Inter Partes Review

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Patents in the Unpredictable Arts No Easy IPR Mark

Back in January of last year Kyle Bass introduced himself to the patent community through a series of brash, public pronouncements on a perceived lack of quality in drug patents. His stated intention was to “knee cap” drug companies by leveraging Inter Partes Review at the Patent Trial & Appeal Board (PTAB) to cancel, in his view, improvidently granted patents. My reaction to those pronouncements was to predict that it would be Mr. Bass that would be “knee capped” as invalidating patents in the unpredictable arts is easier said than done. This is because there is already a significant interest in cancelling such patents from a highly sophisticated generics industry.  If defeating such patents were that easy, generics would already be on it. For this reason, the vast majority of patents sucessfully challenged at the PTAB are in the predictable arts (i.e., electrical and/or mechanical).

Since that time, Mr. Bass has seen his first two IPR filings denied by the PTAB on technical grounds. (failure to prove public accessibility of the underlying prior art references). Earlier this week, the Board denied the third Bass filing on the merits. In this filing, Mr. Bass and friends took on a method of treating multiple sclerosis as claimed Biogen’s U.S. patent 8,399,514. In its decision, the PTAB essentially explained to Mr.Bass that an obviousness analysis, in the unpredictable arts, requires far more than an “obvious to try” rationale. (here).

Given his 0-3 record, and the impending sanction orders against Mr. Bass in his remaining IPR proceedings, the outlook is quite negative for this investment vehicle.
Continue Reading Kyle Bass Now 0-3 at PTAB With More Pain to Come

Pilot Program to Limit APJ Review For IPR Institution

As promised in last week’s rule package, a second Federal Register Notice (here) has issued from the USPTO’s Patent Trial & Appeal Board (PTAB). This Notice, entitled: Request for Comments on a Proposed Pilot Program Exploring an Alternative Approach to Institution Decisions in Post Grant Administrative Reviews, proposes to select IPR petitions for inclusion in a pilot program whereby only a single Administrative Patent Judge (APJ) decides the petition (CBM and PGR are excluded). Currently, three APJs review IPR petitions prior to instituting an AIA trial. However, three judges are only statutorily required for trial, not institution.  So, the PTAB is exploring ways to become more efficient in view of its growing workload.
Continue Reading PTAB Considers Single Judge Pilot Program

Kyle Bass & Friends Swing and Miss in First Two Attempts at IPR

Today, the Patent Trial & Appeal Board (PTAB) denied institution of IPR 2015-00720 and IPR2015-00817 (here and here). These IPR petitions, targeting U.S. Patents 8,663,685 and 8,007,826 of Accorda Therapeutics, were advanced by the so-called “Coalition For Affordable Drugs.”  The Coalition, more widely recognized as a creation of hedge fund manager Kyle Bass, has filed 20+ petitions in the past few months against various drug patents. 

These PTAB denials are likely the first in a long series of disappointments for the Coalition.
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Continue Reading First Two Hedge Fund IPRs Fail

PTAB + Octane Fitness = Problem

Back in 2014, I explained that the recent shift in exceptional case analysis under Octane Fitness, LLC v. ICON Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Mgmt. Sys., would provide opportunity for successful Patent Trial & Appeal Board (PTAB) petitioners. This is because accused infringers are universally embracing PTAB proceedings as an alternative to high cost litigation, and, are increasingly seeking fees after Octane.

Last week, the Southern District of California awarded fees of roughly $400k to a successful USPTO patent challenger in Deep Sky Software, Inc. v. Southwest Airlines Co., 3-10-cv-01234 (CASD).

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Continue Reading Plaintiffs Beware: PTAB Fee Awards Might Be Headed Your Way

Customers of a Defendant Supplier Do Not Have CBM Standing

The Patent Trial & Appeal Board (PTAB) denied institution of a CBM review of Phoenix Licensing, LLC’s (“Phoenix”) 8,352,317 patent in CBM2015-00068, determining that the only remaining Petitioner, Acxiom Corp. (“Acxiom”), lacked standing under § 18(a)(1)(B) of the AIA. (here)

By way of background, the Petition was originally filed by four entities, but the proceeding was terminated with respect to AT&T Mobility LLC, AT&T Services, Inc., and Ford Motor Company (“Ford”), leaving only Acxiom. Under § 18(a)(1)(B), a person may not file a CBM unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or otherwise charged with infringement of the patent. As such, CBM petitions are required to establish that the petitioner meets the standing requirements with sufficient proof. In this case, the Petition merely stated that Acxiom is one of the “real parties-in-interest to and/or privies of one or more parties who have been sued…” without providing any additional explanation or evidence.
Continue Reading CBM Standing Flows Up the Supply Chain, Not Down

Improved Speed For Overlooked Post-Grant Patent Options

Once upon a time, patent reexamination was the only mechanism to challenge a U.S. patent at the USPTO.  First introduced as an ex parte proceeding in the 1980s, patent reexamination was expanded to include an inter partes option in 1999.  Thereafter, patent reexamination became a popular adjunct to patent litigation. Yet, increased popularity of patent reexamination led to significant delays and increased pendency. The expanding timelines, among other shortcomings, prevented inter partes patent reexamination from serving as a true alternative to patent litigation. Not until the patentability trial mechanisms of the America Invents Act (AIA) did Congress finally succeed in providing a true alternative to patent litigation at the USPTO. 

Once the AIA patentability trials were introduced, inter partes patent reexamination was discontinued.  Still ex parte patent reexamination remains an option.  Not surprisingly, reexamination decreased in popularity post-AIA.  The reasons for the decrease in popularity is straightforward.  First, an inter partes AIA challenge option will almost always be preferred over an ex parte option for high-value disputes (where available).  Second, a large number of ex parte reexaminations were pursued, pre-AIA, out of necessity.  That is, older patents were not date-eligible for inter partes reexamination.  Of course, all issued patents are date-eligible for AIA review.  For at least these reasons, the current filing rate of  ex parte reexamination is roughly 50% of the 2008 filing numbers.

The falling numbers for ex parte reexaminations, coupled with the elimination of inter partes patent reexamination has, in limited respects, made ex parte reexamination a more attractive option as compared to 2008.

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Continue Reading Patent Reexamination Speed Presents New Opportunity

Duty of Candor Controls “Prior Art Known to Patent Owner”
UPDATE: This decision is now designated as “Informative” (here)

Last week, an expanded panel of the Patent Trial & Appeal Board (PTAB) clarified the required showings necessary to a successful motion to amend. Of note, the expanded panel included Deputy Chief Nathan Kelly as well as Vice Chief Scott Boalick. In the decision, Masterimage 3D. Inc. v. RealD Inc. (IPR2015-00040) (here), the Board clarified the meaning of the Idle Free phrase: “prior art of record and also prior art known to the patent owner.”

As outlined in Idle Free Systems v. Bergstrom Inc., (IPR2012-00027), amendment during an AIA trial proceeding is by motion. As such, the burden is on the movant to demonstrate entitlement to the patentability of amended claims. One aspect of Idle Free that movants have struggled to digest is the metes and bounds of “prior art known to Patent Owner.” In MasterImage, the Board clarified that the “prior art known to Patent Owner” is linked to the art that would trigger the Patent Owner’s Duty of Candor.
Continue Reading Expanded PTAB Panel Clarifies Idle Free Amendment Requirements

En Banc Rehearing of Cuozzo Appeal Denied

In a close decision, the Court of Appeals for the Federal Circuit (CAFC) denied rehearing in In re Cuozzo Speed Technologies (here). At issue in the request for en banc rehearing was whether or not the Patent Trial & Appeal Board (PTAB) should apply a broadest reasonable view of challenged claims, or apply a district court style construction (Philips). The majority dismissed the argument as one of legislative policy that is beyond the power of the Court to modify. Meanwhile, the dissent argued that the “new” proceedings of the PTAB were adjudicative in nature, provided limited amendment possibility, and therefore required a claim construction consistent with that applied in the courts. 

While the majority decision is short and to the point, the dissent is quite spirited.
Continue Reading PTAB’s Use of BRI Upheld …Again