PTAB Roundup

CAFC en banc: Applicants filing § 145 actions do not pay Office attorneys’ fees. In the original Federal Circuit panel ruling, the majority affirmed the district court’s award of expenses that the Office has traditionally sought in § 145 actions (e.g., travel expenses, expert fees, printing expenses), but reversed the district court’s denial of the Office’s attorneys’ fees. Judge Stoll dissented. NantKwest, Inc. v. Matal, 860 F.3d 1352 (Fed. Cir. 2017). On rehearing, the en banc majority completely affirmed the district court. Writing for the majority, Judge Stoll explained that the American Rule presumes no fee-shifting, and therefore applicants seeking judicial review under § 145 are obligated to pay the Office’s expenses but not its attorneys’ fees. The dissenting Judges would apply the plain meaning of “all expenses” to include attorneys’ fees. NantKwest, Inc. v. Iancu, No. 2016-1794 (Fed. Cir. July 27, 2018) (en banc) (Stoll, joined by Newman, Lourie, Moore, O’Malley, Wallach and Taranto; Prost, joined by Dyk, Reyna and Hughes, dissenting).Notably, a divided Fourth Circuit panel reached the opposite conclusion regarding a nearly identical provision for trademark applicants in 15 U.S.C. § 1071(b)(3)). Shammas v. Focarino, 784 F.3d 219 (4th Cir. 2015) cert. denied sub nom. Shammas v. Hirshfeld, 136 S. Ct. 1376 (2016).


CAFC: Competitor with a product in development lacks standing to appeal IPR. In holding the appellant lacked standing, the Federal Circuit explained that the statutory right to appeal an IPR decision to the Federal Circuit may reduce the usual requirements for redressability and immediacy, but it does not dispense with Article III’s requirement to establish an injury-in-fact. Further, where potential infringement liability is the basis for such an injury-in-fact, a petitioner must show that it has “concrete plans for future activity that creates a substantial risk of future infringement or likely cause the patentee to assert a claim of infringement.” This standard was not met here. Although the petitioner/appellant competes with the patent owner, none of its existing products are accused of infringing the patent-at-issue, and its only potentially infringing product is not yet finalized and continues to evolve. As a result, there is “nothing that can be analyzed for infringement” and the appellant did not otherwise show any risk to future development sufficient to confer standing. The Court also re-affirmed that the IPR estoppel does not inflict an injury-in-fact when the appellant is not engaged in any activities that could give rise to an infringement suit. JTEKT Corp. v. GKN Automotive Ltd., No. 2017-1828 (Aug. 3, 2018) (Dyk, joined by Prost and O’Malley).Notably, the pending petition for writ of certiorari in RPX Corp. v. ChanBond LLC, No. 17-1686 (response requested Jul. 25, 2018) contends that the statutory right to appeal an IPR decision coupled with the IPR estoppel is sufficient to establish standing.


CAFC: No waiver because SAS significantly changed the law. The Federal Circuit granted motions for remand to consider non-instituted claims and grounds in light of SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018). The IPR appeals were fully briefed, argued, and submitted for decision before the Supreme Court issued its SAS decision. Nine days later, the appellant/petitioner moved to remand for consideration of its non-instituted claims. Two months post-SAS, and after the Federal Circuit began remanding other cases for consideration of non-instituted grounds, the appellant moved to remand its non-instituted grounds, too. The Federal Circuit granted the motions for remand over the oppositions of the Office and the patent owner. The appellant/petitioner did not waive its SAS arguments, despite not previously challenging partial institution before the Board or during the appeal, because it “acted promptly” after SAS imposed “a significant change in the law that occurred during the pendency of [its] appeals.” The Court also refused to reach any presently appealed issues before remanding because doing so would be “precisely the type of piecemeal litigation that is historically disfavored.” BioDelivery Scis. Int‘l, Inc. v. Aquestive Therapeutics, Inc., Nos. 2017-1265, -1266, -1268 (July 31, 2018) (Newman, joined by Lourie and Reyna).


CAFC: Catalog distributed at trade show was accessible by relevant public. The Federal Circuit vacated the Board’s finding in an IPR that a catalog was not a prior art printed publication. It was undisputed that hundreds of copies of the catalog were distributed without restriction at an annual dealer show attended by 150 vendors and over 1,000 potential dealers, retailers, and customers. The Court explained that the Board erred by focusing on only one factor relevant to public accessibility of materials distributed at conferences or tradeshows, namely the expertise of the target audience. Considering all the factors, the Court held that the catalog was a printed publication and directed the Board to consider the proposed grounds on the merits. GoPro, Inc. v. Contour IP Holding LLC, Nos. 2017-1894, -1936 (July 27, 2018) (Reyna, joined by Wallach and Hughes).


District Court: No need to seek claim constructions in IPR to preserve for court. The plaintiff argued that the defendant failed to seek the same constructions in IPR that it did in court. The Court ruled that the defendant’s “failure to advance a construction or argue indefiniteness in IPR proceedings is explainable and thus not probative to Markman claim construction” because the PTAB applies the “broadest reasonable interpretation” standard to claim terms instead of the Phillips standard used in district court. Automated Packaging Sys., Inc. v. Free Flow Packaging Int’l, Inc., No. 18-cv-00356, ECF No. 217 (N.D. Cal. Aug. 2, 2018) (Chen).


District Court: Statements during IPR oral argument support narrower claims. The District Court adopted a narrower construction than was adopted by another court in an earlier litigation. The specific issue at hand was not presented in the earlier case, and the defendant in this case also pointed out that the plaintiff/patent owner “repeatedly” indicated that the narrower reading was appropriate during its oral argument in a previous IPR. Those arguments “reinforced” the Court’s conclusion that the claims and specification supported the defendant’s narrower construction. Finjan v. Cisco Sys., Inc., No. 17-cv-00072, ECF No. 134 (N.D. Cal. July 23, 2018) (Freeman).


District Court: Post-SAS stay pending IPR. After the Board partially instituted IPR, the defendant sought a stay. Patent owner/plaintiff statutorily disclaimed the instituted claims and asked the Board to terminate the IPR, and the defendant withdrew its stay motion. But before the Board acted on the disclaimer, SAS Institute issued and the Board instituted IPR of all of the previously denied claims. Nonetheless, several asserted claims were still not involved in the IPR because they were not challenged in the original petition. The Court granted the defendant’s new stay motion, reasoning that the “asserted but non-instituted claims overlap to a great degree with the instituted claims” and even if the IPR did not cancel or modify claims, the court would benefit from the Board’s expertise and guidance on the claims. Symantec Corp. v. Zscaler, Inc., No. 17-cv-04426, ECF No. 222 (N.D. Cal. July 23, 2018) (Tigar).


PTAB: Ex parte Jung no longer “Informative.” The Board designated Ex parte Jung, 2016-008290 (March 22, 2017), as an informative decision on July 10, 2018. On August 7, 2018, the Board announced that “[i]t has come to PTAB’s attention that the decision has not been read as intended. For example, the designation was not intended to reflect new or changed policies with respect to claim construction. As a result, in order to avoid any confusion, the decision has been de-designated and removed from the list of informative decisions. The case remains a routine decision of the Board.”


PTAB: Section 101 is fair game in IPR amendments. The Board denied a patent owner’s motion to amend, holding that the substitute claims are directed to non-statutory subject matter under 35 U.S.C. § 101. The Board rejected the patent owner’s contentions that § 101 attacks are beyond the scope of an IPR, pointing to previous IPRs denying motions to amend under § 101 and explaining that a statement in Aqua Products forbidding a patent owner from “inject[ing] new issues of patentability” in a motion to amend does not preclude the Board from considering a § 101 challenge. Amazon.com, Inc. v. Uniloc Luxembourg SA, IPR2017-00948, Paper 31 (Aug. 1, 2018) (McKone, joined by Parvis and Wormmeester).


PTAB: One-year bar and RPI/privity. The Board denied institution, finding the IPR petition was barred by 35 U.S.C. § 315(b) because defendants in privity with the petitioner were served with complaints for infringement more than a year before the petition was filed. The Board found privity based on the petitioner’s indemnification agreement with its customers (i.e., the defendants) that obligated the petitioner to defend them in patent infringement litigation and also gave the petitioner the right to control the litigation. Arris Int’l PLC v. ChanBond, LLC, IPR2018-00570, Paper No. 21 (PTAB July 20, 2018) (Chang, joined by Bisk and Harlow).


PTAB: Additional discovery and briefing for RPI/privity. The Board granted the patent owner’s motion for additional discovery into the real-party-in-interest filing the IPR. The patent owner sought, and the Board ordered, depositions of the petitioner’s President and the CEO of a third-party company. The Board recognized that the third party is precluded from filing an IPR by § 315(b)’s one-year bar, that existing evidence indicated possible common or overlapping ownership interests, and that the petitioner may be acting on behalf of the barred third party. Kashiv Pharma LLC v. Purdue Pharma L.P., IPR2018-00625, Paper No. 20 (July 31, 2018) (Paulraj, joined by Harlow).


PTAB update at the PPAC. Chief Judge Ruschke and Deputy Chief Judge Boalick presented new statistics and other information at the Patent Public Advisory Committee (PPAC) meeting on August 2, 2018, at USPTO headquarters in Alexandria, Virginia.


Hearing on PTO fees. The PPAC is also holding a public hearing on the USPTO’s intent to set or adjust patent-related fees on September 6, 2018 at USPTO headquarters in Alexandria, Virginia. Relevant documents for this hearing can be found here. The fee proposal will be published by August 29, 2018 and written comments are due September 13, 2018.


PTAB/TTAB Stadium tour at University of San Diego School of Law.The USPTO is partnering with select law schools throughout the country to present live PTAB and TTAB proceedings, including ex parte appeal hearings and AIA trials, and to provide educational sessions where Board judges share tips for successful advocacy before the TTAB and PTAB. This program is best for patent and trademark attorneys who appear in front of the PTAB or TTAB, as well as those who want to learn about practice before these administrative tribunals. The USPTO program is free and open to the public. Continuing Legal Education (CLE) credits is offered. More details and registration here.


*Contributors: Jonathan Strang (EIC), Kevin McNish (Ed.), Kenneth Weatherwax (Ed.), Lori Gordon (Ed.), Benjamin Evans, Janna Fischer, Christopher Geyer, Arvind Jairam, Wing Liang, Sandip Patel, Krupa Parikh, Rebecca Rabenstein, Stevan Stark, Todd 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.