PTAB Roundup

The 2018 PTAB Bar Association Annual Conference will be March 22-23, 2018, at the Ritz-Carlton in Washington, D.C., with pre-conference sessions on March 21. The conference will bring together practitioners, in-house counsel, and members of the bench for a dynamic discussion of best practices, recent developments and trends, policy considerations, and much more.

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CAFC: Board construction consistent with CAFC’s previous construction: A divided Federal Circuit affirmed the Office’s cancellation of patent claims in three inter partes reexaminations. The appellant argued that the Board erred by failing to evaluate the Federal Circuit’s previous claim construction. The majority disagreed, finding that the Board’s construction did not conflict with the Court’s previous construction. In dissent, Judge Newman contended that “‘consistency’ . . . is the wrong inquiry…. The question is whether the PTAB decision is precluded by the prior judicial decision, and whether any equitable or due process exception to preclusion may apply.” Knowles Elecs. LLC v. Cirrus Logic, Inc, No. 2016-2010 (Mar. 1, 2018) (Wallach, joined by Chen; Newman dissenting).

CAFC: Prosecution history disclaimer: The Federal Circuit affirmed the PTAB’s decision finding all claims unpatentable. The Court rejected the Board’s primary reasoning, which ruled out prosecution history disclaimer, but agreed with the Board’s alternative holding that the claims were obvious even if the applicant had disclaimed claim scope. The Board had reasoned that it could not look to the examiner’s statements when determining if the applicant clearly disavowed claim scope. The Court disagreed, explaining that “the applicant amended the claims and explained what was changed and why, and the examiner confirmed the reasons why the amended claims were deemed allowable.” Arendi S.A.R.L. v. Google LLC, No. 2016-1249 (Feb. 20, 2018) (Newman, joined by Bryson and Moore).

District Court: IPRs excluded from trial: The defendant moved to exclude from trial the outcomes of its IPRs of the two patents-in-suit (one petition was denied, the other was instituted but the claims survived). According to the defendant, the outcomes were irrelevant, but the fact that it filed the IPRs was relevant to rebut allegations of willful infringement. The Court granted the motion to exclude and stated that it need not address whether the petitions may be introduced. But the Court continued in a footnote, explaining that the IPR petitions had “limited value” regarding willfulness in this case, and if the Court admitted the petitions, it would also admit the outcomes to avoid undue confusion and would also require a jury instruction regarding the different standards in IPRs. Precision Fabrics Grp., Inc. v. Tietex Int’l, Ltd., Case No. 7:17-cv-03037, ECF No. 288 (D.S.C. Feb. 25, 2018) (Schroeder).

District Court: Magistrate recommends denying IPR fees in exceptional case: The Court had already determined that the defendant was the prevailing party and that the case was exceptional. The magistrate recommended granting attorneys’ fees for the district court litigation, but denying attorney and filing fees related to the IPR. The magistrate recognized that courts have granted IPR fees in cases where the district court litigation was stayed or the PTAB’s decision otherwise played a “central role in determining the outcome” of the district court litigation. But here, the case was “ultimately resolved for reasons that had nothing to do with the IPR proceedings.” M-I Drilling Fluids UK Ltd. v. Dynamic Air Inc., No. 14-cv-04857, ECF No. 377 (D. Minn. Feb. 27, 2018) (originally entered under seal Jan. 26, 2018).

PTAB: St. Regis Mohawk Tribe’s sovereign-immunity motion to dismiss denied: The PTAB denied the Tribe’s motion to dismiss, finding that the Tribe did not establish that tribal sovereign immunity applied to these IPRs and that, even if it did, the IPRs could continue without the Tribe’s participation in view of Allergan’s retained ownership interests. The Board found that this was a case of first impression: there is no controlling precedent or statutory basis for applying tribal immunity to IPRs, and the Tribe’s immunity is not co-extensive with that of the States. The Board ruled that tribal sovereign immunity does not apply because the PTAB is not merely a forum to resolve private disputes: Congress granted the Office authorization to grant patents and to reconsider patentability of “any patent” to protect the public interest. In addition, generally applicable statutes, such as the IPR statute, apply to tribes with limited exceptions that are not applicable here. And even if tribal immunity did apply, the IPRs may continue without the Tribe. Allergan retained significant rights—including the first right to sue for infringement of generic equivalents to the patented drug—and therefore remained the “effective patent owner.” As a result, Allergan has an equal or greater interest in defending the patent and the Tribe is not an indispensable party. Mylan Pharms. Inc. v. Saint Regis Mohawk Tribe, IPR2016-01127, Paper 23 (Feb. 23, 2018) (per curiam: Snedden, Hulse, and Paulraj).

PTAB: Pre-institution stay pending 11th Amendment sovereign immunity appeal:The Board previously denied patent owner University of Minnesota’s motion to dismiss alleging sovereign immunity under the 11th Amendment. Here, the Board granted the university’s motion to suspend its preliminary response due date pending appeal to the Federal Circuit. Ericsson Inc. v. Regents of the University of Minnesota, IPR2017-01186, Paper 21 (Feb. 9, 2018) (per curiam: Bisk, Weinschenk, and Boudreau).

PTAB: Motion to amend claims found invalid by CAFC: Rather than defend its issued claims in a patent owner’s response, the patent owner filed a motion to amend seeking to cancel those claims and substitute amended claims. Meanwhile, the Federal Circuit held that the claims are invalid. The Board did not reach petitioner’s arguments that a patent owner cannot amend claims already found invalid in court. The Board instead denied the motion to amend because the substitute claims introduced new matter and lacked written description support. Semiconductor Components Industries, LLC v. Power Integrations, Inc., IPR2016-01600, Paper 35 (Feb. 14, 2018) (Pettigrew, joined by Giannetti and McNamara).

PTAB: Alternative grounds and commercial success in a predictable art: A divided panel confirmed the patentability of claims directed to a lighted artificial (e.g., Christmas) tree, finding that the petitioner failed to sufficiently articulate a rationale for modifying the teachings of the first two references with those found in a third. The majority was also persuaded by a “remarkable” amount of objective evidence of nonobviousness. In dissent, Judge Plenzler disagreed that the third reference was necessary. In his view, the third reference (and for the most part, the second) was “merely back-up evidence for potential claim interpretations that never materialized” that would “remedy any of those alleged missing details” in the other references. The first two references alone, he concluded, outweighed the objective evidence of nonobviousness. In contrast, the majority stated that the fact that “Petitioner couches its ground in terms of what Patent Owner may allege does not change the fact that Petitioner set forth an obviousness ground containing and requiring the three references.” Polygroup Ltd. v. Willis Electric Co., Ltd., IPR2016-01610, Paper 187 (Feb. 26, 2018) (Saindon, joined by Parvis, Plenzler dissenting).

PTAB: Joinder exception does not apply to DJ of invalidity: Because filing a complaint alleging invalidity of a patent bars a subsequent IPR, the petitioner Colas Solutions filed its first IPR petition before filing its complaint seeking a declaratory judgment of invalidity. Meanwhile, Asphalt Products filed its own IPR against the same patent. Colas Solutions then filed a petition asserting the same grounds as Asphalt Products accompanied by a motion for joinder to Asphalt Products’ IPR. The Board denied Colas Solutions’ second petition and motion for joinder, reasoning that the petition was barred by statute. The joinder provision, 35 U.S.C. § 315(c), contains an express exception for the one-year bar, but it does not contain a similar exception for the bar triggered by Colas Solutions’ civil action alleging invalidity. Colas Solutions Inc. v. Blacklidge Emulsions, Inc., IPR2018-00242, Paper 9 (Feb. 27, 2018) (Goodson, joined by Weatherly and Tartal).

*Contributors: Jonathan Strang (ed.), Kevin McNish, Kenneth Weatherwax, David Roadcap, Ben Evans, Christopher Geyer, Jason Heidemann, Arvind Jairam, Fahd Patel, Rebecca Rabenstein, Todd Siegel. These case summaries are factual in nature and do not reflect the opinions of the contributors, their law firms, or the PTAB Bar Association. Individual contributors do not draft or otherwise have any substantive input into summaries of any case in which the contributor (or his or her firm) was involved.