On May 8, 2018, the USPTO announced its proposed rulemaking for claim construction standard in PTAB proceedings. The PTO proposed to amend the rules to require the PTAB to interpret the claims in IPR/PGR/CBM proceedings using the same standard as applied in federal district courts and the USITC, and to consider any prior claim construction determination concerning a term of involved claim in a civil action or ITC proceeding that is timely made in the PTAB proceeding. The proposed changes would replace the BRI standard with the claim construction standard used in federal district courts and would be consistent with the PTO's current approach for interpreting claims in an expired patent. Full text of the notice is available here.
On April 24, 2018, the U.S. Supreme Court issued its decisions in two much-awaited patent cases involving inter partes review. In Oil States, in a 7-2 decision, the Court held that inter partes reviews were constitutional under the public-rights doctrine. Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC, 584 U.S. ___ (2018). In SAS, in a 5-4 decision, the Court held that the PTAB must decide the patentability of all the claims the petitioner has challenged in an inter partes review. SAS Inst. Inc. v. Iancu, 584 U.S. ___ (2018).
Oil States Energy Svcs., LLC v. Greene's Energy Group, LLC
In Oil States, petitioner Oil States Energy Services, LLC obtained a patent relating to technology for protecting wellhead equipment used in hydraulic fracturing. Oil States sued Greene's Energy Group, LLC for infringement and Greene's Energy challenged the validity in district court and also filed an IPR petition. The district court issued a claim construction order favoring Oil States while the PTAB concluded that the patented claims were invalid. Oil States appealed to the Federal Circuit challenging the PTAB decision and the constitutionality of IPR. While the appeal was pending, the Federal Circuit rejected the constitutionality of IPR in a separate case and summarily affirmed the PTAB's decision involving Oil States.
On appeal, the U.S. Supreme Court held that the inter partes review does not violate Article III. Writing for the majority, Justice Thomas reasoned that IPR falls squarely within the public-rights doctrine and that patents are "public franchises." According to the Court, IPR involves the same basic matter as the grant of a patent subject to the Board's authority and that the Court has recognized that franchises can be qualified in this manner. Addressing the petitioner's arguments, the Court found that the three decision recognizing patent rights are private property were decided under a different statutory scheme, historical practice where courts have adjudicated patent validity does not foreclose Congress from assigning matters governed by public-rights doctrine to the Executive, and that the similarities between the various procedures used in IPR and in courts does not lead to the conclusion that IPR violates Article III. The Court went on to to say that the holding is narrow and does not address whether patents are property for the purposes of Due Process Clause or the Takings Clause.
In his dissent, Justice Gorsuch joined by Chief Justice Roberts, stated that the decision signaled a retreat from Article III's guarantees that "suits at the common law, or in equity, or admiralty" must be heard by independent judges.
Full text of the Oil States opinion is available here.
SAS Institute Inc. v. Iancu
In SAS, petitioner SAS Institute sought an inter partes review of ComplementSoft's software patent alleging that all 16 of the claims were unpatentable. The Director instituted review of only claims 1 and 3-10 and denied review on the rest. At the end of litigaton, PTAB issued a final written decision finding claims 1, 3 and 5-10 to be unpatentable while upholding claim 4. PTAB's decision did not address the remaining claims on which the Director had refused review. SAS appealed to the Federal Circuit which affirmed the Board's decision and dismissed SAS's argument that 35 USC 318(a) required the Board to decide the patentability of every challenged claim in the petition. SAS filed a writ of certiorari.
On appeal, the U.S. Supreme Court, in a 5-4 decision, held that the Patent Office must decide the patentability of all of the claims the petitioner has challenged in an IPR instituted by the PTAB.
Full text of the SAS opinion is available here.
On April 17, 2018, the Federal Circuit affirmed the PTAB's finding that patent owner failed to sufficiently corroborate inventor's testimony of conception. Apator Miitors APS v. Kamstrup A/S, No. 2017-1681 (Fed. Cir. Apr. 17, 2018) (Moore, J.). Kamstrup filed an IPR and Board instituted based in part on Nielsen. During trial, Apator attempted to swear behind Nielsen's effective filing date by proffering a declaration from the inventor. PTAB found that the only evidence of an earlier conception date was the inventor's declaration and that "mere unsupported evidence of the alleged inventor, on an issue of priority" was insufficient proof of prior conception. Based on its finding, the PTAB found the claims to be unpatentable in view of Nielsen reference. On appeal, the Federal Circuit, a panel consisting of Judges Moore, Linn and Chen, affirmed finding that substantial evidence supported the PTAB's finding. The Court reasoned that Apator failed to meet its burden of proof because the email evidence provided to support an earlier conception date failed to indicate that a file relating to the invention was attached.
Full text of opinion is available here.
On June 12, 2017, the U.S. Supreme Court granted certiorari on the constitutionality of IPRs. Oil States Energy Svcs, LLC v. Greene's Energy Group, LLC, 639 Fed. Appx. 539 (Fed. Cir. 2016), cert. granted, No. 16-712 (June 12, 2017). The Court presented the following questions: (1) whether inter partes review-an adversarial process used by the PTAB to analyze the validity of existing patents-violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury; (2) whether the amendment process implemented by the PTO in IPR conflicts with this Court's decision in Cuozzo, and congressional direction; and (3) whether the "broadest reasonable interpretation" of patent claims-upheld in Cuozzo for use in IPR requires the application of traditional claim construction principles, including disclaimer by disparagement of prior art and reading claims in light of the patent's specification.
In its Order, PTAB ruled that demonstratives during oral arguments can only include arguments and evidence already presented to the Board and included in the parties' papers (petition, patent owner response, reply etc). Int'l Business Machines Corp. v. Intellectual Ventures II, LLC, IPR2015-00089, -00092, Paper 41 (PTAB Jan. 14, 2016). In this case, the Petitioner objected to certain slides that cited to patent owner's expert declaration that patent owner did not cite in its Patent Owner Response or any other paper. Patent Owner acknowledged but contended that the paragraphs referenced are conclusions which were argued in the Response. Agreeing with the Petitioner's arguments, the Board precluded the use of the demonstratives to the extent the slides reference paragraphs of the declaration that are not included in the Response.
PTAB instituted an inter partes review after prior denial of the petition conceding that the panel had erred when it overlooked a key argument of the challenger when denying the petition the first time. AVX Corp. v. Greatbatch Ltd., IPR2015-00710.
PTAB designated two recent decisions as being precedential--LG Elec., Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015); and Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (PTAB May 14, 2015). In LG Electronics, LG was served with two complaints, one in 2008 and another in 2014. The 2008 case settled and was dismissed in part with prejudice. The 2014 complaint was served less than a year prior to filing the petition. In refusing the IPR, PTAB disagreed with LG's argument that "a complaint" means "a latest" complaint and that the 2014 complaint makes it eligible to file the IPR. In Westlake, Westlake filed a follow-on CBM petition after PTAB's partial Institution Decision in which the Board opted not to consider some claims. Following issuance of a Final Written Decision, patentee filed a motion to terminate the follow-on petition arguing that the Final Written Decision incorporates the Institution Decision by reference and thus, applies to all claims challenged in the petition, not just the claims on which trial is instituted. PTAB disagreed and found that non-instituted claims are not claims that have resulted in a Final Written Decision.
An expanded panel of the PTAB granted the joinder motion allowing the same party's serially-filed IPR petitions to be consolidated into a single proceeding when one of the petitions would have been time-barred but for the grant of the motion. Zhongshan Broad Ocean Motor Co., Ltd. v. Nidec Motor Corp., IPR2015-00762, Paper 16 (PTAB Oct. 5, 2015). Petitioner timely filed an IPR petition but due to certain deficiencies, filed a second petition more than one year after it had been served with a complaint. The second petition however was accompanied by a joinder motion under Section 315(c). A PTAB panel denied the joinder reasoning that the Petitioner could not be joined as a party to a proceeding in which it is already a party. On rehearing by an expanded panel, the expanded panel concluded that Section 315(c) permits both party joinder and issue joinder. In granting the motion, the expanded panel reasoned that the second petition merely seeks to rectify a procedural deficiency of the first petition and doesn't prejudice the patent owner.
On August 19, 2015, the USPTO announced proposed changes to rules governing PTAB proceedings. The announcement expands the PTO's "quick-fixes" initiated on March 27, 2015. The proposed changes would: (1) allow patent owner's to include new testimonial evidence, such as an expert declaration with its opposition to a petition; (2) set new requirements to police attorney misconduct; (3) clarify aspects of the USPTO's claim construction standard; (4) change how the PTAB should handle multiple proceedings; (5) clarify when the PTAB will allow live testimony; and (6) address motions by patent owner's to amend claims. PTO's announcement can be found here.
On August 7, 2013, a panel of the PTAB issued an order detailing the guidelines for a foreign language deposition. Ariosa Diagnostics v. Isis Innovation Ltd., IPR2012-00022, Paper 55 (PTAB Aug. 7, 2013) In providing the guidelines, the panel acknowledged that 37 CFR 42.53 and the panel's guidelines will govern the taking of a deposition in a foreign language. Per the guidelines, the party proffering the witness is responsible for providing the first interpreter and provide the first interpreter's information at least five business days before cross-examination. The party cross-examining the witness may engage a second interpreter and at least five business days before the cross-examination, provide the information on the second interpreter. A consecutive mode of interpretation shall be used and where the second interpreter disagrees with the first interpreter, the second interpreter shall inform his counsel by note. If counsel desires to raise the disagreement on the record, the second interpreter will be allowed to interpret the question or answer. An objection shall be made on the record in instances where there's a disagreement as to interpretation between the two interpreters.
Disclaimer: The content in this blog is solely for informational purposes and does not constitute legal advice.