Archive for the ‘Litigation’ Category

Are Patent-Friendly PTAB Decisions On the Rise?

Monday, February 6th, 2017

Patent litigation changed with passage of the America Invents Act. Overnight the PTAB became a new venue for challenging patent claims using IPRs, CBMs and PGRs. The initial reaction by the patent bar to the PTAB’s “take charge” approach to instituting review and canceling patent claims was met with approval by businesses under attack by patent trolls and with disdain by patent owners whose patents would have likely sailed through the assertion before the AIA. Some commentators blasted the PTAB for a high percentage of patent claims invalidated in PTAB proceedings.

Those who tried to paint the actions of the PTAB with a broad brush in the first years of IPRs were bound to be both right and wrong. Yes, institution rates were at an all-time high, but factors such as these made the first years of PTAB practice particularly hard to characterize:

  • the patent bar and the PTAB were learning how to litigate these new patent trials for the first time;
  • litigation teams did not have the luxury of seeing how the PTAB viewed patents under review, and to tailor their litigations accordingly; and
  • a number of patents already in litigation were selected based on a pre-AIA (pre-IPR) enforcement economic model:
    • discovery and litigation costs established a minimal nuisance settlement value (now it is the cost of IPR);
    • thinly capitalized patent owners who previously had to outlay only minimal investment in the litigation suddenly had to secure counsel to defend patent rights in these patent reviews for the first time; and
    • the patents under review were drafted to survive district court scrutiny and enjoy the presumption of validity and a clear and convincing standard of review (and many still are).

Public sentiment was a moving target, but so was practice before the PTAB. After witnessing the PTAB’s heightened scrutiny of patentability, rather than file new suits many patent owners decided to wait and watch from the sidelines or take their assertions outside the U.S. Regardless, patent owners quickly learned the benefit of analyzing and selecting patents more likely to survive an IPR, CBM or PGR lodged by a defendant-petitioner before engaging in a patent litigation.

Now, with PTAB institution rates moderating, it remains to be seen whether the Board is easing its scrutiny on patentability or whether higher caliber patent assertions are being lodged in view of that heightened scrutiny.

For example, the PTAB recently rendered some decisions that might give patent owners reason to reconsider:

CASE STUDY 1: IPR2016-01453 – U.S. Patent 7,358,679 – Wangs Alliance Corp. d/b/a WAC Lighting Co. v. Philips Lighting North America Corp., Paper 8, (Feb. 2, 2017)

On February 2, 2017, the Board denied the ’679 IPR Petition filed by Petitioner Wangs Alliance Corp. (“WAC”) challenging Patent Owner Philips’ Lighting patent. The backstory of the dispute between Philips and WAC is quite interesting:

Philips has been embroiled in patent litigation with WAC since May, 2015. Koninklijke Philips N.V. et al. v. Wangs Alliance Corporation, Case No. 14-cv-12298-DJC (D. Mass.). Philips sued WAC for patent infringement of eight patents (not including the ‘679 patent) relating to lighting products and systems relating to LED lighting devices. WAC filed IPR petitions on seven of the eight patents, but obtained institution of only six of the seven IPR petitions. In January 2016, the district court litigation was stayed pending the outcome of the IPRs.

WAC later filed two IPR petitions against the ‘679 patent.  The ’679 patent does not appear in the litigation documents, but WAC identified it as claiming priority to U.S. 7,352,138 (which is in the litigation) and as related to U.S. 7,039,399 (also in the litigation).

The ‘679 patent relates to an LED-based lighting unit that resembles a conventional MR16 bulb having a bi-pin base connector configured to engage mechanically and electrically with a conventional MR16 socket. Claim 1 is representative:

 1. An apparatus, comprising:

at least one LED;

a housing in which the at least one LED is disposed, the housing including at least one connection to engage mechanically and electrically with a conventional MR16 socket; and

at least one controller coupled to the housing and the at least one LED and configured to receive first power from an alternating current (A.C.) dimmer circuit, the A.C. dimmer circuit being controlled by a user interface to vary the first power, at least one controller further configured to provide second power to the at least one LED based on the first power.

WAC’s ’679 IPR petition was denied when the Board adopted a claim construction of “alternating current (A.C.) dimmer circuit” that was narrower than the one proffered by Petitioner WAC.

WAC argued that “A.C. dimmer circuit” means “a circuit that provides an alternating current (A.C.) dimming signal.” WAC further asserted that it requires only receipt of an A.C. signal and the provision of power (A.C. or D.C.) to a light source. Patent Owner Philips countered that “A.C. dimmer circuit” requires an AC output from the AC dimmer circuit. The Board agreed with Philips, based on arguments and claim constructions from a related IPR (IPR2015-01294 which relates to U.S. 7,038,399), and because Patent Owner argued that “every instance of “A.C. dimmer circuit” in the ’679 patent’s specification describes an A.C. output from the A.C. dimmer circuit. (See Prelim. Resp. 4–5.)

A summary of the Philips patents and their IPR outcomes thus far (note: several decisions are still on appeal) shows that Patent Owner Philips is defending its patents well in these proceedings:

* The ’679 Patent is not appearing in litigation documents, but a claim of priority from U.S. 7,352,138 and a relationship to U.S. 7,039,399 is noted in WAC’s petitions. The ’679 IPR outcome is not yet determined because even though the -01453 IPR petition was unsuccessful the -01455 IPR institution decision remains to be decided and is not expected until later this month. Note: several of these decisions are on appeal, so these are not final results.

Philips’ IPR results are comparable to historical statistics when it comes to the number of IPRs instituted, but its results are substantially better than the statistical outcomes associated with IPR final written decisions from 2016 data. For example, early Board practice saw a very high percentage of IPR institutions (starting at ~90% in 2013 and dropping to ~70% in 2016). Upon institution, a patent owner’s chances of losing all claims if the IPR were to reach a final written decision would be roughly 70%.

In this Philips case study, the percentage of IPRs instituted remains relatively consistent with IPR institution outcomes (ignoring the ‘679 IPRs because they are not yet final, we get 5 out of 7 IPRs were instituted or ~70% ); however only one of the institutions resulted in a cancellation of all claims, which is much closer to 17% than the 2016 expected 67% cancellation rate for IPRs instituted which end in a final written decision (again, the results of the Federal Circuit appeals will not be known for some time). However, the data also shows a mixed claim decision outcome in 2 out of 6 IPRs (~33%), which equates to roughly double the typical percentage of mixed claim decisions (typically ~15%). Of course, mixed claim decisions are very hard to evaluate, because one has to know which claims are more likely to be infringed with substantial damages to know if the mixed result was a winner or a loser for a patent owner.

The Philips patent IPR outcomes are not yet final, but as of today Philips is substantially ahead of the 2016 percentages.

Let’s consider another case study:

 

CASE STUDY 2: IPR2015-01769, — U.S. Patent 7,793,433 — Zero Gravity Inside, Inc. v. Footbalance System OY, , Paper 49, (Feb. 3, 2017)

Footbalance System OY sued Zero Gravity Inside, Inc. et al. alleging patent infringement in May, 2015 and filed amended complaints, including a third one filed on October 21, 2016. Footbalance alleged patent infringement of its US Patents 7,793,433 and 8,171,589. The patents related to apparatus and method for producing an individually formed insole.

In response, Zero Gravity filed two IPR petitions challenging claims of each patent on August 19, 2015. Both IPR challenges failed.

The ’589 IPR petition alleged obviousness of claims 1-3, but was not instituted in a Decision Denying Inter Partes Review dated January 13, 2016 (IPR2015-01770, Paper No. 17, January 13, 2016).

The ’433 IPR petition was instituted based on alleged obviousness of claims 1-7, but on February 3, 2017, the Board found that Petitioner Zero Gravity failed to show by a preponderance of the evidence that claims 1-7 of the ’433 patent were unpatentable under 35 U.S.C. § 103. Footbalance managed to maintain its claims despite institution of the IPR.

The Board decided Petitioner failed to show that the prior art taught “wherein the at least one layer of thermoplastic material is configured to reach out from under a heel of a foot only to the metatarsophalangeal joint of the foot”, as recited in Claim 1 (“the MTP limitation”).

According to the Final Written Decision, Petitioner first asserted that the MTP joint extended approximately ¾ of the way down the foot, but Patent Owner countered that a person of skill in the art would understand the MTP limitation requires a precise anatomic location of the MTP joint and not an approximation or average, such as ¾ the length of the foot. The Board found that Petitioner then shifted its argument to assert that the prior art, which taught a pad before the ball of the foot was “so close to the requirements of the MTP limitation that the MTP limitation would still have been obvious to a POSA in light of either of these teachings.” Paper 48, 8-9 (italics in original). The Board was not persuaded:

Petitioner’s contentions in the Petition are not persuasive because they are not based upon the broadest reasonable construction of the MTP limitation. As discussed above, we construe the MTP limitation to require a layer formed to extend to, but no further than, the location of the MTP joint of a specific foot. [ ]. Petitioner, however, does not sufficiently show that an insole having a ¾-length moldable support layer teaches a layer formed to extend to, but no further than, the location of the MTP joint of a specific foot. [ ]

Petitioner’s contentions in its Reply also are not persuasive. Dieckhaus discloses that thermoplastic layer 6 “extends from the back or heel portion of the insole, to approximately just short of the ball section of the foot” [ ].  Approximately just short of the ball section of the foot is not the location of the MTP joints (i.e., the location of the heads of the metatarsal bones and the corresponding proximal phalanx). [ ] Further, Petitioner does not sufficiently show that it would have been obvious to one of ordinary skill in the art to modify Dieckhaus’s thermoplastic layer 6 to extend to, but no further than, the location of the MTP joint of a specific foot. Petitioner’s assertion that such a modification would have been obvious because Dieckhaus’s disclosure is “so close” is a mere conclusory statement. “To satisfy it burden of proving obviousness, a petitioner cannot employ mere conclusory statements. The petitioner must instead articulate specific reasoning, based on evidence of record, to support the legal conclusion of obviousness.” In re Magnum Oil Tools Int’l, Ltd., [cites omitted].

The Footbalance litigation is still in its very early stages, so it is too early to tell how the litigation may turn out, but the Board did not cancel claims from either patent.

These recent outcomes do not establish a trend, but they do show that some patent owners are succeeding despite the heightened scrutiny of PTAB proceedings.  They also show that the PTAB will provide relief to patent owners at both institution and final written decision stages of the PTAB trial.  They also give lessons on better patent drafting, which will be the subject of future posts.

 

Patent Due Diligence and Evaluation After the AIA

Monday, July 18th, 2016

Many factors must be considered for due diligence and valuation of a patent portfolio. The patent owner’s desire to have broad claims that capture a large number of infringements must be tempered against its need for claims that will not be deemed invalid in view of prior art.

Before the America Invents Act (AIA), patents were crafted to survive federal court scrutiny.  An assertion of broad claims was more likely than sweating the details about validity because it was harder to prove a patent was invalid than it was to prove it was infringed.

With the enactment of the AIA, the Patent Trial and Appeal Board (PTAB or Board) is empowered to review patent validity in administrative trials (AIA Trials). Patents are more readily invalidated in these AIA Trials using a lower burden of proof than required in federal district court. Furthermore, the Board’s administrative patent law judges have both scientific and patent law training, which enables them to scrutinize patents more carefully than a typical district court judge or jury.

The “new normal” is that a patent’s validity is likely tested in the PTAB (in IPR, CBM, or PGR) before it is enforced in federal district court. Savvy companies are taking extra measures to review their patents carefully before acquiring and asserting them to reduce or avoid the cost and delay that comes with PTAB proceedings.

WHAT ARE THE DOWNSIDES FOR PATENTS THAT ARE NOT AIA-READY?

  • RISK: AIA Trials statistically favor the Petitioner/Defendant. Don’t invest in a portfolio or a litigation that won’t deliver value.
  • DELAY: Patent Office Trials are one more reason for a stay of parallel federal district court proceedings. Justice delayed is justice denied.
  • COST: Patent owners dragged into an IPR, PGR or CBM can expect six figure defense costs with the best-case outcome being that the claims are upheld—which is essentially the patent’s original status.
  • CLAIM CORRECTION UNLIKELY: Amendments are
    rarely allowed in IPRs, CBMs, and PGRs. Don’t expect to fix defective patents without a lengthy proceeding that is conducted after the AIA Trial.
  • HARM TO FUTURE ACTIONS: If claims survive the AIA Trial validity challenge, admissions may be made that could reduce the effectiveness of any district court infringement action.

Poorly crafted patent claims are typically cancelled in an AIA Patent Trial. High quality patents are more likely to bypass review, and those patent owners avoid the cost, delay, and risk of defending weak claims in AIA Trials.

To get a good read of a patent’s ability to survive AIA review, seek the opinion of patent counsel that is experienced in patent prosecution, patent litigation, and post-grant proceedings.

In case you missed it, I put together a simple 2 minute video with 4 tips to make your patent portfolio AIA-ready.

4 Tips to Make Your Patent Portfolio AIA-Ready

Wednesday, July 13th, 2016

The America Invents Act (AIA) has changed the way that patents are enforced. In traditional patent litigation, a patent was drafted to perform in district court. After the AIA, when patents are asserted, they are first challenged in administrative proceedings before the Patent Trial and Appeal Board (PTAB). These proceedings, called IPRs (inter partes reviews), PGRs (post-grant reviews), and CBMs (covered business method reviews), are conducted by skilled administrative law judges who have both scientific and legal experience. Patents that fail in these more-stringent reviews will never get a day in court, so patent applicants should be adapting their patent strategies to make their patents AIA-ready.

Check out our video for tips on how to make stronger patents that will withstand AIA reviews.

Supreme Court’s Stryker/Halo Decision Makes it Easier for Courts to Award Enhanced Damages In Patent Infringement Cases

Tuesday, June 14th, 2016

The recent Supreme Court decisions in the Stryker and Halo cases just made it easier for courts to award enhanced damages in patent infringement cases, discarding Seagate’s “objective recklessness” test.

The Seagate Test

In 2007, the Federal Circuit announced a test for enhanced damages whereby a plaintiff seeking enhanced damages had to show that the infringement of his patent was “willful.”  In re Seagate Technology, LLC,  497 F. 3d, 1360, 1371.  The Federal Circuit set forth a two-part test to establish such willfulness: First, “a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” without regard to “[t]he state of mind of the accused infringer.” Id., at 1371. This objectively defined risk is to be“determined by the record developed in the infringement proceedings.” Ibid. “Objective recklessness will not be found” at this first step if the accused infringer, during the infringement proceedings, “raised a ‘substantial question’ as to the validity or noninfringement of the patent.” That bar applied even if the defendant was unaware of the arguable defense when he acted.

Second, after establishing objective recklessness, a patentee had to show by clear and convincing evidence the risk of infringement “was either known or so obvious that it should have been known to the accused infringer.” Seagate, 497 F. 3d, at 1371. Only when both steps were satisfied could the district court proceed to consider whether to exercise its discretion to award enhanced damages. Ibid. 

Stryker / Halo Decisions Restore Courts’ Discretion to Award Enhanced Damages

The Supreme Court’s recent decision in the Stryker and Halo cases discarded the Seagate test and restored courts’ discretion to award enhanced damages.  The Court held “[t]he Seagate test is not consistent with §284.”  The relevant language of § 284 contains “no explicit limit or condition on when enhanced damages are appropriate, and this Court has emphasized that the “word ‘may’ clearly connotes discretion.”  So the Court found no explicit requirement for Seagate’s “objective recklessness” test.

The Court also found Seagate unnecessarily required a finding of “objective recklessness” even when wrongdoing was demonstrated by the facts of a case.  The Court also disagreed with Seagate’s requirement of a “clear and convincing evidence” standard for showing recklessness, and held that the proper standard for enhanced damages was a “preponderance of the evidence” — the same standard as for patent infringement determinations.

The Court explained that its decision did not contradict § 298, that failure to present advice to the court may not be used to prove willful infringement:

Section 298 provides that “[t]he failure of an infringer to obtain the advice of counsel” or “the failure of the infringer to present such adviceto the court or jury, may not be used to prove that the accused infringer willfully infringed.” 35 U.S.C. § 298. Respondents contend that the reference to willfulness reflects an endorsement of Seagate’s willfulness test. But willfulness has always been a part of patent law, before and after Seagate. Section 298 does not show that Congress ratified Seagate’s particular conception of willfulness. Rather, it simply addressed the fallout from the Federal Circuit’s opinion in Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F. 2d 1380 (1983), which had imposed an “affirmative duty” to obtain advice of counsel prior to initiating any possible infringing activity, id., at 1389–1390. See, e.g., H. R. Rep. No. 112–98, pt. 1, p. 53 (2011).

Consequently, nine years after Seagate, the Supreme Court has made it easier for courts to make a determination of enhanced damages.  Time will tell if this decision will spur additional patent opinion practice, such as prior to the 2007 Seagate decision.

Federal Circuit Employs Phillips Claim Construction to Measure Claims Amended in Reexamination for Possible Intervening Rights

Monday, February 22nd, 2016

When patent owners sue an accused infringer for patent infringement, one way for the accused infringer to avoid liability is to show noninfringement of the patent claims.  But if the claims are extremely broad, the accused infringer may find it difficult to prove noninfringement and instead may have to rely on a showing of invalidity to avoid liability.  However, a showing of invalidity requires clear and convincing evidence, which is a high standard.  Enter post-grant proceedings, which provide the petitioner (or “requester,” when employing reexamination) a lower evidence standard for patent challenges.

Should the patent be subject to review under post-grant proceedings, the patent owner will likely want to avoid amendment if possible, because amendment that results in substantive changes to the claimed invention can trigger intervening rights, which may provide some reduction of infringement liability for the accused infringer should the claim be substantively narrowed in the post-grant proceeding.  Stakeholders want to know how to determine substantive amendment, triggering intervening rights.  For example, is substantive amendment to be measured by the claim construction standard typically used in the post-grant proceeding (currently “broadest reasonable interpretation,” but pending review by the Supreme Court in Cuozzo), or the claim construction standard used in district court (Phillips)?  The Federal Circuit recently addressed this question when considering amendments made in reexamination for using the Phillips standard in Convolve, Inc. v. Compaq Computer Corp. (Fed. Cir., 2014-1732, Feb. 10, 2016).

Convolve sued Compaq and others in 2000 for infringement of its U.S. Patent No. 6,314,473 relating to minimization of vibrations of a disk drive for quieter operation.  Convolve’s patent ultimately was reexamined and in 2008 certain words were added to the claims during the reexamination.  The court considered whether the amended claims were substantively identical to decide if intervening rights would apply:

“A patentee of a patent that survives reexamination is only entitled to infringement damages for the time period between the date of issuance of the original claims and the date of the reexamined claims if the original and the reexamined claims are ‘substantially identical.’” R & L Carriers, Inc. v. Qualcomm, Inc., [ ]. “[I]t is the scope of the claim that must be identical, not that identical words must be used.” Slimfold Mfg. Co., Inc. v. Kinkead Indus., Inc., [ ]. As a result, amendments made during reexamination do not necessarily compel a conclusion that the scope of the claims has been substantively changed. [ ] This is true even where the claims at issue were amended during reexamination after a rejection based on prior art. Laitram Corp. v. NEC Corp., [ ] Rather, “[t]o determine whether a claim change is substantive it is necessary to analyze the claims of the original and the reexamined patents in light of the particular facts, including the prior art, the prosecution history, other claims, and any other pertinent information.” Laitram[ ].

Accordingly, the Federal Circuit employed a Phillips standard when reviewing the claim amendments:

In determining the scope of the claims, we apply the traditional claim construction principles of Phillips v. AWH Corp.,[ ] (en banc), paying particular attention to the “examiner’s focus in allowing the claims” after amendment. R & L Carriers [ ]; see also Laitram Corp. v. NEC Corp., [ ] (When an amendment is made during the reexamination proceedings to overcome a prior art rejection, that is a “highly influential piece of prosecution history.”).

In one example, the original claims recited “acoustic noise,” but were amended in reexamination to “seek acoustic noise.”  The issue that the Federal Circuit considered is whether this narrowing was a substantive amendment for purposes of its intervening rights analysis.  It could have been deemed the amendment to have been a substantive change, because other types of motor noises could have been ruled out by the amendment, but instead the court considered:

  • the specification, which focused on the seek process and the noise it generates;
  • the claims, which relate “acoustic noise” to the seek time and seek process; and
  • the original prosecution history of the patent, where the patent owner argued that the reason for the amendment.

It concluded:

On their face, the original claims recite only “acoustic noise,” which could encompass any manner of acoustic noise, including that generated from the spindle. But when read in conjunction with the remaining claim limitations and in light of the specification and prosecution history, a person of ordinary skill in the art would understand the claims to be limited to seek acoustic noise.

Consequently, the Federal Circuit decided the claim amendments resulted in substantively identical claims before and after amendment, and therefore intervening rights do not apply:

In sum, we conclude that the addition of the term “seek” before “acoustic noise” did not alter the scope of the claim.  [] Here, the language of the claims, read in light of the specification and prosecution history, especially the applicant’s 2001 remarks and amendment, compel a conclusion that the claims as originally drafted were limited to seek acoustic noise despite the lack of an express recitation in the claims.

The Federal Circuit reversed the lower court’s grant of summary judgment of noninfringement based on the lower court’s determination that liability was precluded by intervening rights.

The Federal Circuit concluded that the claim scope prior to the amendment would have been interpreted to be the same as the scope after amendment using a Phillips construction based on the specification, claims, and prosecution history.  Had the court instead relied upon the broadest reasonable interpretation from reexamination as its gauge, the claims would presumably have been deemed substantively different and the district court summary judgment would have been affirmed.  Convolve allows patent owners an opportunity to avoid intervening rights when amended claims would obtain the same Phillips claim construction as the claims prior to amendment.

 

Patent Trends to Watch in 2016

Friday, January 29th, 2016

2016 is starting off with a bang!  A number of interesting new developments have occurred as we enter into this new year:

AIA 2015 Stats

 

So we will monitor practices by the courts, the PTAB, stakeholders, and patent practitioners to observe the effects and interplay of these decisions and actions over the course of the year.  In particular, it will be interesting to see how the Board and the courts handle claim construction issues knowing that BRI may be revised by the Supreme Court.  Also of great interest is how parallel patent infringement trials will be impacted by the PTAB proceedings on the underlying patents.

 

Board Limits Multiple IPR Challenges in Samsung Electronics v. Rembrandt Wireless Technologies

Monday, June 22nd, 2015

June 22, 2015

Rembrandt Wireless Technologies sued Samsung and Research in Motion for infringement of  U.S. Patent 8,457,228 in June 2013.  The ‘228 patent relates to data communications, and in particular to a data communication system in which a plurality of modems use different types of modulation in a network.

In June of 2014, Samsung filed six IPR petitions to challenge various claims of the ’228 patent.  (IPR2014-00889 to -00893 and -00895.)   Only half of Samsung’s six petitions were instituted for trial, but claim 21 was the only claim of the ’228 patent in the district court litigation that was not instituted for trial in the PTAB.  (Rembrandt also asserted U.S. Patent 8,023,580, which was also the subject of six IPR petitions, and had additional claims not instituted for trial.)

In the original IPR challenge of claim 21 (IPR2014-00892), Samsung unsuccessfully asserted a combination of “admitted prior art” (“APA”) with U.S. Patent 5,706,428 (“Boer”).  Samsung filed another IPR petition in January 2015 with a motion for joinder to IPR2014-00892 proposing new grounds for the unpatentability of claim 21.  (IPR2015-00555.)  These new grounds combined a new reference, U.S. Patent 5,537,398 (“Siwiak”), to the originally asserted prior art.  But on June 19, 2015, the Board again denied institution of trial of claim 21 and without considering Siwiak:

We do not reach the merits of Petitioner’s additional reasoning in the instant Petition as to why Petitioner asserts that the subject matter of claim 21 would have been obvious over the combination of APA, Boer, and Siwiak. Instead, for the reasons discussed below, we exercise our discretion under 35 U.S.C. § 325(d) to deny institution of inter partes review in this proceeding.

35 U.S.C. § 325(d) states:

In determining whether to institute or order a proceeding under . . . chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.

To reject the second IPR petition, the Board integrated § 325(d) with 37 C.F.R.  § 42.1(b):  “[37 C.F.R. § 42] shall be construed to secure the just, speedy, and inexpensive resolution of every proceeding.”  The Board explained its denial of the petition:

Petitioner [ ] presents no argument or evidence that Siwiak was not known or available to it at the time of filing IPR ’892. In fact, Petitioner applied Siwiak in proposed grounds of rejection against claim 21 of the ’228 patent in another petition filed the same day as that in the IPR ’892 proceeding. See IPR2014-00889, Paper 2 at 58–60.  On this record, we exercise our discretion and “reject the petition” because “the same or substantially the same prior art” previously was “presented to the Office” in the IPR ’892 proceeding. [cites omitted]

Petitioner is requesting, essentially, a second chance to challenge the claims. We, however, are not persuaded that a second chance would help “secure the just, speedy, and inexpensive resolution of every proceeding.” 37 C.F.R. § 42.1(b). Permitting second chances in cases like this one ties up the Board’s limited resources; we must be mindful not only of this proceeding, but of “every proceeding.”  [cites omitted]

In this proceeding, however, we are not apprised of a reason that merits a second chance. Petitioner simply presents arguments now that it could have made in IPR ’892, had it merely chosen to do so.  In view of the foregoing, and especially in light of the fact that, barring joinder, this petition is time-barred under 35 U.S.C. § 315(b), we exercise our discretion [to deny the petition].

To conserve its limited resources, the Board must be more selective in petitions it will consider.  Petitioners must provide reasons why the Board should consider new grounds proffered in a subsequent petition, including why the new grounds could not have been presented in an earlier-filed petition.

PTAB Denies 2Wire IPR Petitions

Wednesday, June 10th, 2015

June 10, 2015

TQ Delta LLC sued Pace Americas, Inc. for patent infringement in the U.S. District Court for the District of Delaware in November 2013.  TQ Delta LLC v. 2Wire Inc., Case no. 1:13-cv-01835-RGA. The complaint was amended to name defendants Pace PLC, Pace Americas, LLC and 2Wire, Inc. in January 2014. TQ Delta ultimately alleged infringement by the defendants of 24 patents it owned. These patents relate to digital subscriber line (“DSL”) technology, including for example asymmetric digital subscriber line (“ADSL”) technology and very-high-bit-rate digital subscriber line (“VDSL”) technology.

On November 7, 2014, 2Wire, Inc. filed six inter partes review (IPR) petitions to challenge certain claims of six different patents owned by TQ Delta LLC that were asserted in the suit. (IPR2015-00239 to -00243 and -00247.)  Each IPR petition included a declaration by a technical expert and numerous exhibits. TQ Delta filed Preliminary Patent Owner Responses to each IPR petition.

On May 29, 2015, the Board denied all six IPR petitions. Why?

Each IPR petition was reviewed on its own merits, but in general the Board found that the Petitioner failed to prove its claims of obviousness:

A patent claim, however, “is not proved obvious merely by demonstrating that each of its elements was, independently, known in the prior art.” Id. at 418. “Rather, obviousness requires the additional showing that a person of ordinary skill at the time of the invention would have selected and combined those prior art elements in the normal course of research and development to yield the claimed invention.” Unigene Labs., Inc. v. Apotex, Inc., 655 F.3d 1352, 1360 (Fed. Cir. 2011).  [. . .] Further, an assertion of obviousness “‘cannot be sustained by mere conclusory statements; instead, there must be some articulated reasoning with some rational underpinning to support the legal conclusion of obviousness.’” Id. (citing In re Kahn, 441 F.3d 977, 988 (Fed. Cir. 2006)).

Petitioner does not explain sufficiently in the Petition why a person of ordinary skill in the art would have had reason to combine the teachings of [the prior art] to achieve the method of [the challenged claims]. Petitioner merely alleges that the claims would have been “obvious” in view of the three items of prior art, and describes how [certain prior art documents] allegedly teach various aspects of the claims. . . .

(See, for example, Decision Denying Institution of Inter Partes Review, IPR2015-00240, Paper 18, pp. 8-9.)

Additionally, the Board found that the Petitioner merely stated conclusory results of the asserted combination, but did not proffer a rationale to modify the components of the prior art documents:

Petitioner’s first statement that it “would have been obvious” to combine [certain prior art references] is conclusory and does not demonstrate a reason to combine. See KSR, 550 U.S. at 417–18; Unigene, 655 F.3d at 1360; In re Chaganti, 554 F. App’x 917, 922 (Fed. Cir. 2014) (“It is not enough to say that there would have been a reason to combine two references because to do so would ‘have been obvious to one of ordinary skill.’ Such circular reasoning is not sufficient—more is needed to sustain an obviousness rejection.” (citation omitted)).

(Id at 9.)

Moreover, the Board explained that the Petition must state these things explicitly, and cannot merely incorporate arguments from the expert declaration to draw its conclusions of obviousness. The Board found that the expert’s analysis was not reflected in the Petition, and relied on that to explain its decision to deny institution.  (Id at 11-12.)

* * *

One of the takeaways from this is that post-grant practitioners have to carefully consider how to best present their case to the Board.  Technical cases may involve a great deal of complex information, which must be organized and presented within the very limited pages afforded by the trial rules.  And, depending on the facts of each case, a Petitioner may not get a second chance to challenge the patent before the Board.

 

Are Your Patent Procurement Guidelines Outdated?

Sunday, May 3rd, 2015

 

I saw a bumper sticker that said:  “Change is inevitable, but growth is optional.”  This is true in many facets of life, and it is true for patent practice.  The changes of the past few years are numerous and far-reaching.  Is your patent portfolio strategy growing with these changes?

changes

One Simple Exercise

If you are responsible for your company’s patent portfolio, try this simple exercise:  look at your patent procurement guidelines to find out when they were last updated.  If they were last revised over two years ago, chances are they do not contemplate options like:

  • Track One filings in the USPTO for faster patent examination,
  • steps to use the USPTO’s After Final Consideration Pilot (AFCP) program to rapidly resolve pending prosecution, and
  • procedures to improve your future patent filings in order to survive claim challenges from IPRs, CBMs, and PGRs under the America Invents Act.

All of these options provide tools that can issue more meaningful and robust patents for your company and trim your patent portfolio’s bottom line.

Why Are These Tools Important?

Each of these tools can provide strategic advantages for your portfolio, depending on your goals.  For example:

  • Track One filings may be used in a campaign of patent filing to rapidly assemble issued patent rights in a strategic area, to bolster an ongoing enforcement campaign, or to offset expected or pending AIA patent challenges.
  • The after final consideration pilot program (AFCP) can be used to avoid needless and expensive RCE practice and to accelerate issue of valuable claims.
  • Drafting measures that enhance your patents’ ability to survive (or even avoid) AIA patent trials will become increasingly important–especially if Congress passes legislation to moderate post-grant review estoppel.  Your company saves hundreds of thousands of dollars each time your patents avoid an AIA patent trial — not to mention the potential recoveries that the patent brings when it is clear to the challenger that it is valid and infringed.

Act Now

Of course, there are many more tools for your procurement guidelines and the ones listed above are only some examples.  Every business requires different tools and approaches to match the patent practices and opportunities of that industry.

It takes time to assemble a good set of guidelines.  Even after the guidelines are complete, know that procedures to generate better patents can take time to implement.

When asked to audit patent filings for various companies, I was surprised by a pattern of reluctance to adopt new filing practices observed with preparation and prosecution counsel.  I heard various excuses to resist change, such as “we have been drafting claims like this for years.”   That was undoubtedly true prior to the AIA; however, the scrutiny that patents receive in AIA patent trials is substantially different than prior reexamination and litigation proceedings.

AIA post-grant proceedings are not going away any time in the foreseeable future.  Therefore, we are in a new patent enforcement paradigm and patent procurement practices have to change to adapt to this new enforcement paradigm.  Make sure that your patent prosecution practices are updated to generate the most effective rights possible.

[Editor’s Note:  Additional installments on patent preparation and prosecution in light of the AIA will be posted in the future.  Subscribe for updates.]

Target Wins Rehearing of IPR Joinder Decision with Expanded Panel

Friday, February 13th, 2015

Last fall, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to require joinder requests by a non-party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  Prior to that decision,  the Board had interpreted § 315(c) to allow for issue joinder by the petitioner of the original proceeding (see, for example Microsoft v. Proxyconn, IPR2013- 00109).  Of course, joinder was decided on a case-by-case basis, but had not previously been denied because the request was made by the petitioner of the original proceeding.

Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing.  The Board granted Target’s rehearing request.  In a 4:3 decision,  the majority agreed that § 315(c) had been overly narrowly interpreted in the prior decision:

Turning now to the merits of the Request for Rehearing, the contention at the heart of Petitioner’s request for rehearing is that the denial of its Motion for Joinder was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c).” Paper 22, 1. We agree with Petitioner.

The majority read § 315(c)’s reference to “any person who properly files a petition under section 311” in conjunction with § 311’s requirement that the petition filer not be the patent owner, to broadly interpret § 315(c) to include any person except the patent owner.  This interpretation is at odds with the dissent’s analysis, which reads § 315(c)’s reference to “may join as a party” to literally require a new party for joinder:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). The statute does not refer to the joining of a petition or new patentability challenges presented therein. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joined to IPR2013-00531.

While the majority decision does align with panel decisions on joinder prior to Target, one must ask whether this issue is finally resolved by this expanded panel decision.  For example, what happens if another panel does not follow this interpretation § 315(c)?  Or suppose this decision is appealed; would the Federal Circuit reverse a Board decision on joinder as it relates to institution given its recent interpretation of 35 U.S.C. § 314(d) in In re Cuozzo Speed Technologies? (“We conclude that § 314(d) prohibits review of the decision to institute IPR even after a final decision. . . . Section 314(d) provides that the decision is both ‘nonappealable’ and ‘final,’ i.e., not subject to further review. 35 U.S.C. § 314(d).”)  Would a Federal Circuit appeal have to be in the form of a petition for writ of mandamus?  If so, how would that square with the mandamus decisions in In re Dominion Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014)(mandamus relief not available to challenge the denial of a petition for IPR) and in In re Proctor & Gamble Co., 749 F.3d 1376, 1378–79 (Fed. Cir. 2014)(mandamus relief not available to provide immediate review of a decision to institute IPR)?