PTAB Does Not Tie Inter Partes Review With Related, Pending Applications

The PTAB has issued its second order regarding the consolidation of related “proceedings” in the two companion Inter Partes Reviews brought by Chi Mei Innolux Corp. (CMI) against two patents owned by Semiconductor Energy Laboratory Co. (IPR2013-00028, IPR2013-00038).  In each case, CMI moved to have the PTAB either (1) take jurisdiction over, and suspend prosecution of, an application that claims priority from the patent at issue in the IPR; or (2) review and authorize any further patent filings, claim amendments, etc.  More specifically, CMI argued that the pending (or future) applications may be used to present claims that are patentably indistinct from those at issue in the IPR.  The Board denied the motion, finding that 37 CFR § 42.3(a) (relating to inter partes review jurisdiction) does not require it to take jurisdiction over the related applications and, further, that the patent examiner is in just as good, if not better,  position to review the pending claims vis-à-vis the IPR.  As such, it is not necessary for the Board to review any filings or proposed claim amendments in related patent application(s).

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]37 CFR § 42.3(a) – “The Board may exercise exclusive jurisdiction within the Office over every involved application and patent during the proceeding, as the Board may order.”

37 CFR § 42.2 – “Involved means an application, patent, or claim that is subject of the proceeding.”[/pullquote]

More particularly, the Board pointed out that § 42.3(a) states that the Board may exercise exclusive jurisdiction over “involved” patents or applications.  But, § 42.2 defines “involved” patent as meaning the patent that is the subject of the proceeding and “involved” application as meaning an application that is subject of a proceeding, such as a derivation proceeding.  Order at 2.  The pending, or future, application(s) that claim priority to the patent that is subject of the IPR are not “involved” and there is, therefore, no requirement that the Board take jurisdiction over such application(s).

The Board further declined to review and authorize any filings or claim amendments in any current or future patent prosecution matters.  Such relief would require the Board to be a “gate keeper” for all papers and CMI did not explain why the Board should take on the gate keeper function.  As has become its practice, however, the Board does drop a hint regarding what it may take to convince it to take such action, stating that CMI “has not explained how the claims present in the…application are patentably indistinct from the claims involved in the [subject] patent.” Order at 3.  A patent challenger seeking to obtain the relief sought by CMI in these inter partes review proceedings should attempt to make such a showing – providing a detailed account of how the pending claims are patentably indistinct from the claims at issue in the IPR.

The Board also pointed out that the examiner handling the application(s) is in as good of a position to consider the relative scope of the pending and IPR claims.  For example, “[i]f the examiner makes a determination that the claims of the application are patentably indistinct from the [subject] patent claims, then the examiner can suspend the application pending the outcome of this proceeding.”  Order at 3.

In the end, the Board denied exercising jurisdiction over pending or future patent applications, but did instruct that its ruling be placed in the administrative records of the pending application to put the examiner in that prosecution on notice of the ruling.

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.

Pro Hac Vice Motions in Inter Partes Review Are Commonplace, Non-Controversial

iStock_000009156726XSmallAs previously discussed, only time will tell whether or not the worst case scenario arises and Inter Partes Review and Post Grant Review Practice become part of the “patent guild” – excluding non-practitioners in all but the rarest of cases.  To date, however, the PTAB has not shown any reluctance to consider motions for admittance pro hac vice.  And now, the Board has granted its first Motion for Pro Hac Vice Admission in IPR2013-00020 LKQ Corp. v. Clearlamp, LLC (Harness Dickey Represents Clearlamp in this IPR).

The basis for the Board’s ruling was that good cause was indeed shown since the petitioning attorney: (1) is an experienced litigation attorney, (2) is counsel in litigation related to the IPR, (3) has represented LKQ in the past, and (4) has counseled LKQ on intellectual property matters in the past.  Because the petitioning attorney attested to each of these facts, the Board found good cause existed for the admission of the petitioning attorney.  More specifically, the Board found that there is a need for LKQ to have its related litigation counsel involved in the IPR proceeding.  Order at 2.  Notably, even though the motion was not contested, the PTAB did not seemingly place any weight on that fact at all in coming to its decision.

All is not lost, however, for those worried about the “patent guild,” the PTAB did require that LKQ must continue to have a registered practitioner as its lead counsel in the inter partes review.

PTAB Continues to Add Gloss to Inter Partes Review Trial Practice Rules

iStock_000008674333XSmallWelcome to our third and final report on one of the more comprehensive orders issued to date by the PTAB in an Inter Partes Review proceeding, the PTAB’s “Conduct of the Proceedings” Order from Inter Partes Review No. IPR2012-00022 (Ariosa Diagnostics v. Isis Innovation, Ltd.).  This post focuses on three quick-hitting topics touched upon by the Board in the Ariosa IPR that helps add clarity regarding how these proceedings will be handled.  Earlier posts relating to this order can be found HERE and HERE.

First, the PTAB made note of the fact that the parties advised the Board that they were discussing the entry of a protective order.  As advice that can be used as an IPR practice tip, the Board requested that, to the extent the proposed order deviated from the Board’s default protective order, the parties should identify the differences between the proposed protective order and default protective order.

Second, the PTAB asked Isis, the patent owner, for a date by which it thought it would file any Patent Owner Preliminary Response.  Ariosa took the opportunity to suggest that, given that many of the issues in this Inter Partes Review were similar to those addressed in the co-pending district court litigation between the same parties, that Isis should be given a shortened time frame to file the Preliminary Response.  Isis responded by suggesting that the impending holidays, as well as the fact that counsel for the IPR was different than counsel for the litigation, would make it difficult to file the Preliminary Response sooner than the 3 month window allowed by the Trial Practice Rules.  37 CFR § 42.107.  The Board did not shorten the three month timeframe for filing the Preliminary Response.  It is, however, telling that it considered such an action – suggesting that such requests to shorten the timeframe for filing a Patent Owner Preliminary Response may, under the right circumstances, be granted.

Third, and lastly, Isis requested clarification of the page limit for the Preliminary Response regarding whether such response is limited to the number of pages included in the petition, or whether it was entitled to the full 60 pages allowed by the Trial Practice Rules.  37 CFR §42.24.  The Board made clear that the patent owner is entitled to the full 60 pages provided in the rules, even if the petitioner did not use the full 60 pages in its petition.

Slowly, but surely, clarity is being brought to Inter Partes Review proceedings and the Trial Practice Rules that govern them.

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.

Heavy Burden to Waive Page Limits in Inter Partes Review

If there was any doubt regarding whether the PTAB was serious about the page limitations set forth in the Trial Practice Rules for Inter Partes Review proceedings, Illumina Inc. has learned the hard way that there should be no such doubt.  The PTAB sent a stout warning, through its Order expunging Illumina’s over-length petition, that the page limit rules will be strongly enforced.

In a series of Inter Partes Review petitions filed by Illumina against the Trustees of Columbia University, Illumina filed petitions that met the 60 page limit per 37 CFR 42.24, but also concurrently filed a series of longer petitions.  This is a practice that is considered in the Trial Practice Rules – a petitioner that will move to waive the page limits must file a compliant brief, as well as the over-length brief, and then moved the PTAB to waive the 60 page limit.  In this case, the PTAB denied all such motions across the Illumina proceedings, finding that Illumina failed to set forth sufficient good cause as to why such waiver is required.  See, e.g., Illumina, Inc. v. Trustees of Columbia University, IPR2012-00006.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]37 CFR 42.24(a)(v)(2) – “Petitions to institute a trial must comply with the stated page limits but may be accompanied by a motion to waive the page limits.  The petitioner must show in the motion how a waiver of the page limits is in the best interests of justice and must append a copy of proposed petition exceeding the page limit to the motion.”[/pullquote]

More specifically, Illumina filed its motion to waive the page limit of its petition, alleging that the extra pages were needed to present non-cumulative grounds for unpatentability.  The Board denied the motion, finding that Illumina did not provide sufficient basis for the requested relief, expunging the proposed petition that was 24 pages over the limit.  There are instructive lessons to be learned from the analysis provided by the Board, however, that may help guide future movants regarding what it will take to have a motion to waive page limits allowed.

The Board first noted that the patent challenger’s request lacked “supporting evidence or explanation” regarding why the challenger’s arguments could not sufficiently have been explained within the Trial Practice Rules’ 60 page limit.  Order at 2.  The Board helpfully provided two examples of the types of evidence that may be relevant in this regard: 1) meaningful discussion of relevant teachings found in the additional references cited in the longer version of the petition that are not found in the compliant petition; or 2) meaningful discussion of the limitations of the challenged claims that could not be addressed sufficiently within the 60 page limit because the claims are too numerous or lengthy.  Order at 2-3.  In short, the Board rather bluntly concluded by pointing out that it is not the PTAB’s role to compare the compliant and proposed petitions, and attempt to figure out for itself whether the waiver is in the interest of justice – “Instead [the patent challenger] has the burden of establishing why it is entitled to the relief sought.”

A related, cautionary tale to consider is that this failed effort by Illumina may have far-reaching effects in view of the strong estoppel that attaches to inter partes review proceedings.  There is no question that Illumina was aware of the arguments that it presented in the proposed, over-length petition.  As such, those grounds could have been raised and Illumina will be prevented from relying upon them in the future.  Other challengers in Illumina’s predicament have filed multiple IPR petitions to get around the page limit rules.  Notably, however, the estoppel against Illumina does not attach until after a final, written decision, so Illumina has the opportunity to file additional petitions to address the grounds for challenge that were not allowed in these proceedings.

PTAB Expunges Papers in Inter Party Review Because No Permission Requested

If there is an early lesson to learn regarding protocols to be followed in Inter Partes Review proceedings, it is to make sure you have permission for anything you do before the PTAB.  There are a select few actions that do not require permission, because they are allowable by rule (filing of mandatory notices, patent owner statements, etc.), but for everything else – permission to file must be granted.

This cautionary tale played out in IPR2012-00006 (Illumina, Inc. v. Trustees of Columbia University), and related cases, in which the patent challenger, Illumina, Inc. filed a motion for leave to waive the page limit in the filing of its petition.  The patent owner, Trustees of Columbia University, filed an opposition to that motion, arguing that no good cause had been shown for the filing of an over-length petition.  While the story turned out just fine for the Trustees (the motion to waive the page limit was denied), the preparation of the opposition was wasted because the Board expunged the opposition from the proceeding given that no permission was requested (and granted) to file such an opposition.  This expunging is authorized by the Trial Practice Rules, specifically 37 CFR 47.7(a): “The Board may expunge any paper directed to a proceeding or filed while an application or patent is under the jurisdiction of the Board that is not authorized under this part or in a Board order or that is filed contrary to a Board order.”

The Board is sending an early message in Inter Partes Review proceedings – these proceedings will be closely controlled by the PTAB and very little, if any, leeway is going to be granted from the strict requirements of the Trial Practice Rules.

Inter Partes Reviews Drawing Many Pro Hac Vice Motions

There has been some concern that the “patent lawyer guild” has run amok in light of the requirement that lead counsel in Inter Partes Review and Post Grant Review be patent practitioners (i.e., registered patent attorneys).  It will be interesting to watch, therefore, how stringent the PTAB will be with regard motions to appear pro hac vice – an option for non-practitioners to appear in IPR/PGR proceedings as backup counsel, per 37 CFR 42.10(c):

“The Board may recognize counsel pro hac vice during a proceeding upon a showing of good cause, subject to the condition that lead counsel be a registered practitioner and to any other conditions as the Board may impose.”

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]”The Board may recognize counsel pro hac vice during a proceeding upon a showing of good cause, subject to the condition that lead counsel be a registered practitioner and to any other conditions as the Board may impose.” — 37 CFR 42.10(c)[/pullquote]

Thus far, the Board seems receptive to allowing non-practitioners to participate in inter partes review proceedings, though, to date, the Board has only authorized the filing of a motion pro hac vice, but has not actually granted any such motions.  For example, in a recent order from the PTAB in IPR2013-00010 (Motorola Mobility LLC v. Arnouse), authorization was granted for Motorola to file a motion for pro hac vice admission.  This authorization offers insight into the Board’s thought process both from the perspective of the timing of briefing relating to the motion, as well as the content of such a motion.

First, with regard to timing, the Board instructed that such a motion seeking admission pro hac vice should not be filed any sooner than 21 days after the service of the petition (when patent owner mandatory notices are due).  Order at 2.  Any opposition is due within one week of the filing of the underlying motion.  Order at 3.  But, no opposition can be filed without authorization of the Board.  Id.  As such, this is another reminder that parties must have authorization to make most filings in inter partes review proceedings.

Second, with regard to content of a motion seeking admission pro hac vice, the board instructed that the motion must contain facts showing there is good cause to recognize counsel.  Order at 3.  Also, the motion must contain a declaration of the individual seeking to be admitted that includes requirements similar to requests for admission to appear pro hac vice that have been a mainstay in district court litigation (member of good standing in at least one bar, no suspensions or disbarments, etc.).

Time will tell whether the inter partes review and post grant review procedures become a largely patent bar-centric practice or whether non-practitioners will be freely allowed to participate.  At the outset, the Board seems more than willing to consider the latter course.

Staying Reexamination Proceeding in view of Inter Partes Review

With the inception of Inter Partes Review, and its pseudo-litigation features, there has been considerable anticipation over how the various new rules will be interpreted by the Patent Trial and Appeals Board.  As such, we will be keeping a close eye on all Orders issued by the Board so we can obtain an understanding of how the various rules will be interpreted.  Check back often for updates on these various Orders.

One of the first substantive Orders to come out of the PTAB relates to the consolidation of proceedings that are pending before the Patent Office, issued in Inter Partes Review No. IPR2013-00033(JYC), styled as CBS Interactive Inc., et al. v. Helferich Patent Licensing (U.S. Patent No. 7,155,241).  In the PTAB’s ruling, using the power granted to it in 35 U.S.C. §315, a concurrent reexamination regarding Helferich’s ‘241 patent was stayed pending the IPR involving the same patent.  It is reasonable to conclude that, based on the PTAB’s rationale in the Order, co-pending reexaminations have little chance of proceeding concurrently with Inter Partes Review proceedings, but some background is in order before we review that rationale:

35 U.S.C. §315(d) (introduced in the America Invents Act) granted the Patent Office Director the authority to set rules regarding the manner in which Inter Partes Review or any other proceeding before the Patent Office may proceed, “including providing for stay, transfer, consolidation, or termination of any such matter or proceeding.”  The Patent Office promulgated such a rule, in 37 CFR §42.122, stating that the Board may, during the pendency of an Inter Partes Review, enter any appropriate order regarding such an additional matter.

In CBS Interactive, the Board exercised the authority granted by Congress, and articulated in the Inter Partes Review rules, to stay a pending reexamination relating to the ‘241 patent pending the outcome the CBS Interactive IPR.  Based on the rationale articulated by the PTAB, it is hard to imagine how many reexamination proceedings can survive a subsequent IPR filing.  To that end, the Board gave credence to the fact that it will “ordinarily” not stay a reexamination in light of the requirement that reexamination proceedings be conducted with “special dispatch.”  Order at 2.  The Board went on, however, to articulate six facts that weighed in favor of staying the reexamination – each of which seemingly will be present in every Inter Partes Review:

1)         Even though the claims in the reexamination were not the same as those in the IPR, all independent claims were being reexamined under the same prior art as put forth in the IPR.  Id. at 1-2.

2)         Four of the five petitioners for IPR are also the third-party requesters who filed the request for reexamination.  Id. at 2.

3)         Conducting the reexamination concurrently with the IPR would duplicate efforts within the Patent Office.  Id.

4)         Because each of the claims challenged in the IPR depend from reexamination claims, either directly or indirectly, the scope of the claims in the IPR could change during the review.  Id.

5)         The patentability of all independent claims of the ‘241 patent would be determined in both proceedings.  Id.

6)         Because of the short and definite timeframe required of Inter Partes Review proceedings, allowing the IPR to move forward will simplify issues in the reexamination.  Id. at 3.

Based on the above facts, the Board decided to exercise its discretion and stayed the reexamination proceeding pending the termination or completion of the CBS Interactive IPR.  There is nothing to fault about the PTAB’s reasoning in ordering a stay – for example, there would indeed be considerable duplication of effort if both proceedings were allowed to move forward concurrently and efficiency does dictate a stay.  What is unusual about the order is the PTAB’s comment that it will not “ordinarily” stay co-pending proceedings when it is clear that failing to stay co-pending reexaminations would, in most cases, lead to this duplication of effort.

As such, there is at least something in this Board Order that will help both parties to a stay issues – parties opposing a stay can point to the “presumption” articulated by the PTAB that it will not “ordinarily” institute a stay and parties supporting a stay can point to the facts that lead to a stay (many of which will likely be present in any situation that includes co-pending reexamination and IPR proceedings regarding the same patent).  In the end, though, we would view as low the likelihood that a reexamination proceeding will move forward concurrently with an Inter Partes Review.