Inter Partes Review

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New Declaration Evidence Proper If Rebutting Patentee Arguments to Trial Grounds

The Patent Trial & Appeal Board (PTAB) assesses the content of a patent challenger’s petition (in view of any patentee preliminary response) to determine whether or not to institute an AIA trial proceeding.  If trial is instituted, the Patentee may submit a Patentee Response together with any supporting testimonial evidence.  In most cases, the Patentee Response is the last Patentee response on the merits. Thereafter, the Petitioner, which has the burden of demonstrating unpatentability, is given the last substantive filing via its Petitioner Reply. A few months later, the oral hearing marks the conclusion of the formal trial schedule.

Since the Petitioner is provided with the last substantive response, a common dispute in AIA trial proceedings is the content of the Petitioner Reply.  That is, Patentee’s often argue that arguments or testimony of the Petitioner Reply are “new.”  This raises the question of whether or not the trial is limited to only that material present in the petition filing, or if it also encompasses rebuttal arguments, and more particularly, new rebuttal testimony of a declarant.

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Continue Reading CAFC Endorses Due Process of PTAB Trial Mechanics

Fee Setting Authority to be Exercised for FY 2017 (Oct. 2016)

In advance of the November 19, 2015 Patent Public Advisory Committee (PPAC) meeting, the USPTO has distributed its first fee change plan.  As a reminder, the agency was given fee setting authority under the America Invents Act, this is the first time that authority is being exercised.  The PPAC will provide input on the proposed fees (both patent and trademark) at its upcoming meeting.  Thereafter, the USPTO will issue a Federal Register Notice in January of 2016, with plans on a final notice of rulemaking, and implementation for fiscal year 2017 (October 1, 2016). 

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

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Continue Reading USPTO Proposes Hike in PTAB Fees for 2016

Secondary Indicia of Greater Value in Bio/Pharma

The submission of objective evidence of non-obviousness is rarely effective in the predictable arts (i.e., mechanical/electrical).  This is because such evidence must have a “nexus” to the claimed invention.  And, as the most common secondary indicia is “commercial success,” rarely do broadly drafted patent claim elements so cleanly coincide with sales results.  Long-felt but unsolved need is a further secondary consideration that is less prevalent in the predictable arts as it is in more traditional, laboratory driven industries.  Nexus is a significant hurdle in the predictable arts.

On the other hand, patent claims in the unpredictable arts, such as new drug formulations can have an especially compelling nexus to market appeal and unfilled need.  Where a drug is an improvement over existing formulations, or an altogether new treatment, commercial success and long, unmet need are easily tied to the specific formulations of the claims.  For this reason, secondary indicia of non-obviousness is a far more compelling rebuttal to a patentability challenge of the USPTO’s Patent Trial & Appeal Board (PTAB).

Given the modest, but growing rate of PTAB challenges in the unpredictable arts, petitioners should be wary of challenging especially popular drug formulations.
Continue Reading Secondary Considerations More Effective in Unpredictable Arts

New De Facto Precedent on Question of Issue Joinder

In Target Corp. v. Destination Maternity Corp (IPR2014-00508), the Board departed from previous PTAB practice on issue joinder for the first time. That is, up until Target, a same petitioner was able to join a first-filed petition with a later filed, second petition (i.e., “issue joinder). The first Target decision determined that issue joinder was outside of the statutory authority granted by 35 U.S.C. § 315(c). cf. Microsoft Corp. v. Proxyconn, Inc., (IPR2013-00109, Feb. 25, 2013). Thereafter, an expanded, but divided, panel, reversed, that finding on rehearing. Since that time, as the ultimate decision in Target  was not precedential, the question of whether or not issue joinder is permitted by statute has become panel dependent.

Now, based upon a recent decision of the Board (which tracks a recent brief filed by the USPTO with the CAFC), it appears the Board is moving toward a more consistent policy of accepting issue joinder.
Continue Reading PTAB Moves Toward Consistency on Question of Issue Joinder

PTAB Finds IPR Filing of Hedge Fund Has Merit

Today, in IPR2015-00988, the Patent Trial & Appeal Board (PTAB) instituted review of Cosmo Technologies patent 7,773,720. The patent is directed to controlled release oral pharmaceutical compositions containing 5-amino salicylic acid, also known as mesalazine or 5-ASA, as an active ingredient. Mesalazine is used to treat Crohn’s…

315(b) Bar is Not an Ultimate Issue of PTAB Authority to Invalidate

Back in July, the Court of Appeal for the Federal Circuit (CAFC) determined that a question of CBM eligibility was excepted from the appellate review bar for PTAB institution determinations. The exception for CBM eligibility was found because this question pertains to the PTAB’s “ultimate authority to invalidate.” Versata Dev. Grp., Inc. v. SAP America, Inc. 793 F.3d 1306 (Fed. Cir. 2015). Since the Versata decision, subsequent appeals from the PTAB have probed the boundaries of the exception for other “standing” type issues.

In Achates Reference Publishing Inc. v. Apple Inc., decided yesterday (here), the question presented to the Court was whether or not the petitioner time bar to IPR (35 U.S.C. § 315 (b), i.e.,12 month widow) was an issue of the PTAB’s “ultimate authority to invalidate.”…
Continue Reading CAFC Finds 315(b) Bar to IPR Not Reviewable on Merits Appeal

Senate Proposal Seeks Separate Reexamination Track

Last year, I pointed out that the Central Reexamination Unit (CRU) had extra capacity since inter partes patent reexamination filings were abolished with the passage of the America Invents ACT (AIA) . And, given the adjudicatory mission of the Patent Trial & Appeal Board (PTAB), and the examination depth of the CRU, I recommended that perhaps there could be some joint cooperation between the entities to more effectively review amendments submitted in AIA trial proceedings. Specifically, I envisioned a “Motion to Reissue” that would extend the PTAB 12 month trial schedule another 6 months to allow for a truncated reissue proceeding. This reissue phase would be performed by the CRU with results returned to the PTAB within the 18 month trial schedule. In that same post, I recommended some other changes to the motion to amend process such as allowing claims be submitted in an appendix (since adopted by the Board) and a change to Rule 42.73(d)(3).

A Senate proposal floated last week proposed to change Rule 42. 73(d)(3) and, rather than reissue, add a reexamination component to substitute for the existing motion to amend process at the PTAB.

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Continue Reading Senate Proposes to Add Examiners to PTAB Amendment Process

Board Finds Profit Motive Acceptable for IPR

While all hedge fund filings considered by the PTAB to date have failed on the merits (Kyle Bass is 0-3 & Ferrum Ferro Capital 0-1), today, the Board declined to outlaw such filings as a matter of policy.  In IPR2015-01092, 1096, 1002, and 1103, Patentee Celgene filed Motion for Sanctions against the Coalition for Affordable Drugs. Celgene sought termination of the IPRs on the basis that the use of the IPR mechanism for pure financial gain (short selling and other investment strategy) was repugnant to the Congressional intent for this alternative to patent litigation. Decisions on the merits of the Celgene petitions remain outstanding.
Continue Reading PTAB Denies Sanctions in Hedge Fund Filings

Patentees Back Themselves Into a Corner at PTAB

Both patentees and challengers alike were displeased with inter partes patent reexamination prior to the America Invents Act (AIA). Inter partes patent reexamination was too slow to serve as a true alternative to litigation for patent challengers, and patentees argued the system was biased against them. In formulating the AIA Congress fashioned a replacement, Inter Partes Review (IPR).  The IPR statutes, not surprisingly, mandate speed, and include mechanisms directed to the perceived lack of fairness of the old reexamination model.

Patentees argued that inter partes patent reexamination procedure favored patent challengers since: (1) Declarants in reexamination were not subject to cross-examination; and (2) a patentee was unable to respond to a request for reexamination before it was ordered by the USPTO. Specifically, patentees urged that had they an opportunity to respond to the reexamination request before the USPTO made a decision, years of harassing/expensive reexamination and appeal proceedings could be avoided.  Further, they argued the ability to cross-examine a challenger ‘s declarants would also help expose baseless expert theories assailing their patented claims. For this reason, the IPR statutes provides for cross-examination of declarants as well as a “preliminary response” from patentees.

Yet, even with the added IPR mechanisms, patentees are not faring much better as compared to the days of inter partes patent reexamination. As a result, patentees have lobbied for further changes. These changes, some of which are now proposed as formal rule changes by Patent Trial & Appeal Board (PTAB) may only make matters worse for some patentees.

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Continue Reading Proposed PTAB Rule Change May Backfire on Some Patentees