PTAB Slaps Counsel in Inter Partes Review for Ex Parte Communication

iStock_000017847091XSmallThe sometimes “pick up the phone,” informal nature of Patent Office proceedings ran headlong into the more formalistic nature of litigation recently in the inter partes review styled as Nissan N. Am., Inc. v. Collins, et al. (IPR2012-00035) (J. Lane), in an Order condemning an ex parte communication sent by Patent Challenger.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]37 CFR §42.5 – (d) Ex parte communications.  Communication regarding a specific proceeding with a Board member…is not permitted unless both parties have an opportunity to be involved in the communication.[/pullquote]

The facts that gave rise to the issue commence with the filing of a petition seeking inter partes review filed by Patent Challenger.  In due course, Patent Owner filed its patent owner preliminary response, a filing that included arguments relating to mathematical calculations relevant to the challenged patent claims.  About two weeks later, counsel for Patent Challenger emailed one member of the three judge PTAB panel, ostensibly seeking guidance for requesting judicial notice of an alleged error in Patent Owner’s calculations.

Counsel for Patent Challenger’s first major misstep occurred, however, when it failed to copy opposing counsel on that email communication – a clear violation of 37 CFR §42.5(d).  The Board noted this violation in its Order, and further indicated that even if Patent Challenger had copied opposing counsel, the email was still improper.  Simply, the rules do not permit a reply to a Patent Owner preliminary response.  To remedy the error, the Board provided Patent Owner three days by which it could file a 5 page response to Patent Challenger’s email.

Not content to turn the other cheek, Patent Challenger responded to the Board’s order the same day, filing a Request for Rehearing that argued that it merely violated rule 42.5(d) in the same manner that Patent Owner had violated it earlier. Further, per its argument, Patent Challenger was actually now prejudiced because Patent Owner had five pages to present its argument on the email, whereas Patent Challenger could not fully articulate its argument.  Apparently lost on Patent Challenger was the fact that it was not allowed to raise the issue in the first place, per the Board’s admonition that the email was improper in all events as an improper reply to the preliminary statement.

Patent Owner’s permitted reply to what it described as “somewhat stunning attempts” to submit ex parte arguments, admitted to the mathematical error, but challenged the significance of it.  In a cringe-worthy moment, it was amazing that in this remedy for failing to follow the rules, Patent Owner submitted its response in an out-of-compliance 12 point font (though it came in well under the 5 page limit set by the Board).

In the end, the Board weighed in one last time, denying the Request for Rehearing, finding that its argument that it was merely relying on Board advice to be unpersuasive because the Board personnel suggested a conference call, and the email does not contain an explicit request for a conference call, and because an improper ex parte communication cannot be made proper by adding a request for a conference call therein.  In addition, the Board found that the earlier conduct by Patent Owner was not the same – where that earlier email set forth topics for a conference call, Patent Challenger’s email set forth argument.  In any event, even if the earlier email was improper, that does not transform the second, improper email into a proper one.  Lastly, the Board found no prejudice to Patent Challenger because the problem was started by Patent Challenger’s improper email and allowing Patent Owner a reply was reasonable and justified.