Archive for the ‘motion practice’ Category

Patent Office Board Takes a Bite out of Apple’s IPR Challenge of VirnetX Patents

Thursday, December 19th, 2013

In  mid-2013 Apple filed seven inter partes review petitions to challenge four VirnetX patents.  Recently, the Patent Trial and Appeal Board (the Board) denied all seven inter partes review (IPR) petitions.  This outcome demonstrates the Board’s current interpretation of the one-year bar applied in IPR proceedings and its position on joinder of petitions.

Apple’s Interpretation of the One Year Bar

Apple disclosed that its petitions were filed more than a year after service of a complaint asserting infringement of the subject patents, and understood that the petitions might be challenged depending on the Board’s interpretation of 35 U.S.C. § 315(b) (the statute barring IPR petitions filed after certain assertions of infringement):

Petitioner notes it was previously served with a complaint asserting infringement of the ’135 patent in August of 2010, which led to Civil Action No: 6:10-cv-417. During that action, the District Court established an additional civil action, Civil Action No. 6:13-cv-00211-LED, on February 26, 2013 (also pending in the Eastern District of Texas). The August 2010 complaint does not foreclose the present petition, as Patent Owner served a new complaint on Petitioner asserting infringement of the ’135 patent in December of 2012.

Apple Inc. v. VirnetX, Inc., et al., IPR2013-00348, Paper 1 (June 12, 2013), at p. 1 (emphasis in original).  Similar disclosures can be found in the other six related petitions:  IPR2013-00349, -354, 393, -394, -397, and -398.

Apple anticipated that the 2010 complaint service might cause a concern and argued that the 315(b) bar should not apply:

Petitioner submits this conclusion [that the petitions are not barred] is compelled by the plain language of § 315(b). Notably, § 315(b) does not specify a one-year deadline that runs from the date of the first complaint served on a petitioner. Rather, it states “[a]n inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” Thus, a petition filed within 1 year of the date any complaint alleging infringement of the patent is served on a petitioner is timely under the plain statutory language of § 315(b). This is also the only reading of § 315(b) consistent with the statutory design. Congress designed the IPR authority to be option to contest validity of a patent concurrently with district court proceedings involving the same patent. A timely filed IPR proceeding in any action a patent owner elects to commence is perfectly consistent with this statutory design.

Reading § 315(b) in this manner also is the only way to effectively foreclose gaming of the system by a Patent Owner. Indeed, if § 315(b) were read to foreclose IPR proceedings in a second, independent action for infringement a patent owner elected to commence, it would unfairly foreclose use of the IPR system. For example, a patent owner could assert irrelevant claims in a first action, wait a year, and then assert different claims in a new action that do present risks to a third party. In this scenario, the patent owner would foreclose legitimate use of an IPR to contest validity of the patent claims asserted in the second action based on the third party’s reasonable business decision to not dispute validity of irrelevant claims in the first action. Rather than attempting to decipher which scenarios would be improper, the Board should follow the plain meaning of § 315(b), and find a petition timely if it is filed within 1 year of the date any complaint alleging infringement of the patent is served on a Petitioner.

Finally, reading §315(b) to foreclose this petition based on the August 2010 complaint would be particularly unjust in this case. The 1-year period following service of the August 2010 complaint expired before it was possible to submit an IPR petition – petitions could only be filed on or after September 16, 2012.

Id., Paper 1 at pp. 2-3 (emphasis in original).

But Apple had one more card to play that could avoid the entire issue of the 315(b) bar:  a request for joinder with another IPR proceeding challenging the same patent.

Apple’s Joinder Request

Apple knew that if it could successfully join another IPR proceeding, such joinder under 35 U.S.C. § 315(c) (and  37 C.F.R. § 42.122(b)) would not be subject to the one year bar under the last sentence of 35 U.S.C. § 315(b).  Apple filed its Motion for Joinder on August 21, 2013, requesting joinder to IPR proceedings by New Bay Capital, LLC challenging the VirnetX patents:

Pursuant to the authorization granted by the Panel on August 14, 2013 in Paper No. 6, Petitioner Apple Inc. (“Petitioner” or Apple) moves to have the Board join IPR proceedings IPR2013-00348 & -00349 to each other and with IPR proceeding IPR2013-00375 filed by New Bay Capital, LLC (“NBC”), each of which concerns U.S. Patent No. 6,502,135.

Id., Paper 7 at p. 1.

Apple submits that joinder of the proceedings is fully warranted. See IPR2013-00004, Paper 15 at 4; Dell v. Network-1 Security Solutions, Inc., IPR2013-00385, Paper 17 at 2-3. Joinder is proper under the statutory design of inter partes review, will simplify and reduce the number of issues before the Board and will enable streamlined proceedings (i.e., one coordinated proceeding instead of three separate proceedings). In addition, the Board can manage the joined proceeding in a way that does not impact scheduling or conduct of the proceedings. See Motorola Mobility LLC v. Softview, LLC, IPR2013-00256, Paper 10 at 2-3.

Id., Paper 7 at p. 3.

So, it seemed like Apple had two independent avenues for potential institution of IPR:  (1) an interpretation of 315(b) that would result in no bar of the petitions, and (2) joinder with ongoing IPR proceedings filed by New Bay Capital, regardless of any potential 315(b) bar.

New Bay Capital Terminates its IPRs

On November 6, 2013, New Bay Capital filed unopposed motions to terminate its IPRs (IPR2013-00375, -376, -377, and -378):

Pursuant to 37 C.F.R. §42.73(b)(4) and the Board’s Order of November 1, 2013, Petitioner New Bay Capital, LLC (“New Bay”) moves to terminate the present inter partes review proceeding. Termination is appropriate because New Bay is abandoning this contest, VirnetX does not oppose and a trial has not been instituted.

The Board granted New Bay Capital’s motions and terminated those IPR proceedings on November 12, 2013.

Apple’s IPR Petitions Denied

The Board reviewed the facts of the complaints served on Apple in the past and decided that the 2010 complaint served on Apple barred its IPR petition under 315(b).  The Board also dismissed Apple’s joinder request because the Board had recently terminated the New Bay Capital IPRs:

The timeliness limitation of 35 U.S.C. § 315(b) does not apply to a request for joinder. As such, Petitioner filed a motion to join the instant proceeding with another proceeding, IPR2013-00375, pursuant to 35 U.S.C. 315(c). See Paper 7 (“Petitioner’s Motion for Joinder of Proceedings”). Granting the motion would obviate the time bar under 35 U.S.C. § 315 (b). The IPR2013-00375 proceeding, however, has been terminated. New Bay Capital, LLC v. Virnetx, Inc., IPR2013-00375, Paper 16 (PTAB Nov. 12, 2013). Accordingly, Petitioner’s motion for joinder is dismissed.

Id., Paper 14 at p. 5.

So both of Apple’s avenues for institution of trial in these seven IPR petitions were blocked by the Board.

Reconsideration Still an Option

Even though Apple’s seven IPR petitions were denied, Apple still has the right to request reconsideration and it remains to be seen if it will file requests for rehearing.  Such requests have historically proved to be unlikely to be granted.  Other Petitioners have sought additional avenues for institution that will be discussed in a future post.

PTAB Provides More Guidance on Discovery

Sunday, July 21st, 2013

On March 5, 2013, the Patent Trial and Appeal Board (PTAB or Board) provided guidance to the bar concerning routine discovery and additional discovery.  (See paper 26 in Garmin v. Cuozzo, IPR2012-00001) This decision set forth five factors which are important in determining what constitutes discovery satisfying the “necessary in the interest of justice” standard under 35 U.S.C. § 316(a)(5).  This decision is but one listed on the PTAB’s web page of Representative Orders, Decisions, and Notices, and as a result it is widely known and referenced by post-grant practitioners.

On July 18, 2013, in this same IPR, the PTAB provided yet more guidance concerning discovery.  (IPR2012-00001, paper 50) This time the guidance relates to depositions, and in particular, the circumstances where corrective filings of deposition testimony may be filed by counsel.

Over a month after cross-examinations of its experts, Cuozzo (the Patent Owner) filed errata sheets in an attempt to correct the cross-examination testimony by its experts.  A joint telephone conference was requested by the parties a few weeks later to resolve their dispute regarding the propriety of the filing of these errata sheets.  The Board conducted a telephone conference on July 16, 2013 and issued an order expunging the errata sheets because they were filed without authorization and were submitted after Garmin (Petitioner) had already responded to the (allegedly erroneous) expert testimony for Cuozzo.  The request also came after Garmin’s window of opportunity to conduct further cross examination of Cuozzo’s witnesses or to submit a revised reply to Cuozzo’s response or opposition to Cuozzo’s motion to amend claims.

The Board reminded practitioners that such requests must be authorized before a motion is filed:

The rules for an inter partes review do not provide for the filing of errata sheets in connection with the deposition testimony of a witness. Thus, a party intending to file an errata sheet, for whatever purpose, especially if it is to change the substantive testimony of a witness, must contact the Board and obtain prior authorization before doing so. One of the comments to the proposed rules for implementing inter partes review, post grant review, and covered business method patent review inquired about errata sheets and what is or is not acceptable in an errata sheet, and the Office’s response is that the rules do not provide for the submission of errata sheets and that a party who believes an errata sheet is necessary may request a conference call with the Board. Rules of Practice for Trials Before the Patent Trial and Appeal Board and Judicial Review of Patent Trial and Appeal Board Decision; Final Rule, 77 Fed. Reg. 48612, 48642 (Aug. 14, 2012)(Response to Comments).

IPR2012-00001, paper 50 at page 3.

The Board did not absolutely rule out the possibility of authorizing entry of errata sheets in future cases, but it set forth this guidance:

We take this opportunity to state that unless unopposed by the other party, a request to make a material change to the substance of cross examination testimony is unlikely to be successful no matter when the request is made. Error in transcription is a different matter.

IPR2012-00001, paper 50 at page 4.

The Board emphasized that a party has the ability on redirect to cure any perceived deficiency of testimony or to elicit a more complete answer.

A picture of future PTAB practice is emerging as more decisions are rendered by the Board.  For an advantage in these proceedings, clients will want counsel that is versed in all of the technical aspects of the challenged invention to understand it and to be able to properly question witnesses and clarify their testimony.  Counsel should also be familiar with Patent Office practice to understand what the Board will allow procedurally, and the information that the Board needs to find in the client’s favor.  Counsel also should have litigation experience and deep legal knowledge to properly grasp the impact of testimony and to make sure that the record is as clear and complete as possible for the Board and any Federal Circuit appeal that may follow.

Prosecution Bars and PTAB Practice

Friday, May 10th, 2013

In an earlier post we explored many ways that reexamination differs from post-grant review, inter partes review, and covered business method review. The PTAB has been very clear that reexamination and AIA patent trials are very different.  For example, in ScentAir Technologies v. Prolitec, Inc. (IPR2013-00179 (JL)), the PTAB denied authorization for ScentAir to file a motion to disqualify Prolitec’s counsel in an inter partes review based on a prosecution bar in a protective order from the parallel litigation (paper no. 9).

During the conference call, the PTAB received assurances from counsel for ScentAir that “. . . nothing in the district court’s protective order expressly bars counsel from being counsel of record in an inter partes review before the Patent Trial and Appeal Board, although there is a ‘prosecution bar’ in the protective order prohibiting litigation counsel from drafting or amending claims while prosecuting an application before the U.S. Patent and Trademark Office.”

The Board denied authorization for ScentAir to file a motion for disqualification:

The Board finds informational and key that the protective order at issue specifically bars litigation counsel from prosecution activities without mentioning litigation or trials before the Patent Trial and Appeal Board. An inter partes review is not original examination, continued examination, or reexamination of the involved patent. Rather, it is a trial, adjudicatory in nature and constituting litigation.

In the future, litigation counsel will have to be more detailed about what activities are subject to a prosecution bar to avoid confusion about whether counsel in the district court litigation may participate in trials before the PTAB.

PTAB IPR Petition Joinder Practice Gains Momentum

Monday, April 22nd, 2013

Suppose a patent owner files suit and the defendant wants to file an AIA post-grant proceeding to challenge the validity of the patent.  Suppose further that the post-grant challenge is an inter partes review (IPR) filed by the defendant within a year of service of process of the complaint.  If the IPR petition only alleges grounds of invalidity for certain claims, and the patent owner later amends its complaint to add more claims to the action after the one year period of 35 U.S.C. § 315(b) that were not the subject of the original IPR petition, is the petitioner forced to use ex parte reexamination to challenge the newly added claims?  No.  If the petitioner can apply for joinder under 37 C.F.R. § 42.122(b), the PTAB may consider the second petition and join it with the first timely filed petition, even if it is beyond the one year period of 35 U.S.C. § 315(b).  In Microsoft v. Proxyconn, IPR2013- 00109, the Board allowed joinder, stating:

As is apparent from the statute, a request for joinder affects certain deadlines under the AIA. Normally, a petition for inter partes review filed more than one year after the petitioner (or the petitioner’s real party-in interest or privy) is served with a complaint alleging infringement of the patent is barred. 35 U.S.C. § 315(b), as amended; 37 C.F.R. § 42.101(b). However, the one-year time bar does not apply to a request for joinder. 35 U.S.C. § 315(b)(final sentence); 37 C.F.R. § 42.122(b). This is an important consideration here, because Microsoft was served with a complaint asserting infringement of the ʼ717 patent more than a year before filing the second Petition. Pet. 1. Thus, absent joinder of this proceeding with IPR2012-00026, the second Petition would be barred. Moreover, in the case of joinder, the one-year time requirement for issuing a final determination in an inter partes review may be adjusted. 35 U.S.C. § 316(a)(11), as amended.

This is good news for that Petitioner, since it allowed for adjustment of the petition grounds via joinder to match claims added to a parallel litigation after the one year period of 35 U.S.C. § 315(b).

A motion for joinder was very recently filed in IPR2013-00250 (Ariosa Diagnostics v. Isis Innovation), seeking to join the IPR2013-00250 proceeding with the trial already instituted in IPR2012-00022.  The motion for joinder cites the rule excerpt:

§ 42.122 Multiple proceedings and Joinder.

(b) Request for Joinder. Joinder may be requested by a patent owner or petitioner. Any request for joinder must be filed, as a motion under § 42.22, no later than one month after the institution date of any inter partes review for which joinder is requested. The time period set forth in § 42.101(b) shall not apply when the petition is accompanied by a request for joinder.

It will be interesting to see how the Board considers joinder under the various fact patterns that are inevitable in practice.

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.

PTAB Provides Convenient Access to Instructive Orders, Notices, and Decisions

Saturday, December 1st, 2012

The Patent Trial and Appeals Board has provided a web page that compiles instructive orders, notices, and decisions.  This is a handy reference site for practitioners to learn from decisions made in various covered business method (CBM), inter partes reviews (IPR) and post-grant review (PGR) proceedings.

Patent Trial and Appeal Board (PTAB) Guidance on Pro Hac Vice Admissions

Monday, November 19th, 2012

The PTAB (“Board”) has already decided some motions for pro hac vice admission in various PTAB case proceedings.  A recent decision in case IPR2012-00035 referenced an earlier decision on motion for pro hac vice admission in case IPR2013-00010.  The relevant part of that decision entered October 15, 2012 (Paper 6) states the rules for pro hac vice admission:

Section 42.10(c) of the Code of Federal Regulations (C.F.R.) provides that:

The Board may recognize counsel pro hac vice during a proceeding upon a showing of good cause, subject to the condition that lead counsel be a registered practitioner and to any other conditions as the Board may impose. For example, where the lead counsel is a registered practitioner, a motion to appear pro hac vice by counsel who is not a registered practitioner may be granted upon showing that counsel is an experienced litigating attorney and has an established familiarity with the subject matter at issue in the proceeding.

The Board authorizes both parties to file motions for pro hac vice admission under 37 C.F.R. § 42.10(c) as follows:

1. Time for Filing

The time for filing pro hac vice motions is no sooner than twenty one (21) days after service of the petition, which is the time for filing patent owner mandatory notices. Parties seeking to oppose a motion for pro hac vice admission must file their opposition no later than one week after the filing of the underlying motion. No reply to any opposition shall be filed unless authorized by the Board.

2. Content of Motion

A motion for pro hac vice admission must:

a. Contain a statement of facts showing there is good cause for the Board to recognize counsel pro hac vice during the proceeding.

b. Be accompanied by an affidavit or declaration of the individual seeking to appear attesting to the following:

i. Membership in good standing of the Bar of at least one State or the District of Columbia;

ii. No suspensions or disbarments from practice before any court or administrative body;

iii. No application for admission to practice before any court or administrative body ever denied;

iv. No sanctions or contempt citations imposed by any court or administrative body;

v. The individual seeking to appear has read and will comply with the Office Patent Trial Practice Guide and the Board’s Rules of Practice for Trials set forth in part 42 of the C.F.R.;

vi. The individual will be subject to the USPTO Code of Professional Responsibility set forth in 37 C.F.R. §§ 10.20 et seq. and disciplinary jurisdiction under 37 C.F.R. § 11.19(a);

vii. All other proceedings before the Office for which the individual has applied to appear pro hac vice in the last three (3) years; and

viii. Familiarity with the subject matter at issue in the proceeding.

c. Where the affiant or declarant is unable to provide any of the information requested above in part 2(b) or make any of the required statements or representations under oath, the individual should provide a full explanation of the circumstances as part of the affidavit or declaration.

Pro Hac Vice Admission Denied in SAP v. Versata CBM Patent Review

Friday, November 9th, 2012

My prior post described the pro hac vice admission dispute between SAP and Versata Development Group in PTAB matter CBM2012-00001.  The PTAB wasted no time and issued an order denying the motion for pro hac vice admission of Versata’s litigation trial counsel on November 6, 2012.  The PTAB essentially found that Versata failed to demonstrate “good cause” for why its litigation counsel should be admitted pro hac vice in the PTAB proceeding.

Versata, as the party moving for pro hac vice admission, bears the burden of showing there is good cause for the Board to recognize counsel pro hac vice during the proceeding. Based upon the facts presented, the Board concludes that Versata has failed to meet its burden.

It is:

Ordered that Versata’s motion for pro hac vice admission of Mr. Scott L. Cole is denied.

The Board also referenced documents from the earlier litigation that indicated some sort of noted violations of a protective order in that litigation, and noted that Versata did not identify or explain the noted violations in its motion for admission:

Versata’s motion for pro hac vice admission of Mr. Cole and Mr. Cole’s declaration in support thereof are premised in part on Mr. Cole’s position as lead counsel in the related Versata v. SAP litigation. Versata’s motion and Mr. Cole’s declaration do not address or mention the district court’s finding of a pattern of protective order violations in the related litigation for which Mr. Cole was lead counsel.

As of this posting, no other entries were found in the record after this order, so this might be the final word on this dispute.


Patent Challenger Seeks PTAB Jurisdiction over “Involved” Pending Applications

Saturday, October 20th, 2012

The AIA provides new post-issuance proceedings to challenge issued patents.  But can these challenges be used to stop related pending patent prosecution dead in its tracks?  One recent inter partes review petition requests just that and time will tell whether the PTAB takes control of the related applications.

Chi Mei Innolux Corp. (CMI) filed a petition for inter partes review of U.S. Pat. No. 6,404,480 on October 19, 2012.  The ‘480 patent is owned by Semiconductor Energy Laboratory Co., Ltd. (SELC).  SELC sued CMI for patent infringement in a suit styled Semiconductor Energy Laboratory Co., Ltd. v. Chi Mei Innolux Corp., et al., SACV12-0021-JST (C.D. Cal.), filed on January 5, 2012.

The other patents-in-suit in the litigation are U.S. Patents 7,876,413; 7,697,102; 7,956,978; 8,068,204; and 7,923,311.  CMI has indicated that it will be filing petitions for inter partes review of these other patents-in-suit as well, and CMI hopes to have the resulting PTAB trials consolidated with the PTAB trial instituted for the present ‘480 inter partes review.

The family of patents and applications is shown in the following graphic:


Things get very interesting when CMI identifies the 12/257,514 and 12/257,521 applications as “involved applications” and requests a stay of prosecution of these involved applications:

37 C.F.R. 42.3 conveys exclusive jurisdiction to the PTAB over every involved application and patent during the proceeding, as the Board may order. See 35 U.S.C. 6 (b), as amended, 35 U.S.C. 326(c), and Public Law 112–29, section 18. The term “proceeding” is defined by 37 C.F.R. 42.2 as a trial or preliminary proceeding. Rule 42.2 also defines the term “preliminary proceeding” as beginning with the filing of an IPR petition. To this end, the PTAB now has jurisdiction over the following involved applications. [see graphic above]

Divisional applications 12/257,514 and 12/257,521 are actively being prosecuted before Art Unit 2871. As the family of applications claiming priority to the ‘480 patent remain active, these applications may be utilized as a basis to present patentably indistinct claims, and, may, if allowed to continue, proceed to issuance prior to the determination of the PTAB in this IPR. The issuance of such indistinct claims during the pendency of this IPR is at least inconsistent with 37 C.F.R. 42.373(d)(ii), and, would provide an “end-around” the reasonable number of substitute claims that may be presented in this proceeding. As such, further USPTO processing of these proceedings may prejudicial to the Petitioner’s interests and inconsistent with controlling PTAB rules. Petitioner respectfully submits that it is appropriate under the circumstances for the PTAB to suspend, sua sponte, further prosecution of the above noted applications, or at least require any further patent application filings, or claim changes be authorized by the PTAB prior to submission to the USPTO.

CMI is correct that the PTAB may acquire jurisdiction of involved patents and applications.  37 C.F.R. § 42.3 states:

(a) The Board may exercise exclusive jurisdiction within the Office over every involved application and patent during the proceeding, as the Board may order.

(b) A petition to institute a trial must be filed with the Board consistent with any time period required by statute.

Since “involved” means an application, patent, or claim that is the subject of the proceeding, it will be interesting to see whether the PTAB decides to order control of the pending applications as requested by CMI.

Creative attempts to use the AIA to challenge patents, such as this one, have only begun.  Many more will come.  The complexities of these challenges raise the stakes for patent owners.  They must now reconsider how they choose their patent counsel to make sure they understand not only how to make patent rights that will survive prosecution and litigation, but also rights that will survive reexamination and post-grant review proceedings.

Steady Stream of AIA Post-Issuance Review Petitions Filed in PTAB

Friday, October 19th, 2012

It has been a little over one month since post grant patent reviews were authorized by the AIA and the Patent Office Patent Review Processing System (PRPS) shows about 47 petitions on file in the PTAB.

Look at it this way to put things in perspective:

  • The 47 petitions filed over this past month are just shy in number of the total number of inter partes reexamination requests filed  in the first four years of the inter partes reexamination statute (only 53 total inter partes reexamination requests were filed in the years of 2000 to 2004 according to PTO statistics).
  • If this rate of filing continues for the next 11 months, we could see about 500 petitions in the first year period, which is more than the 374 inter partes reexamination requests filed in 2011.
  • Assuming we only see about 250 such petitions this year, that would roughly equate to the number of filings of inter partes reexamination requests filed in 2009 (258).

So regardless of how many filings are made over the year, AIA post-grant proceedings are off to a very fast start compared to the adoption of inter partes reexamination.  This is interesting because there is obvious popularity despite enhanced filing fees, costs of preparation, and estoppel.