Agency Memorandum Clears Up Long Standing PTAB Debate…For Now

Earlier this week, a guidance memo was issued to the Patent Trial & Appeal Board (PTAB) on the use of Applicant Admitted Prior Art (AAPA) in IPR proceedings.  Much like the agency’s earlier 101 Guidelines on Patent Subject Matter Eligibility, the AAPA Guidance is more a pronouncement of the agency’s independent view of the law as opposed to more traditional implementation guidance on regulatory practices or new CAFC/SCOTUS jurisprudence.  As we know from the Federal Circuit’s feedback on the 101 Guidelines, such independent pronouncements are given little weight outside the agency.

Nevertheless, it is at least helpful to practitioners to have a definitive answer on this issue given the years of PTAB panel variability.  But, this guidance seems a bit short-sighted to my eye.

The memo (here) concludes that that the basis for an inter partes review (IPR) must be a prior art patent or printed publication, and that statements regarding prior art in the challenged patent therefore cannot serve as the basis for instituting an IPR.  But, such statements, may provide evidence of the general knowledge possessed by a person of ordinary skill in the art, and may be used to support an obviousness argument in conjunction with one or more prior art patents or printed publications.

So, AAPA can still be leveraged, just not as an actual prior art reference of a trial ground.

The Director’s conclusion is largely based on the statutory language ”prior art consisting of patents or printed publications.” The memo explains:

[A}ny patent that is used as the “basis of’ a request for inter partes review must be a prior art patent, not the challenged patent.  A patent cannot be prior art to itself, and thus the patent challenged in the IPR cannot be said to be among the “patents” of which the “prior art” “consist[s].” In other words, the challenged patent itself, or any statements therein, cannot be the “basis” of an IPR.

My problem with this conclusion is that reexamination applies AAPA in combination with other patents and printed publications, and has done so for decades based upon identical statutory language. While the memo is careful to explain that the guidance does not apply to reexaminations — given the CCPA blessed the AAPA being used as prior art as far back as 1975— it largely glosses over this inconsistency by arguing that the CAFC has never directly rebutted the Director’s theory.

The memo briefly notes:

This Memorandum’s reading of § 311 (b) is also consistent with ex parte reexamination practice, which likewise contains a statutory provision that limits the “basis” for a request to “prior art consisting of patents and printed publications.” 35 USC§§ 302, 301(a)(1). In reexaminations, admissions “may not be the basis for establishing a substantial new question of patentability. However, an admission by the patent owner of record in the file or in a court record may be utilized in combination with a patent or printed publication.” Manual for Patent Examination Procedure § 2258 (I)(F)(1). The Federal Circuit has upheld the use of specification statements in reexamination in combination with prior art patents or publications, albeit without specifically addressing the limitation that the request be “on the basis of prior art consisting of patents and printed publications.”

(emphasis added)

This reasoning overlooks the bigger picture.

First, the AIA was drafted to replace and improve the previous inter partes reexamination system. The use of the identical “basis” and “patents and printed publications” language in these statutes was not accidental. The point was to build up from this foundation. This foundational language simply makes clear that the scope of any post grant analysis should be limited to documented evidence. That is, by looking only at documentary, technical evidence (as compared to on-sale bar, public use, etc.), the agency can best apply its expertise in a timely manner.

MPEP 2258 explains that analyzing AAPA is no different than prior art patents and printed publications:

An admission as to what is in the prior art is simply that, an admission, and requires no independent proof. It is an acknowledged, declared, conceded, or recognized fact or truth. While the scope and content of the admission may sometimes have to be determined, this can be done from the record and from the paper file or IFW file history in the same manner as with patents and printed publications. To ignore an admission by the patent owner, from any source, and not use the admission as part of the prior art in conjunction with patents and printed publications in reexamination would make it impossible for the examiner to properly determine the scope and content of the prior art  . . .

(Internal cites omitted, underlining added)

On what basis can we conclude that Congress intended to take documented admissions off the table for prior art application in AIA trials when it drafted those statutes with the very same language as the reexamination statutes? Indeed, there is no difficulty whatsoever for the agency to review documentary admissions just as it has been doing for decades in patent examination/reexamination. Given the use of the same statutory language, surely there is at least some presumption of legislative acquiescence to earlier jurisprudence on the scope of patent reexamination.  There is no basis in the AIA statutes or legislative history to conclude that when Congress set out to improve upon the inter partes reexamination system (a decade in the making) that Congress would allow ex parte reexaminations to remain superior in this respect to AIA trials.

The Federal Circuit will likely get a chance to weigh in on this issue as  AAPA grounds previously accepted for trial make their way out of the agency.