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.

Assignor Estoppel Not an Exception to 311(a)

The Patent Trial & Appeal Board (PTAB) has designated the following decision as precedential: Athena Automation Ltd v. Husky Injection Molding System Ltd., IPR2013-00290, Paper 18 (PTAB Oct. 25, 2013), Section II.A. (here)

Athena holds that the doctrine of assignor estoppel is not an exception to 35 U.S.C. § 311(a), which allows “a person who is not the owner of a patent” to file a petition for inter partes review. This decision was later left undisturbed by a split-panel of the Federal Circuit.  The majority found review of assignor estoppel precluded by operation of the appeal bar (35 U.S.C. § 314(d), relying upon the Court’s earlier decision in Achates Reference Publishing.  Of course, the continued viability of Achates is being reconsidered, en banc, in in Wi-Fi One LLC v. Broadcom (here).  As such, this agency precedent might be revisited by the CAFC down the line.

USPTO Explains Intervenor Standing

Some weeks back in Knowles Electronics v. Matal, the Federal Circuit, sua sponte, asked the following of the parties (order here):




When the prevailing party in an inter partes reexamination proceeding before the USPTO’s Patent Trial and Appeal Board (“Board”) declines to appear before this court to defend the decision below, is the USPTO’s Director required to possess Article III standing in order to intervene?

If yes, does the Director possess such standing in this appeal?

Additionally, if the Director does in fact possess standing; must the Director defend the Board’s decision? Alternatively, what are the ramifications if the Director declines to defend the Board’s decision?

The debate has obvious ramifications for appeals from PTAB trial proceedings. Whether intervening when a petitioner drops out/settles its dispute with a patentee, or intervening on appeals deemed to touch upon a significant practice issues, USPTO intervention is quite commonplace. Indeed, the only AIA trial dispute decided by the Supreme Court was a case in which the USPTO intervened at the appellate level, In re Cuozzo Speed Technologies.

Yesterday, the government explained the origin of its standing, as well as its propriety under Article III.

Of course, the government has explicit statutory authority to intervene, much like a petitioner has an explicit statutory right to appeal from an adverse judgment of the PTAB.  However, as recently clarified in Phigenix, Inc. v. ImmunoGen, Inc., Article III standing requires an injury in fact, an additional hurdle for some.  In this same vein, the Court seeks reassurance that the agency is not running afoul of Article III standing requirements.

The government brief (here) points out, first and foremost that intervenors do not need Article III standing, explaining:

Article III of the Constitution limits the courts to adjudicating cases or controversies. Thus, a party seeking relief from a federal court must show that there is a justiciable case or controversy, which requires a demonstration that the party has a direct and concrete stake in the outcome of the case. The courts do not inquire into the standing of a party that is not seeking separate affirmative relief, such as an intervenor seeking to oppose the plaintiff or appellant. Because the USPTO here has intervened in support of the agency’s decision and does not seek affirmative relief of its own, no separate Article III inquiry is necessary.

One might argue that this reasoning makes sense when there are adverse parties still in the case and the relief sought by the Intervenor is that of another.  On the other hand, when an Intervenor steps in the shoes of an adverse party to continue an appeal it essentially adopts the affirmative relief of another — the supporting is over. The more compelling view to me is the simple explanation that in the “substitute party” scenario, the agency can piggyback off of the Article III standing of the appellant (which is virtually all cases for the Solicitor). In this regard, the government explains that the standing inquiry is directed at those who invoke the court’s jurisdiction. (citing Roeder v. Islamic Republic of Iran, 333 F.3d 228, 233 (D.C. Cir. 2003)

The government also argues that even if Article III standing where required, defense of agency decisions and practices would suffice:

It is not the matter that was before the agency which constitutes the Article III case or controversy, but rather the dispute between Knowles and the agency concerning the lawfulness of the agency action.

(internal quotes and citations omitted)

The government also points to the interest in representing the public interest and pursuing relief on behalf of the public, presumably from improvidently granted patents. Policy positions that will be explored further by the Supreme Court in Oil States Energy Services v. Greene’s Energy Group.

The Knowles brief is due 8/14 with government’s reply due on 8/28.

Failure to Argue Differing Claim Language of Similar Claims Haunts Appellant

PTAB practitioners must always be mindful of the Board’s longstanding practice to treat grouped claims as standing or falling together. That is, claims should be argued separately where the claims are phrased similarly, but with some deliberate grammatical or additional term difference to distinguish scope.  In those cases, it is important to discuss the implications of the grammatical differences. Simply reciting a claim limitation, and asserting that the limitation is/is not found in the prior art, is not taken by the Board as a separate argument for patentability.

That said, such layered arguments may fall prey to the tight space constraints in AIA trial proceedings where more pressing arguments are necessary.

For example, one of the more particularly tricky aspects of AIA trial practice prior to May of 2016— at least for petitioners— was fitting all of petitioners arguments within the fifteen pages allocated for a Petitioner Reply by the PTAB.  As a result of the limited real estate, some petitioner arguments that might have been otherwise made were often cut for space constraints. Fortunately, in May of 2016, the fifteen page limit was increased to twenty-five pages.

Yesterday’s decision of the Federal Circuit emphasized the risks of claim grouping; perhaps a reflection of the earlier AIA trial briefing constraints.

In HTC Corp. v. Cellular Communications Equipment (here), the Court considered the language of similar method and apparatus claims (claims 1 and 24). In analyzing the key claim construction dispute of the apparatus claim, the Court determined that this claim required separate components where the prior art only showed a single component. Arguably, method claim 1 was broader, and failed to include some of the key language driving the Court’s two-component construction for claim 24. However, rather than reach that issue on its own, the Court found that the Appellant had forfeited that argument, explaining:

In the particular circumstances presented, we will not consider giving claim 1, in the respect at issue, a different scope from that of claim 24, which, we have concluded, requires two separate components .  .   .  . In the PTO, [appellant] did not “fairly put [the Board] on notice as to the substance of” any request to distinguish claims 1 and 24 regarding this critical issue of scope. . . .

It is not plausible that [appellant] inadvertently overlooked the potential for a half win, which it might well have deliberately chosen to discourage by taking an all-or-nothing approach. Moreover, the IPR regime at issue places a special premium on efficient Board resolution of patentability challenges. . . . In these circumstances, we will not decide whether claim 1 should be accorded a different scope from that of claim 24 in the respect at issue.

The majority explained that forfeiture determinations are fact specific, and emphasized the fact that appellant took a position before it (at oral argument) that claims 1 and 24 were not being argued as having a different scope on appeal.

The dissent took issue with the forfeiture determination only, explaining that the majority decision was “incorrect and troubling for future cases.”  The dissent insisted that the petitioner had argued claim 1 separately:

For example, in its IPR petition to the Board, [appellant] presented a detailed claim chart and specific disclosures found in the [prior-art references] that, in its view, made each limitation obvious for each claim at issue; in particular, HTC presented a different set of disclosures found in the prior art with respect to claim 1’s diverting limitation than to claim 24’s diverting limitation. .  .  . In another example, in the Petitioner’s Reply to the Board, [appellant] argued that “CCE’s statement that . . . D’Aviera does not disclose anything . . . that could perform the intervening diverting step is misguided. The language of claim 1 does not preclude the same structure from performing the diverting step and the controlling step.”

(emphasis in original)

While AIA trial petitions routinely cite to differing portions of a reference for similar claims, it remains unclear how this may/may not have been changed by the Board at institution.

As to appellants Reply arguments, it is worth noting that the Court considered a simialr issue in In re Lovin, 652 5 F.3d 1349, 1357 (Fed. Cir. 2011) (holding that the Board reasonably interpreted its rules of practice as requiring “more substantive arguments in an appeal brief than a mere recitation of the claim elements and a naked assertion that the corresponding elements were not found in the prior art” to constitute a separate argument).   While an analysis of a rule construction as opposed to a forfeiture scenario, the Court has previously endorsed the Board’s view of such citations as not being a separate argument.

While space constraints for Petitioner Reply’s are less worrisone than a year ago, petitioner’s faced with cutting brief content might cite to HTC to justify an extension to the page limit; especially in those cases where a Patentee is arguing a significant number of individual claims.

Judge Gilstrap Singled Out in Congressional Hearing as Defying SCOTUS

Yesterday, the House IP Subcommittee on the Courts, Intellectual Property and the Internet conducted a hearing entitled: The Impact of Bad Patents on American Businesses. During the hearing, Chairman Darrell Issa (R-Calif.) and House Judiciary Committee Chairman Bob Goodlatte (R-Va.) did not mince words expressing their displeasure with the EDTX’s handling of the Supreme Court’s recent decision in TC Heartland.

At the opening of the hearing, Chairman Issa explained that Judge Gilstrap’s interpretation of TC Heartland “rejects the Supreme Court’s unanimous decision” and is “an act I find reprehensible.”  It only got worse from there.
Chairman Issa explained that Judge Gilstrap may be more interested in serving the surrounding hotels and law firms, but that his recent decision outlining his TC Heartland analysis “does not serve justice” (ouch).  Then, Chairman Issa finished up with: “it is not common for a member of Congress to call out an individual judge or a district, but after a long period of enrichment of a community by judges who consider that community’s well being as part of their goal, I can reach no other conclusion “Comments by Representative Bob Goodlatte were more measured, but also strong, he stated:

Just a few weeks ago, the Supreme Court in its TC Heartland decision concurred with Congressional enactment of a patent specific venue provision in Title 18. This decision was expected to lead to a sharp reduction in cases being filed in one particular district in Texas that seems skilled at attracting patent trolls. Unfortunately, one judge in this district has already re-interpreted both the law and the unanimous Supreme Court decision to keep as many patent cases as possible in his district in defiance of the Supreme Court and Congressional intent.

While Congress seems unlikely to get to any significant patent reform given its current dance card, EDTX may have just invited a rifle-shot bill targeting its venue practices in the short term.

Patent Owner Sur-Replies on the Uptick

Back in June of 2016, the Federal Circuit issued its opinion in Genzyme Therapeutic Products LP v. BioMarin Pharmaceutical Inc.(here).  At the time I explained that Genzyme was a game-changer.  This was because it made clear that the trial portion of an AIA proceeding was an opportunity for both sides to build a record — not a mere analysis of the four corners of the trial petition.  As stated simply by the Court in Genzyme, “[t]he purpose of the trial in an inter partes review proceeding is to give the parties an opportunity to build a record by introducing evidence—not simply to weigh evidence of which the Board is already aware.” (emphasis added)

As a reminder, an instituted AIA trial (absent a motion to amend) includes a single brief from each party, the petitioner filing the last brief as the party bearing the burden of demonstrating unpatentability.

Since Genzyme, the Board has become far more comfortable with petitioners citing to new exhibits in petitioner replies (assuming such exhibits/arguments are in support of existing positions as opposed to altogether new theories).  At roughly the same time Genzyme issued, and since, the Board has been faulted for violating the Administrative Procedure Act (APA). For example, for failing to give parties a fair opportunity to respond to issues. (e.g., SAS Institute Inc., v. ComplementSoft LLC)  These developments are helping drive a more liberal perspective at the Board as to additional briefing possibilities for Patent Owners.

A review of trial practices immediately before Genzyme, as compared to today, illustrates an increased willingness on the part of the PTAB to permit Patent Owner sur-replies at the close of the trial, effectively giving Patent Owners the last word in trial briefing.

As shown in the graph below (using the Spring of ’16 (pre-Genzyme) and ’17 as sample windows) Patent Owners are seeing an uptick in sur-replies. While this uptick may appear modest at first blush, there were 35 fewer cases available in the 2017 sample.

(While the charts above show cases (red) in which a formal order was issued denying a sur-reply request, as panels routinely issue such decisions via email, this aspect of the chart is unreliable)

Where sur-replies are granted, it is routinely for one of two scenarios: (1) The patentee bears the burden on an issue, such as antedating; or (2) The sur-reply is sought to address alleged new arguments/exhibits of the Petitioner Reply, as shown in the chart below.


Going forward this trend will is likely to continue. For this reason, some formal guidance from the Board would appear in order to clarify when a Patent Owner may be entitled to a sur-reply as a matter of right (i.e., for matters in which the Patent Owner carries the burden).  Such guidance would quell unnecessary disputes, and reduce the need to request panel attention to referee the same.

As to new argument/evidence issues, it is uncommon for a petitioner reply not to have at least one new exhibit. (“new” meaning not appearing in the trial petition).  Given the increasing willingness of the Board to grant sur-replies on this basis, care must be given to ensure that this argument does not become an avenue for abuse.

Patent Owner’s raising affirmative defenses, or AIA statutory issues (perhaps of increasing importance after WiFi One) would be wise to consider sur-reply options going forward. Indeed, the Federal Circuit will often point out that the failure to seek such relief may foreclose otherwise viable arguments on appeal.

Bill Would Effectively End PTAB

The STRONGER (Support Technology & Research for Our Nation’s Growth and Economic Resilience) Patents Act was unveiled in the U.S. Senate this week.  This is the newest incarnation of a previously stalled bill known as the “STRONG Patent Act of 2015.”  The new bill, like its predecessor, proposes significant modifications to the patentability trial mechanisms of America Invents Act (AIA).  These modifications, if adopted, would for all practical purposes end AIA trial proceedings at the Patent Trial & Appeal Board (PTAB) — the apparent goal of the organizations backing this legislative effort.

Notably, this same agenda prevented the 2015 bill from gaining any real traction. While the new bill does include some improved proposals for amending claim at the PTAB, oddly, it also doubles-down on its anti-PTAB agenda.
The draft bill is found (here)

A summary of the PTAB provisions are provided below along with my commentary on each:

Section 102A: Change to Philips Claim Construction – Mandates the PTAB apply a Philips claim construction.

Rationale Given: “Harmonize” PTAB with courts
Unstated Goal: Overrule Cuozzo

Practical Impact
: None.
As I have stated here ad nauseum, and as the PTAB has demonstrated in every expired patent it interprets, this change would not lead to the same highly nuanced constructions of the courts.

Section 102B: Change Burden of Proof – Mandates that the Board presume patents are valid and require “clear and convincing evidence” to demonstrate unpatentability.

Rationale GIven: “Maintaining” presumption of validity and “clarifying” that district court standards apply to PTAB
Unstated Goal: Repeal AIA Trial Proceedings

Practical Impact:
  Would effectively end PTAB trials.
-The existing RLP standard would still be used at IPR institution, then, during trial the standard would change to clear and convincing.  Paying $23k to secure an institution decision under a RLP standard only to lose at trial on a higher standard (and be estopped on the full universe of patent and printed pub. art. See (f) below) is why this would shut down the PTAB overnight.  Moreover, the judges of the USPTO would be effectively deferring to a patent examiner on questions of patentability, turning the Board’s traditional mission on its head.  Amendment would also still be offered, which is inconsistent with these concepts. These proposals will be non-starters for the tech lobby.

Section 102C: Article III Standing – Requires Article III standing to file an AIA trial petition

Rationale Given: Minimizing abuse and eliminating privateering (i.e., Kyle Bass)
Unstated Goal: A bit of the above, mixed in with a lot of interest in making proactive challenges more difficult.

Practical Impact: To avoid debates over DJ standing, petitions will be likely delayed until after a lawsuit has commenced.
-The Kyle Bass experiment ended in disaster (as I predicted it would). While there may be a few still toying with this business model, there are other ways to address this problem without taking away a valuable due diligence tool.  Parties often proactively file before litigation to increase the chances of a stay, or to simply address problem patents before investing and launching a product that may be accused of infringing. This change would have the unfortunate consequence of making litigation inevitable, where at present, it can often times be avoided.

Section 102D Limitation on Reviews – Mandates that the PTAB may only conduct one AIA trial per claim of a patent.

Rationale Given: Reduce repetitive and harassing attacks
Unstated Goal: Prevent multiple parties of a lawsuit from mounting individual IPR defenses

Practical Impact: Even a settled, but instituted IPR would stop all later IPR challenges
-This bill argues for “harmonization” with district court practices inconsistently.  Here, the PTAB would have a completely different “first-filer” system. 

Section 102E: Interlocutory Appeals from Institution Decisions to CAFC – Patentees may seek interlocutory of institution decision, petitioners may not.

Rationale Given: Institution decisions can have a negative impact on patent owners regardless of trial outcome
Unstated Goal:  None

Practical Impact: More expense for all, more work for CAFC.  Unlikely to move the needle in any material regard for the vast majority of cases.
-The CAFC has enough additional work from the PTAB and the trial would proceed in parallel, which is inefficient. A simpler solution would be to allow for a rehearing to a different PTAB panel (for a fee).

Section 102F: Absolute Estoppel Covering Full Universe of Prior Art – If you lose an IPR, you cannot raise any invalidity grounds on any patents and/or printed publications.

Rationale Given: Eliminate duplicative proceedings
Unstated Goal: Make estoppel absolute

Practical Impact: Coupled with the new standards discussed above, kill the PTAB.
-This change is not highlighted in the summary materials accompanying the bill, and for good reason. This is a radical departure from current practice.

Section 102F: No Second Petition for a Patent  – A petitioner may not file a second IPR (for example, against different claim) unless sued on those claims after the first was filed.

Rationale Given: Eliminate repetitive proceedings
Unstated Goal: Remove Board discretion to accept secondary filings.

Practical Impact: Second petitions of a same party are already a rarity, but can proceed on a discretionary basis (i.e., determined case-by-case by Board)
-The Board should make Conopco precedential so there is more predictability; not all panels follow this case.

Section 102G: Routine Discovery for Real-Party-in-Interest – Broadens concept of the RPI to an entity making financial contributions to challenge is a real-party-in-interest estopped from future challenges, ensuring that no entity gets multiple bites at the apple to challenge a patent. Also broadens routine discovery to explore issue.

Rationale Given: No second bite at the apple
Unstated Goal:  None

Practical Impact:  More discovery, more costs.
-Unlikely to move the needle in the vast majority of cases. The Board is best suited to determine the need for additional discovery on a case-by-case basis.

Section 102H: Exclude Patents Upheld in Federal Court From USPTO Review – If a district court reviews the validity of a patent before the PTAB, the post-issuance
proceeding should not start, if that determination occurs during the PTAB proceeding the PTAB should pause pending appeal.

Rationale Given: Priority given to ITC and federal court decisions
Unstated Goal: Carve out to benefit pharma patents

Practical Impact: Strangely elevates the decision of one administrative agency with expertise in trade matters (ITC) over the USPTO.
-Would create a race between the courts and PTAB like we had with inter partes reexamination, which IPR was designed to improve.  This is a clear attempt to roll back portions of the AIA

Section 102I: Amendment of Claims  – Provides a pathway for patent owners to enter into an “expedited” examination procedure instead of amending claims before the PTAB.

Rationale Given: Provide expedited examination procedure
Unstated Goal:  None

Practical Impact: This is a needed change.
-I proposed this idea three years ago.

Section 103 Tracks 102, but for PGR

Section 104: Composition of PGR and IPR Panels – Mandates that U.S. Patent and Trademark Office (USPTO) adjudicators who decide whether to permit a post-grant proceeding are distinct from the PTAB judges who will decide the outcome of a petition.

Rationale Given: Clarify intent of AIA
Unstated Goal: None

Practical Impact: More expense for PTO, more expense for public. Unlikely to result in statistically significant changes to PTAB trial outcomes.
-A more sensible way to provide the same relief is to allow for a rehearing option that would include a new panel, but at an appropriate fee.  Building this same control into every trial as a default will unnecessarily increase costs for the public and the agency.

Section 105: No Anonymous Reexams + One Year Window – Eliminates ability to file anonymous reexamination and adds 1 year window requirement to reexamination.

Rationale Given: Harmonize reexamination with AIA trials
True Goal: Eliminate reexamination as an option for most patent challengers

Practical Impact:  Reexamination is an ex parte proceeding, one of the the only strategic benefits over IPR (an inter partes proceeding) is anonymity. This loss of anonymity, coupled with the one year window would have a chilling effect on third party filings.
-Reexamination has existed for 30+ years and is primarily a tool for patent owners.  These changes are simply unnecessary.

What’s Next?:

This bill, like its predecessor is not likely to get very far (Bio/Pharma and small inventor organizations will face off against the tech lobby).  Is it a valuable starting point for a broader conversation on patent rights in the U.S.?  I’m not so sure.  Starting the conversation on an extreme end of the spectrum hasn’t been working very well for the folks in Washington — who, it would seem, have some bigger legislative fish to fry in the months/years ahead.

“Closely Tied” Language of Cuozzo & Institution-Centric Statutes

The en banc opinion on the scope of the AIA’s appeal bar (35 U.S.C. §§ 324(e)/314(d)) remains outstanding in WiFi One.  Still, we have seen a few opinions from the Federal Circuit as of late that nibble around the edges of this issue.  From these decisions, we see the Court focusing on the statute underlying the appealed issue, and whether or not that statute is tied, in timing or substance, to the institution stage.  The most recent, Credit Acceptance Corp. v. Westlake Services, found another exception to the appeal bar for CBM estoppel. 35 U.S.C. 325(e)(1).

In Credit, (here) the Court emphasized the potential for estoppel at any stage of the proceeding as a factor that tended to show that the estoppel statute was not “closely related” to institution.  The Court also emphasized that 325(e)(1) estoppel would extend to non-AIA proceedings such as patent reexamination, and that estoppel also impacted Article III proceedings.

As to the underlying facts of Credit, petitioner filed two CBM proceedings against different groups of claims of a same patent.  The first CBM concluded before the second on March 24, 2015. In the first CBM decision the Board found claims 1-9, 13, and 34-42 to be unpatentable under §101.  In light of this final written decision, Patentee moved to terminate the second CBM asserting that petitioner was “estopped from challenging claims 10-12 and 14-33 under §325(e)(1)”. (pg 5 of the opinion).  The Board denied CAC’s motion, explaining that estoppel under §325(e)(1) applies on a claim-by-claim basis and that the final decision in the first CBM was only relevant to claims 1-9, 13, and 34-42; therefore, Westlake was not estopped from maintaining its challenged in the second CBM.

The Board then issued a final decision in the second CBM finding claims 10-12 and 14-33 unpatentable under §101.  Patentee appealed the second CBM decision arguing that petitioner should have been estopped from maintaining its challenge (as well as the holding under §101).

After the Supreme Court’s Decision in Cuozzo, the Federal Circuit first had to explain why the Board’s decision to allow Petitioner to maintain its second CBM was not barred under 35 USC §314(d). The Federal Circuit distinguished the case from Cuozzo by honing in on the word “maintain” in §325(e)(1) as opposed to the word “institute” in §314(d):

The estoppel provision at issue here, § 325(e)(1) (like the comparable IPR provision, § 315(e)(1)), is distinct from the issues addressed in Cuozzo. Specifically, § 325(e)(1) does not refer to “institution” decision and in fact is not limited to institution decisions.

Of course, the statute of interest in WiFi One (315(b)) specifically references institution: [a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date. . . . (emphasis added).  If the “closely tied” language were the only guidance provided by Cuozzo, this might be the end of the road for WiFi One.  But, Cuozzo (as explained in Credit) provided a host of additional, potential carve outs:

[W]e need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.” Thus, . . . we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under § 112” in inter partes review.

WiFi One would not seem to present a constitutional issue.  Further, the one-year bar directly references institution, and is therefore a “closely related statute” consistent with Credit.  Left to be answered in Wifi One is when the agency’s institution decision may be challenged as being beyond statutory limits of the AIA.  Such statutory limits cannot be for every AIA statute or the appeal bar would be rendered toothless (and would directly contradict Cuozzo’s holding on 312(a)(3)). So, are we left deciding which AIA statutes are more fundamental to ultimate agency authority than others?  If so, it would seem that a statute such as 315(b) that while closely tied to institution defines what the agency “may not” do, might still be a question of statutory limits under Cuozzo.

We will find out soon enough.

Are You Properly Corroborating Your In Re Katz Declarations?

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. Last week, in EmeraChem Holdings, LLC v. Volkswagen Group of America, Inc.,the Federal Circuit considered the degree of corroboration necessary to disqualify a prior art reference as an inventor’s own work.  In EmeraChem the Cout made clear that such corroboration may be within the inventor declaration itself, but, it must be more than a mere naked assertion of inventorship.

In EmeraChem (here) petitioner Volkswagen sought Inter Partes Review (IPR) of Patent No. 5,599,758 (‘758 Patent).  One of the references cited in the IPR was U.S. Patent No. 5,451,558 (‘558 reference). The ’558 reference lists four co-inventors, two of which are the sole co-inventors listed on the challenged ‘758 Patent assigned to EmeraChem.  The ‘558 reference qualified as prior art under pre-AIA 102(e) since the “inventive entity” was different than the ‘758 patent.

In an attempt to disqualify the ‘558 reference as prior art, EmeraChem filed an inventor declaration signed by the two inventors of their ‘758 patent.  The Declaration stated that the cited parts of the ‘558 reference were solely invented by them and not the other two listed inventors.  No statements by the two remaining inventors listed on the ‘558 reference were provided by EmeraChem or Volkswagen.
The PTAB rejected the inventor declaration submitted by EmeraChem was not sufficient to prove that the ‘558 reference was not prior art under pre-AIA 102(e).  The Board noted that EmeraChem did not call the other inventors of the ‘558 reference as witnesses and did not offer “any contemporaneous documentary evidence in support of the Campbell Declaration.”  (pg. 4 of the opinion).

The Federal Circuit affirmed the Board’s decision rejecting the inventor’s declaration.  The CAFC noted that the declaration itself “amount[ed] to a naked assertion” and that the declaration did not provide “any context, explanation, or evidence to lend credence to the inventor’s bare assertion.”  (pg 6 of the opinion). The CAFC relied upon case law that highlighted the concern for corroborating evidence when an interested party is the one making the declaration.  In this case, the inventors of the challenged patent were clearly “interested parties”. (pg 7 of the opinion).

But what about the sections of the Manual of Patent Examining Procedure (MPEP) that seem to suggest an unequivocal statement by inventors is enough?

The CAFC distinguished EmeraChem’s reliance on MPEP §§715.01(a), 715.01(c)(I), and 2136.05 (and characterizations of case law cited therein).

The Court distinguished In re DeBaun, 687 F.2d 459 (C.C.P.A. 1982), highlighting the fact that DeBaun attached a drawing to his declaration that corroborated the assertions made in the declaration.  Therefore, the Court held that DeBaun does not “stand for the proposition that a declaration alone is always sufficient to support an inventor’s claim to inventorship.”  (pg 8 of the opinion). Further, as to In re Katz, the Court focused on the significance of the fact that the two co-authors on Katz’s published article were explained in the declaration as mere teaching assistants.  In Katz, the declaration was sufficient to rebut “the board’s inference that [the co-author’s] names were on the article because they were co-inventors.”  (pg 9 of the opinion).  The CAFC noted that in both Debaun and Katz, something more than a naked assertion by the inventor was needed.

As this case makes clear, the MPEP does not have the force and effect of the law. As pre-AIA applications will be pending for many years to come, prosecutors would be wise to bolster their In re Katz declarations with more than just mere conclusions of inventorship.  Ideally, the inventors would explain the contributions of the co-authors in a manner that makes clear that their contributions do not rise to the level of inventorship.

USPTO Headquarters to Host Half-Day PTAB Conference

As the Patent Trial & Appeal Board (PTAB) has previously announced, it will host a half-day Judicial Conference on June 29, 2017 from 1-5PM.  The conference will be held in the Madison Auditorium.  The program will be directed toward both AIA trial proceedings and ex parte appeal practices. The detailed agenda and webcast link are found below:

Time​ Event
1:00 – 1:10 p.m. Welcome
1:10 – 1:30 p.m. State of the Board
​1:30 – 2:15 p.m. Behind the Scenes at PTAB: A Look at the Inner Workings
​2:15 – 3:00 p.m. Perspectives from the Bench and Bar: Winning your Ex Parte Appeal
​3:00 – 3:15 p.m. ​Break
​3:15 – 4:55 p.m. AIA Trial Hot Topics
4:55 – 5:00 p.m. Closing Remarks
5:00 – 6:00 p.m. Informal Social Gathering

There is no cost to attend and registration is not required.  CLE credit is not available.

To access the Webcast go to: