IPR Motions for Joinder are Common, But Not Automatic

11155838_sRecent statistics show that motions for joinder are granted about 60% of the time. While parties can, therefore, expect a sympathetic ear regarding these motions, they are not always successful and it is worth noting the shortcomings of one such motion from Samsung Electronics Co., Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC v. Arendi S.A.R.L, IPR2014-01143, involving US Pat. No. 7,496,854. In that case, the Board denied a motion for joinder due to several deficiencies in the motion.

Petitioner moved to join the instant petition with a related proceeding (IPR2014-00206) because the related proceeding involved the same patent, claims, prior art, and ground of unpatentability. Decision at 4. Further, Petitioner argued that the two proceedings have three other similarities: (1)  that the claim charts in both petitions are “substantially identical” with respect to the common ground of unpatentability; (2)  the instant petition adopts rationale of the Board advanced in the related proceeding; and (3)  the instant petition presents no new issues that would complicate the related proceeding. Id. at 5.

The Board disagreed, however, noting several deficiencies and issues in Petitioner’s Motion for Joinder which weighed against joining the proceedings. First, Petitioner failed to set forth in its motion a statement of differences between the instant proceeding and related proceeding with which joinder is sought. Second, Petitioner failed to set forth any statement of the meaning of “substantially identical,” regarding the claim charts in the two proceedings. Third, the Board found that there were, in fact, new issues presented in the instant proceeding, as Petitioner relied upon testimony which introduced argument and evidence not presented in the related proceeding. Id. at 5. Fourth, Petitioner stated that briefing and discovery would be simplified with joinder, but failed to explain how. Lastly, the Board noted that Petitioner’s promise to increase efficiency by working with the petitioner in the related proceeding rang hollow because there was no indication that the petitioner in the related proceeding would work with the instant Petitioner.  Id. at 6.

The PTAB is more than willing to join proceedings, but only if the joinder will not effect the fair, efficient, and just administration of the IPR proceedings. Here, Petitioner came up short in its showing regarding why the Board could grant joinder and maintain a fair and efficient proceeding.

 

 

Inter Partes Review – A Fair and Efficient Litigation Alternative

IPRWith special thanks to my co-author, Laura Sheridan of Google, the linked article takes a detailed look at the first two years of inter partes review practice before the Patent Trial and Appeal Board and seeks to provide insights into some of the most critical areas of the proceedings. Like all change, the implementation of IPR has caused considerable commentary from both supporters and critics. There can be no denying, however, the overwhelming popularity of the proceedings as an alternative to litigation. As the article points out, while the proceedings are not perfect, the statistics and facts underlying IPRs makes clear that they are, at least, fair.

The article is re-published with permission from the Association of Corporate Counsel (http://www.acc.com).

PTAB Shows a Willingness to Intervene in Deposition Disputes

10929882_sExperienced district court litigators are reluctant to “call the judge” when a dispute arises during a deposition. Judges do not want to take the time to deal with mundane discovery disputes and parties do not want to get on the wrong side of the judge. The Office Patent Trial Practice Guide bucks this trend, explaining that “[t]he Board encourages the use of conference calls to raise and resolve issues in an expedited manner.” Id. at 48758. We think lawyers are still reluctant to make that call, but experience is showing that the Board is willing to intervene to settle procedural matters.

For example, in Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-00424, Patent Owner asked the Board to limit cross-examination of its expert witness by prohibiting questions directed to whether a feature would have been obvious to one with ordinary skill in the art. Paper 33 at 2. The Board granted the request.

In the Petition, Petitioner relied on a particular prior art reference as disclosing the claimed feature, not as rendering that feature as obvious. Petitioner argued that “obviousness, inherent disclosure, and the understanding of ordinary skill in the art…are inter-mingled as one integral discoverable topic.” Id. at 3. The Board, however, disagreed stating the Petitioner knew the difference between the separate concepts and that they topics were not one and the same. Additionally, the Board found Petitioner has no reason to inquire about the obviousness in light of that feature based on the specific grounds instituted for trial, the arguments in the petition, and absence of testimony in the expert witness’s declaration regarding obviousness of the feature. Id.

In short, deposition combatants take note – the Board is showing both a willingness to intervene in discovery disputes and to limit the testimony of witnesses to only that which is at issue in the IPR proceeding.

PTAB Offers Guidance Regarding Discovery in Inter Partes Reviews

iStock_000013492145XSmallStill confused about how much discovery you will be able to obtain in an IPR? Fear not, as two of the PTAB’s Administrative Patent Judges have weighed in with a primer on inter partes review discovery. The PTAB blog entry provides a nice overview of “routine” and “additional” discovery, including some insights into the reasons why the Board believes it is constrained in its grant of additional discovery in IPR proceedings.

To that end, as our statistics have made clear, only 28% of Motions for Additional Discovery have been granted through the 2nd year anniversary of IPR practice. Of note in the PTAB’s blog posting is that this low percentage is due to several key constraining forces on the Board. First, the AIA legislative history makes clear that additional discovery is confined to “particular limited situations, such as minor discovery that PTO finds to be routinely useful, or to discovery that is justified by special circumstances of the case.” Second, statutory deadlines for completing IPR proceedings require a much more streamlined procedure than the broad discovery allowed in litigation. Third, the Board notes the fact that discovery is only allowed when in the “interests of justice.” Because this standard is slightly higher than the “good cause” standard, the Board is more constrained on this issue than on other issues it is called on to decide.

Lastly, the article provides a helpful synopsis of a number of other PTAB decisions relating to additional discovery that can be a helpful reference.

Patent Office Propaganda?

14009594_sAs you know, we take statistics pretty seriously here at IPR-PGR.com. After our most recent quarterly IPR Report indicated a claim survival rate of 27% (for claims actually put into an IPR trial), we were surprised to learn that the PTO is reporting a rate that is nearly double our calculated rate – 52%. After doing a little digging, it seems the Patent Office is including in its “survived” claims calculation those claims that were challenged in a petition, but ultimately not ruled upon because the case was terminated (i.e., via settlement between the parties). We do not include those claims in our calculation because it is difficult to discern the reasons why such cases are settled. In fact, we deem it more likely than not that proceedings are terminated because Patent Owners are fearful for the viability of their claims so, if anything, settlement indicates the claims would not have survived.

In the end, there is nothing misleading about the conclusions being drawn by the Patent Office, but like all statistics, they must be taken with a grain of salt.

Testing that Proved Inherent Properties of Prior Art Accepted by Board

Here is another update on the Corning assault on patents owned by DSM IP Assets (DSM) patents, this one styled as Corning Incorporated v. DSM IP Assets B.V. (IPR2013-00050), involving U.S. Pat. No. 6,323,255.  All 19 claims of the ‘255 patent were placed into the inter partes review trial, based on all five obviousness grounds proposed by Corning.

As in the previous battles, the ‘255 patent relates to compositions that may be used as optical fiber coatings.  In this case, the patent covers coatings that have the properties of resistance to discoloration and high elongation. Specifically, the compositions include “at least one transesterified and/or high-purity monomer” to which the coating’s unique properties can be attributed.

As with the previous Corning v. DSM battles, the key takeaway from the Board’s ruling relates to the inherent disclosure of certain properties of the claims-at-issue in the prior art.  Corning’s over-arching position is that the prior art disclosed the claimed coatings, despite the fact that not all the claimed characteristics of the coatings were explicitly listed in that prior art.  The Board agreed, finding that Corning had established a reasonable likelihood of proving that the 19 challenged claims are unpatentable.

For example, with regard to the limitation that the subject composition, when cured, has “a ΔE value of less than 20 when exposed to low intensity fluorescent light for a period of ten weeks,” Corning acknowledged that the prior art did not disclose this property.  Instead, Corning relied on testing by its employees that showed that the property was inherent in the prior art it cited.

DSM responded by arguing that (1) it was improper to rely upon ex post facto testing to show inherency, (2) no motivation to combine was disclosed, and (3) no showing of “reasonable expectation of success in making the combination” were shown.  The Board rejected each such argument, as explained below.

Ex post facto Evidence

DSM’s argument was based on the erroneous view of the law that an inherent disclosure cannot be part of an obviousness analysis.  As the Board pointed out, “ample case law establishes that inherent disclosure may be relied upon in finding that subject matter would have been obvious at the time of its invention.  E.g., In re Napier, 55 F.3d 610, 613 (Fed. Cir. 1995).”  Order at 11. The Board did point out, however, that unknown properties in the prior art may not be relied upon for providing a rationale for modifying or combining the prior art.  Id.  Corning used the testing in support of the former argument, not the latter.  As such, it was appropriate to consider in the Board’s decision.

Reason to Combine

The Board simply disagreed with DSM that Corning had failed to provide any evidence of a reason to combine.  The art itself, as well as Corning’s expert’s declaration, provided such motivation.

Reasonable Expectation of Success

Again, the Board disagreed with DSM’s finding.  More particularly, the Board stated that “[s]ubstituting a 95% pure monomer for a 90.4% pure monomer does not strike us, on the record currently before us, as a change so drastic that it would raise significant doubt in the mind of a the skilled artisan as tot he properties of the resulting composition.”  Order at 13.  Though the Board left the door open, with this statement, for DSM to provide expert evidence to refute Corning’s position, at this stage of the proceeding, the Board was not convinced that the obviousness argument must fail.

Having accepted Corning’s testing evidence, that proved the inherent properties of the prior art compositions, the Board’s subsequent obviousness analysis was relatively straightforward, resulting in another (preliminary) win for Corning.

39 for 44: Previously Considered Art Survives Again in Grant of Two Inter Partes Review Trials

The Board furthered its early reputation of providing thorough decisions regarding the institution of inter partes review trials, by digging into dependent claims of the challenged patents and allowing certain claims to survive in two cases styled ABB, Inc. v. Roy-G-Biv Corporation (IPR2013-00062 and IPR2013-00074), involving US Patent Nos. 6,516,236 and 8,073,557. The Board granted trial on 7 of 10 challenged claims for the ‘236 patent and 12 of 29 challenged claims for the ‘557 patent.

The patents relate generally to a system that facilitates the creation of hardware-independent motion control software. In particular, the patents describe a high-level motion control application programming interface (“API”) made up of functions that are correlated with driver functions associated with controlling a mechanical system that generates movement based on a control signal.

Patent Owner specifically addressed proposed interpretations of the terms “primitive operations” and “core driver functions.” Because Patent Challenger’s proposed interpretations for the other patent terms did not appear unreasonable, the Board adopted them “at this stage of the proceeding.” We emphasize this point because it reinforces other decisions by the Board that suggest that a Patent Owner can address claim construction issues again after an IPR trial has been initiated.  As to the term “primitive operations” the Board found that Patent Challenger’s proposed definition was overly and did not comport with an explicit definition provided in the specification.

The Board used a similar analysis in adopting the specification definition of “core driver functions,” against Patent Challenger’s argument that the term was too vague. Patent Challenger’s position “ignores the explicit definition in the claim language itself.”  As should be expected, the intrinsic evidence controlled regarding this claim construction issue.

Having addressed the claim construction issues, the Board turned to Patent Owner’s argument that a prior art reference was cumulative because it was considered during the original prosecution and Inter Partes Reexamination of the ‘236 patent. The Board rejected the argument: “While we are cognizant of the burden on the Patent Owner and the Office to rehear the same or substantially the same prior art or arguments that were considered by the Office in a prior proceeding, we decline to reject the petition solely on the ground that Stewart, a reference related to the operating system upon which Gertz’s system is based, is a member of an eight-page list of references on the ‘236 reexamination certificate.” IPR2013-00062 Order at 13.

Despite that minor victory, Patent Challenger’s anticipation arguments were then rejected because they failed to show that operations performed by control tasks in Gertz were “primitive operations,” as that term was defined by the Board, above. With regard to the grounds based on obviousness, the Board was not persuaded by the Patent Owner’s arguments that the Gertz reference taught away from using primitive operations. The Board did, however, find that limitations in dependent claims 5-7 were not disclosed by the proposed combination of references, preventing a finding of obviousness.  Specifically, the Board found Patent Challenger’s argument that the prior art disclosed the limitation contained in these claims to be lacking.  It is interesting to note that, in a footnote, the Board mentioned that although Patent Challenger asserted the limitations were disclosed by another reference, Patent Challenger did not assert a combination that included that reference as a ground of unpatentability. IPR2013-00062 Order at 17.

After completing its analysis, the Board granted trial on some, but not all of the challenged patent claims of both the ‘236 and the ‘557 patents. The Board’s claim construction analyses, which were based on the definitions disclosed in the specification (rejecting an argument that such definitions were vague) doomed some of Patent Challenger’s anticipation and obviousness challenges.

35 for 37: Partial Victory for Patent Owner As Board Puts Some, But Not All, Claims into IPR Trial

iStock_000013398807XSmallIn recent decisions, the Board has had a soft spot for Patent Owners.  Shortly after denying only the second petition for inter partes review, as previously discussed, only 29 of 40 challenged claims were put into an inter partes review trial in the case styled MicroStrategy, Inc. v. Zillow, Inc. (IPR2013-00034), involving US Pat. No. 7,970,674.

The ‘674 patent is directed to the field of electronic commerce techniques related to real estate. The ‘674 patent discloses an approach where valuing homes is responsive to owner input, allegedly resulting in a more accurate, inexpensive, and convenient valuation.

The Board first addressed a claim construction dispute between the parties involving the term “user knowledge about the distinguished home.” Patent Owner advocated a narrower construction limited to “the owner or a person with equivalent knowledge to the owner,” apparently trying to avoid prior art references directed more towards agents. The Board was not persuaded.  Relying primarily on the specification, the Board determined that such a “user” could be any person “knowledgeable about the distinguished home” and was not limited to the owner.  Order at 9-10.  Relatedly, the Board went on to construe “owner of a home” and “new geographically-specific home valuation model” based primarily on the specification of the ‘674 patent.

Turning to the specific grounds of challenge, the Board first granted two anticipation grounds after rejecting Patent Owner’s arguments that one or more limitations was missing. A related obviousness challenge, based on the 102 reference in combination with an additional reference, was denied as redundant. Order at 13. It will be interesting to see what will happen if the Board is later convinced that the anticipating reference does not contain all claim limitations.  Given the Board’s reluctance to date to grant any rehearing request, maybe this possibility is extremely remote.

The Board next proceeded through analysis of the remaining obviousness challenge grounds. In some instances the Board found a reasonable likelihood of prevailing, but other times the Board was unpersuaded because of opposing arguments presented by Patent Owner in its Preliminary Response.  For example, for certain of the challenged claims, Patent Owner successfully argued that Patent Challenger’s combination of references still failed to disclose an element of the challenged claim. Order at 18-19.  On the flip side, grounds for other claims were granted where the Patent Owner “did not set forth any reason as to why [Patent Challenger’s] arguments were unpersuasive.” Order at 23, 25.

After completing its detailed obviousness analysis, the Board granted trial on some, but not all of the challenged patent claims. For some claims, the Board found Patent Challenger’s arguments to be more persuasive, but for other claims, Patent Owner’s silence in its Preliminary Response was deafening. Indeed, Patent Owner’s strong arguments that persuaded the Board to not grant some grounds seemed detrimental to Patent Owner’s interests with regard to other grounds.  That is to say, the Board treated Patent Owner’s silence as a kind of acquiescence to Patent Challenger’s arguments.

33 and 34 for 35: Two Inter Partes Review Trials Instituted Where Patent Waived Preliminary Response

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Kyocera is a believer in the new inter partes review proceedings, having filed three IPR petitions.  Its first two attempts have been met with initial success as it obtained favorable decisions (HERE and HERE) from the PTAB in instituting inter partes review trials against two Softview LLC patents. The cases are styled Kyocera Corporation v. Softview LLC (IPR2013-00004 and IPR2013-00007), involving US Pat. Nos. 7,831,926 and 7,461,353.

As noted in our Report on the first six months of inter partes review proceedings, just 6% of Patent Owners have decided to waive their right to file a Preliminary Patent Owner Response.  Softview is a big part of that statistic, having decided in both of these proceedings to not file a Patent Owner Preliminary Response.  Interestingly, it does not appear that Softview waived the response to speed the proceedings – instead, it just let the deadline for filing its preliminary response lapse without filing anything.  There is nothing in the Board’s decisions, however, suggesting that the waiver impacted the Board’s consideration.

The ‘926 and ‘353 patents are drawn to the scalable display of Internet content, e.g., HTML based content, cascade style sheets (CSS) and XML, on mobile devices by enabling the content to be rendered, zoomed and panned for better viewing on small screens and standard monitors. A client side viewer receiving the Internet content has an Internet browser and uses the simple vector format (SVF) originally designed to handle common computer-aided design (CAD) file formats to describe the current web content. Translation of the content into a scalable vector representation can be done by a third party proxy service, the content provider’s web site, or the client.

Patent Challenger referred to Patent Owner’s proffered claim constructions from co-pending litigation in its Petitions – arguing that such constructions were reasonable.  The Board agreed. It seems clear, in this instance, that Patent Owner took a broad view of the scope of the patent claims before the federal district court and Patent Challenger is using that broad scope to its advantage in the inter partes review proceeding.

The Board then proceeded to go through a workmanlike obviousness analysis using an element by element approach. In the end, the Board granted trial on all challenged claims in both cases, using obviousness grounds that involved a combination of up to four references in some instances. It is not surprising, given that Softview waived its preliminary response, that no key disputes were discussed in the Board’s decisions that bear mentioning here.  If anything, the Board’s decisions were more detailed in its obviousness analysis than most; most likely reflecting the fact that Patent Owner did not “concede” any limitations in a preliminary response.

30 for 31: Prior Art from Original Prosecution Used as a Basis for Institution of Inter Partes Review

iStock_000000202778XSmallThe Patent Trial and Appeal Board continued to give little or no deference to previous decisions by the Patent Office in granting an inter partes review trial in response to a petition filed by Chimei Innolux in a case styled as Chimei Innolux Corp. v. Semiconductor Energy Lab. Co., Ltd. (IPR2013-00038), involving US Pat. No. 7,956,978. Both challenged claims were put into trial based on multiple obviousness grounds.

The ‘978 patent describes LCD devices having two opposing substrates bonded together with a sealing material. The ‘978 patent solves a problem in the prior art by using dummy wiring sections which are nearly equal in height to the other conductive lines to render the seal and consequent gap more uniform.

The Board first addressed two statutory threshold issues. The Patent Owner argued that the petition for inter partes review was improper under section 325(d) because the PTO Examiner previously considered the same prior art references during prosecution of the application leading to the ‘978 patent. The Board rejected this argument because there was no showing of substantially the same arguments, beyond simply using the same prior art references. Order at 6. The Board noted new evidence not considered during the prior examination, including the Patent Challenger’s expert declaration. In general, therefore, a Patent Challenger’s expert declaration, alone, seems like enough to allow prior art previously considered during examination to be used as a basis for inter partes review.

The Board next addressed the Patent Owner’s contentions that the petition should be denied due to a failure to identify all real parties-in-interest, because not all co-defendants in pending litigation were listed. Despite the fact that all co-defendants represented to the district court that they all “participated in filing the instant Petition” and agreed to be bound by this inter partes review, the Board found that insufficient evidence was set forth by Patent Owner to prove that the co-defendants not listed as real parties-in-interest had control over the IPR proceeding. Order at 7.

The Board then proceed through a fairly straight-forward obviousness analysis, failing to find Patent Owner’s objections to the grounds asserted in the petition to be persuasive.  As such, the Board granted an IPR trial on two different obviousness grounds using references cited in the original examination of the application leading to the ‘978 patent, as additionally supported by Patent Challenger’s expert declaration. Maintaining a developing trend in IPR practice, the Board is providing almost no deference to the Patent Office’s previous decisions relating to the patent-in-suit, leaving open the potential for Patent Challengers to re-use prior art references from the original examination.