Rajan Law Office Blog - Rajan Law Office, LLC | Intellectual Property & Litigation

Supreme court rules pto director's review of decisions, not power to remove apjs, matters

6/21/2021

On June 21, 2021, in a plurality opinion, the U.S. Supreme Court ruled that what matters is that the Director have the discretion to review decisions rendered by APJs. U.S. v. Arthrex, No. 19-1434 (June 21, 2021). Smith & Nephew and ArthroCare Corp petitioned for inter partes review of a patent owned by Arthrex. A PTAB panel of 3 APJs concluded that the patent was invalid. On appeal to the Federal Circuit, Arthrex argued that the APJs were principal officers who must be appointed by the President with the advice and consent of the Senate, and therefore, their appointment by the Secretary of Commerce violated the Appointment Clause of the Constitution. The Federal Circuit held that the APJs were principal officers whose appointments were unconstitutional because neither the Secretary nor Director can review their decisions or remove them at will. As a remedy, the Federal Circuit invalidated the tenure protections of APJs who may be removed at will by the Secretary.
The question before the Supreme Court was whether the authority of APJs to issue decisions on behalf of the Executive Branch is consistent with the Appointments Clause of the Constitution. In a plurality opinion by CJ Roberts, the Court ruled that regardless of whether the Government is correct that at-will removal by the Secretary would cure the constitutional problem, review by the Director better reflects the structure of supervision within the PTO and the nature of APJs' duties. In vacating and remanding the case back to the Acting Director of the USPTO, the Court held that "because the source of the constitutional violation is the restraint on the review authority of the Director, rather than the appointment of APJs by the Secretary, Arthrex is not entitled to a hearing before a new panel of APJs."
Full text of the opinion is available here.

ptab designates decisions as precedential

3/18/2019

On March 18, 2019, the PTAB designated three decisions as precedential, two decisions relating to oral arguments and one decision on motion to amend.
Motion to Amend
Amazon.com, Inc. v. Uniloc Luxembourg S.A., IPR2017-00948 (PTAB Jan. 18, 2019) (Paper 34): In the context of a motion to amend, Section 311(b) does not preclude Petitioner from raising, or the Board from considering, other grounds of unpatentability, including Section 101, as to substitute claims not yet part of a patent. The Board explained that Aqua Products shifted the burden from the patent owner on patentability in a motion to amend but did not foreclose analysis of whether substitute claims complied with Section 101.

Oral Argument: The following two decisions are related to testimony at oral arguments.
K-40 Electronics, LLC v. Escort, Inc., IPR2013-00203 (PTAB May 21, 2014) (Paper 34): Factors that may be considered in determining whether to permit live testimony. In granting the motion to present live testimony from the named inventor, the panel elucidated the following factors: (1) whether demeanor of witness may be critical to assessing credibility; (2) whether witness is principal fact witness; and (3) whether witness testimony may be case-dispositive
DePuy Synthes Products, Inc. v. MEDIDEA, LLC, IPR2018-00315 (PTAB Jan. 23, 2019) (Paper 29): Testimony of an inventor at the oral hearing is considered new evidence, and not permitted, if a declaration from the inventor has not been previously provided. In referring to the Trial Practice Guide, the decision states that "[a] party may rely upon evidence that has been previously submitted in the proceeding and may only present arguments relied upon in the papers previously submitted."

On March 7, 2019, PTAB designated a decision on motion to amend as precedential.
Lectrosonics, Inc. v. Zaxcom, Inc., IPR2018-01129, 01130 (PTAB Feb. 25, 2019) (Paper 15): This decision sets forth the requirements and burden for a motion to amend. A motion to amend may cancel and/or propose substitute claims; the substitute claim will be treated as contingent and considered only if a preponderance of evidence establishes that the original claim was unpatentable. The burden of persuasion is on the petitioner to show proposed substitute claims are unpatentable and the Board determines unpatentability by preponderance of the evidence based on the entire record. Motion may propose reasonable number of substitute claims and must explain if more than one substitute claim per challenged claim. Patent owner must respond to ground of unpatentability involved in the trial. Motion may not present substitute claims that enlarge the scope or introduce new matter. Motion must include a claim listing reproducing each proposed substitute claim and the motion, as well as any opposition, is limited to 25 pages while reply and sur-reply are limited to 12 pages. All parties have a duty of candor including patent owner's duty to disclose any material to patentability of substitute claims.

The decisions are available here.

rule 36 judgment has collateral estoppel effect

12/10/2018

On December 10, 2018, the Federal Circuit affirmed the PTAB's decisions finding that Apple had met its burden of proving the challenged claims as obvious as VirnetX was collaterally estopped from relitigating whether a prior art reference was a printed publication. VirnetX Inc. v. Apple, Inc., No. 2017-2490, -2494 (Fed. Cir. Dec. 10, 2018) Apple filed two IPRs challenging US 8,504,696 as obvious over a US patent and printed publication RFC 2401. VirnetX argued that RFC 2401 was not a 102(b) prior art but the Board disagreed and invalidated the challenged patent. During pendency of appeal in this case, the Federal Circuit affirmed the Board's decisions, in a Rule 36 judgment, in another case between the same parties (VirnetX I) in which the Board found the RFC2401 to be a printed publication for 102b analysis. Subsequent to the VirnetX I decision, Apple filed a notice of supplemental authority in this case notifying the court of the relevance of the Rule 36 judgment in VirnetX I arguing that VirnetX was collaterally estopped from relitigating the printed publication issue.

On appeal, the Federal Circuit stated that a party is collaterally estopped from relitigating an issue if: (1) a prior action presents an identical issue; (2) the prior action actually litigated and adjudged that issue; (3) the judgment in that prior action necessarily required determination of the identical issue; and (4) the prior action featured full representation of the estopped party. According to the court, a Rule 36 judgment may serve as a basis for collateral estoppel if the issue was essential or necessary to the Rule 36 judgment. In affirming the Board's decision here, the court reasoned that the question of whether RFC 2401 was a printed publication was essential to the Rule 36 judgment in VirnetX I since each ground of unpatentability that VirnetX appealed in VirnetX I relied on RFC 2401.
Full text of the opinion is available here.

uspto proposes rule changes to claim construction standard in ptab proceedings

5/8/2018

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.

supreme court rules ipr constitutional and requires ptab to address every challenged claim

4/24/2018

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.

inventor testimony insufficient to prove conception date

4/17/2018

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.

SUPREME COURT grants cert in ipr constitutionality

6/12/2017

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.

DEMONSTRATIVES AT PTAB ORAL ARGUMENTS CANNOT INCLUDE NEW EVIDENCE

1/14/2016

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 INSTITUTES IPR AFTER PRIOR PETITION DENIAL

1/13/2016

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 designates precedential decisions

1/12/2016

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.