Supreme Court Hears Arguments in Cuozzo Case

8345487_sWe should soon find out whether the Federal Circuit will again face reversal at the hands of the Supreme Court in a patent case. Today, the Court heard oral arguments in the case of In re Cuozzo, the first IPR decision to reach the highest court. The transcript of the proceeding can be found HERE. Reading the reaction of judges in oral argument can be a very dangerous game, but a few key observations can be noted:

First, while there were two issues on appeal, the issue of whether the Broadest Reasonable Interpretation claim construction standard is appropriate in IPR proceedings garnered almost all of the attention of the Court. Only Justices Ginsburg and Sotomayor briefly touched upon the second issue of whether the Board’s decision to institute can be reviewed by an appellate court.

Second, Chief Justice Roberts seemed troubled by the use of BRI in PTO proceedings. More specifically, Chief Justice Roberts was particularly concerned that the PTAB and a district court could come to different conclusions regarding the meaning of a claim limitation. Among his questions that indicated his seeming posture against BRI include: “It’s a very extraordinary animal in legal culture to have two different proceedings addressing the same question that lead to different results” and “It just seems to me that that’s a bizarre way to…decide a legal question.” Also, after the Solicitor explained how a district court and the PTAB may come to different conclusions, the Chief Justice asked: “And this is under a statute designed to make the patent system more reasonable and more expeditious in reaching judgments?” If an opinion comes out against BRI, we would expect the Chief Justice to author it.

Third, Justices Kennedy and Breyer seemed more favorable to BRI, framing the issue as the PTO taking a second look at questionable patents that should not have issued in the first place. As such, BRI might be appropriate for this second look in IPR. For example, Justice Kennedy asked “Well, if the patent is invalid under its broadest, reasonable interpretation, doesn’t that mean the PTO should never have issued the patent in the first place, and doesn’t that give very significant meaning and structure to this process?” Relatedly, Justice Breyer commented that “what we’re trying to do with this process is to tell the Office, you’ve been doing too much too fast. Go back and let people who are hurt by this come in and get rid of those patents that shouldn’t have issued.” These questions were less clear on their intent than Chief Justice Roberts’ questions, but indicated an understanding of why BRI had been adopted.

Fourth, regarding the issue of judicial review of PTAB decisions to institute, Justice Ginsburg indicated agreement with the Federal Circuit’s reading of 35 USC 314(d), while Justice Sotomayor seemed skeptical. Justice Ginsburg asked about the purpose of that statute if not to prevent all review of the Board’s decisions. Petitioner argued that it was to preclude mandamus and prevent review of the denial to such a hearing. At the end of the hearing, Justice Sotomayor returned to this issue, and asked why Congress would tell the PTO not to institute trial except in limited circumstances “but nobody’s going to ever watch you to make sure that’s what you’re doing.” This latter exchange was more involved and left the listener with the distinct impression that Justice Sotomayor was troubled by the lack of judicial oversight of the PTO’s decisions to institute.

Lastly, seven of the eight sitting justices asked at least one question. As is typical in such arguments, Justice Thomas did not question counsel for either Petitioner or the Solicitor.

 

Joinder Provisions of IPR Continue to Save Co-Defendants in Litigation

5097986_sThe joinder provisions of inter partes review proceedings were instituted as a direct response to the ability of parties to settle proceedings before a final written decision is instituted. Via the joinder rules, a second Petitioner can join a previous proceeding to continue a challenge to a patent in the event that the first Petitioner settles with the Patent Owner, and even if the second Petitioner would otherwise be barred pursuant to 35 USC 315(b). This scenario played out in IPR2015-00568, Nintendo of America, Inc. and Nintendo Co., Ltd. v. Babbage Holdings, LLC involving U.S. Pat. No. 5,561,811. A key factor in all joinder cases has been the strong similarity between the petitions in the proceedings that are sought to be joined, to ensure the Board has the ability to maintain a reasonable schedule in the original proceeding.

Petitioner Nintendo filed a Motion to join with another petition challenging the ‘811 patent, field by 505 Games Interactive, Inc. v. Babbage Holdings, LLC (IPR2014-00954). Nintendo’s petition asserted the same ground on which the Board instituted IPR in the ‘954 petition. Decision at 2. Nintendo’s joinder motion also represented that it would take an “understudy role” “unless and until all ‘954 petitioners settle with the patent owner.”

Although the Patent Owner later settled with 505 Games, the Board allowed Nintendo to join, and instituted review. First, Nintendo’s motion was timely filed to satisfy the requirement that the request for joinder be filed no later than one month after the institution date of the ‘954 proceeding (See 37 C.F.R. § 42.122(b)). The Board also noted that this petition was essentially the same as the ‘954 petition in grounds, prior art, expert testimony, and arguments presented, with the lone exception being Nintendo’s petition adopting the Board’s claim constructions in the ‘954 proceeding. Id. at 3.

Patent Owner opposed the motion, arguing that Patent Challenger’s decision to delay 8 months in attempting to join the petitioners in the ‘954 proceeding is prejudicial because Patent Owner settled the ‘954 proceeding under the impression that the IPR would be totally disposed of. Id. at 4. Patent Owner further asserted that Patent Challenger’s intent to at reserve the right to bring forth different positions than those asserted in the ‘954 proceeding would derail the trial schedule due to additional briefing and discovery.

The Board was unpersuaded. The Board stated that Patent Owner’s argument regarding settlements was not persuasive because at the time of the Motion for Joinder in this proceeding, there had been no Motion to Terminate in the ‘954 proceeding. Also, in light of expected termination of the the earlier proceeding, there would be no disruption in the instant trial schedule, given no briefing/discovery coordination will be needed post-termination. Id. at 4-5. Accordingly, the Board joined the two proceedings.

IPR Incorporation by Reference Argument Not Enough to Save Priority Claim

26168884_sMany patent challengers have found “incorporation by reference” arguments to be a tempting way to try to convert an obviousness argument into an anticipation argument, but “incorporation by reference” can also impact whether a reference qualifies as prior art, as was the case in IPR2014-00664, IGB Automotive Ltd. and IG Bauerhin GMBH v. Gentherm GMBH.  In that case, the Board instituted review in part because the challenged patent’s earliest claimed priority document did not sufficiently describe the claimed subject matter, rejecting Patent Owner’s argument that the priority document’s “incorporation by reference” sufficiently bolstered the patent’s disclosure.

More specifically, the patent-at-issue claimed priority to two provisional applications having different filing dates. Decision at 14.  Patent Owner argued that a prior art reference (Knoll) relied upon by Petitioner was not prior art because it antedated the earlier of the claimed priority documents. Petitioner countered that the earlier provisional did not contain an enabling disclosure for the subject matter of the claims at issue, making the challenged patent’s earliest priority date filing date of the second (later) provisional application. Id. at 14.  If this later priority date were used, then the Knoll reference would qualify as prior art. The Board agreed with Petitioner, finding that the earlier provisional application did not, on its face, adequately describe at least one of the limitations in the challenged claims.  Decision at 15.

Patent Owner presented a back-up argument, asserting the earlier provisional application does support the priority claim based on that provisional’s “incorporation by reference” of other documents that did adequately describe the claim limitations at issue.  The Board rejected this argument, finding that the facts did not meet the strict incorporation by reference standard, which requires that the alleged priority document “both identifies with ‘detailed particularity’ the specific material in the patents asserted to be incorporated by reference, and ‘clearly indicates’ where that material is found in the incorporated patents.”  Decision at 15 (Board’s emphasis, and citing Xenon Environmental, Inc. v. U.S. Filter Corp., 506 F.3d 1370, 1378–79 (Fed. Cir. 2007).

Accordingly, the Knoll reference did qualify as prior art.

 

PTAB Will Not Review Contract Issues Even if They Relate to Standing

14118600_sWhether a Petitioner breached a contract, that limited its ability to challenge a patent, is an issue outside the purview of the PTAB, per a recent decision in Ford Motor Company v. Paice LLC & The Abell Foundation, Inc., IPR2014-00570, involving US Pat. No. 8,214,097. Patent Owner had sought the denial of an IPR petition based on lack of standing.

Patent Owner argued that Petitioner was barred from filing the subject Petition because such action breached an arbitration agreement between the parties which limited Petitioner’s ability to challenge the claims of the ‘097 patent.  Patent Owner argued that, because Petitioner was in breach of the contract by filing for inter partes review, Petitioner lacked standing to file the instant Petition. Decision at 5.

The Board’s hands were tied, however, because the disputed contractual matter raised by Patent Owner was outside the purview of the PTAB under authority granted by the AIA. Whether Petitioner had breached the arbitration agreement by filing for inter partes review of the ‘097 patent is for the district courts to decide (indeed, there was a co-pending action that will decide this issue). Since this question of breach had not been settled at the time of the Board’s decision, the Board rejected Patent Owner’s argument that Petitioner should be barred or estopped from filing the instant petition.  Id. at 6.

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.

Paragraph IV Certification Does Not Constitute “Civil Action” That Bars IPR

13731151_sMomentum is growing in the filing of inter partes petitions by drug companies seeking to invalidated Orange Book patents. We will be keeping a close eye on some of the issues that are unique to these pharmaceutical IPR proceedings, including Noven Pharm., Inc. v. Novartis AG and LTS Lohmann Therapie-Systeme AG, IPR2014-00550, involving US Pat. No. 6,335,031. In this case, the PTAB considered whether the filing of a Paragraph IV certification constitutes a “civil action” for inter partes review purposes, barring the filing of an IPR petition.

In its preliminary response, Patent Owner argued that the petition-at-issue was barred pursuant to 35 U.S.C. § 315(a) because Petitioner filed a Paragraph IV certification with the FDA prior to filing the IPR petition. § 315(a) states that an IPR shall not be instituted if petitioner filed a “civil action,” challenging validity of the patent, prior to filing the IPR petition. Petitioner argued that, because of the Paragraph IV certification stated that the ‘031 patent was invalid, Patent Owner was forced to bring a civil action to defend the ‘031 patent. Decision at 6. Thus, even though it was Patent Owner that actually filed the civil action, Petitioner’s action in filing the Paragraph IV certification should be considered the filing of a civil action.  Id. at 7.

The Board disagreed, determining that, when § 315(a) refers to a “civil action,” it means the filing a complaint with a court. Though Petitioner’s filing of a Paragraph IV certification with the FDA was a form of challenge to the ‘031 validity, it was not a filing of complaint with a court. Therefore, the Petition is not barred.  Id. at 7.

Ornamental Feature of Claim Given No Patentable Weight by PTAB in Obviousness Analysis

21315324_sNot all claim limitations are treated equally. In Crocs, Inc. v. Polliwalks, Inc., IPR2014-00424, involving US Pat. No. 8,613,148, the Board addressed an argument for patentability based on an ornamental feature found in the challenged claims. But, the Board found the ornamental feature (a specific animal design incorporated into shoes) could not be relied upon to impart patentability to the claims.

Patent Owner had argued that a prior art reference raised against the ‘148 patent did not disclose an animal character or design which was formed by projections and recesses, as recited in the claims.  The Board disagreed because ornamental features cannot be relied upon to impart patentability. This doctrine applied here, even though the design or ornamental feature was recited in the claim. As such, the Petition was granted and an IPR trial instituted. It is worth noting that the Board did go on to cover its bases and found that, even if the ornamental feature was to be given patentable weight, the references cited by Petitioner sufficiently suggested making shoes with the claimed animal character or design.

Later Priority Date for IPR-Challenged Patent Where No Written Description in Parent

4177464_sThe Board denied an interesting attack from Patent Owner who suggested that Petitioner’s argument, that the patent-at-issue was not entitled to the priority date of its parent, was barred in inter partes review proceedings because it is based on 35 U.S.C. § 112. SAP America, Inc. v. Pi-Net International, Inc. IPR2014-00414, involving US Patent No. 8,346,894; and parent patent, US Patent No. 8,037,158.

Petitioner argued that the subject matter of the challenged claims of the ‘894 patent were not disclosed in the parent ‘158 patent in a manner sufficient to meet the requirements of 35 USC §112, first paragraph. Order at 11. As such, per Petitioner, the ‘894 claims were not entitled to the priority date of the ‘158 parent patent.  Specifically, Patent Challenger argued that negative limitations in some of the ‘894 claims were not disclosed in the ‘158 parent specification. Id.

Patent Owner’s Preliminary Response argued that the petition exceeded the scope of inter partes review (which allows only challenges under 35 USC §102 and §103) by including an analysis under §112 in the challenge.

The Board began its analysis by noting that there is a difference between arguing that a claim is unpatentable based on §112 inadequate written description grounds and arguing that a claim is not entitled to a given priority date based on §112 grounds.  Further, Patent Owner provided no arguments on the merits against Petitioner’s assertions of lack of written description in the parent ‘158 patent.  Accordingly, after dismissing inapplicable case law cited by Patent Owner because of this distinction, the Board agreed with Petitioner and found that the ‘894 challenged claims were not entitled to the priority date of the ‘158 patent because the ‘158 patent did not provide an adequate written description of the challenged claims.

Board Considers Proof of Diligent Reduction to Practice

22397198_sPatent Owner’s attempt to disqualify prior art in an inter partes review failed because it could not show diligence from conception to reduction to practice in Medtronic, Inc., et al. v. Troy R. Norred, M.D., IPR2014-00395, U.S. Patent No. 6,482,228.

Patent Owner’s preliminary response sought to remove one of the allegedly-anticipatory references as prior art by providing evidence of conception prior to the effective filing date of the reference and diligence to reduction to practice (the filing of the patent application, in this instance). To remove a reference with an art-date during 1999, Patent Owner argued that the claims at issue of the ‘228 patent were conceived in late 1998 and there was reasonable diligence until reduction to practice. To support the argument, Patent Owner submitted documentary evidence and exhibits to the Board.

The Board was not persuaded, however, finding that the exhibits were not sufficiently linked to each claim limitation to prove reasonable diligence during the period between conception and filing of the patent application. The Board specifically pointed out that though some exhibits pertained to drawings present in the ‘228 patent, those drawings were not relied upon to illustrate claimed features of the invention. Further, the evidence presented did not show several claimed features of the ‘228 invention, including a “tissue valve.” Therefore, reasonable diligence was not proven for all claimed features and the reference at issue was deemed to be prior art.

131 Declaration That Was Successful in Prosecution Deemed Insufficient in Inter Partes Review

iStock_000019749872SmallThe Board proved willing to overturn a previous patent examiner’s judgment in another type of issue in Iron Dome LLC v. E-Watch, Inc., IPR2014-00439, where, in instituting an inter partes review trial, the Board found that Patent Owner did not properly swear behind a prior art reference, despite the fact that, during earlier prosecution, the Patent Office found that the prior art was properly antedated.

The prior art at issue had an effective filing date of April 25, 1995 qualifying it as prior art under 35 U.S.C. §§ 102(a) and 102(e) because it was not issued or published more than one year prior to the effective filing date as the ‘871 patent, but the effective filing date was earlier than the effective filing date of the ‘871 patent. Id.

During the original prosecution of the patent-at-issue, the Examiner found that the inventor’s submitted declaration sufficiently antedated the prior art reference. Id at 6. The Board took a fresh look at the declaration in the inter partes review, however, and disagreed with the Examiner’s earlier determination. Id at 8. As such, the prior art was relevant in the IPR and the Board determined that there was a reasonable likelihood that the challenged claims were unpatentable in view of that art.

Patent Owner will, of course, have another opportunity with its Patent Owner Response to seek to antedate the prior art at issue, but in the meantime, this is another example of the Board’s willingness to reconsider issues that were purportedly decided during previous examination or reexamination.