First One Gets Away from Bass-Backed Group

3119029_sMany in the pharmaceutical industry have been concerned about becoming a target of the Coalition for Affordable Drugs, the group backed by hedge fund manager Kyle Bass.  But yesterday the first target of Bass’s strategy, Acorda Therapeutics, scored a big win when the PTAB declined to institute review in the first two IPRs filed by Bass’s group.

In February Bass’s group filed IPR petitions against two Acorda patents, 8,007,826 and 8,663,685.  Both are listed in the Orange Book for Acorda’s Ampyra tablets used to treat walking difficulty in patients with MS; they are the last-expiring patents listed for that product.

The Board found that both petitions failed to established that the relied-upon art was in fact prior art.  In each IPR petition, the Coalition relied on two poster presentations, one from a conference in September/October 2001, and another from a conference in September 2002.  Each was before the priority date, but the Board agreed with Acorda that neither was established as a “printed publication.”  Because the Coalition did not show that the posters were distributed (rather than presented) or otherwise indexed, the Board considered the factors from In re Klopfenstein, 380 F.3d 1345, 1349 n.4 (Fed. Cir. 2004) to determine whether the presentations nonetheless qualified.  Those factors are:  [1] the length of time the display was exhibited, [2] the expertise of the target audience, [3] the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and [4] the simplicity or ease with which the material displayed could have been copied.  According to the Board, the Petitioner failed to make a sufficient showing that these factors were met.

So, the first decisions in the Bass-filed applications did not succeed, but it may not matter. If the speculation is correct, the Coalition already made its money in the stock market.

Draft IEEE Standard Not a Printed Publication in IPR

18456950_sWhether the art presented in an inter partes review petition is a printed publication has arisen more frequently as Petitioners push the envelope to take advantage of the benefits of IPR proceedings. To that end, the PTAB was given the opportunity to decide the issue of whether a draft IEEE standard could be considered a printed publication in Samsung Elec. Co. v. Rembrandt Wireless Techs., IPR2014-00514. Finding that the placement of the draft standard on a “Working Group” server was akin to placing the file on a server to facilitate peer review, which the Federal Circuit has held is not publication, the Board denied the Petition.

To qualify as a printed publication, a document “must have been sufficiently accessible to the public interested in the art.” In re Lister, 583 F.3d 1307, 1311 (Fed. Cir. 2009). Order at 6-7. In this case, Petitioner presented the draft standard, along with the declaration of an editor of the standard. That editor testified that the standard was available on a Working Group server and that announcements were sent when drafts became available. Further, there were no restrictions on who could attend the Working Group meetings, or could provide an email address to be included in the Working Group. Id. at 5.

Patent Owner argued that posting the draft standard to the Working Group server did not make it a printed publication. Further, the Petition did not set forth any evidence regarding the availability of the document to individuals other than members of the group. Id. at 7. There was also no evidence that the group’s meetings were advertised or even announced to the public. Id. at 7.

The Board found that the storage of the prior art was similar to the placement of a file on a server to facilitate peer review in preparation for later publication, which the Federal Circuit has found does not constitute public accessibility. Id. at 8. SRI Int’l, Inc. v. Internet Sec. Sys., Inc., 511 F.3d 1186, 1194 (Fed. Cir. 2008). Thus, the prior art was determined to not be a printed publication. Because the challenged grounds each relied on this disqualified art, the Petition was denied. Id. at 9, 10.

Copyright Notice on Prior Art Establishes Priority Date in IPR

12111095_sThe PTAB weighed in on whether a copyright notice can be sufficient to demonstrate the priority date of a printed publication in FLIR Systems, Inc. v. Leak Surveys, Inc., IPR2014-00411, -434, -608, and -609.  In Flir, Petitioner relied in the petition upon a brochure that contained a copyright notice of 2002. Patent Owner argued that the printed publication was an “undated reference.” Order at 18. Given that the document contained the Copyright notice, however, the Board was persuaded that Petitioner had established a priority date of 2002, and allowed the document as prior art. Id. at 19.

Interestingly, the Board also considered another printed publication, a user guide, that failed to contain a publication date or copyright notice. The Board cited, however, to the testimony of a witness who stated that the user guide was distributed with a related product before the priority date of the subject patent. Further, the witness testified that the product and user guide was publicly available prior to the priority date of the patent-at-issue. Is this not an end-around the printed publication requirement by using a prior use to corroborate the publication? That is what a different PTAB panel found HERE when it decided that an undated document was not prior art because it contained no publication date and that panel decided that any testimony from a witness about a prior use of the underlying product disqualified the art as a prior use, not a printed publication.

PTAB Rejects End-Around the IPR Printed Publication Requirement

17502113_sPost Grant Review provides a breath of fresh air to Patent Office patentability challenge procedures by allowing prior sales and prior uses as eligible prior art. But, of course, PGR is only available for post-AIA patents and only within 9 months of their issue date. For inter partes review, only patents or printed publications can be used in patentability challenges. That has not stopped some petitioners from trying to shoehorn prior uses into the proceedings by disguising them as printed publications…without success.

For example, in A.R.M., Inc. v. Cottingham Agencies, Ltd., IPR2014-00671, involving US Pat. No. 7,666,103, in each of the challenge grounds, Petitioner relied on a prior art reference that related to the operation of an amusement park ride.  The petition and expert testimony both failed to identify the precise date of the reference and, instead, only indicated that the amusement park ride of the reference was built and operated well before the effective filing date of the ‘103 patent.  Decision at 6. The Board took issue with the Petitioner’s reliance on this testimony of “prior use” of the invention to establish a date of the printed publication.

Under 35 U.S.C. § 311(b), inter partes review is limited to challenges based only on patents or printed publications.  Prior use challenges are not available in inter partes review.  Id. at 7. In this proceeding, the Board found that Petitioner did not adequately show that the amusement park ride “reference” was in fact a printed publication, as no prior art date was asserted and the “reference” was referred to as a prior use in both the petition and expert testimony.  With all asserted grounds relying upon the disqualified reference, the Board denied the Petition across all grounds. Id. at 8.

Board Will Not Fill In Evidentiary Gaps in Inter Partes Review Petition

iStock_000009779932SmallIn a victory for Patent Owner, Zerto was unable to get any of 13 challenged claims of an EMC Israel Development Center patent into a trial for inter partes review, in Zerto, Inc. v. EMC Israel Development Center, Ltd., (IPR2013-00458), involving U.S. Pat. No. 7,577,867.

The ‘867 patent generally relates to “data protection and disaster recovery and, in particular, to tracking and managing storage systems with dynamically changing data.” More specifically, the ‘867 patent discloses processing data across multiple nodes of a “storage area network.”

Of interest in the Board’s decision was its analysis of a ground for obviousness in view of two references.  Finding that Petitioner had failed to set forth sufficient evidence to meet its burden, the Board made clear that it would not “resort to speculation or unfounded assumptions.”  Order at 18, citing In re Warner, 379 F.2d 1011, 1017 (CCPA 1967).  “We will not resort to such speculation or assumptions to cure the deficiencies in the factual basis in order to support Petitioner’s alleged grounds of unpatentability based in whole or in part on Warrick.”  Id. 

Also interesting was the Board’s consideration of whether a reference constituted prior art.  The “Kashya” reference had a title page bearing a date of August 4, 2004.  Order at 25.  Petitioner relied on this date as proof of the art’s relevance as 102(b) art.  But, the reference also has a copyright date of 2013.  The reference further states that “[a]ll information contained or disclosed by this document is considered confidential and proprietary by Kashya Inc.”  Lastly, the reference contained “tracked changes” that gave the appearance that it was merely a working document.  As a result of these facts, Patent Owner contended that Petitioner had not sufficiently established that the document qualified as a printed publication.

The Board held that, because Petitioner did not address the other evidence in Kashya, that indicates that it has not been disseminated publicly, the reference did not qualify as a prior art printed publication.  For example, the “confidential and proprietary” notice has been considered by the Federal Circuit – Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d 931, 936-37 (Fed. Cir. 1990) (holding that documents containing the legend “Reproduction or further dissemination is not authorized…not for public release” were not printed publications).

Unsuccessful on all grounds, Zerto was unable to get 13 challenged claims of the ‘867 patent into a trial for inter partes review.

Detailed Means-Plus-Function Analysis Underlies Board’s Decision to Institute Six Related IPR Trials

Six PersonalWeb Technologies patents were thrown into inter partes review trials by EMC Corporation in cases styled as EMC Corp. v. PersonalWeb Tech., LLC (IPR2013-00082 through IPR2013-00087), involving U.S. Pat. Nos. 5,978,791; 6,415,280; 7,945,544; 7,945,539; 7,949,662; and 8,001,096.

The six patents each relate to a data processing system that identifies data items, such as data files or records, by using an identifier which depends on all of the data in the data item and only on the data in the data item. This implies that the identity of a data item is said to be independent of its name, origin, location, or address – a feature that is useful in identifying and subsequently eliminating duplicate copies of data items. The system involves having a “True File registry,” into which all data items are assimilated, with duplicates being eliminated.

After describing the cited art in the first case of the series, the Board began in all six cases with the customary claim construction analysis. Of note in the Board’s ruling was its construction of “data” and “data item.”  Relying on CAE Screenplates Inc. v. Heinrich Fiedler GmbH & Co. KG, 224 F.3d 1308, 1317 (Fed. Cir. 2000), the Board noted that, “[i]n the absence of evidence to the contrary, we must presume that the use of different terms in the claims connotes different meanings.”  See, e.g., 82 Order at 15.

Also of note was the Board’s treatment of the means-plus-function claim language from the subject claims. In particular, the Board found that “[t]he corresponding structure of a means-plus-function limitation…must be more than simply a general-purpose computer or microprocessor to avoid pure functional claiming.”  The Board then conducted a detailed analysis of the specification to determine what structure corresponded to the claimed function.

Finally, in a situation common to the related cases, the Board embarked on a lengthy discussion as to whether some of the prior art references cited by Patent Challenger were “printed publications” under 35 U.S.C. §102(b). For example, Patent Owner argued that one of the references was not a printed publication because there was no evidence to indicate that it could have been located prior to the critical date.  See, e.g., 84 Order at 18.  The Board did not agree, noting that whether a given reference is a printed publication involves a case-by-case inquiry into the facts and circumstances surrounding the reference’s disclosure to members of the public.  Id. at 19.  In this case, because the title page of the reference clearly showed that the reference was posted on a publicly accessible site well known to those interested in the art prior to the critical date, the reference is to be considered a printed publication.  The Board distinguished this type of factual scenario – where the reference indicated when it was created and publicly disseminated – versus the scenario presented in Synopsis, Inc. v. Mentor Graphics Corp., wherein a brochure, without any such indication of public availability, was at issue.

In the end, the Board granted all six of Patent Challenger’s petitions for inter partes review as to all challenged claims based on extensive obviousness and anticipation grounds.

Eleventh Inter Partes Review Trial Instituted

The Patent Owner winning streak, for repelling inter partes review challenges, was halted at just one in view of the Board’s institution of an IPR trial in the proceeding styled as Synopsys, Inc. v. Mentor Graphics Corp., (IPR2012-00042), involving US Patent No. 6,240,376. The Board instituted an inter partes review trial with regard to 12 of the 29 proposed claims, using one (anticipation) of the 11 proposed grounds. This record 41 page order is loaded with aspects of IPR practice that are worth noting.

The subject matter of the ‘376 patent claims is the simulation and prototyping of integrated circuits. The Board started its analysis at a logical starting point – claim construction. At threshold, the Board made a point of emphasizing that no claim construction is necessary for terms if one of skill in the art would recognize the ordinary and customary meaning of those terms.  Citing Biotec Biologische v. Biocorp, Inc., 249 F.3d 1341, 1349 (Fed. Cir. 2001) (finding no error in non-construction of “melting”); Mentor H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365, 1380 (Fed. Cir. 2001). The Board found that many terms in the challenged claims did not require construction for this reason.

Other terms, however, required construction, including “instrumentation signal,” “gate-level netlist,” “gate-level design,” and “sensitivity list.” To come to its opinion regarding claim scope, the Board relied upon two claim construction principles that are worth noting. First, regarding the first three of the above-listed terms, the Board noted that the terms were not explicitly defined in the specification, but found that the specification (including the examples) did contain useful context that would help define the terms. Thus, using the specification as a claim construction guide, the Board synthesized the various relevant specification excerpts to develop claim constructions of the relevant terms. Second, in defining “sensitivity list,” the Board determined that its construction was informed by certain dictionary definitions relevant to that limitation, citing to both an online definition and an IEEE reference.

Using these defined terms, the Board instituted an inter partes review trial on 12 of the 29 proposed claims, using one of the 11 proposed grounds.

Turning to its decision to institute an IPR trial, the Board first considered Patent Owner’s argument that the petition was statutorily-barred in view of 35 USC §315(b). Per that section of the Patent Act, an inter partes review may not be instituted if the petition was filed more than one year after the service of a federal court complaint alleging infringement of the subject patent. Here, the Patent Owner served a complaint on a third party company over five years earlier. That third party had since become a subsidiary of Patent Challenger and, thus, per Patent Owner, the challenger and third party were in privy with one another, preventing the filing of the petition.  The Board disagreed with this argument, finding that Patent Challenger was not a privy of the third party at the time the third party was served with the federal court complaint. Further, no evidence was even submitted that showed privity between the parties at the time the petition was filed. While Patent Owner argued that the relevant time for the analysis is the date on which the IPR is instituted, the Board again disagreed.  Privity is measured as of the date of the filing of the petition.

Having cleared the statutory bar argument presented by Patent Owner, the Board proceeded to consider each of the 11 grounds of unpatentability set forth in the petition by Patent Challenger. In general, however, the Board based its denial of most proposed anticipation grounds on the all elements rule and denied all obviousness grounds in view of Patent Challenger’s failure to identify with particularity the basis for its obviousness argument. See, e.g., Order at 21 (“Petitioner asserts, in a single sentence, that [the prior art reference], by itself, renders claims 1-5, 8-10, 20-24, 28, 32, and 33 obvious under 35 U.S.C. §103….Petitioner does not explain the reasoning behind this assertion.”).

But, among the arguments submitted by Patent Challenger, was an unpatentability ground that was based on a prior art brochure. The interesting issue was whether the brochure was actually a printed publication because it did not include any indication of when it was created or whether it was publicly disseminated. Patent Challenger had asserted that it was published at least as early as July 9, 1996 because it was filed in an Invention Disclosure Statement on that date. But, Patent Owner responded that inclusion on an IDS was insufficient to provide proof of publication and the file history for the patent did not become public until the patent issued, on November 17, 1998. Based on these facts, the Board agreed with Patent Owner that the brochure was not a printed publication.  Patent Challenger had simply failed to adequately prove that the brochure was publicly-available during the relevant time frame.  Order at 36.

Lastly, it is worth noting that in another portion of the Board’s decision, it denied certain obviousness grounds because “[Patent Challenger] does not address why a person of skill in the art would have combined the two references.” Order at 34. This is yet another indication that it is essential to include expert testimony with any petition to ensure an adequate basis for any proposed unpatentability grounds.

In the end, the Board granted yet another IPR trial, but did so only after an exhaustive review of various challenges by both parties.  Most beneficial for future inter partes review participants is the fact that this analysis yields many insights into IPR practice that will inform later proceedings.