In a decision last month, the Court of Appeals for the Federal Circuit gave petitioners in AIA proceedings yet another weapon to invalidate patents – by affirming a Patent Trial and Appeal Board (PTAB) decision that relied, at least in part, on new evidence introduced by the petitioner in its reply brief. (Genzyme Therapeutic Products LP v. BioMarin Pharmaceutical Inc., Fed. Cir. No. 15-1720).

Writing for a three-judge Fed. Cir. panel, Judge William C. Bryson said it should be expected that petitioners will introduce new evidence during the course of an Inter Partes Review (IPR) proceeding. Judge Bryson dismissed the notion that the record of an IPR is essentially closed following the PTAB’s institution decision.

“There is no requirement either in the board’s regulations, in the [Administrative Procedures Act] or as a matter of due process for the institution decision to anticipate and set forth every legal or factual issue that might arise in the course of the trial,” according to Judge Bryson.

Genzyme had argued that it was impermissible for the PTAB to relied on different evidence than the evidence relied upon in the institution decision.

“Genzyme’s argument that the institution decision must refer to every bit of evidence that is relied on by the board in its final written decision reflects a misunderstanding of the role of the institution decision in inter partes review proceedings before the board,” said the judge.

The opinion draws a distinction between new grounds for invalidity and new evidence that supports the grounds on which the trial was initiated.   According to Judge Bryson, if the PTAB decision is based on the same grounds, due process is satisfied as long as the opposing party is notified and given a chance to respond.
Continue Reading PTAB Can Rely on New Evidence Introduced by Petitioner in its Reply

IPR petitioners wary of the statutory estoppel under 35 U.S.C. § 315(e)(2) may have reason to be cautiously optimistic.   Judge Sue Robinson of the Federal District Court of Delaware recently held that Toshiba is not estopped from presenting invalidity grounds at trial that it did not raise in an earlier IPR.  Intellectual Ventures I LLC v. Toshiba Corp. No. 1:13-cv-00453, D.I. 559 & 574 (D. Del. December 19, 2016 & January 11, 2017).

35 U.S.C. § 315(e)(2) reads in relevant part:

The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a) . . . may not assert . . . in a civil action arising in whole or in part under section 1338 of title 28 . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

In her opinion, Judge Robison noted that the Federal Circuit has interpreted Section 315(e)(2) very literally. “[E]stoppel applies to grounds for invalidity upon which the Board instated review in the IPR proceeding, whether or not the Board addresses those grounds in its final decision (‘instituted grounds’). . . . [T]here likewise can be no dispute that estoppel does not apply to invalidity grounds that were raised by a petitioner in an IPR, but rejected by the Board as instituted grounds (i.e., ‘noninstituted grounds’).” Intellectual Ventures I LLC v. Toshiba Corp. No. 1:13-cv-00453, D.I. 574 (D. Del. January 11, 2017).

As background, Intellectual Ventures sued Toshiba for infringement of claims 17 and 19 of the ’819 Patent in Delaware in 2013. Toshiba petitioned for IPR of the ’819 Patent in 2014. Toshiba prevailed in the IPR, with the PTAB invalidating claims 17 and 19 in a final written decision. Toshiba Corp. v. Intellectual Ventures II LLC, No. IPR2014-00418, Paper No. 28 (P.T.A.B. Aug. 7, 2015).

Before the Delaware court, Intellectual Ventures moved for summary judgment that Toshiba is estopped from raising one of its invalidity grounds at trial because the ground was based on publicly available prior art that could have been raised in Toshiba’s IPR petition. Intellectual Ventures I LLC v. Toshiba Corp., No. 1:13-cv-00453, D.I. 559 at p.26 (D. Del. December 19, 2016). Judge Robinson disagreed, citing Shaw Indus. Group, Inc. v. Automated Creel Systems. Id. In Shaw, the Federal Circuit held that Section 315(e)(2) does not estop a ground rejected by the PTAB at the institution stage because, since “[t]he IPR does not begin until it is instituted,” the petitioner “could [not] have reasonably raised – the [rejected] ground during the IPR.” 817 F.3d 1293, 1300 (Fed. Cir. 2016) (emphasis in original). Extending the Shaw logic, Judge Robinson found that Toshiba is not estopped from raising its invalidity ground that was not raised at all in IPR. No. 1:13-cv-00453, D.I. 559 at 27 (D. Del. December 19, 2016). But Judge Robinson expressed misgivings at this result, noting that “[a]lthough extending the [Shaw] logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit’s interpretation in Shaw.” Id.
Continue Reading IPR Estoppel Provisions May Not Be That Scary After All

In the case of Phygenix, Inc. v. ImmunoGen, Inc., the Court of Appeals for the Federal Circuit (CAFC) held that the petitioner (Phygenix) that had unsuccessfully challenged certain claims of ImmunoGen’s U.S. Patent No. 8,337,856 (“the ‘856 patent”) in an inter partes review (IPR) lacked standing to appeal a Patent Trial and Appeal Board (PTAB) decision that affirmed the validity of the challenged claims because Phigenix had “not offered sufficient proof establishing that it has suffered an injury in fact…”  Although the Federal Circuit has required appellants to demonstrate standing in other proceedings, the Phygenix case is the first time this doctrine has been applied to bar an appeal of a final written decision in an IPR proceeding.

ImmunoGen owns the ‘856 patent, which is directed to an antibody-maytansinoid conjugate that is purportedly useful in combating a variety of cancers. Genentech has a worldwide exclusive license to the ‘856 patent for producing the drug Kadcyla®. Phigenix in turn owns U.S. Patent No. 8,080,534 (“the ‘534 patent”). Phigenix alleged that the ‘534 patent covers Genentech’s activities relating to Kadcyla and hence the subject matter claimed in the ‘856 patent.

The America Invents Act (AIA) provides that “a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent.” 35 U.S.C. 311(a). The AIA does not impose a standing requirement for a challenger to request the institution of an inter partes review (IPR) of a patent.  However, the patent appellate court recently held that an IPR petitioner must have standing in order seek the appellate review of a PTAB’s final decision.

Phigenix sought inter partes review of the claims of the ‘856 patent based on an obviousness challenge.  The PTAB initiated a trial but ultimately found the challenged claims to be nonobvious.  Following the final written decision, Phigenix appealed the PTAB’s decision to the CAFC.  In response, ImmunoGen filed a motion to dismiss arguing that Phigenix lacked standing to appeal the PTAB’s decision.  A single judge of the CAFC denied ImmunoGen’s motion but requested that the parties file briefs addressing the standing issue. 

Phigenix provided declarations in support of its standing to appeal the PTAB’s decision and argued that ImmunoGen’s ‘856 patent increases competition between itself and ImmunoGen and increased competition represents a cognizable injury.  In particular, Phigenix argued that “[t]he existence of ImmunoGen’s ‘856 patent has … encumber[ed] Phigenix’s licensing efforts while ImmunoGen receives millions of dollars in licensing revenue.” Phigenix did not, however, contend that it faced the risk of infringing the ‘856 patent, or that it was an actual or prospective licensee of the ‘856 patent, or that it planned to take any action that would implicate the ‘856 patent.

The CAFC emphasized that a party’s standing to sue is a doctrine that is rooted in the case or controversy requirement of Article III of the U.S. constitution. In particular, in order to have standing, an appellant “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the [appellee], (3) that is likely to be redressed by a favorable judicial decision.”  Further, the CAFC stressed that although Article III standing is not necessarily a requirement to appear before an administrative agency, “an appellant must nonetheless supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court.” 
Continue Reading Federal Circuit Requires Standing To Appeal An IPR Decision

The Federal Circuit reversed a Patent Trial and Appeal Board (PTAB) invalidity decision last week that had found a patent for a molasses-based, road deicing agent obvious over earlier patents on sugar-related inventions.  The Federal Circuit panel of Judges Pauline Newman, Raymond C. Clevenger and Kathleen M. O’Malley concluded that the U.S. Patent and Trademark Office (USPTO) finding of invalidity during reexamination proceedings was faulty because the USPTO had failed to set forth a prima facie case explaining why a person of ordinary skill in the art would have been motivated to combine references from disparate technological fields.  In Re Natural Alternatives, LLC (Fed. Cir. No. 2015-1911, August 31, 2016).

Univar, Inc., a licensee of U.S. Patent No. 6,080,330 owned by Natural Alternatives, LLC., filed three reexamination requests in 2011, seeking review of the licensed patent. The reexamination proceedings were consolidated, and the examiner found the claims drawn to a deicing composition comprising 25-99% desugared sugar beet molasses obvious in light of an earlier Polish patent combined with certain secondary prior art references.  Natural Alternatives appealed the reexamination decision to the PTAB but the board affirmed the examiner’s position, and the patent owner then appealed to the Court of  Appeals for the Federal Circuit.

In a decision handed down on August 31, 2016, the Federal Circuit disagreed with the PTAB’s reasoning.  First, the panel found the PTAB’s reliance on a 1990 Polish Patent No. PL 164018 to Zdzislaw (“Zdzislaw”) was misplaced because it did not teach the use of “desugared” molasses.  The process described in the Polish patent retained approximately 50% of the sugar in the molasses, while the patent at issue described processes for removal of most of the sugar.  Second, the Federal Circuit panel found one of the secondary references to be so far afield of the invention that a skilled artisan would not have motivated to combine it with Zdzislaw.  Finally, the panel found the examiner and the PTAB had improperly ignored the patent owner’s evidence of commercial success.

In particular, the decision criticized the PTAB’s reliance on U.S. Patent No. 5,639,319 to Daly (“Daly”); alone or together with a journal article titled “Winter is Hell,” published July 1997 in Public Works (“Public Works”).  The Daly patent was directed to the use of desugared sugar beet molasses (DSBM) as tire ballast, which served the unrelated purpose of stabilizing and balancing tires.  The Federal Circuit panel agreed with the patent owner that a person having ordinary skill in the art would not have found Daly to be reasonably pertinent to the problem of deicing road surfaces.
Continue Reading Despite PTAB “Sweet Talk” Federal Circuit Reverses Invalidity Of Deicing Patent

In a rare case of disagreeing with the Patent Trial and Appeal Board (PTAB), the Court of Appeals for the Federal Circuit (CAFC) vacated and remanded a PTAB decision invalidating claims 10-25 of PPC Broadband, Inc.’s U.S. Patent No. 8,323,060, which were challenged in an inter partes review (IPR) proceeding by Corning Optical Communications RF, LLC. (IPR2013-00342).

The challenged claims of PPC’s patent relate to a coaxial cable connector and require that the cable connector include “a continuity member having a nut contact portion positioned to electrically contact the nut and positioned to reside around an external portion of the connector body when the connector is assembled …” The Board held that the broadest reasonable construction of “reside around” was “in the immediate vicinity of; near.” Based on this construction, the Board concluded that the claims were obvious in view of the references cited by the petitioner, Corning, against the claims.

The Board reached this construction by relying on the broadest dictionary definition of the term “around.” In contrast, PPC (the patent owner) had proposed that the broadest reasonable construction of the term “reside around” in light of the claims and the specification is “encircle or surround.”

The CAFC sided with the patent owner and held that in the context of the patent the Board’s construction was not reasonable. The CAFC explained that “[t]he fact that ‘around’ has multiple dictionary meanings does not mean that all of these meanings are reasonable interpretations in light of the specification.” The CAFC further stated that all of the claims of the patent are directed to coaxial cable connectors and the components of these connectors partially or wholly encircle the inner electrical conductor. The CAFC emphasized that “[g]iven the context of this technology, it seems odd to construe the term ‘reside around’ without recognizing the context of its use in terms of the coaxial cable at issue.”
Continue Reading CAFC Vacates a PTAB Decision Due To Faulty Claim Construction

The Court of Appeals for the Federal Circuit decided an appeal earlier this month in a long-running battle between footwear manufacturers Nike and Adidas that gives Patent Owner Nike a partial (and perhaps fleeting) victory. The Federal Circuit affirmed the Patent Office decision in-part, vacated-in-part and remanded the case for further proceedings.

On November 28, 2012, Adidas AG petitioned the Patent Trial and Appeal Board (the “Board”) to institute an Inter Partes Review (“IPR”) to invalidate all of the claims of Nike’s 7,347,011 patent. (IPR2013-00067). After a trial was instituted, Nike did not file a Patent Owner Response but instead filed a Motion to Amend, requesting the Board cancel claims 1-46 and add new substitute claims 47-50. The Board granted the motion to cancel all of the original patent claims but denied the motion as to the proposed new claims 47-50, stating that Nike provided only a conclusory statement that the proposed claims were patentable which failed to persuade the Board to grant the motion. In the alternative, the Board also stated that Nike failed to prove patentability of the substitute claims over the prior art references identified by Petitioner Adidas. Nike appealed the decision. Nike, Inc. v. Adidas AG, No. 2014-1719, 2016 BL 38897 (Fed. Cir. Feb. 11, 2016).

Under § 316(e), the Petitioner carries the burden of proving that the patented claims under attack in an IPR proceeding are unpatentable. Nike argued that this burden also applies to new substitute claims submitted by the patent owner in a Motion to Amend. In other words, Nike argued that it does not carry the burden of proving that its new substitute claims were patentable. However, the Federal Circuit did not agree and concluded that section 316(e) does not keep the burden of proving unpatentability with the Petitioner for new substitute claims. Id. at 4. Accordingly, Nike carries the affirmative duty to justify why the newly drafted claims, which had never been evaluated by the USPTO, should be entered. Id. at 5.

However, the Federal Circuit concluded that at least one of reasons advanced by the Board for denying the Motion to Amend as to Nike’s substitute claims was improper. The court concluded that the statement used by Nike, that the proposed substitute claims were patentable over the prior art of record and over the prior art not of record but known to the patent owner, was adequate to address “known prior art” not of record in the proceeding absent an allegation of conduct violating the duty of candor. Id. at 21.
Continue Reading Battle Between Sneaker Makers Nike and Adidas Will Go Another Round

Two of the earliest challenges to patents under the new post grant proceedings established by the America Invents Act (AIA) are now on appeal to the Court of the Appeals for the Federal Circuit and both appeals are taking direct aim at the US Patent and Trademark Office’s decision to adopt a controversial standard for claim construction – the so-called “Broadest Reasonable Interpretation” standard – to govern all of the new AIA proceedings.

Versata v. SAP concerns the very first “covered business method” (CBM) review proceeding (CBM2012-00001) conducted by the USPTO and is on appeal by the Patent Owner, Versata, of the Patent Trial and Appeal Board (PTAB) decision to invalidate certain challenged claims. Cuozzo v. Garmin concerns the first inter partes review (IPR) proceeding and likewise is on appeal from a PTAB decision finding Couzzo’s claims invalid.

Both appellants are challenging the USPTO’s claim construction standard as impermissible substantive rule-making by the agency and arguing that the standard instead should be the same as that applied to issued patents by the federal courts – the so-called Phillips rule that requires judges and juries to give the elements of a claim their “ordinary and customary meaning.” (See, Phillip v AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005))
Continue Reading Does the Broadest Reasonable Interpretation Standard Make Sense?

About a month ago we posted an article on the dismissal of Consumer Watchdog’s appeal at the Court of Appeals for the Federal Circuit following a loss at the USPTO in an inter partes reexamination. Consumer Watchdog, Inc. had petitioned the U.S. Patent Office to review a stem cell patent owned by the Wisconsin Alumnae Research Foundation (WARF). A reexamination was conducted but the patent survived the challenge. Consumer Watchdog then appealed the government’s refusal to invalidate the WARF patent.

In Wisconsin Alumni Research Foundation, 753 F.3d 1258  (Fed. Cir. 2014), a three-judge panel of the CAFC found that a non-profit entity “dedicated to providing an effective voice for taxpayers and consumers” lacked standing to appeal to an Article III Court despite the statute’s general statement of a right to appeal. In the panel decision, written by Judge Rader, the court found that Consumer Watchdog, Inc., simply had “not identified a particularized, concrete interest in the patentability of the [patent at issue], or any injury in fact flowing from the Board’s decision.”

Well . . . unwilling to go quietly into the night . . . Consumer Watchdog has now petitioned the U.S. Supreme Court for certiorari review of the Federal Circuit decision. The Petition asserts that the Federal Circuit’s decision had failed to take into account cases concerning the Freedom of Information Act (FOIA) and the Federal Election Campaign Act, where the Supreme Court has upheld laws giving third parties standing to appeal agency actions.
Continue Reading Do-Gooders Won’t Take “No” For An Answer

According to its mission statement, Consumer Watchdog is a non-profit entity “dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics” – and they apparently also challenge patents in their spare time.

In 2006 Consumer Watchdog filed a request for inter partes reexamination under the old pre-AIA rules, challenging certain patent rights to stem cells that had been granted by the USPTO to the Wisconsin Alumni Research Foundation. When this public interest group failed to get the WARF patent thrown out last year, they exercised their statutory right to appeal. Section 141(c) of the U.S. Patent Laws provides that a party to a USPTO administrative proceeding who is dissatisfied with the Patent Office’s final written decision may appeal to the U.S. Court of Appeals for the Federal Circuit. (35 U.S.C. § 141.)

However, like Dikembe Mutombo swatting away a lay-up, the Federal Circuit recently told Consumer Watchdog: Not in my house! Chief Judge Radar writing for a unanimous three-judge panel rejected the appeal out of hand because the public interest appellant simply lacked standing. According to the Federal Circuit opinion, to invoke federal jurisdiction, the petitioner must meet the minimum requirements of Article III. Consumer Watchdog v. Wis. Alumni Research Found., 753 F.3d 1258, 1260 (Fed. Cir. 2014).
Continue Reading Do-Gooders Need Not Apply