Business Method Patent Challenge
By Scott A. McKeown
| February 22, 2017
Is In re Packard the Correct Standard for AIA Trials?

In re Packard Inextricably Linked to Patent Examination Practices?


Back in 2014, the Federal Circuit determined the standard for a USPTO indefiniteness analysis in In re Packard (here). This standard was more deferential to the agency as compared to the district court's "reasonable certainty" standard later enunciated in Nautilus v, Biosig Instruments Inc.  When Packard issued, I questioned whether that standard could be argued to apply to post-grant proceedings. This was because the Court's determination in Packard was deeply rooted in patent examination practices.

More recently, the Patent Trial & Appeal Board (PTAB) has adopted Packard in some of its decisions analyzing claims under 35 U.S.C. § 112 (e.g., PGR20015-00018, Telebrands Corp. v. Tinnus Enterprises LLC). But, decisions of the Federal Circuit since Packard, have made clear that grounds of unpatentability in AIA trial proceedings are not akin to rejections in patent examination.  As explained by the court in In re Magnum Oil Tools Int’l, Ltd. the prima facie procedural mechanisms of patent examination do not comport with proper AIA trial practices.

Will the CAFC pull the rug out from under the PTAB's application of Packard in AIA trails?

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By Scott A. McKeown
| February 10, 2017
Article III Standing Found for PTAB Appeal Where Threat of Suit

Article III Standing for PTAB Appeals Once Again Revisited by Federal Circuit


Last month, the Federal Circuit made clear that Article III standing is necessary for petitioners to appeal from adverse decisions in AIA trial proceedings in Phigenix, Inc. v. ImmunoGen, Inc. (here)  The Phigenix decision follows an earlier decisionConsumer Watchdog v. Wisconsin Alumni Research Foundation (Warf) finding the same Article III standing requirement for the now defunct inter partes patent reexamination. 

Yesterday, in PPG Industries, Inc., v. Valspar Sourcing, Inc., the Federal Circuit again addressed the issue of standing in appeals from the Patent Trial and Appeal Board (PTAB). At issue in these consolidated appeals was whether PPG Industries, Inc. (“PPG”) had standing to appeal the PTAB’s decisions in two inter partes reexaminations where the patent owner Valspar Sourcing, Inc. (“Valspar”) was the prevailing party. Showcased in this appeal is evidence deemed to satisfy Article III standing for an appeal from the PTAB.
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By Scott A. McKeown
| January 3, 2017
PTAB Trials to Increase in Cost for 2017

Fee Setting Authority to be Exercised in 2017 

The USPTO discussed its first ever fee increase under the fee setting authority of the America Invents Act (AIA) in November of 2015.  At the time, an initial proposal was provided to the Public Patent Advisory Committee (PPAC) for review.  While the hope was to have the proposed fee adjustments take effect on October 1, 2016 (start of FY 2017), significant stakeholder feedback and considerations have, understandably, slowed the rule making process.

Prior to the close of 2016, a Notice of Proposed Rule Making (NPRM) issued requesting comments from the public on proposed fee increases for post-grant patent proceedings, including AIA trials.  With comments collected last month, a Final Rule Notice is imminent.  

Expected Patent Trial & Appeal Board (PTAB) fee increases include:

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By Scott A. McKeown
| December 14, 2016
CAFC Explains PTAB Expertise & Its Role In IPR Fact Finding

Expert Agency Need Not Accept Expert Testimony


AIA trial practices of the Patent Trial & Appeal Board (PTAB) are often analogized to that of the district courts. Yet, in practice, there are more differences than similarities between the two. The PTAB, unlike the district courts, is an expert agency. For this reason, its decisions are reviewed on the substantial evidence standard of the Administrative Procedure Act (APA). 5 U.S.C. § 706. Further the PTAB applies the preponderance of the evidence evidentiary standard, which stands in stark contrast to the clear and convincing standard of the district court.  Taken together, these two foundational differences are worlds apart from district court trial practices, and, serve as the primary drivers behind the appeal of the PTAB to patent challengers.

Counsel more accustomed to the favorable patentee standards of the district courts, often times find themselves struggling with the seemingly bizarro world of PTAB administrative trials— such as the agency's ability to disregard expert testimony that would be given weight in the district courts.
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By Scott A. McKeown
| November 22, 2016
CAFC Defines Outer Boundaries of CBM Eligibility

"Incidental to" or "Complementary to" Financial Products/Services is Not Enough


Since 2012, the Patent Trial & Appeal Board (PTAB) has reined in its definition of a covered business method (CBM) patent under Section 18 of the AIA. In early CBM decisions, it was enough for the patent specification to reference some incidental or complimentary financial service aspect for the PTAB to find CBM eligibility. Since those early decisions, the PTAB has recalibrated its CBM eligibility analysis. Today, the Board increasingly seeks out claim language explicitly related to financial transactions/services. 

Yesterday, in Unwired Planet, LLC v. Google Inc., (here) the Federal Circuit had occasion to consider CBM eligibility in the context of one of those earlier PTAB decisions. In Unwired, the CAFC rejected the specification-based analysis, a decision that is sure to reverberate across pending CBM appeals of the same vintage now before the Federal Circuit.

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By Scott A. McKeown
| November 10, 2016
Are Partial AIA Trial Institutions a Good Thing?

Dispute Over AIA Trial Institution Practices ...Be Careful What You Wish For


Since the advent of AIA trials, opponents of the system have attempted to unravel them.  First, BRI was challenged, then 7th amendment constitutionality, and a host of other administrative issues; all have failed to date. Yet, a few challenges to fundamental AIA trial practices persist. Earlier this week, the Federal Circuit denied en banc review in one such remaining challenge, in SAS Institute Inc., v. ComplemenSoft LLC.  

As previously discussedSAS challenged all sixteen claims of ComplementSoft’s patent 7,110,936 in inter partes review (IPR). Trial was instituted for claims 1 and 3-10, but claims 2 and 11-16 were denied institution. On appeal to the CAFC, SAS argued that it was inefficient to institute on only a subset of claims, and that the controlling rule authorizing partial institution (37 C.F.R. § 42.108(a) was in direct conflict with statutes 35 U.S.C. §§ 314(a)/318(a); the Federal Circuit disagreed (Judge Newman dissenting).

If it were agreed that the statute "at least one claim" is in conflict with the rule (perhaps on eventual appeal to the SCOTUS) is this really something petitioners or patentees should want?  

Probably not.
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By Scott A. McKeown
| October 17, 2016
PTAB to Adjust Attorney Client Privilege Rule

Privilege Expanded to Cover Communications with Foreign Agents


Tomorrow's Federal Register will include a NPRM to amend the rules of practice before the Patent Trial and Appeal Board (PTAB). The proposed rule recognizes that, in connection with discovery conducted in certain proceedings at the United States Patent and Trademark Office, communications between U.S. patent agents or foreign patent practitioners and their clients are privileged to the same extent as communications between clients and U.S. attorneys. (advanced copy here)

The rule would apply to Inter Partes Review (IPR), Post-Grant Review (PGR), the transitional program for Covered Business Method (CBM) patents, and derivation proceedings. This rule would clarify the protection afforded to such communications, which is currently not addressed in the rules governing Board proceedings at the USPTO.

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By Scott A. McKeown
| October 13, 2016
New PTAB Evidence Option Not Moving the Needle So Far

Preliminary Responses Accompanied by Declaration Evidence: Early Results 


Back on May 1st, the Patent Trial & Appeal Board (PTAB) began to accept new testimonial evidence with patentee preliminary responses.  The PTAB implemented this change to address complaints that patentees were disadvantaged by previous rules precluding such evidence from accompanying a preliminary response to the petition. It was argued that the previous rules were especially imbalanced as almost all petitions were accompanied by petitioner declaration evidence.  I had my doubts.

Now that we are some 5 months removed from the rule modification, early results are in.  

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By Scott A. McKeown
| October 3, 2016
PTAB Trial Fees Slated for Significant Increase in 2017

Fee Setting Authority to be Exercised for FY 2017 

The USPTO discussed its first ever fee increase under the fee setting authority of the America Invents Act (AIA) in November of 2015.  At the time, an initial proposal was provided to the Public Patent Advisory Committee (PPAC) for review.  While the initial hope was to have the proposed fee adjustments take effect on October 1st (start of FY 2017), significant stakeholder feedback and considerations have, understandably, slowed the rule making process.  At long last, the Notice of Proposed Rule Making (NPRM) issued today.  Since a Final Rule Notice must follow the NPRM, the proposed fee adjustments will not go into effect until calendar year 2017.

Notable Patent Trial & Appeal Board (PTAB) fee increases include:

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By Scott A. McKeown
| September 29, 2016
Forum Selection & PTAB Estoppel Burden

315(e) Estoppel as an Affirmative Defense


As most are aware, completed AIA trial proceedings have estoppel consequences for failed petitioners.  For example, an unsuccessful Inter Partes Review (IPR) petitioner of a given patent claim, real party in interest, or privy of the petitioner, is estopped from asserting that the same claim is invalid in a civil or ITC action on any ground that the petitioner raised or reasonably could have raised during the failed IPR. (35 U.S.C. § 315 (e)(2)). The same estoppel applies to requesting or maintaining a proceeding before the USPTO with respect to such a claim (35 U.S.C. § 315(e)(2)).  As can be appreciated from this statutory framework, whether before the courts or the Patent Trial & Appeal Board (PTAB), Congress was clearly interested in preventing patent challengers from getting the proverbial second bite at the apple.

Occasionally, however, a petitioner will uncover new prior art that could not have reasonably have been raised in the earlier PTAB proceeding  Petitioners seeking to overcome the affirmative defense of statutory estoppel may find that the courts are far more receptive in this regard than the PTAB.
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