Concurrent Proceedings

General Plastic Factors & Follow-on Petitions

Last September, the Patent Trial & Appeal Board (PTAB) held that the advanced state of a district court proceeding militated in favor of denying a petition for IPR in accordance with the General Plastic factors (NHK Spring Co. Ltd. v. Intri-Plex Technologies Inc). Given this holding, Patent Owners may now consider speedier forums, such as the International Trade Commission (ITC) as providing incremental protection from a PTAB challenge.

Last week, the Board clarified that consideration of late stage parallel proceedings is done only in the context of assessing discretionary institution of “follow-on” petitions under 35 U.S.C. § 314(a).  In doing so, the Board also highlighted that an advancing ITC action (even in a follow-on petition scenario) may be of a lesser concern than a district court proceeding given its unique nature. Continue Reading Co-Pending ITC Action Less of an Equitable Concern for PTAB?

PTAB Success a Relevant Consideration Under 35 U.S.C. § 285

After Octane Fitness, district courts “may determine whether a case is ‘exceptional’ in the case-by-case exercise of their discretion, considering the totality of the circumstances,” looking at substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated.

As one recent decision makes clear, not only can a successful PTAB trial aid a litigation fee dispute, but the PTAB fees themselves may be recoverable. Continue Reading Leveraging Your PTAB Record to Secure Attorney Fees in District Court

Even Preliminary Proceeding Arguments Notice the Public

It is well-established that statements made by a Patent Owner during an inter partes review (IPR) can constitute prosecution disclaimer— even in papers filed by a Patent Owner before the trial. Aylus Networks, Inc. v. Apple Inc., No. 2016-1599 (Fed. Cir. May 11, 2017)

As a reminder, prosecution disclaimer prevents a patentee that clearly and unmistakably disclaimed a certain meaning for its patent claims during prosecution from recapturing this same meaning during claim construction in a subsequent litigation. As was the case in Aylus, Patent Owners are learning that the timing of such a disclaimer, or lack of express adoption by the Patent Trial & Appeal Board (PTAB), is of no moment. Continue Reading Beware Prosecution History in PTAB Trials

Assignor Estoppel Precluded by AIA Statutes…But What of Other Equitable Defenses?

The doctrine of assignor estoppel bars the assignor of a patent from challenging the validity of the patent after it is assigned. In considering this defense to an AIA trial proceeding, the Patent Trial & Appeal Board (PTAB) had consistently held that this common-law doctrine is subject to abrogation by statute, and that the AIA statutes do exactly that. The Federal Circuit recently agreed.

However, the Board has considered and applied other equitable defenses. For example, the Board has applied waiver (prior to the Federal Circuit’s determination that tribal immunity did not apply to the PTAB). Thus, equitable defenses that do not conflict with the AIA statutes may be leveraged.

One equitable defense that could become more prominent going forward —given the alignment of claim construction standards between the PTAB and courts— is judicial estoppel.

Continue Reading Equitable Defenses at the PTAB

New Director’s Interest in Predictability To Drive PTAB Change

As pointed out yesterday over at IPWatchdog, the USPTO Solicitor has withdrawn as Intervenor in the Federal Circuit appeal between Telebrands Corporation and Tinnus Enterprises (stemming from PGR2015-00018, challenging a patent pertaining to the well-known Bunch-o-Balloons® product on indefiniteness grounds). The USPTO intervened in the earlier appeal to defend the indefiniteness standard applied in the PGR. This is because the applied standard was stricter than that enunciated in Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014). The application of a different, stricter standard caught some by surprise that had not realized that the Federal Circuit endorsed that very standard for agency proceedings in In re Packard, 751 F.3d 1307, 1310 (Fed. Cir. 2014).

I pointed out at the time of this appeal that the Packard indefiniteness standard is grounded in ex parte examination policies and practices.  As such, it was unclear whether the Court’s holding in Packard could be properly extended to AIA trial proceedings. Yet, the Solicitor’s decision to withdraw as Intervenor in the Tinnus dispute is not a sign that the agency lacks faith in its brief. Rather, the change is indicative of a new direction for PTAB trial proceedings. Continue Reading PTAB Likely to Adopt a Philips Construction for AIA Trials in 2018

Federal Circuit to Consider PTAB Sovereign Immunity Defense

State-affiliated entities enjoy immunity from suit in federal courts under the 11th amendment. To date, a handful of such entities have successfully leveraged the same immunity theory to avoid review of their patents before the Patent Trial & Appeal Board (PTAB). While still other Patent Owners have aligned themselves with Native American Tribes in an effort to benefit from their sovereign status in the hopes of avoiding PTAB review.

More recently, in Ericsson v. Regents of the University of Minnesota.the PTAB has determined that sovereign immunity is waived where the sovereign entity files an infringement suit. (here)

Appeal was taken from this decision this week. Continue Reading PTAB Sovereign Immunity Dispute Heads to CAFC

February Webinar to Explore Litigation Strategies & PTAB Antidotes

This month’s edition of the PatentsPostGrant.com free webinar series will be held on Thursday, February 22nd @ 2PM (EST). The February Webinar is entitled: Roadblock PTAB: Litigation Strategies & IPR Antidotes.

Register (here)

Program Description: In the 5+ years since their inception, AIA Trial proceedings have become invaluable tools for defendants facing patent infringement claims, and thorns in the side of many patent owners. As a result, patent owners have worked hard to more effectively navigate or even altogether circumvent the PTAB. Some of the strategies in the last year, which have faced varying degrees of success, include asserting patents in fast track jurisdictions such as the International Trade Commission (ITC), raising Constitutional challenges to the PTAB’s authority, and structuring ownership to include sovereign entities to leverage sovereign immunity defenses.

The February PatentsPostgrant.com webinar is presented by R&G PTAB Practice Chair Scott McKeown & IP Litigation Counsel Matt Rizzolo who will offer their insights and experiences relating to potential “PTAB antidotes” that have been used by patent owners, and will discuss how these and other strategies and tactics may fare in 2018 and beyond.

The formal portion of the webinar will begin at 2PM Eastern and will last for approximately 50-60 minutes. After the presentation there will be a Q&A period. To attend the webinar please sign up via the link above. You will receive a registration confirmation email immediately. Two hours prior to the webinar you’ll receive another email with a link and instructions for joining the presentation. CLE credit will be provided (CA, NYC, VA).

Patentee Estoppel Can Shut Down Related Prosecution

Patent prosecutors might consider PTAB estoppel a pure post-grant concern. That is, a litigation issue restricted to district courts after a failed PTAB challenge, or an issue raised in the context of a second-bite at the PTAB apple. But, PTAB estoppel can effect both failed petitioners and unsuccessful patent owners. Patent owner estoppel, often overlooked, is only now beginning to impact patent prosecution.

Prosecutors beware. Continue Reading The PTAB Estoppel Keeping Patent Prosecutors Awake at Night

What Exactly is the “Thrust of the Rejection?”

Every so often a decision comes out of the USPTO’s Patent Trial & Appeal Board (PTAB) or the Federal Circuit that has immediate value for patent prosecutors. For example, back in June, the Federal Circuit analyzed the degree of corroboration necessary for an In re Katz declaration.  Earlier this week, the Court reviewed an appeal from an inter partes reexamination in Honeywell Intl. Inc. v. Mexichem Amanco Holding S.A. de C.V. et al. to determine whether or not the Board’s reliance on a reference different from those of the patent examiners underlying rejections constituted a “new rejection.”  The Court’s discussion, especially that found in the dissent, may help shed light on this somewhat amorphous standard.

While a new rejection analysis may appear to be limited in relevance to patent prosecution and appeals before the PTAB, this same analysis can be helpful in navigating Administrative Procedure Act (APA) compliance in AIA trial proceedings.
First, the “new rejection” framework stems from notice and due process concepts of the APA. As discussed previously in the AIA trial context, 5 U.S.C. § 554(b)(3) prevents the Patent Trial & Appeal Board (PTAB) from introducing new claim interpretation theories without notice, or opportunity to respond.  In patent prosecution and appeals before the PTAB, this procedural concern often manifests itself as a change in a rejection that so changes the “thrust” of the earlier positions that it would violate due process to close prosecution or enter an appeal decision absent further opportunity for the Applicant/Appellant to respond on the merits.

Turning back to Honeywell, the Federal Circuit vacated and remanded the PTAB’s decision rejecting numerous claims in two merged inter partes reexaminations. Part of the reason for the majority’s remand was that the PTAB relied on a new ground of rejection.  Specifically, the PTAB rejected Honeywell’s evidence of unexpected results in light of the “”Omure reference, on the grounds that this reference demonstrated the Patentee had not established a nexus to its secondary indicia evidence.  As noted by the majority, Omure—while briefed by the parties—was not explicitly relied upon by the Examiner. Thus, the Court concluded that the PTAB’s reliance on Omure constituted a new ground of rejection in violation of the APA. (not a “new ground” per se, more a “new evidentiary” basis for denying the patentee’s argument)

Judge Wallach dissented from this part of the opinion, concluding that the PTAB did not issue or rely on a new ground of rejection.  The dissent (here) noted that:

When considering whether the [PTAB] issued a new ground of rejection, the ultimate criterion of whether a rejection is considered new in a decision by the [PTAB] is whether applicants have had fair opportunity to react to the thrust of the rejection.

Which begs the question: What exactly is the “thrust” of a rejection?

Judge Wallach explains that the PTAB is not limited to reciting and agreeing with the Examiner’s rejection verbatim, and may further explain the rejection and respond to parties’ arguments.  Dissent Op. at 2.  On the other hand, if the PTAB finds facts not found by the examiner regarding the differences between the prior art and the claimed invention, and these facts form the basis for the PTAB’s rejection, then the PTAB improperly enters a new ground of rejection.  Id.

Applying this reasoning to the facts of Honeywell, Judge Wallach found the majority’s reliance on statements by the PTAB that they “disagreed” with the Examiner were not sufficient to rise to the level of a new rejection.  Rather, having concluded that the record supported a finding of prima facie obviousness, the PTAB next considered evidence of secondary considerations.  The Board concluded there was no nexus, without relying on Omure.  Thus, according to Judge Wallach, the “PTAB’s analysis of secondary considerations does not include an improper new ground of rejection.”  That is, although the PTAB discussed Omure in other portions of its analysis in rejecting Honeywell’s secondary considerations argument, it was not the principal evidence upon which the PTAB’s rejection was based, and thus should not be considered a new ground of rejection.  Rather, the PTAB was simply providing a more thorough explanation of the Examiner’s conclusion, and limiting the PTAB to “verbatim repetition of the examiner’s office actions…would ill-serve the [PTAB’s] purpose as a reviewing body.”

The takeaway here is that the “thrust” of the rejection balances the interests of notice and due process with the administrative flexibility necessary to explain decisions differently.  Where the “thrust” may be argued to have shifted will depend upon whether or not the difference in explanation is supplementary in nature, or altogether new, principal evidence. As demonstrated by Honeywell reasonable minds may differ in this analysis.

Court Declines Review of Finality Issue

The CAFC first considered the validity of Baxter International’s U.S. Patent 5,247,434 (the ‘434 patent) on appeal from a patent infringement litigation with Fresenius. In that first 2009 appeal (now commonly referred to as Fresenius I), the Court upheld the patent over certain prior art. After Fresenius I, the litigation dispute went back to the district court on a damages related remand.

Meanwhile, in May 2012 a patent reexamination proceeding initiated by Fresenius in 2007 made its way to the CAFC. The reexamination was based on much the same prior art as previously considered in Fresenius I. This time, the CAFC affirmed the determination of the PTAB (then BPAI) that the claims were obvious over the applied prior art applying the more liberal standards for USPTO challengesEn banc review was then sought, but declined by the CAFC. A petition of certiorari on the seemingly conflicting results was also pursued, but denied by the Supreme Court.

Thereafter, Fresenius II made it’s way to the CAFC to determine whether the outstanding damage award of the district court was enforceable in light of the CAFC’s decision in In re Baxter (2012). The CAFC held that since the damage award was not yet final, it was essentially voided by the cancellation of the patent in reexamination. Once again, en banc review was sought, and denied by the CAFC, last summer. A second petition for certiorari was then pursued for Fresenius II. This most recent petition was denied today, finally ending the dispute.

Given the high court’s lack of interest in Fresenius I, which more squarely presented the issue of seemingly conflicting final results, it is not at all surprising that the latest plea to the highest court was also denied.

The amicus briefing in particular sought to inject a broader policy spin on the finality determination of Fresenius II.  But, in the end, the fact pattern of this dispute was simply too unique.  30+ years of ex parte patent reexamination experience has resulted in analogous situations occurring once or twice. While the amicus briefs warned of a flood of reexamination requests in view of the Fresenius result, experience has demonstrated the exact opposite. That is, such ex parte patent reexamination challenges are far from effective, and routinely outlast most litigation disputes. For this reason, the world of post grant patent challenges has evolved since the early 1980’s to the expedited, inter partes style opposition of the America Invents Act. (AIA)

The new patent challenge proceedings of the AIA such as Inter Partes Review (IPR) and Post Grant Review (PGR) must be initiated relatively early in patent disputes, and must conclude within 12-18 months of trial institution. As, such, outside of perhaps the ITC, it would be unlikely for a concurrent court proceeding to reach determination before the USPTO’s Patent Trial & Appeal Board (PTAB). Thus, the concern that these proceedings could serve to undermine an earlier damage award is also misguided.

For the short term at least, Covered Business Method (CBM) patent challenges are the exception. CBM proceedings can be filed late in a litigation. For example the SAP v. Versata dispute is one that immediately comes to mind. Yet, once the anomaly of pre-AIA verdicts are worked out of the system, it is hard to imagine that an infringer would play out years of litigation in the hopes of unplugging a significant damage award by CBM (if even available), or take their chances on a slow, one-sided reexamination proceeding.