Federal Circuit Weighs in on Evidentiary Challenge in IPR, Reversing PTAB

34447773_sMore often than not, evidentiary issues in IPR proceedings fail to make headlines because the Board will structure its Final Written Decision to avoid evidentiary challenges. Findings that a party’s motion to exclude is denied as moot are common. That makes the Federal Circuit’s decision in REG Synthetic Fuels, LLC v. Neste Oil Oyj (November 8, 2016) all the more interesting. In that decision, the Court reversed the Board’s decision to exclude certain evidence submitted by Patent Owner during the trial.

More specifically, Patent Owner sought to swear behind one of the prior art references presented in the Petition. Among the evidence provided for this purpose was test data from third parties, communications between the inventor and third parties, and minutes from a meeting that the inventor had attended. Id. at 5. Petitioner moved to exclude this evidence on the basis of lack of authentication, hearsay, or as improper reply evidence. The Board granted the motion to exclude.

On appeal, the Court first clarified that priority issues, including conception and reduction to practice, are questions of law predicated on subsidiary factual findings. Id. at 6. The Court addressed the Board’s finding that two emails between the inventor and a third party (Exhibit 2061 in the case) provided necessary corroboration of the patented invention. Id. at 16. Petitioner argued that the emails were hearsay because they contain out of court statements by a third party. Patent Owner responded by arguing that it did not offer the emails to prove the truth of the matter asserted. The Court agreed with Patent Owner, finding that the emails were offered for the non-hearsay purpose to show that the inventor thought he had achieved a quality claimed in the patent-at-issue. “The act of writing and sending the email is, by itself, probative evidence on whether [the inventor] recognized–at the time that he had written the email–” the claimed property. Id. at 17. In short, the exhibit was legally significant because it showed that the inventor communicated the conception of the invention to the third party.

Because the Board excluded relevant evidence in the trial, the case was remanded for further consideration.

PTAB Grants IPR Motion to Exclude – Knocks Out Exhibits As Untimely

53129743_sThe Board rarely grants motions to exclude, but it did so in Toshiba Corp. v. Optical Devices, LLC, IPR2014-01447 (March 9, 2016).  There, Patent Owner moved to exclude four exhibits; the motion was denied as two of them and granted as to the other two.  Patent Owner objected to the two admissible exhibits (a data sheet and press release) on grounds of lack of authentication, inadmissible hearsay, and/or irrelevance.  The PTAB dispensed with these objections quickly.  Concerning authentication, a trademark notice on the document sufficiently authenticated the material.  The document’s date was not hearsay:  “the fact that a document bears a date is not hearsay.”  As to irrelevance, the PTAB found (as is common) that the Patent Owner’s argument was really about sufficiency of the evidence, which should not be raised in the form of an irrelevance objection.

The two excluded exhibits were a current website containing a link to a downloadable datasheet, and an accompanying authentication declaration from the Internet Archive.  These exhibits submitted for the first time with Petitioner’s reply.  The Board noted these exhibits were not provided in response to evidentiary objections from Patent Owner, nor were they submitted in accordance with the procedures for introducing supplemental evidence or information into proceedings (37 C.F.R. § 42.64(b)(2) and 42.123(a)–(c)), despite Petitioner’s early awareness of Patent Owner’s objections to the alleged public availability of the information.  Because the submission of these exhibits was untimely, the PTAB excluded them.  Notably, the PTAB’s exclusion order was not based on any Federal Rule of Evidence, but rather solely on the Board’s rules concerning the timing of submissions.