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Welcome to Winston & Strawn’s Patent Trial and Appeal Board Practice Update. This publication is a digest of decisions and orders from the weeks of September 30th and October 7th. 138 new orders were reviewed for inclusion in this summary.
As always, please feel free to forward this on to any colleagues or contacts that you think might find this useful. |
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Volume 1, Issue 5
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Empirical Analysis of IPR Institution Decisions |
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As of October 11, 2013, the Board has issued a total of 210 institution decisions under 37 C.F.R. § 42.108 in inter partes review proceedings. Of those decisions, 154 instituted trial as to all challenged claims on at least one ground presented for review. In 27 of those decisions, the Board refused to institute IPR of any claims. Finally, the Board’s decision was “mixed”—with trial on some challenged claims being instituted, and on other challenged claims being denied—in 29 trials. A comparison of the data through September 27th and through October 11th is shown in the table below for each individual claim. The percentages may not necessarily add up to 100% due to rounding. |
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| The result of the 210 institution decisions in IPR is reflected in the following pie chart. |
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| Collectively, the Board has reviewed petitions for inter partes review of 3237 claims through October 11, 2013 (an increase of 240 claims since September 27, 2013). Of those 3237 claims, the Board has determined: (1) to institute trial on 2602 of those claims, (2) to deny the petition to institute trial on 630 of those claims, and (3) 5 of the challenged claims were disclaimed, resulting in no decision by the Board on the petition as to those claims. A comparison of the statistical analysis of IPR institution decisions between September 27th and October 11th is shown in the table below, followed by a graphical break-down of the decision on each claim for which a PTAB trial has been sought. |
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Number of Petitions for Post-Issuance Trials Jumps Significantly in September and October Looks to Continue the Trend: A Look at the Number of Post-Issuance Trial Filings By Month. |
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September proved to be a record month for post-issuance trial filings before the PTAB. The PTAB received 73 petitions for IPR, and 8 petitions for CBM review. And, it looks like the trend will continue, with 43 petitions for IPR and 9 petitions for CBM being filed in the first two weeks of October. The PTAB has received a total of 574 petitions for IPR since September 16, 2012, a rate of almost 10.4 per week. Thus, the number of petitions for IPR has relatively consistently increased month-to-month. The number of post-issuance trials filed per month is reflected in the table below. The data for October is current through October 11, 2013. |
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Empirical Analysis of PTAB IPR Denial Decisions |
| The Board has denied a total of 27 petitions for inter partes review. The denials have been for a wide variety of reasons. The following pie chart summarizes the general reasons for denial. |
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| Thus, as can be seen from the chart above, the majority of petitions have been denied due to issues with the contentions on the merits (37%). However, in certain instances, the petitioner has taken what I have characterize as “unreasonable” positions on claim construction. This may not necessarily be accurate, since in some of these cases, the Board has concluded that the specification has failed to link corresponding structure to the claimed functions in 112, paragraph (f) limitations, and the petitioner has attempted to construe the claim nonetheless. This accounts for 18% of denials. Seven percent of denials were caused by the PTAB denying a motion for joinder. These petitions were also late, and could be grouped with the one year bar petitions (11%). In certain situations, the petitioner failed to offer a claim construction. In some such cases, the Board concluded that the petitioner’s construction was implicit in the way it was applying the prior art, and construed the claim in a way that resulted in the petition being denied. This accounted for 19% of the denials. In 1 case, (4%), the petition was denied because the petitioner had filed an earlier DJ action. |
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Should Patent Assignment Agreements Include Contractual Provisions Precluding Assignors From Pursuing Post-Issuance Trials After Board Reaffirms Decision that Assignor Estoppel Is Not a Defense To a Post-Issuance Trial Proceeding? |
The Board recently denied a request for rehearing of its decision denying a motion for additional discovery on the basis that assignor estoppel is not a defense that a patent owner can raise in a post-issuance trial proceeding. Specifically, in Redline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, Paper 40 (Oct. 1, 2013), the Patent Owner argued that “[t]here is no indication in the [the AIA] or its legislative history that Congress intended inter partes reviews to grant assignors an end run around the bar that they would face in district court litigation.” The fact that 35 U.S.C. 311(a) does not expressly reference assignor estoppel should not be dispositive, according to the Patent Owner. The Patent Owner further argued that the legislative history shows that the PTAB has the ability to make “equitable determinations” and that the PTAB already makes equitable determinations in other areas of its jurisdiction. The Board disagreed, explaining that the question to be answered was not “whether the Board has the authority to make equitable determinations or to recognize equitable defenses in inter partes reviews,” but instead “whether the Board has the authority to recognize the equitable defense of assignor estoppel in an inter partes review.”
The Board first noted that under 35 U.S.C. 311(a), Congress indicated that “a person who is not the owner of a patent” can petition for a post-issuance trial. “Here, we are presented with a clear expression of Congress’s broad grant of the ability to challenge the patentability of patents through inter partes review. Moreover, Congress has demonstrated that it will provide expressly for the application of equitable defenses when it so desires.” The Board further looked to statutes related to the International Trade Commission (“ITC”) which allows the ITC to consider all legal and equitable defenses. Under this authority, the ITC “concluded that it must consider the defense of assignor estoppel in cases in which a patent owner may seek to have infringing gods excluded from the United States.” Here, however, “Congress issued no similar statutory mandate to the Office in connection with AIA post-grant reviews, instead, making inter partes reviews widely available to ‘a person who is not the owner of a patent.’” Because assignor estoppel cannot be raised in post-issuance trials, the Board concluded that it had not abused its discretion when denying discovery into assignor estoppel issues.
This decision raises a number of questions for would be assignees including whether they should include in assignment agreements provisions that would preclude attacks on the patent in post-issuance trial proceedings. If advisable, how would such a provision be enforced? Would that leave the assignee with a remedy of seeking to enforce the agreement by filing for a TRO or injunction? It will be interesting to see if this issue is ultimately addressed by the Federal Circuit. |
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Parties Should be Prepared to Identify Basis in the Record for Demonstratives Used At Hearings in Post-Issuance Trials. |
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The Board recently ruled on objections to parties demonstrative exhibits and expunged one party’s demonstratives from the record and ordered that those demonstratives be re-filed without the objectionable material. Specifically, in Idle Free Sys., Inc. v. Bergstrom, Inc., IPR2012-00027, Paper 63 (Oct. 7, 2013), the parties raised objections to each other’s demonstratives for an upcoming hearing. “The Board heard arguments from each party. Counsel for Petitioner could not identify where in the record the specific arguments contained on Petitioner’s slides 6 and 7 already exist. Pointing out that unpatentability of the claim is at issue in the case is insufficient to justify raising new specific arguments at final hearing.” Thus, parties should be cautious when preparing their demonstratives and be prepared to identify the basis in the record for each of the demonstratives and arguments presented in those demonstratives. |
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Board Authorizes Filing of Errata Sheets. |
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Despite previously denying requests to submit errata sheets in earlier proceedings, the Board has granted requests to submit errata sheets in two separate proceedings. In one group of proceedings, the request was unopposed. Illumina, Inc. v. The Trustees of Columbia Univ. in the City of New York, IPR2012-00006, Paper 77 (Oct. 1, 2013); Illumina, Inc. v. The Trustees of Columbia Univ. in the City of New York, IPR2012-00007, Paper 85 (Oct. 1, 2013); Illumina, Inc. v. The Trustees of Columbia Univ. in the City of New York, IPR2013-00011, Paper 77 (Oct. 1, 2013). In the second proceeding, the request to submit errata sheets was opposed, and the Board warned the party submitting the errata sheets that if any errata sheet changes the substance of the testimony, the Board would not consider the sheet. CBS Interactive Inc. v. Helferich Patent Licensing, LLC, IPR2013-00033, Paper 101 (Oct. 7, 2013). The Board explained that “[e]rrata sheets may correct only typographical and minor grammatical errors. The Board may decline to consider a submission of errata sheets containing any substantive change.” |
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Although a Party May Infer That Documents Sought to be Discovered From Declaration, Inferences Are Too Speculative To Warrant Additional Discovery. |
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In a series of related decisions, the Board has echoed statements made in earlier decisions regarding motions for additional discovery. Specifically, the Board has indicated that even where a party can infer the existence of a document, the movant must show more than an inference. See Corning Inc. v. DSM IP Assets B.V., IPR2013-00043, Paper 48 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00044, Paper 46 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00045, Paper 46 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00046, Paper 46 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00047, Paper 42 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets, B.V., IPR2013-00048, Paper 50 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00049, Paper 45 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00050, Paper 42 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., IPR2013-00052, Paper 45 (Oct. 4, 2013); Corning Inc. v. DSM IP Assets B.V., Paper 43 (Oct. 4, 2013). These decisions reaffirm just how difficult it will be to obtain additional discovery in IPR proceedings. In authorizing the motion for additional discovery, the Board indicated that “that inference of a document’s existence is too speculative a basis on which to premise a motion for additional discovery. Rather, the moving party must demonstrate that evidence already in its possession tends to show, beyond speculation, that the requested document not only exists but also contains useful information.” |
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The PTAB Has Been Inconsistent On The Scope of Cross-Examination Testimony in Post-Issuance Trial Proceedings. |
| According to prior decisions by the PTAB, anything a declarant says in a declaration was fair game for cross-examination of that declarant in a post-issuance trial proceeding. The Board previously refused to allow a party to file a motion to limit the scope of cross-examination to the grounds on which trial was instituted. Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., IPR2013-00128, Paper 34 (Sept. 16, 2013). In Kyocera Corp. v. Softview LLC, IPR2013-00004, Paper 18 (May 3, 2013); Kyocera Corp. v. Softview LLC, IPR2013-00007, Paper 18 (May 3, 2013); Kyocera Corp. v. Softview LLC, IPR2013-00007, Paper 18 (May 3, 2013), the Board noted that the witness submitting a declaration must be made “available for cross examination on all direct testimony.” A similar decision was made in Micron Tech., Inc. v. The Bd. of Trustees of the Univ. of Illinois, IPR2013-00005, Paper 21 (Apr. 15, 2013); Micron Tech., Inc. v. The Bd. of Trustees of the Univ. of Illinois, IPR2013-00006, Paper 18 (Apr. 15, 2013); Micron Tech., Inc. v. The Bd. of Trustees of the Univ. of Illinois, IPR2013-00008, Paper 27 (Apr. 15, 2013), where the Board explained that under 37 C.F.R. 42.53(d)(5)(ii), the proper scope of cross examination is the scope of direct testimony. The Board explained that testimony about grounds on which trial was not instituted “may be relevant to the state of the prior art.” However, in a decision rendered in ZTE Corp. v. ContentGuard Holdings, Inc., IPR2013-00133, the petitioner “requested that cross-examination be limited to the grounds on which trial was instituted.” The Patent Owner noted that 37 C.F.R. 42.53(d)(5)(ii) allows cross-examination into “all statements” made by the declarant, “including statements unrelated to the grounds on which trial was instituted.” The Board agreed with the petitioner this time, citing Section (I)(F) of the Office Patent Trial Practice Guide’s statement that “discovery before the Board is focused on what the parties reasonable need to respond to the grounds raised by an opponent,” 77 Fed. Reg. 48756, 48761 (Aug. 14, 2012). “Accordingly, the Board indicated that the cross-examination is limited to statements of [the declarant] related to the grounds on which trial was instituted.” The Board then made a curious statement that “statements of the witness in related proceedings or publications may be used at cross-examination for impeachment purposes.” See also ZTE corp. v. ContentGuard Holdings, Inc., IPR2013-00136, Paper 27 (Oct. 9, 2013); ZTE Corp. v. ContentGuard Holdings, Inc., IPR2013-00137, Paper 33 (Oct. 9, 2013); ZTE Corp. v. ContentGuard Holdings, Inc., IPR2013-00138, Paper 34 (Oct. 9, 2013); ZTE Corp. v. ContentGuard Holdings, Inc., IPR2013-00139, Paper 32 (Oct. 9, 2013). It is unclear whether this is referencing statements in the declaration pertaining to grounds that were not instituted, but since that is the subject of the dispute, it would seem that the Board would have said so if that is what it meant. |
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Prior Arbitration Proceeding May Not Prelude Subsequent Challenge to Validity in IPR Proceedings. |
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In Amkor Tech., Inc. v. Tessera, Inc., IPR2013-00242, Paper 37 (Oct. 11, 2013), the Board rejected a patent owner’s argument that the issues decided in arbitration between the parties “are preclusive under the Patent Act,” thus foreclosing the petition in this case. The Board disagreed because (1) “an inter partes review is concerned with unpatentability of claims . . . not with validity of claims”; (2) the statute acknowledges that inter partes review proceedings can occur before, or after, or concurrent with other proceedings or actions, depending on the specific circumstances”; and (3) “the collateral estoppel that may be applied to subsequent suits in federal courts between the parties does not apply necessarily to the U.S. Patent and Trademark Office (‘PTO’).” The Board thus concluded that “the instant inter partes review is not precluded by the Tribunal’s decision in Amkor II, which found the '076 Patent not invalid.” The Board further rejected the notion that 35 U.S.C. 294 precluded the IPR because the arbitration was for breach of contract, and petitioner had argued that the arbitration “did not finally adjudicate issues of infringement and validity. . . . Amkor quotes the Tribunal in Amkor II as providing that the Tribunal’s consideration of infringement ‘does not turn a cause of action for breach of contract into a cause of action for patent infringement.’” The Board concluded that the arbitration was over a breach of contract, and that not “all issues involved would likewise limit [petitioner] from seeking redress.” Notably, the Board concluded that the patent owner had failed to show that the demand for arbitration was served under 35 U.S.C. 315(b), precluding institution of a post-issuance trial. |
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Upcoming Hearings in PTAB Trial Proceedings. |
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The Board has announced the following hearings in the upcoming weeks. The hearings are open to the public. Liberty Mutual Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00002 and CBM2013-00004 will both be heard at 1 PM on October 21, 2013. This hearing will last up to 2 hours. Liberty Mutual Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003 and CBM2013-00009 will both be heard at 1 PM on October 15, 2013. This hearing will last up to 2 hours. CBS Interactive Inc. v. Helferich Patent Licensing, LLC, IPR2013-00033 will be heard October 23, 2013 at 10 AM. The hearing will last up to 2 hours. |
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