Pilot Program Seeks to Convey AIA Trial Art & Arguments to Examiners

At yesterday’s Patent Public Advisory Committee (PPAC) meeting, USPTO Assistant Deputy Commissioner for Patent Operations Jack Harvey explained a new pilot program to be launched in the spring of 2016.  The Pilot seeks to establish a “bridge between the Patent Trial & Appeal Board (PTAB) and patent examiners” examining patent applications relating to an ongoing AIA trial proceeding.

The goals of the program are to ensure that examiners are: (1) aware of the ongoing AIA trial proceedings and consider the records during examination; (2) study the results of these proceedings; and (3) adapt examination practices based on the PTAB feedback.  It was explained during the PPAC meeting that of the publication-based prior art submitted in AIA trial requests only 25% was found of record in co-pending patent applications, 50% for patent-based prior art.  Once the information is conveyed to the examiners (via an electronic dossier), it may be made of record as appropriate.

Patentee Burden Drives PTAB Obviousness Analysis

In Prolitec, Inc., v. Scentair Technologies, Inc.  the Court of Appeals for the Federal Circuit (CAFC) confirmed that patentees bear the burden of demonstrating patentability for amended claims in AIA trial proceedings before the USPTO Patent Trial & Appeal Board (PTAB).  Prolitec also found that this burden encompassed both the art of record in the AIA trial proceeding as well as the original patent prosecution history.

On appeal, Illumina argued that the Board, focused on the added limitation to the exclusion of the rest of the claim.  Illumina reasoned that because the prior art teaches both that SBS requires greater than 90% deblocking efficiency, and that cleaving disulfide linkages was variable and inefficient, one of skill in the art would not have been motivated to combine the prior art for SBS methods. In the view of Illumina, the presence of a disulfide linkage in the art was not enough absent the view of the combination.

For its part, Intelligent Bio-Systems (“Bio”) responded [to Illumina’s argument that “the Board improperly limited its analysis to the disulfide linkage limitation, rather than also considering the combination of the additional limitations] that Illumina failed to carry its burden of showing that the proposed substitute claims were patentable over the prior art of record.  Bio also argued that because the Board had already decided in it Decisions to Institute that the prior art taught all of the limitations in the original claims, the only additional limitation in the proposed claims was the disulfide linker, and thus the Board only needed to address the prior art relating to the successful use of disulfide linker in DNA sequencing.

(Of course, a Decision to Institute is preliminary. Yet, amendment is only denied at the time of Final Written Decision (FWD).  Here, the Board seemingly had not strayed from its original determination.)

In affirming the Board, the Court explained (here):

Because none of the original claims comprised the limitation of the linker containing a disulfide linkage, the Board chose to primarily address prior art relevant to that limitation to determine whether Illumina had proven that the addition rendered the claims as a whole nonobvious.

The Board did not analyze the obviousness of using a disulfide linkage in SBS in isolation, however; the original claims provided a backdrop for the Board to find that one of skill in the art would have reasonably expected to succeed in using a linker with a disulfide linkage as claimed. The prior art taught the use of linkers containing disulfide linkages for attaching a label to a nucleotide, as well as the desirability of simultaneously removing labels and protecting groups, in DNA sequencing methods. One of skill in the art would have been motivated to use a commercially available linker to attach a label to a nucleotide that also could be removed when removing the protecting group, and thus would have been motivated to modify SBS prior art with a disulfide linkage as claimed. The heightened standard that Illumina decries is instead properly Illumina’s burden to show nonobviousness, proof that one of skill in the art would not have a reasonable expectation of success in using a disulfide linkage. 

(emphasis added)

Stated another way, it was not the Board’s burden to demonstrate obviousness in a traditional sense (by assessing the claim as a whole). Rather, the Board may simply fault the patentee’s showing, focusing on the newly added language as compared to the existing record, which was reaffirmed by the Board at the time of the FWD.

PTAB Trial Basics To Be Reviewed By High Court

Earlier this month the Supreme Court granted certiorari in Cuozzo Speed v. Lee.  The Cuozzo appeal involves the very first Inter Partes Review (IPR) ever filed with the USPTO’s Patent Trial & Appeal Board (PTAB). Throughout the IPR and CAFC appeals, patentee Cuozzo has maintained that the broadest reasonable claim interpretation (BRI) employed by the PTAB is improper, and that the PTAB’s decision to institute trial should be reviewable on appeal. The Federal Circuit disagreed on both issues, but sitting en banc was sharply divided.

In its petition for certiorari Cuozzo presented two issues for review to the Supreme Court, now accepted:

1.     Whether the court of appeals erred in holding that, in IPR proceedings, the Board may construe claims in an issued patent according to their broadest reasonable interpretation rather than their plain and ordinary meaning.

Yet, is it accurate to characterize BRI as somehow eschewing plain and ordinary meaning?  Of course not.

In fact, the MPEP explicitly instructs examiners and PTAB judges to consider plain and ordinary meaning, directly quoting Philips.

From MPEP 2111:

I.THE WORDS OF A CLAIM MUST BE GIVEN THEIR “PLAIN MEANING” UNLESS SUCH MEANING IS INCONSISTENT WITH THE SPECIFICATIONUnder a broadest reasonable interpretation, words of the claim must be given their plain meaning, unless such meaning is inconsistent with the specification. The plain meaning of a term means the ordinary and customary meaning given to the term by those of ordinary skill in the art at the time of the invention. The ordinary and customary meaning of a term may be evidenced by a variety of sources, including the words of the claims themselves, the specification, drawings, and prior art. However, the best source for determining the meaning of a claim term is the specification – the greatest clarity is obtained when the specification serves as a glossary for the claim terms. The words of the claim must be given their plain meaning unless the plain meaning is inconsistent with the specification.                                        .              .               .               .               .
III.“PLAIN MEANING” REFERS TO THE ORDINARY AND CUSTOMARY MEANING GIVEN TO THE TERM BY THOSE OF ORDINARY SKILL IN THE ART “[T]he ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention, i.e., as of the effective filing date of the patent application.” Phillips v. AWH Corp.,415 F.3d 1303, 1313, 75 USPQ2d 1321, 1326 (Fed. Cir. 2005) (en banc); Sunrace Roots Enter. Co. v. SRAM Corp., 336 F.3d 1298, 1302, 67 USPQ2d 1438, 1441 (Fed. Cir. 2003); Brookhill-Wilk 1, LLC v. Intuitive Surgical, Inc., 334 F.3d 1294, 1298 67 USPQ2d 1132, 1136 (Fed. Cir. 2003) (“In the absence of an express intent to impart a novel meaning to the claim terms, the words are presumed to take on the ordinary and customary meanings attributed to them by those of ordinary skill in the art.”).

(emphasis added)

While the MPEP does not have the force and weight of the law, it does make abundantly clear that the plain and ordinary meaning is part and parcel of a proper BRI analysis.  A plain and ordinary meaning that is unreasonable in view of the intrinsic record should be declined whether in the PTAB or the district court.  Indeed, the agency explained exactly that in the final rule package for IPR, namely:

During a proceeding, a claim of an unexpired patent will be given its broadest reasonable construction in light of the specification of the patent in which it appears. See, e.g., § 42.100(c).This means that the words of the claim will be given their plain meaning unless the plain meaning is inconsistent with the specification. In re Zletz, 893 F.2d 319, 321 (Fed. Cir. 1989). In the absence of a special definition in the specification, a claim term is presumed to take on its ordinary and customary meaning, a meaning that the term would have to a person of ordinary skill in the art. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). Therefore, petitioners are not required to define every claim term, but rather merely provide a statement that the claim terms are presumed to take on their ordinary and customary meaning, and point out any claim term that has a special meaning and the definition in the specification.  

77 Fed. Reg. 48700 (Aug. 14, 2012).

So, what really is the difference between BRI and Philips? It certainly is not the absence of an assessment of “plain and ordinary” meaning.

Setting aside the that BRI proclaims it is the “broadest” interpretation….it is not unreasonably so.  The term “broadest” cannot be decoupled from “reasonable” in a BRI analysis.  Is Philips then, the most reasonable construction that still allows for a claim to be held valid (i.e., broad but not so broad)?  Most proponents of using Philips at the PTAB seem to think so, but this is also plainly incorrect. Philips explains that in rare circumstances it is appropriate to select a construction that favors validity where two constructions are equally plausible, and a strong inference can be shown “that the PTO would have recognized that one claim interpretation would render the claim invalid, and that the PTO would not have issued the patent assuming that to be the proper construction of the term.” Even in such rare cases, the PTO does not apply any presumption of validity, or deference to earlier work—nor should it.

There is virtually no difference between a proper BRI analysis and a proper Philips analysis. The difference, as I have pointed out before is the technical decision makers. Whether applying BRI or Philips, the outcomes are unlikely to change in any meaningful regard when done properly. Much like the recent appeal in Microsoft Corp. v. i4i Ltd. Partnership, 131 S.Ct. 2238 (2011), my expectation is that the high court clarifies and endorses the lower court ruling, at least as to claim construction.  In other words, I expect the Cuozzo decision to comment on the appropriate reach of BRI, concluding that it encompasses the plain and ordinary meaning as already applied in practice (albeit not as written law in the MPEP or rule comments).

As to the second question posed, this is where we may see some change to PTAB practice. Judge Newman is of the opinion that the bar is meant for interlocutory appeal, which makes sense given the 12 month trial schedule. As to an absolute appeal bar, the high court may look for more evidence of that intent, which is nowhere found in the legislative history. The statute simply tracked the old reexamination bar to challenging the threshold showing (SNQ).  Adopting that language for the AIA has swept in a host of other issues that were never contemplated at the time of drafting the patent reexamination statutes, such as the 315(b) bar and real-party-in-interest considerations.  My expectation is that the appeal bar will be softened to limit only interlocutory review of institution decisions.

Stay tuned.

Meet the New Boss, Same as the Old Boss….

When instituting an Inter Partes Review (IPR)—or any AIA trial proceeding for that matter— a panel of three administrative patent judges finds that the petitioner has made the threshold showing necessary for trial to proceed.  Later, these same three judges will assess all evidence presented during the trial to determine whether or not any claims of the subject patent should ultimately be cancelled as unpatentable.  Some patentees consider the use of the same judges from start to finish to be unfair. That is, there is a belief that use of the same judges brings with it a bias in favor of following through on the initial determination.

Ethicon argues that to avoid these constitutional concerns, we must construe the statute to preclude the Director from delegating the decision to institute to the same panel of the Board that makes the final decision. We disagree with Ethicon and conclude that, where, as here, there are no other separate procedural-fairness infirmities alleged, the PTO’s assignment of the institution and final decisions to one panel of the Board does not violate due process under governing Supreme Court precedent.   
                           .            .            .           .          .   
Both the decision to institute and the final decision are adjudicatory decisions and do not involve combining investigative and/or prosecutorial functions with an adjudicatory function. The inter partes review procedure is directly analogous to a district court determining whether there is “a likelihood of success on the merits” and then later deciding the merits of a case.                                      
                            .          .          .          .          .
Lastly, Ethicon argues that the Board panel’s exposure to a limited record in the decision to institute improperly biases it so as to disqualify it from making the final decision on the merits. But,  .    .    . adjudicators are afforded a “presumption of honesty and integrity” and even “exposure to evidence presented in nonadversary investigative procedures is insufficient in itself to impugn the fairness of [adjudicators] at a later adversary hearing.”  

(Emphasis added)

The Court also considered the argument that 35 U.S.C. § 3(b)(3)(B) limited the Director’s authority to delegate to officer’s she appoints (unlike PTAB judges). This argument was also rejected as 3(b) is not a delegation provision, but a source of authority. The discussion of the due process issue is lengthy and touches upon interesting Supreme Court as well as Administrative Procedure Act (APA) law, worth a closer read.

Ironically given the bias argument, the Court spent very little time on the merits, affirming the Board’s decision to cancel the claims of the Ethicon patent.

Judge Newman’s dissent argues that the AIA statutes’ use of “Director” for the preliminary proceeding evinced a bifurcated design. She distinguishes the preliminary proceedings of trial courts as being subject to appellate review, unlike PTAB institution decisions.  Finally, she argues that the Director has no discretion to delegate in violation of the statute. While all fair points, the AIA statutes were modeled on earlier patent reexamination statutes, which also referenced Director review and patent examination procedures separately.  Of course, the same examiners initiating a patent reexamination (based upon a preliminary showing that was not subject to appeal) were also the ones conducting it.  There was no bifurcation of decision makers in reexamination until the time of appeal — as is the case with the AIA.  The only difference with reexamination was that there were two levels of appeal, first to the Board, then to the CAFC.  Nevertheless, the concern of biased fact finders would seem to be common to both scenarios.

The argument that the Board is full of “hanging judges” has always struck me as odd. If such were the case, one would expect the Federal Circuit to simply reverse all such appeals. Of course, so far, the PTAB track record is quite favorable.

Decisions of Note for Practitioners

During last week’s, blog webinar I recounted some of the more noteworthy Patent Trial & Appeal Board (PTAB) decisions of 2015. My focus was not on interesting cases in an academic sense, but instead, on cases that were impacting PTAB practice today.

These cases included clarification of various AIA estoppel provisions, the final word on issue joinder, clarification of the Idle Free amendment requirements, and a decision that was a game changer for AIA petition practice.
Below is a discussion of each case, in order of importance; I start first with Conopco. Although originally decided in late 2014, it was the March 2015 rehearing decision that finally held 35 U.S.C. § 325(d) as including a “reasonably could have been raised” component.

1.     Conopco, Inc. dba Unilever v. The Procter & Gamble Company IPR2014-00628, Pet.  Req. for Reh’g Denied, Paper 23, March 20, 2015 (here)
In Conopco the Board declined institution under 325(d).  Of note, the decision found the art of  a follow-on petition to be similar/substantially similar to a first, failed petition, not on technical similarity, but on the basis that it “reasonably could have been raised” earlier.  

[Patentee] argues that the Board should not have considered whether any new prior art or arguments raised in the second petition were known or available to [patentee] at the time of filing the first petition.     .       .      . [patentee’s argument] would allow petitioners to unveil strategically their best prior art and arguments in serial petitions, using our decisions on institution as a roadmap, until a ground is advanced that results in review—a practice that would tax Board resources, and force patent owners to defend multiple attacks. 

While each trial petition is analyzed as to particular facts, Conopco was cited quite frequently in 2015. (Note: the 315(b) bar prevents follow-on petitions in many cases, but not all)

2.     Apotex v Wyeth IPR2015-00873, Institution Decision, Paper No. 8, September 16, 2015 (here)
In Apotex, the Board considered whether a trial ground denied in a first petition as “redundant” was subject to 315(e)(1) estoppel in a second petition raised by a same petitioner (i.e., reasonably could have been raised).  The Board held that a redundant ground could not have been raised, and therefore was not barred by 315(e)(1), explaining:

[G]rounds raised during the preliminary proceeding, but not made part of the instituted trial, are not raised “during” an inter partes review and cannot be the basis for estoppel under 35 U.S.C. § 315(e)(1). Nor are such grounds ones that “reasonably could have been raised during” the review, because once denied, the Board’s decision on institution prevents Petitioner from raising that ground during the trial.

In this case, trial was denied on the merits.  Also, 325(d) was not used to deny institution, presumably in the interests of fairness given the earlier redundancy determination. The topic of redundancy is an issue to watch in 2016 as some Federal Circuit panels have recently voiced significant concern with its due process implications. This issue may be ripe for mandamus in 2016 given the indirect encouragement of the Court.

3.     Zhongshan Broad Ocean Motor Co., et al., v. Nidec Motor Corp., IPR2015-00762, Pet. Req. for  Reh’g Granted,  Paper 16, October 5, 2015 (here)
Zhonghsan (see earlier post here) appears to have put to rest the debate over whether or not issue joinder is permitted under 35 U.S.C. § 315(c).  This case, made clear that while issue joinder may be denied on discretionary grounds where appropriate, such a denial should not be based on the argument that 315(c) only permits party joinder. 

Since Target v. Destination Maternity, petitioners have learned to be over inclusive on targeted claims due to the uncertainty on issue joinder. As such, issue joinder may become less of a concern going forward. 

4.     Square Inc. v.  Unwired Planet, LLC, CBM2015-00148, Denial of Institution, Paper 14, December 23, 2015 (here)
In Square, the Board considered the applicability of “reasonably could have raised” estoppel under 325(e)(1)  in a follow-on CBM filing.  Keep in mind that CBM estoppel outside of the USPTO is only effective as to art actually “raised” in the CBM proceeding by a petitioner.  The estoppel standard applied to a same petitioner’s second CBM filings is asymmetrical, encompassing “reasonably could have been raised.”  

Square was one of the first decisions to explore what “reasonably could have raised” might mean in the context of newly discovered art.  In this decision, the Board held it was not enough to simply be unaware of prior art at the time of the first filing. Rather, the Board required an explanation as to why the discovered art could not have been raised earlier. In this case the Board seemed particularly focused on the timing of the second filing. 

This will remain a hot topic for 2016 as both the courts and the USPTO consider these fact intensive scenarios.

5.     MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040, Order re Motion to Amend, Paper 42, July 15, 2015 (here)
MasterImage clarified the Idle Free amendment requirements. More specifically, the Board explained the Idle Free language: “prior art of record and also prior art known to the patent owner” by distinguishing between record art, and that which would necessarily be produced under the Duty of Candor. 37 C.F.R. § 42.11.

With respect to “prior art of record…” the Board explained this information as follows:

The reference to “prior art of record” in the above-quoted text, as well as everywhere else in Idle Free, should be understood as referring to:

          a. any material art in the prosecution history of the patent;

          b. any material art of record in the current proceeding, including art asserted in grounds on which the Board did not institute review; 
              and

          c. any material art of record in any other proceeding before the Office involving the patent.

As to the more open ended language “prior art known to the Patent Owner,” the Board clarified this language as:

The reference to “prior art known to the patent owner” in the above quoted text, as well as everywhere else in Idle Free, should be understood as no more than the material prior art that Patent Owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office under 37 C.F.R. § 42.11, in light of a Motion to Amend.     .    .     . [W]hen considering its duty of candor and good faith under 37 C.F.R. § 42.11 in connection with a proposed amendment, Patent Owner should place initial emphasis on each added limitation. Information about the added limitation can still be material even if it does not include all of the rest of the claim limitations.

Amendment will remain unpopular at the PTAB for 2016 for a variety of reasons, not the least of which is intervening rights.  That said, this change, together with other quick fix changes, enables an interested patentee to readily amend, if desired.