The Current Roundup


SCOTUS: Court will address constitutionality of IPRs under Article III and the Seventh Amendment: The Court will consider “[w]hether inter partes review, an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents, violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury.” The patent owner in the case argues that “[s]uits to invalidate patents must be tried before a jury in an Article III forum, not in an agency proceeding,” because “[p]atents have been treated as common-law property rights since at least the mid-seventeenth century” and their validity therefore must be adjudicated by a court and in a trial by jury. The case will be argued during the October 2017 term. Oil States Energy Servs., LLC v. Greene’s Energy Group, LLC, No. 16-712.

SCOTUS: Patent exhaustion triggered by foreign sales and despite restrictions: The Supreme Court held “that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale.” Restrictions on the sale may, however, still be enforceable as a matter of contract law. Justice Ginsburg dissented as to foreign sales. Impression Prods., Inc. v. Lexmark Int’l, Inc., 581 U.S. ____ (May 30, 2017), No. 15-1189

CAFC: PTAB’s estoppel decisions reviewable on appeal; estoppel extends only to instituted claims: The Federal Circuit affirmed the PTAB’s cancelation of claims in a Covered Business Method review. The patent owner contended that the petitioner was estopped under 35 U.S.C. § 325(e)(1) by the Board’s earlier final written decision on a partially-denied CBM petition that challenged (but did not institute) on the same claims. The majority held that it could review the Board’s estoppel determination, and that estoppel affects reaches only the previously instituted claims addressed in the final written decision. Judge Mayer agreed that the challenged claims were unpatentable, but disagreed that the Court had jurisdiction to review Board’s estoppel determination, viewing it as part of the non-appealable institution decision. Credit Acceptance Corp. v. Westlake Servs., No. 2016-2001 (Jun. 9, 2017) (Dyk, joined by Reyna; Mayer dissenting-in-part).

CAFC: Denied rehearing of CBM eligibility decision: The Federal Circuit denied rehearing en banc by a vote of 6 to 5, and denied panel rehearing by a vote of 2 to 1, of its divided February 21, 2017 panel opinion, 848 F.3d 1370, holding that a patent, to be eligible for CBM review under America Invents Act Section §18(d)(1), must “have a claim that contains, however phrased, a financial activity element.” Chief Judge Prost and Judges Lourie, Dyk, Wallach, and Hughes dissented from the denial of rehearing en banc and Judge Plager concurred in the denial of panel rehearing.Secure Axcess, LLC v. PNC Bank Nat’l Assoc’n, No. 2016-1353 (Jun. 6, 2017).

District Court: More on the estoppels: In this case, the district court adopted a narrow reading of Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016), broadly estopping the defendant from raising grounds that it raised during the IPR and grounds that it reasonably could have raised, but did not raise, in the IPR petition. Cobalt Boats, LLC, v. Sea Ray Boats, Inc., C.A. No. 2:15cv21, ECF No. 285 (E.D. Va. June 5, 2017).

For more interpretations of Shaw and the scope of the IPR estoppel, see the May 19, 2017 PTAB Roundup.

District Court: No substantial deference to PTAB for priority date finding in institution decision: Seeking to demonstrate that the patent-at-issue was not entitled to the benefit of its claimed priority date, the defendant asked the court to apply “substantial deference” to a PTAB institution decision. The court declined, noting that this was not an appeal to the Federal Circuit, and that an institution decision is preliminary in nature, not even binding the Board. Riddell, Inc. v. Kranos Corp., No. 16-C-4496, ECF No. 136 (N.D. Ill. May 30, 2017) (Kennelly).

PTAB: Routine discovery of declarant not relied upon after institution: After institution, the patent owner no longer relied on the expert it used to support its preliminary response, using another expert instead to support its response. Nonetheless, the Board required the patent owner to make the preliminary declarant available for cross examination as routine discovery. “If the testimony is prepared for the preliminary proceeding and not subsequently relied upon during the trial, cross-examination of the declarant may be unnecessary, but it is permitted.” Reactive Surfaces LTD., LLP v. Toyota Motor Corp., IPR2016-01462, Paper No. 30 (PTAB May 31, 2017) (Kaiser, joined by Abraham and Ankenbrand).

PTAB: Document from well-known publisher years before critical date qualifies as printed publication: The patent owner contended that the ATM User-Network Interface Specification qualifies as a printed publication because the copyright date of 1993 established public availability before the critical date and that the supporting declaration from an employee of the specification’s publisher did not corroborate an exact date of publication. The Board disagreed, finding that the totality of circumstances supported a finding that the document was a prior-art printed publication. Specifically, the Board noted that the specification “is a book published by a well-known publisher several years before the critical date of June 30, 1998.” The Board also relied testimony that publishing “educational, technical, and professional literature” is part of the company’s “ordinary course of business” and concluded that the copyright notice itself was not hearsay because the specification “qualifies as an ancient document under Fed. R. Evid. 803(16).” Arista Networks, Inc. v. Cisco Systems, Inc., IPR2016-00303 (PTAB May 25, 2017) (Moore, joined by Quinn, Clements).

PTAB Statistics: The Board’s April and May Trial Statisticsare now available. There were 116 petitions filed in April 2017 compared with 136 in April 2016, and 139 in April 2015. Of those 116 petitions, 2 were CBMs and 3 were PGRs. There were 127 petitions filed in May 2017 compared with 114 in May 2016 and 145 in May 2015. Of those 127 petitions, 6 were CBMs and 7 were PGRs. The Board has yet to post ex parte appeal and interference statistics for either April or May.


*Contributors: Jonathan Strang (ed.), Thomas Donovan, Kevin McNish, Fahd Patel, Steven Peters, Todd Siegel, Dan Smith, Kenneth Weatherwax, Ben Evans, John Holley, Arvind Jairam, Thomas King, Thomas Pasternak, Rebecca Rabenstein, Diva Ranade, Surenda (Kumar) Ravula, David Roadcap, and Jocelyn Yu. 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.