Live Testimony for Fact Witness Can Be Appropriate at IPR Oral Hearing


With the Patent Office considering changes to inter partes review practice to potentially increase the use of live testimony at oral hearings, it is worth reviewing the first case in which the Board allowed such live testimony.  In K-40 Electronics v. Escort, IPR2013-00203, the PTAB granted Patent Owner’s request to present live testimony from the inventor at the oral hearing. Paper 34 at 2. The Board noted its default position that live testimony is often not necessary, but under very limited circumstances, cross examination may be ordered to take place in the presence of an administrative patent judge. See Office Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012). Paper 34 at 2.

Key to this case was Patent Owner’s attempts to antedate the only references relied upon by Petitioner. The Board found, therefore, that the testimony of the inventor was critical to the determination and the inventor’s credibility could be best judged live. Id. at 2. The Board also discussed that, because the inventor is a fact witness, this favors live testimony, versus a typical expert witness wherein credibility turns on the plausibility of their theories, and not their demeanor. Id. at 3. The Board continued by stating that should Petitioner suspect that the inventor is changing his testimony, he may be impeached with his prior testimony. Id. at 3.

Motion to Exclude is Proper Vehicle in IPR to Remove Reference as Evidence

34447773_sPatent Owners have often made the argument that certain art of record in an inter partes review is not actually prior art. The proper way to remove that evidence from the record is via a Motion to Exclude, not merely by making arguments in a Patent Owner Response or at the oral hearing. This issue, and an improper attempt at exclusion, arose in ABB, Inc. v. Roy-G-Biv Corporation, IPR2013-00063, involving US Pat. No. 6,513,058.

Earlier in a previous inter partes review proceeding, Patent Owner had argued that the invention of the ‘058 patent was conceived and reduced to practice prior to the effective art date of the relied-upon prior art references. As such, Patent Owner asserted that the references relied upon in the challenge were not available as prior art. Decision at 5-6. The Board rejected this argument in the earlier IPR as lacking adequate evidentiary support for diligence in reducing the invention to practice. Id. at 6.

In this later proceeding, Patent Owner made additional arguments and cited additional cases, all in an unsuccessful attempt to convince the Board. As a backup argument, Patent Owner argued that Petitioner failed to meet its burden of proof in establishing the publication date of one of the references, and therefore the reference was not eligible as prior art. This challenge, however, was made at the final hearing – not as part of a motion to exclude the prior art reference. Id. at 8.

The Board found that Patent Owner’s argument was untimely, including that the final hearing “is not the place to advance a new theory of the case.” Order at 9. Further, pursuant to 37 C.F.R. § 42.64(b)(1), an objection to the admissibility of a reference must be served within ten business days of the institution of the trial. This must be followed by a motion to exclude the reference. Id. at 8. However, Patent Owner did not raise an objection to the reference nor did it file a motion to exclude.  With these actions now time barred, the Board deemed Patent Owner’s attempt to challenge the art-date of the reference to be untimely. Id. at 9.

Infringement Contentions From Copending Litigation Not Allowed as Supplemental IPR Information

Glucosamine & MSM labelingThe circumstances under which the Board will entertain the inclusion of “supplemental evidence” in an inter partes review proceeding remains a moving target. It is worth noting, therefore, the case of Mentor Graphics Corp. v. Synopsys, Inc., IPR2014-00287, wherein the Board denied Petitioner’s efforts to include Patent Owner’s infringement contentions from a co-pending district court litigation involving the same patent. Paper 17 at 2. Petitioner claimed that these contentions reflect Patent Owner’s assessment of the claim scope. Id.

The Board found that the only relevance the contentions have is an alleged inconsistency as compared to arguments made by Patent Owner in the IPR. Id. at 3. They further determined that the contentions were served prior to any substantive discovery in the district court litigation and are supplanted by final infringement contentions as well as the District Court’s Order Construing Claims. Id. The Board, therefore, found that, while the district court’s construction may be informative, the preliminary infringement contentions are too tenuous to be relevant to the Board’s application of the broadest reasonable construction standard. Id. Thus, Petitioner’s Motion to Submit Supplemental Information was denied. The Board however noted that Petitioner can bring these contentions forward in its Reply, if appropriate as rebuttal. Id.

Despite Lack of Familiarity with Specific Technology-at-Issue, Industry Expert Not Excluded

iStock_000011114669SmallThe Board continued its reluctance to exclude evidence in inter partes review proceedings in Primera Technology, Inc., v. Automatic Manufacturing Systems, Inc., Final Written Decision, IPR2013-00196 by denying a motion to exclude the expert testimony of Patent Owner’s industry expert. The Board has indicated its desire to be presented with a story regarding the patentability or unpatentability of the patent subject to an IPR. By continuing to deny motions that seek to exclude experts with long tenures in a particular industry, though not necessarily with the specific technology at issue in the IPR, the Board may be indicating a preference for industry experts who can tell a long, detailed story about the relevant technology.

In Primera, Petitioner challenged the credibility of Patent Owner’s expert, seeking to exclude his declaration. Id. at 26. More specifically, Petitioner argued that during his deposition, the expert admitted to having no familiarity with the general state of the art, contrary to his declaration. Id. Petitioner also argued the expert’s testimony was inadmissible under Fed. R. Evid. 702 because he was not qualified as an expert. Id.

The Board examined the expert’s work experience and skill set and denied the relief requested in the motion to exclude. Id. at 28. First, the Board gave credit to the expert for his 21 years of industry experience in various, related technologies. Id. Second, though the expert lacked specific experience with the type of microscope slide printer at issue went to the weight and sufficiency of his testimony, rather than its admissibility. Citing Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1221 (Fed. Cir. 2006). Id.

In the end, the Board denied the motion to exclude.

Board Addresses Procedure for Making Board Aware of Supplemental Evidence

There has been, to date, much confusion surrounding the propriety and timing of filing “supplemental evidence” with the Board.  In Sealed Air Corporation v. Pergis Innovative Packing, Inc., IPR2013-00554 through IPR2013-00558, the Board clarified the issues upon request of Patent Challenger regarding the proper procedure to file supplemental evidence in response to an evidentiary objection.

[pullquote align=”left|center|right” textalign=”left|center|right” width=”30%”]

37 CFR § 42.64(b):
(b) Other evidence. For evidence other than deposition evidence:
(1) Objection. Any objection to evidence submitted during a preliminary proceeding must be served within ten business days of the institution of the trial. Once a trial has been instituted, any objection must be served within five business days of service of evidence to which the objection is directed. The objection must identify the grounds for the objection with sufficient particularity to allow correction in the form of supplemental evidence.
(2) Supplemental evidence. The party relying on evidence to which an objection is timely served may respond to the objection by serving supplemental evidence within ten business days of service of the objection.[/pullquote]

Patent Challenger acknowledged the Rules for service of supplemental evidence on an opposing party in response to an evidentiary objection under 37 CFR § 42.64(b)(2), but noted the Rules are silent as to the filing of such evidence with the Board. The Board instructed that, in situations where a party’s objection to evidence can be overcome by later-served supplemental evidence, the objection would not become the basis of a motion to exclude evidence, and therefore the Board would not be made aware of either the objection or the supplemental evidence Accordingly, the Rules do not provide for filing of evidentiary objections or supplemental evidence during the initial stages of a proceeding.

The Board only becomes aware of supplemental evidence when there is an evidentiary dispute which cannot be resolved. In such situations, the objecting party may file a motion to exclude evidence, which can be opposed by the filing of an opposition to the motion to exclude.  This opposition may be accompanied by exhibits containing previously-served supplemental evidence.  Only at this time will the Board be made aware of the supplemental evidence.

In short, objections to evidence and supplemental evidence served within 10 days of such objections, pursuant to 37 CFR § 42.64(b)(2), should only be filed with the Board at the Motion to Exclude stage of the proceeding.

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.

Entry of Supplemental Evidence a Tough Hurdle to Navigate in IPR Proceedings

iStock_000001758213XSmallEarly expectations of inter partes review proceedings were that the PTAB would be reticent to allow supplemental evidence to be entered by either party – there would be no second bites at the apple for participants in IPR trials.  As Board decisions have continued to pile up, it is becoming clear that those early predictions were accurate.  Here, we summarize a number of Orders directed to the issue of supplemental evidence to prove that point.

Redline Detection, LLC v. Star Evnirotech, Inc., IPR2013-00016 (Paper 24).  Petitioner sought to introduce four new exhibits, after the Board instituted an IPR trial in the proceeding.  Among the evidence Petitioner sought to include was a declaration of an expert who purported to further explain “several aspects of the references on which the IPR was granted and further helps establish reasons for combining the references…”  Order at 2.  The Board pointed out that, pursuant to 37 CFR § 42.123, supplemental evidence can be filed within one month of the date the trial is instituted, but that does not mean such a motion will be granted “no matter the circumstance.”  Because the evidence sought to be introduced could have been presented with the Petition, the motion was denied.

CBS Interactive, et al. v. Hleferich Patent Licensing, LLC et al,, IPR2013-00033 (Paper 79).  Patent Owner argued that Petitioner submitted evidence with its reply brief that should have been included in the Petition.  The Board noted that, whether a reply contains arguments or evidence outside the scope of a reply is left to the determination of the Board. “The Board will determine whether a reply contains improper arguments or evidence when the Board reviews all of the parties’ briefs and prepares the final written decision.  Should there be improper arguments or evidence presented with a reply, the Board, exercising its discretion, may exclude the reply and related evidence in their entirety, or alternatively, decline to consider the improper arguments and/or related evidence. Briefing from the parties as to whether an argument or evidence is submitted outside the scope of a proper reply rarely is authorized.”  Order at 3.

Research in Motion Corp. v. Mobilemedia Ideas, LLC, IPR2013-00016 (Paper 19).  Petitioner sought authorization to submit additional grounds of unpatentability based on a motion for summary judgment granted in co-pending litigation, wherein two claims of the subject patent were deemed anticipated.  The Board denied the request, finding that the original petition should have included all of the asserted grounds of unpatentability.  37 CFR § 42.104(b).

Blackberry Corp. v. Mobilemedia Ideas, LLC, IPR2013-00036 (Paper 40).  Patent Owner convened a conference call with the Board to discuss the reply to the Petition filed by Petitioner.  In general, Patent Owner argued that the reply, and related exhibits, were improper because they contained new arguments and evidence that did not respond to arguments raised in the response, but should have been filed with the petition.  The Board pointed out that 37 CFR § 42.23(b) sets forth that a reply may only respond to arguments raised in the corresponding opposition or patent owner response and that the Trial Practice Rules state that “a reply that raises a new issue or belatedly presents evidence will not be considered.”  77 Fed. Reg. 48756, 48767.  Petitioner sought leave to re-file its reply, eliminating any such new matter.  The Board allowed that re-filing.

ZTE Corp., et al. v. Contentguard Holdings, Inc., IPR2013-00139 (Paper 27).  In light of the Board’s claim construction in its decision to institute an IPR trial, Petitioner sought to introduce two new references that were deemed “more pertinent to the claimed subject matter than the prior art cited by the petitioner in its petition.”  Order at 2.  The Board held that the PTO rules do not permit “a petitioner to refrain from initially construing a key claim term…wait for the Board to render a construction for the term, and then ask to submit supplemental evidence based on that construction to bolster its position, particularly if that evidence was in the petitioner’s possession at the time of filing of the petition.”  As such, Petitioner was deemed not to have established sufficient basis for submitting the new references.

Illumina, Inc. v. The Trustees of Columbia University in the City of New York, IPR2012-00006 (Paper 82).  Patent Owner argued that Petitioner submitted new evidence in violation of 37 CFR § 42.23(b).  The Board stated that it would make a determination of whether new issues or new evidence was presented in the reply brief.

Kyocera Corp. v. Softview, LLC, IPR2013-00004 (Paper 32).  Patent Owner argued that the evidence cited in its reply brief raised new claim construction issues and new challenges to the patentability of the claims, as well as introduces new prior art and evidence.  As such Patent Owner sought to file a Motion to Strike the reply.  The Board held that such a motion was unnecessary in view of the fact that the Board will decide whether new issues were raised or new evidence introduced.  Order at 2-3.

47 for 52: Expert Declaration Provides Support for Grant of Inter Partes Review Trial

Mobile phone and tablet with battery chargers in white backgroundExpert testimony played a key role in Motorola successfully forcing three challenged claims of a Mobile Scanning Technologies patent into an IPR trial, in a case styled Motorola Solutions, Inc. v. Mobile Scanning Technologies, Inc. (IPR2013-00093), involving US Patent No. 6,065,880.  Trial was instituted for all three challenged claims based on 5 out of 18 challenge grounds.  Notably, the ‘880 patent was previously involved in a reexamination proceeding, during which the claims at issue were amended.

The ‘880 patent describes an adapter electrically coupled to a PDA. The adapter includes a laser or other light source which emanates a light beam that can be modified into a digital signal to download information to a PDA equipped with a photo detector or used as a presentation pointer. Also, electronic components of the adapter can be integrally incorporated into the PDA, so as to eliminate the need for the adapter.  This single, embedded PDA design is the subject of the challenged claims.

At threshold, the Board addressed three preliminary matters raised by Patent Owner in its Preliminary Response.  First, the Board addressed a defense raised by Patent Owner that the Petition was barred in light of a previous settlement, wherein the Eastern District of Texas retained exclusive jurisdiction over any future action relating to the ‘880 patent.  This issue was addressed in a prior decision by the Board.  In general, the Board found that it was not the right venue to decide if the district court’s order was being complied with.  The requirements for an IPR petition were met, so it was appropriate to move forward.  Patent Owner was instructed to approach the district court to enforce any of that court’s orders.  Second, the Board addressed Patent Owner’s defense that the non-patent references cited in the Petition were not authenticated.  Also, discussed in the earlier order, the Board found that it “will determine the proper weight to accord to the various references at each stage of the proceeding.”  For purposes of this stage, an adequate evidentiary showing had been made.  Third, Patent Owner argued that the IPR is duplicative of the prior reexamination.  The Board held, however, that given that the ongoing reexamination was stayed, that issue was moot.

The Board then moved to a claim construction analysis of disputed terms “PDA” and “microcontroller.”  Turning first to the specification, the Board declined Patent Owner’s efforts to read a synchronization feature or a personal information manager into the definition of “PDA”, finding that the terms were not mentioned in the patent and Patent Owner pointed to no evidence in the prosecution history or other documentary evidence to limit the “PDA” claim term. Without citing evidence, Patent Owner stated that those skilled in the art would recognize that a “microcontroller” is a highly integrated system-on-a-chip and that the term “microcontroller” is not used interchangeably with the term “microprocessor” in the ‘880 patent. However, the specification used both terms and the Board held that there was no distinction between them for the purposes of the claims of the ‘880 patent. Unsurpisingly, given that Patent Owner was unsuccessful in arguing narrower claim constructions, the Board went on to grant trial on all challenged claims.

In finding a likelihood of anticipation of claim 18 by one of the references, the Board relied on the Petitioner’s expert declaration as evidence that components were necessary for a scanner to operate and were inherent in the reference’s disclosure of a bar code processor connected to a microprocessor. Order at 25. Later, the Board relied on evidence from the Petitioner’s expert declaration that an integrated scan engine must have a photo detector positioned to receive light reflected from the bar code an analog-to-digital converter to process the signal and that it was inherent in another reference. Order at 29. Further, the expert declaration was used to establish that the use of visible red lasers in scanners, and the use of a visible laser diode to emit a visible red beam, was well known by the mid-1990s. Order at 34-35. In short, Petitioner’s expert declaration provided significant ammunition to support the Board’s decision.

Patent Owner sought to dissuade the IPR trial by arguing that Petitioner’s sales of mobility products proved non-obviousness, but the Board rejected the argument because Patent Owner did not provide evidence concerning the size and product scope of the relevant market, the Petitioner’s market share, or evidence of a nexus between the Petitioner’s alleged sales and the claimed invention.

In the end, the Board granted trial on all three challenged claims, based on 5 challenge grounds.

37 for 42: Previously-Considered Art Lives Again in Grant of Inter Partes Review Trial

iStock_000014464933XSmallThe Board has again failed to toss aside argument and art previously considered by the Patent Office (this time in an ex parte reexamination) and, instead, instituted an inter partes review trial on all six challenged claims in a case styled Nexans, Inc. v. Belden Technologies, Inc. (IPR2013-00057), involving US Pat. No. 6,074,503. Four of 9 proposed grounds for challenge were granted in the Board’s decision.

The invention of the ‘503 patent involves a method of producing a cable. The method includes a step of passing a plurality of transmission media such as wires and a core through a first die which aligns the plurality of transmission media with surface features of the core and prevents twisting motion of the core. The method includes another step of bunching the aligned plurality of transmission media and core using a second die which forces each of the plurality of transmission media into contact with the surface features of the core. The bunched plurality of transmission media and core are twisted close to the cable, and the closed cable is jacketed.

Patent Owner first argued that because three of the references contained in the petition were already considered by the examiner in a prior ex parte reexamination which resulted in confirmation of the claims, the Board should deny those portions of the petition. The Board cited 35 U.S.C. § 325(d) and stated the statute gives the Director the authority not to institute review on the basis that the same or substantially the same prior art or arguments were presented previously to the USPTO, but does not require so. Because the Patent Challenger’s alleged unpatentability grounds have some merit, the Board declined to deny the petition under 35 U.S.C. § 325(d). Order at 8. This continues a trend of the Board’s willingness to consider references even if they were previously considered during original prosecution or a reexamination.

The Board then turned to its claim construction analysis and interpreted the terms “core” and “prevents twisting motion of the core.” Basing its definition of “core” strictly on the specification of the ‘503 patent, the Board found that the term “core” does not have to have a bulky or extensive cross-section and there is no reason to exclude structure in the form of thin tape from forming or constituting the core. The Board also determined that “prevents twisting motion of the core” was met by the prevention of twisting in the area where the core passes through the first die once the desired position of the core for alignment during production is established. Thus, twisting of the core need not be prevented (1) at all places along the axial length of the core, or (2) before the desired alignment of the core has been determined and put in place and cable production has commenced.

The Board then considered several grounds asserting anticipation of the challenged claims.  To that end, Patent Challenger argued that a prior art reference disclosed a branching board of a first die which inherently prevented twisting of the core. The Board rejected the argument, stating that because the disclosure does not show an axial view of the branding board in the direction of cable feed, it could not be known what manner the core passes through the branching board. To establish inherent disclosure, the limitation at issue necessarily must be present in the corresponding element described in the prior art reference. Inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient to establish inherency. Order at 26. The Board found that even if the branching board, in some circumstances, prevented twisting of the core, the possibility is inadequate to establish inherent disclosure of twist prevention.

In the obviousness challenge grounds analysis, the Board determined that inserting an additional die upstream of a wire-splitting board of the assembly of a prior art reference involved merely a predictable use of a prior art element disclosed in other references.  Further, Board held that such a combination need not be predicated on any specific teachings; that is, the Board “need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” Order at 33.

Patent Owner sought exclusion of one of the Patent Challenger’s exhibits on the ground that it constituted inadmissible hearsay. The exhibit is a collection of selected trial transcripts from related litigation, including the testimony of an expert witness. The Board stated that exclusion of evidence at this stage of the proceeding is premature. Order at 41. In any event, the exhibit appeared to have been relied on by the Patent Challenger only in connection with arguments regarding a reference that was not applied as a basis for any granted challenge grounds.

In the end, the Board instituted trial on all challenged claims including, notably, some challenge grounds that used a reference that was previously considered during an ex parte reexamination.

PTAB Excludes New Evidence that Patent Challenger Attempts to File Post-Petition

stopsignA pair of rulings by the PTAB make clear that Patent Challengers must get their initial inter partes review filing correct the first time because no new evidence will be allowed after the petition has been filed.

In the first ruling, in the inter partes review styled as Sony Corp. v. Tessera, Inc. (IPR2012-00033), Patent Challenger sought to submit to the Board, prior to its decision whether to institute the trial or not, two documents not submitted with the petition. Sony sought to admit the documents because they purported to be inconsistent with Patent Owner’s Preliminary Response. The Board did not allow the submission, ruling instead that, should a trial be instituted, Sony would be able to submit the documents with a brief statement only identifying what is being filed, with no comment on their content. It should be noted that the Board ultimately did grant an inter partes review trial on the petition, despite not accepting the new evidence.

In the second ruling, in the inter partes review styled as EMC Corp. v. Personal Web Tech., LLC, (PR2013-00082), Patent Challenger sought authorization to file three replacement exhibits that it claimed would contain no substantive changes. Patent Owner opposed the request, arguing that the new exhibits actually contained substantive and drastic changes, as compared to what was filed with the petition. The Board agreed with Patent Owner, finding that the original exhibits were readable and, further, that it would be a burden on Patent Owner to have to review the new documents when its preliminary response was due so soon.

The Board has shown, if anything, a strict adherence to the trial practice rules. These two rulings bolster that reputation, holding Patent Owner’s feet to the fire in getting their complete evidence record into the proceeding when the petition is filed.