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.

First Inter Partes Review of a Design Patent

On December 5, 2012, Munchkin, Inc. and Toys “R” Us, Inc. filed the first Inter Partes Review petition directed to a design patent, targeting US Patent No. D617,465, entitled DRINKING CUP.  Not surprisingly, the patent is the subject of a lawsuit brought by Luv N’ Care, Ltd. against Toys “R” Us in the Southern District of New York.

The inclusion of claim construction issues in Inter Partes Review proceedings is one of the most interesting aspects of these proceedings and the strategies relating to this issue bear watching. In this design patent case, and despite the guidance in Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 679 (Fed. Cir. 2008) (“the preferable course ordinarily will be [to not] attempt to ‘construe’ a design patent…”), the petitioner in this IPR attempts to set forth a form of verbal description of the claimed design.

Otherwise, the petition does not differ remarkably from the pattern used/required in utility patent cases – there is a priority date issue; there are multiple combinations of prior art used to attempt to demonstrate the unpatentability of the claims; etc.

Next up, I am sure, a motion to stay….

Harness Dickey Enters Appearance in Inter Partes Review Involving Data Access Patent

Harness Dickey entered its appearance on behalf of Proxyconn, Inc. in a pending Inter Partes Review proceeding filed by Microsoft Corporation.  The Inter Partes Review is related to patent lawsuits filed by Proxyconn against Microsoft, Acer, Hewlett-Packard, and Dell.  The subject patent, U.S. Patent No. 6,757,717, is entitled “System and Method for Data Access.”  Claims 1-3,10-12, 14, and 22-24 have been included in Microsoft’s Petition Requesting Inter Partes Review.

Inter Partes Review Battle Erupts Between Corning and Royal DSM

And just like that, the number of inter partes reviews filed since the inception of the proceedings (exactly 2 months ago), took a big jump with the filing of eight IPR petitions by Corning against patents owned by Netherlands-based Royal DSM NV.  The filings, from November 15 and 16, are interesting given that none of the patents has ever been involved in patent litigation, with Corning or otherwise.  Further, the patents appear to cover coatings that are already sold by DSM to Corning for the production of coated fiber optics.  To that end, in April 2011, DSM and Corning announced the extension of a 30-year relationship in between the companies related to the sale of such coatings. Thus, it remains to be seen what has caused Corning to go on the attack after such a long term business relationship with DSM.

Given the high cost of inter partes review, and the attendant estoppel provisions, it has been anticipated that these Patent Office proceedings will only be used in the event of pending, threatened, or expected litigation.  If these suppositions are correct, we should keep an eye on the district court litigation dockets for DSM’s patent infringement lawsuits against Corning, marking the next battle in this new high-tech war.

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.

Harness Dickey Enters Appearance in Inter Partes Review Involving Auto Patent

Harness Dickey entered its appearance on behalf of Clearlamp LLC in a pending Inter Partes Review proceeding filed by LKQ Corporation.  The Inter Partes Review is related to a patent lawsuit filed by Clearlamp against LKQ, pending but now stayed in the Northern Distirct of Illinois.  The subject patent, U.S. Patent No. 7,297,364, is entitled “Method for Refurbishing Head Lamp Surfaces.”  All 24 claims of the ‘364 patent have been included in LKQ’s Petition Requesting Inter Partes Review.

Inter Partes Review Possible Where Patent Found Valid at District Court

In a case that will impact the role of Inter Partes Review and Post Grant Review at the Patent Office, the Federal Circuit issued a precedential order denying a petition for rehearing en banc in the case of In re Baxter, Int’l Inc (Fed. Cir. 2011-1073) (originally reported at 678 F.3d 1357).  The concurring opinion of Judge O’Malley (with which Judges Rader and Linn joined) sought to clarify an issue raised by the dissent (Newman, J.) relating to whether an administrative action can nullify a judicial order.  Specifically, Judge O’Malley wanted to clarify that nothing in the underlying ruling prevents the Patent Office from reviewing the validity of a patent, even if a district court has previously found the patent is not invalid.  “A judgment in favor of a patent holder in the face of an invalidity defense or counterclaim merely means that the patent challenger has failed to carry its burden of establishing invalidity by clear and convincing evidence in that particular case- premised on the evidence presented there.” Id.at 2. It is also instructive to note that the Court found that a later review of a patent before the Patent Office is undertaken based on the particular evidence before the PTO, and with a lower burden of proof (preponderance of the evidence).

Importantly, however, the Federal Circuit clarified, and the PTO conceded, that a later finding of invalidity of a patent by the Patent Office (i.e., in an Inter Partes Review) does nothing to alter a prior judicial decision against a specific patent challenger.  For example, if Defendant is found to infringe a patent, but that patent is later deemed invalid, principles of res judicata prevent that Defendant from removing the burden of its loss in federal court.

While the Baxter case was decided in the context of reexamination, there is nothing in the Federal Circuit’s order that would suggest that the holding does not also apply to Inter Partes Review and/or Post Grant Review.  Merely because a patent was found not invalid at the district court level does not prevent that same patent from being subject to Inter Partes Review or Post Grant Review.  That is not to say, however, that the defendant who loses in that district court case can reverse that federal court determination by prevailing at the PTAB.

Compelled Testimony and Production in Inter Partes Review and Post Grant Review

Among the main attractions of the new Inter Partes Review (IPR) and Post Grant Review (PGR) proceedings are their psuedo-litigation features.  Included among those key features is the ability to take discovery from the opposing party.  As compared to previous attempts by Congress to create cost-effective Patent Office proceedings for challenging the validity of patents, discovery helps make it less worrisome for patent challengers to submit prior art to the Patent Office for consideration.  That is, patent challengers can feel more comfortable that they will remain in control of their prior art in the IPR and PGR as compared to previous proceedings where such control can be lost. While we previously discussed “Mandatory Initial Disclosures,” this article focuses on discovery provisions from the America Invents Act that allow for obtaining documents and testimony from third parties in inter partes review and post grant review proceedings via “Compelled Discovery,” as oultined in 37 C.F.R. §42.52.

Since 1861, provisions allowing the Patent Office to issue subpoenas compelling the testimony or documents from entities, in “contested cases,” has been part of the Patent Act in 35 U.S.C. §24.   While this provision was previously used in interferences or displinary proceedings, it is clear that Inter Partes Review and Post Grant Review are to be considered “contested cases,” opening up the subpoena power to IPR/PGR litigants.

The proper procedure for invoking this subpoena power is to make a “Motion for Authorization” to the Patent Trial and Appeal Board (PTAB) seeking the discovery.  Of course, the PTAB is going to be interested in learning the relevance of the discovery and any such motion must identify the prospective witness by name or title and, if document production is requested, the nature of the document must be described.  As a reminder, the Office Trial Practice Guide encourages that any motion a party may seek to make in the trial be raised at the joint conference call between the parties and the Administrative Law Judge handling the trial, that call being set to occur within 1 month after the PTAB decides to institute a trial (p48765).

Testimony and documents from outside the United States may also be compelled, but additional requirements must be set forth in the Motion for Authorization.

In the case of ex-US testimony, the Motion for Authorization must include:

1. Identification of the Foreign Country

2.  An explanation as to why the witness can be compelled to testify in the foreign country, which must include, (1) a description of the procedures which will be used to compel the testimony and (2) an estimate of the time it is expected to take the testimony

3.  A demonstration that the Party has made reasonable efforts, including an offer to pay for travel arrangements and associated expenses, to secure agreement of the witness to testify in the United States but has been unsuccessful.

In the case of ex-US production of documents, the Motion for Authorization must include:

1.  Identification of the Foreign Country

2.  An explanation as to why production of the document can be compelled, which must include, (1) a description of the procedures which will be used to compel production and (2) an estimate of the time it is expected to obtain production

3.  A demonstration that the Party has made reasonable efforts, including an offer to pay for associated expenses, to secure agreement to produce the document or thing from the individual or entity having possession, custody or control of the document or thing in United States but has been unsuccessful.

To help gauge the likelihood of the PTAB granting a Motion for Authorization, it is important to keep in mind the Patent Office’s concern regarding excessive costs.  Throughout the Patent Office’s commentary on the rule, the need to minimize costs in these proceedings is mentioned often.  A Motion for Authorization should, therefore, thoroughly explain the disccovery that is sought, the reasons why it is crucial to the proceeding, and why it cannot be obtained through less expensive, less obtrusive means.  This is not to say, however, that the PTAB will look unfavorably upon these motions – though the Patent Office wants to minimize the high costs and significant time associated with discovery, compelled discovery is a significant part of the discovery process in Inter Partes Review and Post Grant Review and should be used as necessary to obtain third party testimony and documents.