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.

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.

Why IPR and PGR Matter to Patent Owners

Created in the America Invents Act (AIA), the new Inter Partes Review (IPR) and Post Grant Review (PGR) “trials” at the US Patent Office have the potential to be game-changers in the way patents are challenged in the future.  After several attempts at creating Patent Office-based proceedings that are efficient and effective, there is much in the new IPR and PGR that lend credence to the notion that Congress finally hit on a combination of pure patent litigation and Patent Office procedure that will be attractive to patent challengers.  As a result, patent owners need to be intimately aware of the details and strategy considerations of these proceedings because of certain advantages offered to patent challengers, including:

1.            The burden of proving patent invalidity in an IPR or PGR proceeding is merely a “preponderance of the evidence” – lower than the standard required in Federal court of “clear and convincing evidence”;

2.            Claims in an IPR or PGR proceeding are given their “broadest reasonable interpretation,” consistent with the patent prosecution standard at the Patent Office; this is likely to be a broader interpretation than what would be argued in Federal court, making it easier to read claims on prior art;

3.            While cost, as compared to prior PTO proceedings, will be higher, cost is still considerably lower than patent challenges in Federal court;

4.            The speed of these proceedings – to be completed within 12 months – may be an attractive feature in some circumstances;

5.            The PGR procedure allows challenges to patents based on novelty and obviousness arguments for non-published prior art, such as prior use and prior sale, as well as 101 and 112 issues; and

6.            The ability to have some litigation tools to control the proceedings – depositions, oral hearing, etc. – will make it more palatable to submit good prior art to the Patent Office.

All is not lost, however, for patent owners.  Patent owners may appreciate the speed of the proceedings and the ability to have access to some litigation tools, as discussed above.  In addition, patent owners will find the following features attractive:

1.            Patent challengers, and their privies, are estopped from later raising validity challenges actually raised, or which could reasonably have been raised, in IPR and PGR proceedings (after a final written decision is entered) – this estoppel applies to Federal court litigation, USITC, as well as other proceedings before the Patent Office and attaches much quicker than the previous Patent Office proceedings;

2.            Patent challengers are afforded the ability to make claim amendments to overcome prior art issues, where appropriate (and, as is often the case, these narrowing amendments can result in claims that are stronger from a validity perspective, but not changed from an infringement perspective);

3.            IPR and PGR are not available if a petitioner has already filed a civil action claiming patent invalidity (counter claims do not count); and

4.            IPR and PGR are not available if filed more than one year after a civil action is brought by patent owner.

Only time will tell if IPR/PGR become the long-desired elixir for expensive patent litigation.  There are some who predict they will be little-used proceedings.  Others suggest they may transform patent litigation and serve as a commonly-used substitute for Markman hearings.  We’ll look forward to seeing this new development unfold before our eyes.

What is Harness Dickey?

Just about 90 years ago, our founder, J. King Harness, set forth a simple but powerful philosophy: Our client is our trusted business partner. This philosophy has been passed down through generations of Harness Dickey attorneys. We never compromise on thoroughness or responsiveness to client needs.  That philosophy is invaluable in times such as this, with the implementation of the most sweeping overhaul of the Patent Act in over 60 years – the America Invents Act.  Harness, Dickey is particularly well-suited to assist with the AIA’s implementation of new “trials” before the Patent Trial and Appeal Board (PTAB) – Inter Partes Review and Post Grant Review.  Harness Dickey’s lawyers, who have made us a world leader in patent prosecution and world beaters in patent litigation, sit right at the appropriate intersection of litigation and patent office practice that is the cornerstone of the new Patent Office trials.

We look forward to you joining the thousands of clients we have guided in all sectors of business and technology, and of all sizes, in advancing your intellectual property interests in Inter Partes Reviews and/or Post Grant Reviews.