentor Graphics sought discovery relating to the issue of assignor estoppel.  Briefly, Mentor Graphics believed that additional discovery may have led to evidence proving that the petitioner was in privity with an assignor of the patent-at-issue.  For purposes of this motion, the Board assumed it could hear the issue of assignor estoppel, but ultimately denied the motion, in any event, because Mentor Graphics had not proven that the discovery was necessary in the interest of justice.  More specifically, Mentor Graphics: (1) failed to provide an explanation with evidence sufficient to show that something useful will be uncovered by the discovery: (2) failed to provide what efforts it had made to acquire, on its own, the discovery it now seeks; and (3) proffered discovery requests that were burdensome in terms of finances, human resources, and meeting the IPR time schedule.

Redline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, Paper 31 (August 27, 2013).  In an analogous case to the Mentor Graphics decision discussed above, Star Envirotech’s Motion for Additional Discovery, seeking information that would prove the applicability of an assignor estoppel defense, was denied because this three judge panel decided that assignor estoppel cannot be successfully raised as a defense in an inter partes review.  Thus, because assignor estoppel was not deemed to be a valid defense in inter partes review proceedings, Star Envirotech could not meet its burden to show that the requested discovery was necessary in the interest of justice.

The Exception

Corning Inc. v. DSM IP Assets B.V., IPR 2013-00043, Paper 27 (June 21, 2013).  Proving that it was not simply hitting the “NO Button” with regard to each Motion for Additional Discovery, the Board partially granted DSM’s request for Additional Discovery, allowing DSM discovery into laboratory notebooks and related documents that contained protocols and testing that underlie test results submitted by Corning’s expert.  In this IPR proceeding, Corning took the position that the subject matter in the challenged claims was unpatentable over the prior art based on inherent properties not explicitly recited in the prior art.  As such, Corning’s experts recreated the prior art compositions and tested them to prove that the properties from the DSM patent claims were inherent in those compositions.  DSM obtained the Board’s permission to discover the lab notebooks of Corning’s experts, but not actual samples of the compositions prepared by Corning, nor any testing results that were inconsistent with Corning’s testing (the latter discovery being deemed required already by “Routine Discovery”).