Lessons From Practicing at the PTAB

S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.

Patent Office Litigation:
Lessons Learned
Deborah Sterling, Ph.D. – Director
Sterne, Kessler, Goldstein & Fox PLLC
January 14, 2016


2
PTO Litigation Timeline: Key Issues
Petition
Filed
PO
Preliminary
Response
Decision
on Petition
PO Response
& Motion to
Amend Claims
Petitioner Reply
& Opposition to
MTA
PO Reply
to Opp
to MTA
Oral
Hearing
Final
Written
Decision
3 months ≤ 3 months 2-3 months 2-3 months 1 month 1-2 months
Statutory Filing Bar
Real Party in Interest
325(d) Discretion
Joinder
Priority Challenges
Prima Facie Attack (prior art date)
Stays
Motions to Exclude
Estoppel
Federal Circuit Appeal


3
•  Since September
16, 2012, 3,966
IPR petitions, 406
CBM petitions, and
15 PGR petitions
have been filed
•  Averaged 150
petitions per month
in 2015 – slightly
up over 2014.
The Rise of PTO Litigation (1/8/15)
0

500

1000

1500

2000

2500

3000

3500

4000

Sep-‐12

Dec-‐12

Mar-‐13

Jun-‐13

Sep-‐13

Dec-‐13

Mar-‐14

Jun-‐14

Sep-‐14

Dec-‐14

Mar-‐15

Jun-‐15

Sep-‐15

Dec-‐15

IPR
and
CBM
Filings
by
Month

Total

Month


4
PTAB Institution Outcomes (12/3/15)
•  Trial has been instituted in 1,839 IPR proceedings (72.4%) and denied in 700 (27.6%)
•  Trial has been instituted in 221 CBM proceedings (69.7%) and has been denied in 96 (30.3%)
•  Parties reached a settlement prior to a decision on institution in 449 IPRs and 41 CBMs
•  The Board institutes trial for 64.2% of challenged claims in IPRs, and 63.9% of challenged claims in CBMs.
Period Institution Rate
1st - 3rd Quarter FY2013 91.2%
4th Quarter FY2013 82.1%
1st Quarter FY2014 78.5%
2nd Quarter FY2014 81.3%
3rd Quarter FY2014 72.2%
4th Quarter FY2014 71.2%
1st Quarter FY2015 77.7%
2nd
Quarter
FY2015
68.8%

3rd
Quarter
FY2015
63.6%

4th
Quarter
FY2015
62.5%

1st
Quarter
FY2016
72.6%

Total
72.2%

70%

75%

80%

85%

90%

95%

Mar-‐13

May-‐13

Jul-‐13

Sep-‐13

Nov-‐13

Jan-‐14

Mar-‐14

May-‐14

Jul-‐14

Sep-‐14

Nov-‐14

Jan-‐15

Mar-‐15

May-‐15

Jul-‐15

Sep-‐15

Nov-‐15

Tracking
the
Cumula@ve

Ins@tu@on
Rate


5
PTAB AIA Trial Outcomes
Outcome
Count
Percentage

Final Written Decision Received
684
46.6%

Institution Denied
299
20.4%

Settled Post-Institution
264
18.0%

Settled Prior to Institution
146
9.9%

Request for Adverse Judgment
59
4.0%

Institution Vacated; Case Terminated
10
0.7%

Petitioner Abandoned Petition
4
0.3%

Pending
1
0.1%

Patent Owner No Response (Claims Cancelled)
1
0.1%


6
Statutory Filing Bar: Civil Action
35 U.S.C. §315(a):
(1) Inter partes review barred by civil action. An inter partes review may not be
instituted if, before the date on which the petition for such review is filed, the
petitioner or real party in interest filed a civil action challenging the validity of a
claim of a patent
•  Counterclaim challenging the validity of a claim of a patent does not
constitute a civil action challenging the validity of a claim of a patent.
35 U.S.C. §315(a)(1)
•  DJ of non-infringement is not a civil action challenging the validity of
a claim of a patent [Ariosa, IPR2012-00022]
•  Filed does not mean “filed and served” [Anova, IPR2013-00114]
•  Dismiss DJ action w/o prejudice “leaves parties as if action had
never been brought.” [Butamax, IPR2013-00539]


7
Statutory Filing Bar: 1-Year Bar
35 U.S.C. §315(b):
An 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 … is
served with a complaint alleging infringement of the patent.
•  Though statute does not refer to a “civil action,” this is how the
Board has interpreted this section. An ITC action does not qualify,
nor does a complaint in an arbitration. See Amkor, IPR2013-00242,
Paper 98.


8
The 1-Year Bar, cont.
•  An IPR directed to amended claims of a reexamined patent,
where the original patent was the subject of an infringement
complaint served more than a year earlier, is barred.
[BioDelivery Services, IPR2013-00315]
•  An IPR triggered by a second infringement complaint filed and
served less than a year earlier but after a first infringement
complaint for the same patent filed and served more than a
year earlier is barred. [Apple, IPR2013-00348]
•  Infringement complaint served more than one year earlier but
dismissed without prejudice does not trigger the bar. [Macuato,
IPR2012-00004]


9
Real Party in Interest (RPI)
•  Practice Guide states:
•  “what constitutes a real party in interest or privy is a highly fact-
dependent question” (77 FR 6884)
•  “actual control or the opportunity to control the previous proceeding
is an important clue that such a relationship existed” (77 FR 6884)
•  “[f]actors for determining actual control or the opportunity to control
include existence of a financially controlling interest in the
petitioner.” (77 FR 6884)
•  “For example, a party that funds and directs and controls an IPR or
PGR petition or proceeding constitutes a ‘real party-in-interest,’ even
if that party is not a ‘privy’ of the petitioner” (77 FR 48760)


10
RPI or RIP
•  It includes determining the “existence of a financially controlling interest in
the petitioner[,] ... the nonparty’s relationship with the petitioner; the
nonparty’s relationship to the petition itself, including the nature and/or
degree of involvement in the filing; and the nature of the entity filing the
petition.” [ZOLL Lifecor, IPR2013-00606].
•  When an error in identifying RPI was minor “because the current entities
are legal successors to their original entities” the PTAB allowed petition to
keep its original filing date. [Valeo, IPR2014-01203]
•  Where the Petitioner failed to identify all RPIs and amending filing date
would result in time-barred petition, the PTAB terminated IPR proceedings.
[Corning, IPR2014-00440]


11
325(d) Discretion: Second bites of the
apple
•  35 U.S.C. § 325(d): In determining whether to institute or order a
proceeding … 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.
•  whether a previous petition was instituted/remains pending;
•  whether the second petition was brought by the same petitioner
•  whether the second petition uses the same or different prior art as the previous
petition;
•  whether the second petition challenges the same claims as in the first petition;
•  whether the second petitioner faces a statutory one-year bar under 35 U.S.C. §
315(b);
•  whether the second petition presents new declaration evidence; and
•  whether the second petitioner could have sought joinder with an earlier
proceeding.


12
Joinder: Discretionary
•  PO or petition may request joinder via motion, no later than one month after
the institution date of any IPR for which joinder is requested. 37 C.F.R. §
42.122 (b)
•  cannot join if base proceeding terminated [Apple, IPR2013-00354 and
IPR2014-00061]
•  party is not required to file motion for joinder simultaneously with petition
[Apple, IPR2013-00348]
•  one month time period can be waived for special circumstances
[IPR2013-00495 (waived); IPR2013-00584; IPR2014-00061 (not waived)]
•  secondary (understudy) party may assume first chair role if parties settle
[IPR2013-00495]
•  Joinder is for joining parties, not issues [SkyHawke, IPR2014-01485]


13
Priority Challenges: IPRs and Prior Art
In IPRs:
•  The Board addressed Petitioner's priority challenge in 63
Institution Decisions and 7 FWDs
•  Out of 63 Institution Decisions:
•  priority challenge successful in 30 cases (48%)
•  priority challenge unsuccessful in 17 cases (27%)
•  Priority challenge moot in 16 cases (25%)
•  The Petitioner was successful in maintaining priority challenge
in all 7 FWDs


14
Priority Challenges: IPRs and Prior Art
•  An attack on a priority claim based on 112, 1st paragraph is not
prohibited in an IPR [Rackspace, IPR2014-0058]
•  Priority challenge failed when it relied upon the same 112, 1st
paragraph issue that was raised during prosecution and
overcome [Prism Pharma, IPR2014-00315]
•  Priority challenge succeeded when it relied upon the same
112, 1st paragraph issue that was raised and overcome during
prosecution of a related patent application, but scope of claims
in challenged patent were significantly different [Daiichi
Sankyo, IPR2015-00291]


15
Priority Challenges: PGR Eligibility
In PGRs:
•  Priority chain challenged in one PGR in order to turn patent
from pre-AIA patent to post-AIA patent [see Inguran,
PGR2015-00017]
•  Priority challenge successful and PGR instituted
•  Important because patent otherwise not eligible for PGR
•  PGR opens door to 112, 101, etc., in addition to prior art
based challenges


16
Prima Facie Attack: Prior Art Date
To qualify as 102(e) prior art by virtue of an earlier effective filing
date, a prior art patent or published application’s claims must
have 112, 1¶ support in earlier-filed application
•  PTAB held challenged claims not unpatentable in FWD where
petitioner failed to demonstrate claims of 102(e)(1) published
application or 102(e)(2) patent had 112, 1¶ support in earlier-
filed provisional or nonprovisional application
•  Vmware, IPR2014-01304 and -01305 (102(e)(2))
•  Ariosa, IPR2014-01093 (102(e)(1))
•  PTAB expanding CAFC decision in Dynamic Drinkware v.
National Graphics, 2015-1214


17
Motions to Exclude: Fatal evidentiary gap
•  Prior art not actually prior art--authenticated publication date
not shown
•  In TRW Automotive [IPR2014-01347] all grounds relied
upon a reference that PO moved to exclude as
unauthenticated
•  PTAB excluded reference and petitioner’s case fell apart
•  FWD confirmed all challenged claims


18
Cannot Appeal Institution Decision
•  All Federal Circuit appeals from institution decision, even on standing issues,
dismissed
•  In re Procter and Gamble Co. – mandamus is not a proper vehicle for
challenging institution of IPR
•  In re The University of Illinois – statutory scheme precludes the court from
hearing an appeal from the Director’s decision to institute
•  In re Versata – statutory provisions applicable to post-grant review contain an
identical bar to appellate review of institution determinations
•  All district court appeals from institution decision, even on standing issues,
dismissed
•  Mentor Graphics Corp. v. Rea, EDVA – Institution decision is not a final agency
action, and is not reviewable by the EDVA. Can appeal to CAFC at conclusion
of IPR.
•  Dominion Dealer Solutions, LLC v. Lee, EDVA – Institution decision is not a
final agency action, and is not reviewable by the EDVA


19
Stays: District Court
•  District courts are generally granting stays
•  Over 65% of contested motions to stay have been granted
•  BUT…Most district courts are waiting until institution before even
considering a motion to stay
•  IPR
•  310 stays granted by district courts pending the outcome of an IPR
(140 stipulated, 4 sua sponte)
•  88 stays denied by district courts pending the outcome of an IPR (1
stipulated)
•  CBM
•  57 stays granted by district courts pending the outcome of a CBM (20
stipulated)
•  16 stays denied by district courts pending the outcome of a CBM


20
Estoppel: Petitioner in Dist. Ct.
•  Estoppel in IPR applies to “prior art consisting of patents or
printed publications.” [Redline Detection IRP2013-00106]
•  Some courts may apply estoppel before a FWD [Invensys Sys.
v Emerson Elec. (E.D. Tex)]
•  But others may not [National Oilwell Varco v Omron Oilfield &
Marine (W.D. Texas)]


21
Estoppel: at PTAB
•  Petitioner:
•  PTAB denied a second IPR petition under the estoppel
provision when the grounds in the second IPR differed from
those in the first but the underlying art was the same [Dell,
IPR2015-00549]
•  Patent Owner:
•  estoppel under rule 42.73(d)(3) applies only after all
appeals have been exhausted [SDI Technologies, Inc.
IPR2014-00343]


22
AIA Appeals to the CAFC
Total Number of Appeals Docketed
451

Appealed from IPR Final Written Decisions
382

Appealed from CBM Final Written Decisions
69

Appeals from Non-Final Decisions
22

Appeals by Patent Owners
301

Appeals by Petitioners
69

Number of Cross Appeals
40

Total Number of Mandamus Petitions
11

Petitions from decisions in IPR proceedings
10

Petitions from decisions in CBM proceedings
1

Impact
on
the
Federal
Circuit

§  Docketed
104
appeals
in
2014,
309
in
2015,
and
38
in
2016
(TYD)

§  The
vast
majority
of
appeals
are
pursued
by
patent
owners

§  Cross
appeals
represent
two
appeals
based
on
one
decision


23
AIA Appeals to the CAFC
Cases Submitted to the Federal Circuit 90 Percentages
Decided 60
Affirmed 56 93% Affirmed
Affirmed Fed. Cir. R. 36 34
Affirmed Non-Precedential 12
Affirmed Precedential 10
Remanded 3 5% Remanded
Reversed 1 2% Reversed
Dismissed 8
Pending 22
Impact
on
the
Federal
Circuit

§  Over
90%
of
appeals
decided
on
the
merits
have
been
aﬃrmed

§  Over
50%
of
decisions
issued
are
Rule
36
summary
aﬃrmances

§  Almost
10%
of
appeals
have
been
involuntarily
dismissed


24
Outcomes Observations
•  Roughly 50% of final decisions are appealed to the Federal Circuit,
and the vast majority of those are by losing patent owners
•  In front of the Federal Circuit, appellants are losing over 90% of
the time with Rule 36 affirmances deciding over 50% of cases
•  high affirmance rate is a natural consequence of the highly
deferential standard of review applicable to the majority of
issues appealed by parties (e.g., substantial evidence, abuse
of discretion, arbitrary and capricious)
•  The Court appears to be handling the volume by issuing Rule 36
affirmances and aggressively consolidating related cases
•  The Court appears to be staying on track in issuing opinions within
90 days of oral argument, but a calendaring backlog is emerging


25
Significant Cases
In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268 (Fed. Cir. 2015)
§  Upheld BRI as appropriate claim construction standard
§  Institution decision is not appealable, even from final decision
§  Board not strictly limited to grounds raised in the petition
Dynamic Drinkware, LLC v. Nat’l Graphics, 800 F.3d 1375 (Fed. Cir. 2015)
§  There is no presumption that a patent is entitled to its priority claim
§  Burden of production shifts to establish/rebut prior art status in an IPR, but
§  Ultimate burden of persuasion stays with petitioner to prove unpatentability
Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015)
§  PTAB’s determination regarding the filing bar of 315(b) is not appealable
Ethicon Endo v. Covidien, 2016 WL _______ (Fed. Cir. Jan. 13, 2016)
§  It is within the Office’s statutory authority to delegate both the decision to institute and final
written decision to the same panel


26
Questions?
Deborah Sterling, Ph.D., Director
dsterlin@skgf.com ▪ 202.772.8501

Lessons From Practicing at the PTAB

More Related Content

Similar to Lessons From Practicing at the PTAB (20)

More from Patexia Inc. (14)

Recently uploaded (20)

Lessons From Practicing at the PTAB