Archive for the ‘estoppel’ Category

Board Guidance on its View of Petitioner Estoppel: Westlake Services v. Credit Acceptance Corp:

Tuesday, July 21st, 2015
July 21, 2015

Last week, the Board provided an opinion to offer guidance on its view of the scope of petitioner estoppel.  The Westlake Services v. Credit Acceptance Corp. decision relates to the scope of estoppel to a Petitioner following a final written decision from a first petition.  Westlake Services v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (PTAB May 14, 2015). 

This case addresses the question of the scope of Petitioner estoppel when only part of the claims in a CBM proceeding are instituted for trial.  In short, the first petition set forth grounds to challenge the patentability of all claims of U.S. Pat. 6,950,807.  Only some claims were instituted for trial.  Later, the Petitioner filed another petition to challenge claims that were not instituted for trial in the first proceeding.  A final written decision was issued by the Board in the first proceeding finding the instituted claims unpatentable under § 101, and the Patent Owner sought to block the second petition based on petitioner estoppel under 35 U.S.C. § 325(e)(1):

The petitioner in a post-grant review of a claim in a patent under this chapter that results in a final written decision under section 328(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that post-grant review.

The Patent Owner obtained permission to brief the Board with its reasons why the Petitioner was estopped from filing the second petition.  The Patent Owner argued that § 328(a), provides “[i]f a post-grant review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.”  In this case the Patent Owner wanted estoppel to apply to all claims to prevent Petitioner from coming back for a second bite on the claims that were not instituted for trial.  After all, the petition was trying to challenge every claim of the patent and the Board did not institute on several claims.  So the Patent Owner relied on this language to assert that the estoppel arising from the Final Written Decision applied to all claims.

Here is the Patent Owner’s logical syllogism:

A.  The Petition challenged all claims.

B.  § 328(a) provides a Final Written Decision is with respect to “any patent claim challenged by the petitioner.”

C.  Therefore, the Final Written Decision applies to all claims, even though institution was only to a subset of the claims.

D.  § 325(e) provides estoppel to all claims because the Final Written Decision is to all claims in (C) above.

E.  Accordingly, Petitioner is estopped from challenging all claims.

The Board denied the Patent Owner’s logic.  Essentially, it determined that § 328(a) and § 325(e) apply on a claim-by-claim basis, and therefore estoppel applies only to the claims instituted for trial.  The Board wanted to clarify estoppel applies only to a claim in a patent that “results in a final written decision” under § 328(a).  So the Board’s logic is different:

A.  The Petition challenged all claims.

B.  Trial was instituted to only some claims.

C.  The Final Written Decision under § 328(a) is only to the instituted claims.

D.  § 325(e) provides estoppel to “a claim in a patent” that “results in a final written decision” under § 328(a), therefore estoppel is only to the instituted claims.

E.  Accordingly, Petitioner is estopped from challenging the instituted claims.

The Board’s guidance about the scope of estoppel allows all parties to make informed decisions about how to better litigate their cases.

AIA Post-Grant Practice Rapidly Integrates Federal Circuit and Board Decisions

Saturday, June 1st, 2013

AIA post-grant practice has many advantages over other proceedings, but one of the great benefits of AIA post-grant practice that we have not discussed is the speed in which AIA post-grant proceedings adopt recent patent decisions from different sources.  This is really an exciting and challenging feature of AIA post-grant practice that has become even more apparent in recent filings.  One of the reasons that AIA proceedings are so quick to adopt changes in patent law is that the PTAB offers a panel of patent judges who are already versed in patent law, so the Board does not have a large learning curve to process new decisions from the Federal Circuit and laws from Congress.  Another reason is that AIA patent trials are relatively fast-paced proceedings, which by their very nature will apply legal decisions quicker than routine district court practice.  Yet another reason is that many of the changes in practical post-grant practice are being driven by the Board itself, so the Board can quickly and consistently synthesize inputs from other sources and deploy its own procedural and legal changes.  The result is a petitions practice that can adapt quickly to a rapidly changing patent legal landscape.

One example of rapid integration of recent decisions is shown by a recent CBM petition filed on behalf of LinkedIn (CBM2013- 00025) that challenges claims 1-17 of U.S. Patent No. 7,856,430 (the ‘430 Patent) owned by AvMarkets, Inc.  This CBM petition is a convergence of findings from the recent Federal Circuit decision in CLS Bank lnt’l v. Alice Corp. Pty. Ltd., 2013 WL 1920941, at *9 (Fed. Cir. May 10, 2013) and the recent CBM petition and trial (SAP v. Versata, CBM2012-00001).  LinkedIn’s petition is notable for both what it includes and what it omits.  For example, the petition includes a single challenge of patent eligibility under 35 U.S.C. § 101 akin to the ultimate patentability challenge in SAP v. Versata and incorporating the recent CLS Bank decision.  For example, pages 4-5 of the LinkedIn petition borrows from the SAP v. Versata CBM:

The Board has concluded that the AlA’s definition of CBM patents should “be broadly interpreted and encompass patents claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity.” SAP America, Inc. v. Versata Development Group, Inc., No. CBM2012- 00001, at 21-22 (P.T.A.B. January 9, 2013) (Decision regarding the Institution of Covered Business Method Review), citing 77 Fed. Reg. 157 (August 14, 2012) at 48736. In particular, the Board has held that it does “not interpret the statute as requiring the literal recitation of the terms financial products or services [and that the] term financial is an adjective that simply means relating to monetary matters.” id. at 23. “At its most basic, a financial product is an agreement between two parties stipulating movements of money or other consideration now or in the future,” and encompasses “patents [that] apply to administration of business transactions.” ld., quoting 157 Cong. Rec. S5432 (daily ed. Sept. 8 2011) (statement of Sen. Schumer).

And pages 22-23 of the LinkedIn petition also incorporates findings from CLS Bank:

Moreover, the ‘430 Patent ultimately claims nothing more and nothing less than the abstract idea of generating sales leads by putting product data in a searchable index, adding only the instruction to “apply it” in the broadest field of use imaginable-the Internet. Mayo, 132 S. Ct. at 1294. That does not suffice to make these claims patentable. The idea of cataloguing customer and product data in the field of use of”the Internet” necessarily implies putting them in the formats known to be searchable on the Internet. The claims add nothing that is not already implicit in the abstract idea. Because the steps are “as a practical matter … necessary to every practical use” of the abstract idea of making commercial data searchable on the Web, they are “not truly limiting.” CLS Bank, 2013 WL 1920941 at * 11 , citing Mayo, 132 S. Ct. at 1298 (Lourie, J. concurring); see id. at *28-*29 (Rader, J., concurring) (key inquiry is “whether the claim covers every practical application of [the] abstract idea” but even if not, ” it still will not be limited meaningfully if it . .. only … identiflies] a relevant audience, a category of use, field of use, or technological environment”). The Internet is in fact so broad an area of application, it can barely be said to limit the claim even to a field of use.  CyberSource Corp. v. Retail Decisions, Inc., 620 F. Supp. 2d 1068, 1077 (N.D. Cal. 2009) (“The internet continues to exist despite the addition or subtraction of any particular piece of hardware … [T]he internet is an abstraction …. One can touch a computer or a network cable, but one cannot touch ‘the internet.”‘), aff’d, 654 F.3d 1366.

Also notable is that LinkedIn’s filing omits several things found in other CBM petitions, like a challenge based on prior art, an expert declaration offering evidence, and use of every available page (LinkedIn’s petition is only 27 pages of a possible 80 pages afforded CBM petitions).  With this approach, LinkedIn keeps the cost of challenge to a minimum and reduces estoppel to the single ground asserted should the Board issue a final decision upholding the patent.  Of course, the petition was recently filed on May 29, 2013, so it is too early to tell if it will be successful, but the concept of challenging a patent based on a petition with relatively few pages and no initial expert testimony is the latest adaptation of post-grant practice courtesy of the America Invents Act.

Progressive Casualty Litigation Stayed Pending Outcome of Liberty Mutual CBMs

Wednesday, April 24th, 2013

Progressive Casualty Insurance Co. sued different insurance companies for patent infringement of 5 of its patents in 2010-2012 in the Northern District of Ohio.  (Cases 1:10CV01370 and 1:11CV00082 against Safeco; Case 1:12CV01068 against State Farm; and Case 1:12CV01070 against Hartford.)  One of the defendants is Safeco Insurance Company, which has Liberty Mutual as its parent.  In 2012 and 2013 Liberty Mutual filed ten covered business method patent review (CBM) petitions (two CBM petitions were filed per patent).  Eight of these ten petitions were instituted for trial and two petitions were denied, but each of the five patents has at least one CBM where trial was instituted by the PTAB.

Liberty Mutual and the remaining defendants moved to stay the litigation based on the CBMs instituted.  Progressive opposed the motion to stay.  The District Court heard oral arguments on April 11, 2013, and granted the motion stay on April 17, 2013.

The court used a four-factor test set forth in the AIA section pertaining to CBMs (AIA § 18(b)(1), P.L. 112-29, 125 Stat. 284, 331):

  • (1) whether a stay, or the denial thereof, will simplify the issues in question and streamline the trial;
  • (2) whether discovery is complete and whether a trial date has been set;
  • (3) whether a stay, or the denial thereof, would unduly prejudice the nonmoving party or present a clear tactical advantage for the moving party; and
  • (4) whether a stay, or the denial thereof, will reduce the burden of litigation on the parties and on the court.

It is interesting that the Liberty Mutual litigation was previously stayed pending the outcome of ex parte reexaminations, yet the Court found the benefits of inter partes covered business method review compelling enough to order another stay pending the outcome of the PTAB trials.  Some of these benefits observed by the Court include:

  • CBM proceedings are inter partes rather than ex parte, which allows Liberty mutual “a better platform to advocate its interests.”
  • CBM proceedings are “presided over by a panel of three administrative judges whom are required to have ‘competent legal knowledge and scientific ability,’ 35 U.S.C. § 6(a), as opposed to a single patent examiner.”
  • To institute CBM review, the petitioner must show the claims are likely invalid, 35 U.S.C. § 324(a), which is more onerous than meeting the “substantial new question of patentability” standard required to initiate ex parte reexaminations.
  • The Court also found the short timeline of the CBM proceedings (to be completed within 18 months of institution of trial), to be attractive and likely to decide issues before the Court.

For further information the order for stay provides the details of the Court’s findings and has a detailed table attached at the last page showing the different CBMs and their status.

AIA Patent Trials Differ from Reexamination

Saturday, April 20th, 2013

In the past few months, I have had discussions with many different stakeholders about how AIA post-grant review differs from conventional reexamination.  AIA patent trials (post-grant review or PGR, inter partes review or IPR, and covered business method patent review or CBM) are substantially different than traditional reexamination.  Some of these differences are summarized in the table below (click on the table to enlarge it):

Other than legacy inter partes reexaminations, the Central Reexamination Unit (CRU) is currently only charged with processing ex parte reexaminations.  What remains to be seen is how ex parte reexamination will change as the CRU processes the legacy reexaminations and its docket frees up.

Comparative Study of Post Issuance Review Options

Friday, September 21st, 2012

Today I had the pleasure of co-presenting at the Midwest IP Institute on various post-issuance proceedings with Kevin Rhodes, Chief Intellectual Property Counsel and President of 3M Innovative Properties Company.  A PDF of our joint presentation is found here.

The presentation provides a comparison between IPR (inter partes review), PGR (post grant review), and CBM (covered business method) patent review.  It contrasts these proceedings to ex parte reexamination (EPX).  The goal was to present the available options for review of patents now that inter partes reexamination is no longer available.

The presentation further covered administrative trials in the PTAB.  A hypothetical was used to demonstrate the use of litigation, IPR, PGR, CMB, and EPX depending on strength of 35 USC § 101 and § 112 arguments as opposed to 35 USC § 102 and § 103 prior art invalidity arguments.  Different scenarios were used to demonstrate the complexity of the analysis.

My thanks to Kevin Rhodes and 3M for allowing me to post these slides.

Preissuance Submission Final Rules Published July 17, 2012

Friday, July 20th, 2012

The Patent Office has published its final rules for preissuance submissions under the AIA. A copy of the final rules can be found here (2012-16710). I briefly summarized the rule requirements in a presentation that can be found here (Preissuance Submissions Final Rule July 17 2012).


Do You Want That Post-Grant Review Super-Sized? – Part III

Tuesday, November 22nd, 2011

This is the third post in a series of articles on PGR strategies.  In Part I, I made the point that while patents come in all shapes and sizes, post-grant reviews (PGRs) basically come in two sizes.  By statute, the PGR must complete in 1 to 1 ½ years.  Part II addressed some of the issues that the Petitioner faces during a PGR and when the Petitioner may benefit from a 6 month extension.  This post will provide some insight to the Patent Owner’s analysis of what to do if its patent is tested in a PGR.


Do You Want That Post-Grant Review Super-Sized? – Part II

Wednesday, November 16th, 2011

This is the second post in a series of articles on PGR strategies.  In my last post I made the point that while patents come in all shapes and sizes, post-grant reviews (PGRs) don’t.  PGRs are very different from ex parte prosecution.  In ex parte prosecution, if a patent application includes 200 claims that are somehow not divided by restriction practice, there is a way to prosecute all of them using extensions of time, requests for continuing examination (RCEs), and an almost unlimited capacity to amend the claims if necessary.  In post-grant review, however, the Patent Owner has limited time to argue its position and limited opportunities to amend the issued patent.  Furthermore, the Petitioner may appear to have an initial advantage when a petition for a PGR is granted because the Patent Office will employ a heightened standard when deciding whether to grant a PGR.  The heightened standard provides that granted PGR petitions include grounds that are likely to result in a successful challenge at least one claim of the patent.  But at this stage, despite this initial “win” for Petitioner, the PGR is still young and there is much to consider.


New, More Popular Post-Grant Patent Challenges Drive Patent Generation Strategy

Saturday, September 24th, 2011

Patent Generation and Enforcement Before the Popularity of Post-Grant Proceedings

Patent Owners adopt different approaches for drafting patent applications.  For large companies a patent production line approach is frequently adopted which limits the cost and the commensurate drafting efforts on any particular application.  There is a reasonable argument to use this “assembly line” approach for very large portfolios.  But for smaller companies and/or for extremely strategic portfolios this approach may fail.  Why?  Because when the effort expended to establish patent rights is limited, the resulting patent applications can be hastily drafted, or just plain incomplete.  They can also fail to consider relevant prior art.  Such applications can turn into weak patents.  And weak patents in litigation or in reexamination may lose the day for the patent owner.


America Invents Act: Post-Grant Procedures for Patent Challengers

Monday, September 19th, 2011

Now that the America Invents Act has become law there are several new provisions for patent challengers to consider.  For example, the Act includes:

  • preissuance submissions by third party challengers (Sec. 8 — see the last post);
  • Post-Grant Review (Sec. 6 – see slides*);
  • Inter Partes Review (Sec. 6 – see slides*);
  • Business Method Transitional Proceedings (Sec. 18 – see slides*); and
  • Formation of the Patent Trial and Appeals Board (PTAB) (Sec. 7 – see slides*).

(*Many of the features of the last 4 bullet items on this list are discussed in my PowerPoint slides presented at the AIPLA Electronics and Computer Law Summit on August 16, 2011.)