PTAB Roundup

SCOTUSSecure Axcess vacated. The Supreme Court vacated as moot the Federal Circuit’s decision addressing the scope of CBM review, Secure Axcess v. PNC Bank National Association, 848 F.3d 1370 (Fed. Cir. 2017), ordering the Federal Circuit “to remand the case to the Patent Trial and Appeal Board to vacate the Board’s order.” The Supreme Court provided no further explanation other than a cite to United States v. Munsingwear, Inc., 340 U. S. 36 (1950). Under the Munsingwear doctrine, the decision below should ordinarily be vacated where intervening mootness prevents appellate review. Here, PNC Bank argued in its petition for cert that the Munsingwear doctrine applied because the underlying CBM became moot when a parallel IPR invalidated all of the challenged claims and the plaintiff dismissed its infringement suit with prejudice. PNC Bank Nat’l Assoc. v. Secure Axcess, LLC, No. 17-350 (May 14, 2018) (per curiam order).

CAFC: Standing to appeal, and a proper Reply. A divided panel held that the appellant/petitioner had standing to appeal its loss in a PGR despite its agreement with the patent owner to jointly manufacture and obtain FDA approval of the patented drug. The appellant was concurrently seeking a declaratory judgment in district court that it had the right to terminate the agreement. The majority held that the appellant’s affidavit (filed on appeal) that it intended to file an ANDA and market the drug when the agreement is terminated or expires in 2021 was sufficient to demonstrate a concrete and particularized injury in fact. In dissent, Judge Schall concluded that the appellant lacked standing even though the immediacy equipment for standing is relaxed because Congress accorded the right to appeal an administrative action. The injury remained speculative because it was contingent on the pending district court case.On the merits, the Court held that the Board abused its discretion when it refused to consider a declaration and other evidence submitted with the petitioner/appellant’s reply. The appellant was entitled to respond to the challenges raised in the patent owner’s response regarding the witness’s qualifications and personal knowledge. In addition, the patent owner’s challenges to the test data could not have been reasonably expected because the patent owner had itself relied on the same data in its FDA filings. The court also held that the supporting evidence required by 37 C.F.R. § 42.65(b) for test data, e.g., how the test was performed and how the data were generated, may be proffered in any form—the rule does not require expert testimony. The Board could have granted a surreply if it was concerned that patent owner should have an opportunity to address these issues. Altaire Pharms., Inc. v. Paragon Bioteck, Inc., No. 2017-1487 (May 2, 2018) (Wallach, joined by O’Malley; Schall dissenting).

CAFC: No privity here. The Federal Circuit affirmed final written decisions finding all claims unpatentable in several IPRs and that the petitioner was not time-barred. Despite the petitioner’s contractual relationships and contacts with a time-barred party, substantial evidence supported the Board’s finding that the parties were not in privity because the time-barred party lacked control of the IPR petitions. The Court explained that “privity” in 35 U.S.C. § 315(b) takes its common-law meaning informed by the Supreme Court’s non-exclusive factors in Taylor v. Sturgell, 553 U.S. 880 (2008). Although control is not the only factor, the Board properly focused on that one factor because it was the focus of the patent owner’s arguments. WesternGeco L.L.C. v. ION Geophysical Corp. (In re WesternGeco LLC), Nos. 2016-2099 et seq. (May 7, 2018) (Chen, joined by Wallach and Hughes).

CAFC: Proof of patentability not required to add a claim to an Interference. The Court affirmed the Board’s finding that the appellant’s interfering claims lacked written description support, but vacated as arbitrary and capricious the Board’s denial of the appellant’s motion to add a new claim. The appellant’s motion complied with the Board’s standing order, which requires only a certification that the movant is unaware of any reason that the proposed claim is unpatentableGen. Hosp. Corp. v. Sienna Biopharms., Inc., No. 2017-1012 (May 4, 2018) (Moore, joined by Reyna and Taranto).

CAFC: Rejected for not naming all inventors. The Board correctly affirmed the Examiner’s rejections under 35 U.S.C. § 102(f) for failure to name a co-inventor. The sole named inventor conceded that someone else suggested an essential feature of the invention. As a result, the other person must be named as a co-inventor. In re VerHoef, No. 2017-1976 (May 3, 2018) (Lourie, joined by Newman and Mayer).

District Court: Stays, and willful infringement despite instituted IPR.  The plaintiff asserted multiple patents and the district court stayed litigation pending instituted IPRs of all asserted claims. The court lifted the stay for the one patent that survived its IPRs, and the jury found that patent willfully infringed. The court enhanced damages, noting that the Board’s IPR institution “would ordinarily be evidence of the reasonableness of” the defendant’s subjective belief the patent was invalid, but the defendant did not present any evidence regarding such beliefs.” As for the other patents, the court left the stay in place for the one that was appealed, and now that Oil States has been decided, lifted the stay to dismiss the others with prejudice. Ericsson Inc. v. TCL Comm. Tech. Holdings, Ltd., No. 2:15-cv-00011, ECF No. 483 (E.D. Tex. May 10, 2018) (Payne).

District Court: PTAB construction puts parties on notice. The Court granted the plaintiff’s motion to strike the portions of defendant’s amended invalidity contentions supposedly justified by the court’s claim construction of a particular term. The Court’s construction, however, was consistent with the Board’s earlier construction—which put defendant on notice of the Court’s “reasonable and likely construction of the term.” Choon’s Design Inc. v. Tristar Prods., Inc., Case No. 2:14-cv-10848, ECF No. 175 (E.D. Mich. May 3, 2018) (Roberts).

PTAB: Threshold showing of public availability. The Board denied a patent owner’s request for rehearing, explaining that a threshold decision to institute evaluates whether the petitioner is reasonably likely to satisfy the preponderance of the evidence standard at a later time. Here, the petitioner’s evidence that a presentation was publicly available—including a conference program listing the presentation and an archived webpage linking to it—was sufficient to warrant institution. The Board stressed, however, that institution does not imply that the petitioner’s evidence satisfies the preponderance standard for a final written decision. Merck Sharp & Dohme Corp. v. Pfizer Inc., IPR2017-02138, Paper 16 (May 4, 2018) (Fredman, joined by Scheiner and Harlow).

PTAB: Patent owner’s counsel not DQ’ed for prosecuting a prior-art patent. A petitioner sought to disqualify opposing counsel because counsel had previously prosecuted one of petitioner’s patents that the petitioner submitted as prior art in the IPR. The Board refused to disqualify, reasoning that doing so would encourage gamesmanship. Prosecuting the prior-art patent did not involve the same transaction or legal dispute as the current IPR, and there was no evidence that any confidential information learned during prosecution of the prior art is relevant to the validity of the patent-at-issue. Commscope Tech. v. Dali Wireless, IPR2018-00571, Paper 18 (May 8, 2018) (Fenick, joined by Easthom and Haapala).

PTAB: Director’s conflicts not imputed to Board panel. A patent owner sought to dismiss several IPRs, contending that a conflict caused by Director Iancu’s prior representation of the petitioner in a related litigation was not adequately addressed by his recusal in these cases. The Board denied the motion, finding that the specific judges assigned to the proceeding could carry out their predesignated duties impartially. St. Jude Med., LLC v. Snyders Heart Valve LLC, IPR2018-00105, Paper No. 11 (May 3, 2018) (Scanlon, joined by Weatherly and Worth).

PTABSAS Institute implementation update. The Board continues to issue orders in partial institution cases to address the Supreme Court decision. These orders typically ask the parties to meet and confer and then contact the Board to discuss whether additional briefing and/or argument is required. This is not always the case, however. In two cases, for example, the Board added the previously non-instituted grounds to two IPRs, but did not invite briefing on the newly instituted grounds. Instead, the panel simply indicated that the final written decision would address all of the grounds. BMW of N. Am., LLC v. Stragent, LLC, IPR2017-00676, Paper No. 31 (May 7, 2018); NetApp, Inc. v. Intellectual Ventures II, LLC, IPR2017-00276, Paper No. 37 (May 10, 2018). In another example, the Board’s final written decision instructed the parties to file a request for rehearing if the SAS Institute decision “requires additional considerations.” Celanese Int’l Corp. v. Daicel Corp., IPR2017-00165, Paper 50 (May 4, 2018).

Proposed change to IPR/PGR/CBM claim-construction standard. The PTO announced a Notice of Proposed Rulemaking to change the claim-construction standard in AIA proceedings from the broadest reasonable to the narrower Phillips standard. Comments are due to by July 9, 2018.

Other News. Director Iancu reported that “innovation is alive and well in 2018,” inducting 15 new innovators to the National Inventors Hall of Fame. “Collectively, this year’s inductees have used IP protection to create more than 16 startups, some of which have grown into leading American companies in fields from biotechnology to wireless communications. They have dramatically changed things from the way we watch sports and communicate to the way we eat food and care for the environment. Their vision has manifested into thousands of jobs and countless improvements to our very way of life.”

*Contributors: Jonathan Strang (EIC), Kevin McNish (Ed.), Kenneth Weatherwax (Ed.), Lori Gordon (Ed.), Benjamin EvansTimothy CaineChristopher GeyerJason HeidemannArvind JairamWing LiangSandip PatelKrupa ParikhRebecca RabensteinDavid RoadcapStevan StarkTodd Siegel, and Amy Simpson. 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.