PTAB 2019: A Year of New Precedent

There were a number of high profile developments at the Patent Trial & Appeal Board (PTAB) in 2019. New procedures for amending claims, Practice Guide updates to thwart parallel petition filings, a successful constitutional challenge based on the Appointments Clause, and another SCOTUS review of the PTAB appeal bar.  But, not all of these developments impact the day-to-day life of PTAB practitioners.  Of greater interest to PTAB practitioners are the developments that change the game for the average AIA trial, with this in mind, below are my Top 5 PTAB Practitioner Developments of 2019.

At a high level, 2019 was all about new PTAB precedent.  With the Director’s Precedential Opinion Panel changing the way decisions were designated in 2019, more precedent issued in 2019 on AIA trials than all of the proceeding years combined. This guidance settled some long-standing disputes among panels on such questions as issue joinder, while also refining discretionary factors and considerations under 35 U.S.C. 314(a), which brings us to the Top 5:

5.   314(a) Extended to Different Petitioners and Looks to Potential District Court Overlap (NHK Spring & Valve Corp, Precedential May 7, 2019)

Expansion of discretionary denials of institution under 314(a)/325(d) was my top development for 2018.  The developments were made precedential in 2019.

As a reminder, in NHK Spring Co., Ltd. v. Intri-Plex Techs., Inc.,(here) IPR2018-00752 (PTAB Sept. 12, 2018) (Paper 8), institution was denied  under 35 U.S.C. § 325(d) after applying the Becton Dickinson factors and under 35 U.S.C. § 314(a) after determining that instituting review would be an inefficient use of Board resources where the district court proceeding was nearing final stages and the Board proceeding would involve the same claim construction standard, the same prior art references, and the same arguments as in the district court.

A more recent decision in Valve Corp. v. Elec. Scripting Prods., Inc.,(here) IPR2019-00062, -00063, -00084 (PTAB Apr. 2, 2019) (Paper 11)  was also designated precedential. This decision denies institution after applying the General Plastic factors, explaining that the Board’s application of the General Plastic factors is not limited to instances when multiple petitions are filed by the same petitioner. This decision also explains that when different petitioners challenge the same patent, the Board considers any relationship between those petitioners when weighing the General Plastic factors.

The application of these holdings to all proceedings, greatly changed the calculus for petitioners on petition timing, especially for multi-defendant suits.

4.  Flexible Approach to Public Accessibility Determinations  (Hulu, LLC, v. Sound View Innovations, LLC:, Precedential by POP Panel December 20, 2019)

Prior to this decision of the POP, there was significant panel dependency in assessing the public accessibility of a non-patent literature document at institution.  Some panels seemed to require a showing of a likelihood of public accessibility to move forward, while others  required a more definitive showing.

In its now precedential decision, the Board found that a more flexible approach was needed at institution.

The  POP explained that the Board will consider the totality of the circumstances, including indicia on the face of the reference, to determine whether petitioner has established a reasonable likelihood that the reference is a printed publication.  The Board was unwilling to hold that a particular indicia is per se sufficient to establish that a reference qualifies as a printed publication, emphasizing (here):

[T]he burden is on the petitioner to identify with particularity evidence sufficient to establish a reasonable likelihood that the reference was publicly accessible before the critical date of the challenged patent, and therefore that there is a reasonable likelihood that it qualifies as a printed publication.  .   .  .  ¶ We do not hold that any particular indicia per se is sufficient at the institution stage. Rather, the indicia on the face of a reference, such as printed dates and stamps, are considered as part of the totality of the evidence.

In justifying the “likelihood” showing the Board emphasized petition requirements, and noted that petitioner has some limited opportunities to present new evidence later, including: (1) in a reply to a patent owner preliminary response; (2) in a reply to the patent owner response; and (3) in a motion to file supplemental information.

This holding gives some comfort to petitioners that their public accessibility proofs at institution will no longer be subject to varying degrees of scrutiny, Still, a best practice is to include your evidence of public accessibility with the petition to increase your chances that, in aggregate, the evidence establishes a reasonable likelihood that the reference was publicly accessible.

3.  RPI Can be Fixed Without Resetting the Filing Date (Adello Biologics & Proppant Express, Precedential April 16, 2019)

In 2019 the PTAB officially changed its position on whether a post-filing change to an RPI designation requires a resetting of the petition filing date. (Abandoning representations the agency made to Congress to the contrary)

First, in Adello Biologics LLC v. Amgen Inc., Case PGR2019-00001 (PTAB Feb. 14, 2019) (Paper 11) the Board granted Petitioner’s’ Motion to Update its Mandatory Notices before the institution of trial and denied Patent Owner’s request for permission to file a Motion for Discovery of facts surrounding a real party-in-interest (RPI) issue. The Board determined that Petitioners’ update to the Mandatory Notices was permissible under 35 U.S.C. § 322(a)(2) without assigning a new filing date to the Petition because Petitioners did not act in bad faith or engage in gamesmanship in omitting the RPI from the Mandatory Notices in the Petition and Petitioners’ delay did not result in any undue prejudice to Patent Owner.

In another decision designated precedential the same day, Proppant Express Investments, LLC v. Oren Technologies, LLC, Case IPR2017-01917 (PTAB Feb. 13, 2019) (Paper 86) the Board denied Patent Owner’s Motion to Terminate. The Board determined that the Petition was not time-barred under 35 U.S.C. § 315(b) in view of the Federal Circuit’s guidance in Applications in Internet Time (AIT) because the RPI that Petitioner added in an update to its mandatory notices would not have been time-barred if named at the time the Petition originally was filed. The Board further determined that the addition was permissible without assigning a new filing date to the Petition. This order also sets forth a number of factors that the Board previously has considered when allowing a new RPI to be named without assigning a new filing date to a petition, including: (1) avoiding 315(b) bar or estoppel rules; (2) prejudice to patent owner as a result of the delay; (3) bad faith; and (4) gamesmanship.

This development makes the RPI battles that were raging in many routine filings less attractive for Patent Owners, at least those not being challenged by customer/supplier entities as discussed next.

2.  The Rise Of Privity Battles (Ventex Co., Ltd. v. Columbia Sportswear N. Am., Inc., Precedential Apr. 16, 2019)

With RPI becoming less of a focus, the shift for some Patent Owner’s will be to privity; especially where there are Joint Defense Groups, and Indemnification scenarios.  While the Ventex decision was designated precedential for its discussion of a an RPI/privy that would have been time barred at the time of petition filing, it is most noteworthy for its outline of how to determine a privy. In the decision, the Board explains that satisfying one of the Taylor v. Sturgell factors is enough to find privity.

In decisions since, the Board has taken interest in the relationships between parties, including permitting discovery of joint defense agreements and indemnification documents. These developments should raise serious flags for those petitioners that are typical indemnitors (suppliers) that may have been slow to react to such claims in the past.  The supplier 315(b) clock may start ticking when your customer is sued.

1.  More Power to the PTAB (Dex Media Inc. v. Click-To-Call Technologies, LP., SCOTUS Pending)

Finally, although this result will be felt in 2020, the writing was put on the wall in 2019.

In December 2019 the SCOTUS heard arguments in Dex Media Inc. v. Click-To-Call Technologies, LP to assess  the scope of the appeal bar of 35 U.S.C. § 314(d) for AIA Trial Proceedings.  More particularly, whether disputed violations of 35 U.S.C. § 315(b) are barred from appeal.

As a reminder, the court initially addressed the appeal bar in Cuozzo, commenting that the appeal bar would not preclude all appeals, such as “shenanigans” where the agency exceeds its statutory bounds. The Court addressed the bar again, arguably in passing, in SAS v. Iancu: “Cuozzo concluded that Section 314(d) precludes judicial review only of the Director’s ‘initial determination’ under Section 314(a) that ‘there is a “reasonable likelihood” that the claims are unpatentable on the grounds asserted’ (emphasis added).  It was the perceived tension in these statements that was the focus of Dex debate.

While the parties debated whether the statement in SAS was correct at oral argument, several justices of the Court seemed to take the view that technical violations, such as 315(b) were not important enough to constitute a “shenanigan” under Cuozzo given the fact that the ultimate determination had other paths to appellate review, and unraveling such a determination for such a violation seemed counterproductive. For example, Justices Kagan and Ginsburg explained it would be “a little bit silly to go back to square one” and that there was “something unseemly about nullifying the determination on the merits.” These statements seem to communicate a belief that such issues do not rise to the level of “shenanigans.” Other Justices commented on the perceived “small potatoes” nature of the technicality. (transcript here)

Given the Court’s satisfaction that there are other paths to appellate review on the merits case (perhaps satisfying the separation of powers concern for this appeal bar), and the view that this particular issue is more in the way of a technicality, it is my expectation that the Court will tighten the appeal bar in 2020 to preclude 315(b) appeals, which would likely also sweep in other common technical disputes now on appeal, such as RPI/privity disputes.  This will limit AIA trial appeals to “meat and potatoes” prior art and claim construction discussions, and perhaps, more importantly shield many other determinations from appellate review, raising the stakes for practitioners to find their success before the Board.

Honorable mentions:  Yes, the Appointments Clause issue was a big deal in the last quarter of 2019.  But, it remains to be seen if this development will have any practical impact on more than a handful of cases, my prediction is that it will not.

The Amendment PIlot was another noteworthy development for practitioners in 2019, but is also limited to those cases where amendment makes sense; which is maybe 10-15%.

The very first POP decision on the topic of issue joinder (Proppant Express Investments v. Oren Technologies), is likely to be reversed, and, in any event, it is a relatively uncommon scenario.

Finally, the PTAB’s crack down on parallel petitions (what I call “pile on”) was not a widespread abuse, so this change is also limited in impact.

Later this week I’ll post my Top 5 PTAB Developments of 2019 for Patent Litigators.