Attorney Argument in Preliminary Response Continues to be Trumped by Expert Evidence from Petition

DroppingChallenging two patents with a common parent application, Butamax Advanced Biofuels was able to get 28 challenged claims of one Gevo patent and 18 challenged claims of a second into separate trials for inter partes review, in cases styled as Butamax Advanced Biofuels LLC v. Gevo, Inc. (IPR2013-00214 and IPR2013-00215), involving U.S. Pat. Nos. 8,304,588 and 8,283,505.

The duo of patents both relate to a “method for recovering C3-C6 alcohols, including isobutanol, from dilute aqueous solutions, such as fermentation broths.”

The Board in both cases dealt with a handful of preliminary issues before delving into the analysis. The first issue regarded whether DuPont should have been named as a real party-in-interest by Patent Challenger. The Board rejected Patent Owner’s argument that inter partes review should be barred because of this issue, reasoning that the mere fact that DuPont and Butamax (who have board of directors’ members in common, among other tangential ties) share a common interest in the two patents does not necessarily make DuPont a real party-in-interest.  The real party-in-interest inquiry is “fact-dependent” and Patent Challenger simply had not set forth persuasive evidence of DuPont’s ability to fund or direct the proceeding.  IPR2013-00214 Order at 4.  This issue is, of course, challenging for a Patent Challenger to prove in light of the Board’s high burden to obtain “additional discovery” that would help provide the persuasive facts for this fact-dependent inquiry.

The Board then rejected Patent Owner’s argument that inter partes review should be barred because the references relied upon and the arguments utilized were previously considered by the Examiner. In discounting Patent Owner’s argument, the Board simply stated that Patent Challenger’s arguments had merit. IPR2013-00214 Order at 5.

To conclude the preliminary matters, the Board rejected Patent Owner’s argument that expert testimony should be discredited because it was provided by an expert with a business relationship with DuPont (an alleged unnamed real party-in-interest), citing the expert’s qualifications and persuasive testimony. IPR2013-00214 Order at 6.

The Board’s analysis of the merits of the petitions contained a few interesting points.  For example, in the 214 proceeding, the Board deemed the preambles of the challenged claims limiting, especially given that a portion of the preamble provided antecedent basis support for certain of the dependent claims. IPR2013-00214 Order at 9.

In the 215 proceeding, the Board considered Patent Owner’s argument that, by modifying one prior art reference’s disclosed process by including as step from another reference, the fundamental principles of operation of the process would be changed.  Thus, per Patent Owner, the proposed modification would render the prior art invention inoperable.  IPR2013-00214 Order at 11.  The Board discounted this argument based on the rational that Patent Owner’s “argument improperly is based on what each reference teaches separately, and not on the teachings of the combined references.”  Id.  More specifically, the Board relied on the Federal Circuit’s decision in In re Keller, 642 F.2d 413, 425 (CCPA 1981) to not require “bodily incorporation” of a secondary reference into a primary reference.

This decision shows why there is a growing trend in IPR practice to waive the Patent Owner Preliminary Response or, at the least, to not focus on the merits of, for example, an obviousness analysis.  Time and again in the Board’s decision, it discounted the attorney argument of Patent Owner and referred, instead, to the declaration testimony of Patent Challenger’s expert.  Clearly, expert evidence, if properly presented, is provided great weight, as compared to mere attorney argument (and no expert testimony is, of course, allowed in such a Preliminary Response).  As such, Patent Owners are reconsidering the forecast of arguments that could be made in the formal response to the petition, when expert testimony may be provided, given that the Board is not giving much weight to those arguments in the Preliminary Response.

60 for 65: Corning Succeeds On Three Additional IPR Petitions

Corning extended its winning streak in its challenges of patents owned by DSM IP Assets (DSM) in three related cases styled as Corning Inc. v. DSM IP Assets B.V. (IPR2013-00043, IPR2013-00044, and IPR2013-00047), involving U.S. Pat. Nos. 7,171,103; 6,961,508; and 6,438,306 respectively.

All three patents relate to optical fibers having multiple-layered, radiation-curable coatings as well as to the compositions of the radiation-curable coatings. The coatings act to confer “microbending resistance” and specifically, the ’103 and ‘508 patents are directed to coated optical fibers in which the coating provides “good microbending resistance” and “a high cure speed.” Further, the ‘306 patent is specifically directed to a coated optical fiber with a cured resin coating which does not restrict the mechanical properties of the optical fiber.

In all three cases, the Board began with a short claim construction analysis. In general, the Board either adopted Patent Challenger’s constructions, or deemed that claim construction was unnecessary at this stage, without providing any meaningful analysis supporting its decisions.

Then, the Board turned to an overview of the petition. In all three cases, Patent Challenger asserted that the subject matter in the challenged claims was only allowed during prosecution because many of the claim limitations were in the form of inherent properties not explicitly set forth in the prior art. To support this position, Patent Challenger relied on the expert testimony of two of its own scientists, one of which reproduced prior art compositions to test them for inherent properties, and the other of which vouched for the validity of testing.

Patent Owner objected to these inherency arguments, arguing that (a) Patent Challenger’s anticipation argument actually required multiple references to explain the testing being conducted, (b) the petition should be denied due to Patent Challenger basing its challenges on ex post facto testing, (c) a person of ordinary skill in the art would not have been motivated to combine the prior art references cited by Patent Challenger to produce the claimed invention, nor would they have had a reasonable expectation of success, and (d) in the cases involving the ‘508 and ‘306 patents, Patent Owner argued that Patent Challenger deviated from the prior art teaching in its formulations and testing, even in one case calling Patent Challenger’s methods “fatally flawed.”

Among the interesting aspects of the Board’s decision was its analysis of whether a particular prior art reference inherently possessed a material limitation of the challenged claims.  To that end, Patent Owner argued that Patent Challenger was relying on a combination of references in its anticipation challenge.  The Board disagreed, finding that Patent Challenger may rely on evidence extrinsic to the primary prior art reference to show that the primary reference inherently possesses a particular property, “so long as the extrinsic evidence establishes that the property is ‘necessarily present in the thing described int he reference, and that it would be so recognized by persons of ordinary skill.'” citing Continental Can Co. USA v. Monsanto Co.948 F.2d 1264, 1268 (Fed. Cir. 1991).  00043 Order at 12.

As in previous Corning decisions, the Board also declined to adopt Patent Owner’s argument that ex post facto testing cannot be used in an obviousness analysis.  Because Patent Challenger was not using the testing to provide the rationale for combining prior-art references to reach the claimed subject matter, the testing was proper evidence in the obviousness analysis.  See, e.g., 00043 Order at 18-19.

It is worth noting that this is an interesting decision for a reason related to the decision whether or not a Patent Owner should file a Preliminary Response to the Petition.  Momentum is certainly on the side of not filing such Preliminary Responses, given the overwhelming rate of Petition grants to date.  That is, given the low likelihood that such a response will be successful, there is little incentive to a Patent Owner to explain its positions early in the proceeding.  In this case, while the Board ultimately granted the IPR trial, Patent Owner was given a detailed exposition of the weaknesses in its arguments, as currently viewed by the Board.  This will give Patent Owner a detailed road map for expert testimony and argument in its formal response in an attempt to rebut the challenge grounds.

In summary, the Board granted the petition of Patent Challenger as to 18 of 18 challenged claims in the ‘103 patent, 22 of 22 challenged claims in the ‘508 patent, and 14 of 14 claims in the ‘306 patent based on obviousness and anticipation grounds, solely obviousness grounds, and solely anticipation grounds, respectively.

33 and 34 for 35: Two Inter Partes Review Trials Instituted Where Patent Waived Preliminary Response


Kyocera is a believer in the new inter partes review proceedings, having filed three IPR petitions.  Its first two attempts have been met with initial success as it obtained favorable decisions (HERE and HERE) from the PTAB in instituting inter partes review trials against two Softview LLC patents. The cases are styled Kyocera Corporation v. Softview LLC (IPR2013-00004 and IPR2013-00007), involving US Pat. Nos. 7,831,926 and 7,461,353.

As noted in our Report on the first six months of inter partes review proceedings, just 6% of Patent Owners have decided to waive their right to file a Preliminary Patent Owner Response.  Softview is a big part of that statistic, having decided in both of these proceedings to not file a Patent Owner Preliminary Response.  Interestingly, it does not appear that Softview waived the response to speed the proceedings – instead, it just let the deadline for filing its preliminary response lapse without filing anything.  There is nothing in the Board’s decisions, however, suggesting that the waiver impacted the Board’s consideration.

The ‘926 and ‘353 patents are drawn to the scalable display of Internet content, e.g., HTML based content, cascade style sheets (CSS) and XML, on mobile devices by enabling the content to be rendered, zoomed and panned for better viewing on small screens and standard monitors. A client side viewer receiving the Internet content has an Internet browser and uses the simple vector format (SVF) originally designed to handle common computer-aided design (CAD) file formats to describe the current web content. Translation of the content into a scalable vector representation can be done by a third party proxy service, the content provider’s web site, or the client.

Patent Challenger referred to Patent Owner’s proffered claim constructions from co-pending litigation in its Petitions – arguing that such constructions were reasonable.  The Board agreed. It seems clear, in this instance, that Patent Owner took a broad view of the scope of the patent claims before the federal district court and Patent Challenger is using that broad scope to its advantage in the inter partes review proceeding.

The Board then proceeded to go through a workmanlike obviousness analysis using an element by element approach. In the end, the Board granted trial on all challenged claims in both cases, using obviousness grounds that involved a combination of up to four references in some instances. It is not surprising, given that Softview waived its preliminary response, that no key disputes were discussed in the Board’s decisions that bear mentioning here.  If anything, the Board’s decisions were more detailed in its obviousness analysis than most; most likely reflecting the fact that Patent Owner did not “concede” any limitations in a preliminary response.

24 for 25: Inter Partes Review Trial Instituted in View of Waived Patent Owner Preliminary Response

iStock_000016813098XSmallIn only the second decision to initiate an IPR trial on ALL proposed grounds, the Board granted a petition filed by Research in Motion in the IPR styled Research In Motion Corp. v. Mobilemedia Ideas LLC (IPR2013-00016), involving US Patent No. 6,441,828. The trial involves a smaller than average number of claims and grounds, as the decision was granted for all 5 challenged claims based on all 10 challenged grounds.

The subject matter of the ‘828 patent involves an apparatus (e.g., an electronic picture frame) for displaying a digital image in a normal direction regardless of whether the apparatus is placed with the shorter or longer side down.

The Board spent a considerable amount of the decision discussing claim construction, starting with a finding that the preamble of the only independent claim (Claim 6) is not limiting because it did not add any further limitation that is not already present in the body of the claim. Order at 6.  Further, the Board found that the preamble of Claim 6 only recited an intended use for the claimed apparatus (“for displaying image data read from a recording medium.”).  Id.

The Board then proceeded to address the Patent Challenger’s means-plus-function claim limitation positions, noting that because the Patent Owner did not file a patent owner preliminary response, the Board did not have the benefit of ascertaining the Patent Owner’s position on the claim construction of the means-plus-function limitations. Order at 7. The Board stated that the Patent Owner would have an opportunity to present its construction in the patent owner response and was clear to remark that the claim construction positions it was taking in its Order were made solely to determine whether to institute the trial.  The Board then went on to identify specific structure for each of the means-plus-function limitations, often agreeing with the Patent Challenger’s position.

The Board proceeded to analyze each of the Patent Challenger’s anticipation and obviousness grounds, finding a reasonable likelihood of prevailing in each instance. The Board again made subtle references to the waiver of the patent owner preliminary response in stating more than once that the Patent Challenger’s explanations of its invalidity contentions were “unrebutted.” Order at 22, 25.

In the end, it was a total success for Patent Challenger at this stage of the proceeding. Patent Challenger’s strategy of focusing on a small number of grounds was successful, as it avoided the quandary many other Patent Challengers have faced – the Board denying cumulative or duplicative grounds. Although it was not apparent how crucial the waiver of the patent owner preliminary response was in this decision, the Board’s repeated emphasis of “unrebutted” challenge grounds indicates that patent owners should strongly consider the advantage of rebutting a Patent Challenger’s argument at an early stage of the proceeding to give the Board the opportunity to potentially narrow the trial.

Preliminary Statement Must Rebut Statement of Facts in Petition

Tucked within a fairly innocuous PTAB Order authorizing Patent Owner to file a motion seeking additional discoveryNeedle in a haystack was an interesting excerpt that should be noted regarding the content of a Patent Owner Preliminary Response. The Inter Partes Review at issue is styled as Apple Inc. v. Achates Reference Publishing, Inc., IPR2013-00080, involving US Patent No. 6,173,403.

The issue that drew my attention in this Order related to what requirement, if any, a Patent Owner has to respond to a statement of facts that is included in a petition. The Trial Practice Rules, as proposed, included a requirement that a petition must contain a statement of material facts. In the final rules, however, that requirement was dropped in favor of a stance that such statements of material facts are optional. Seemingly left unanswered in the Rules is the question of what must Patent Owner say in its Preliminary Response in opposition to any statement of material facts included in a petition.

That question was answered by the Board in above-referenced “Order Authorizing Motion for Additional Discovery.” In that Order, the Board noted that the issue arose by virtue of an inquiry by Patent Owner during a status conference call. Patent Owner requested guidance on whether its preliminary response must respond to the statement of facts provided with Patent Challenger’s petition. The Board instructed that, “[s]hould Patent Owner choose to file a preliminary response…Patent Owner must respond to Petitioner’s statement of facts by admitting or denying each fact, or stating that the fact cannot be admitted or denied based on information available at this point in time.” Order at 3. Notably, this response does not count against the page limit for a preliminary response.

You just never know where a nugget of PTAB guidance might be found.

Board Denying Requests for Filing a Reply to Patent Owner Preliminary Response

As could be expected, the parties to the first wave of inter partes review proceedings are probing the limits of the Trial Practice Rules and gauging where the Board will allow leeway, and where it will not.  One issue that has come up on a number of occasions is whether a Patent Challenger can obtain leave to file a reply to a Patent Owner Preliminary Response – the answer is no.

37 CFR §42.107 affords Patent Owner an opportunity to file preliminary response to the petition for the limited purposes of setting forth the reasons why no inter partes review should be instituted.  The Trial Practice Guide expands upon this general framework and instructs that potential patent owner preliminary responses include: (1) the petitioner is statutorily barred, (2) the references cited are not in fact prior art, (3) the art lacks a material limitation of all independent claims, (4) the art teaches or suggests away from a combination advocated by petitioner, and (5) petitioner’s claim interpretation is unreasonable.  77 Fed. Reg. 48764 (Aug. 14, 2012).

Neither Rule 107, nor any other provision in the Patent Office rules, provides for a reply to a patent owner preliminary response.  As such, just as is required for any other action not authorized by the rules, Patent Challengers have, on occasion, sought authorization to file replies to such response, presumably worried that issues raised in the preliminary responses may cause the Board to decline to institute an IPR trial.  In general, this course of action has been unsuccessful, with the Board relying upon the lack of authorization for such replies within the rules, but also the fact that, to the extent an incorrect version of the facts results in an unfavorable decision, the Patent Challenger has the ability to seek, as a matter of right, a rehearing of the issue.  More can be learned from reviewing the details of a few of these decisions:

In Vestcom Int’l, Inc. v. Grandville Printing Co. (IPR2013-00031), the Board denied a request to file a reply to patent owner’s preliminary response.  The basis for the motion by Patent Challenger was that the preliminary response by Patent Owner raised unforeseen issues concerning collateral estoppel arising from a previous reexamination.  Because the Rules do not allow for a reply to a Patent Owner Preliminary Response, and further, that if there are errors in the Board’s ultimate decision, Patent Challenger can request rehearing, the request to file a reply was denied.

As previously discussed HERE, in the inter partes review styled as Nissan N. Am., Inc. v. Collins, et al. (IPR2012-00035), the Board chided an attorney for sending an ex parte email to the Board seeking to comment on the preliminary response filed by Patent Owner.  The Board denied Patent Challenger the right to file a reply, and further allowed Patent Owner a five page brief to respond to the improper argument that was contained in the improper email to the Board.

Lastly, in Motorola Solutions v. Mobile Scanning Tech., LLC (IPR2013-00093), the Patent Challenger has sought leave to file a reply to Patent Owner’s Preliminary Response, but no decision has yet been rendered by the Board.  If history is a guide, however, Patent Challenger should be planning to seek recourse, if at all, via a request for rehearing.

Significant Grounds Must Exist to Permit New Testimony in Inter Partes Review

The PTAB has again shown that, unless there is a solid demonstration of good cause, it will not allow much wiggle room in the implementation of the Inter Partes Review Trial Practice Rules.  This time, in IPR2012-00035 (Nissan North America v. Collins), the patent owner sought authorization to introduce testimony with its Preliminary Patent Owner Response, despite the fact that 37 CFR §42.107(c) states that no new testimonial evidence is allowed in such a preliminary response to the petition.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]37 CFR §42.107(c) – (c) No new testimonial evidence.  The preliminary response shall not present new testimony evidence beyond that already of record, except as authorized by the board.[/pullquote]

The Trial Practice Guide further explains the circumstances under which new testimony may be presented in a preliminary response:  “The preliminary response may present evidence other than new testimonial evidence to demonstrate that no review should be instituted. §§ 42.107(c) and 42.207(c). New testimonial evidence may be permitted where a party demonstrates that such evidence is in the interests of justice. For example, the Board may permit new testimonial evidence where it addresses issues relating to the petitioner’s standing, or where the Board determines that consideration of the identified evidence is necessary in the interests of justice as the evidence demonstrates that the trial may not be instituted.”  Trial Practice Guide at 48764.

In Nissan, the patent owner, Collins, stated that permitting new testimonial evidence was in the interests of justice because the testimony it intended to offer would refute the patent challenger’s witness’ testimony as to how one of skill in the art would view the prior art.  This was deemed an insufficient basis by the Board “to veer from the ordinary course of the proceeding.”  Order at 4.

As has been its practice in early Orders, however, the PTAB did provide some guidance on what may be sufficient to satisfy the “interests of justice” in the future.  In this regard, if the new testimony were directed to an issue of standing (i.e., whether the petition was properly filed), as the Trial Practice Guide suggests, new testimony may have been allowed.  Evidence that is directed merely to the credibility of a witness is not sufficient to overcome the rule prohibiting new testimonial evidence.  While the patent owner could rely upon other evidence to attack the witness’ credibility, “new testimonial evidence in this context is best considered if and when a trial is instituted.”  Order at 4.

Objection to Scope of an Inter Partes Review Should Be Made in Preliminary Response

As forecasted in an earlier post, the PTAB’s “Conduct of the Proceedings” Order from Inter Partes Review No. IPR2012-00022 has three components of interest and upon which we are reporting in three separate posts.  The second facet of that Order relates to the scope of an Inter Partes Review proceeding and when any objections to the scope should be raised.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]35 U.S.C. §311(b) — Scope.–A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.[/pullquote]

More particularly, the patent owner, Isis Innovation, Ltd., made a request to the PTAB that certain portions of the IPR petition be stricken because those portions discussed the Supreme Court’s decision in Mayo Collaborative Services v. Prometheus Labs., Inc., 132 S. Ct. 1289 (2012).  Per Isis, the Mayo decision relates strictly to subject matter eligibility under 35 U.S.C. §101 and, because Inter Partes Review proceedings are limited to prior art issues under §§102 and 103 (and only documentary evidence, at that), any mention of Mayo must, necessarily, be outside the scope of the present IPR proceeding. 35 U.S.C. §311.

Again showing its bent to simplify and consolidate Inter Partes Review proceedings (and concurrently avoid extensive motion practice), the PTAB denied the request to strike the portions of the IPR petition that mentioned Mayo.  Instead, per the PTAB order, any challenge to the portions of the petition that Isis deems inappropriate should be brought in the Patent Owner Preliminary Response.  As with Part I of the “Conduct of the Proceedings” Order, stay tuned….

Standing in Inter Partes Review Should Be Challenged in Preliminary Response

One of the more comprehensive orders handed down by the PTAB in the first few months since the initiation of Inter Partes Review proceedings was issued in IPR2012-00022, Ariosa Diagnostics v. Isis Innovation Ltd.  There are three separate portions of the Order that we will address in three separate posts for clarity (and because they are not very closely related).[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]”35 U.S.C. §315(a)(1) – Inter Partes Review Barred by Civil Action. –An inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.”[/pullquote]

In the first portion of the Order, the Board considered Isis’s request to file a motion challenging Ariosa’s standing to bring the IPR in the first place.  The basis of the challenge related to the fact that Ariosa had filed a declaratory judgment action seeking a finding of non-infringement in United States District Court for the Northern District of California.  Isis filed a counterclaim for infringement in response and, as an affirmative defense to that counterclaim, Ariosa asserted that the patent-in-suit was invalid.

The basis of the motion is 35 U.S.C. §315(a)(1), which bars an inter partes review when the challenger has previously filed a civil action challenging the validity of a claim (declaratory judgment counterclaims do not count).  It seems clear that Isis would have argued in its motion that the PTAB should construe the filing of a declaratory judgment action seeking non-infringement to be equivalent to these facts – wherein a later affirmative defense alleging invalidity is “a civil action challenging the validity of a claim of the patent,” as required by the statute.

But, that determination must wait for another day because the Board denied authorization to Isis to file the motion to challenge Ariosa’s standing.  The proper place to make this type of argument, per the Board, is as part of the patent owner preliminary statement.  Stay tuned.