In a final rule published in the Federal Register on October 11, 2018, the U.S. Patent and Trademark Office (USPTO) took a remarkable step of acknowledging unfairness in the way its Patent Trial and Appeal Board (PTAB) has been conducting trials for the past six years. The rule change will apply to all of the

The 2011 America Invents Act (AIA) provided a variety of new ways to administratively challenge patents, including the now widely used inter partes review (“IPR”) procedure.  In two recent appeals of IPR decisions, Genentech has challenged the constitutionality of IPR proceedings when applied to patents that were already issued as of the date that the AIA was enacted.

Genentech has filed two appeals to the Court of Appeals for the Federal Circuit (“Federal Circuit”) involving decisions by the U. S. Patent Office’s Patent Trial and Appeal Board (“PTAB”) invalidating certain patent rights issued to Genentech on immunotherapy biologics. (Federal Circuit Docket Nos. 18-1933 and 18-1959.)  These patents have been asserted against a number of competitors seeking to market biosimilar products to Genentech’s Avastin® and Herceptin® antibody therapeutics.

The appeals stem from two IPR Petitions filed by Hospira, IPR2016-01771 and IPR2016-01837, that challenged claims of U.S. Patent Nos. 7,622,115 and 7,807,799, respectively. The ’115 Patent issued in November 2009 and the ’799 Patent issued in October, 2010 – both issuance dates being well before the 2011 enactment of the AIA.  The PTAB initiated trials on both patents and ultimately found all of the challenged claims to be invalid over the prior art presented by Hospira.

Genentech’s briefs assert “the retroactive application of inter partes review to a patent issued before that procedure existed is unconstitutional, a taking without just compensation and a denial of due process,” in violation of the Constitution’s Fifth Amendment.

The Federal Circuit has now certified Genentech’s constitutional challenges to the U.S. Attorney General, who has been directed to inform the Court whether the United States intends to intervene in the appeals within 30 days.

Genentech’s position may seem like a “Hail Mary pass” effort to save its patents, especially in light of the U.S. Supreme Court’s decision earlier this year in Oil States Energy Services, LLC v. Greene’s Energy Group, LLC, No. 16-712, 138 S. Ct. 1365 (2018) (“Oil States”), where the Court rejected the patent owner’s argument that revoking patent claims as a result of an IPR proceeding is unconstitutional under Article III and the Seventh Amendment.

In the Oil States case, the Court held that the decision to grant a patent is a matter involving public rights and, hence, a challenge to a patent’s validity need not be heard exclusively in an Article III federal court and does not require a jury trial.  (For our detailed analysis of the Oil States decision, click here.)

However, Genentech’s arguments are based on the Fifth Amendment’s prohibition on taking private property for public use without just compensation by a process that did not exist when the property rights were granted. The author of the Oil States decision, Justice Clarence Thomas, emphasized the narrowness of the holding in the Oil States case and made it clear that the case addresses “only the precise constitutional challenges . . . raised here.” Oil States at 1369.
Continue Reading Attorney General’s Office May Weigh In on Constitutionality of IPRs involving Pre-AIA Patents

The U.S. Supreme Court’s decision this week in SAS Institute v. Iancu has upended a major provision of the U.S. Patent and Trademark Office (PTO) regulations for inter partes and post grant review proceedings conducted by its Patent Trial and Appeal Board (PTAB).  By concluding in a 5-4 decision that the agency lacks the authority

On October 4, 2017, the Court of Appeals for the Federal Circuit, sitting en banc, overruled an earlier panel decision and found that the Patent Trial and Appeal Board (PTAB) had been impermissibly placing the burden of proving the patentability of amended claims on the Patent Owner, rather than the Petitioner.   See, Aqua Products

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

Under 35 U.S.C. 315(e)(1), a petitioner in an inter partes review of a claim in a patent that has resulted in a final written decision by the Board may not request or maintain a proceeding before the Patent Office with respect to that claim on any ground that the petitioner raised or reasonably could have

The USPTO has gone ahead and finalized new rules for post-grant proceedings under the America Invents Act (AIA) – despite heavy criticism that the rules do little to alter the lopsided nature of these proceedings. The new rules were published at 81 FR 18750 on April 1, 2016 and go into effect on May 2, 2016.

Technically this “final rulemaking” amends various portions of 37 C.F.R. 42, the rules that govern post-grant proceedings under the AIA, including inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR).

Perhaps the most significant change is that under the new rules the patent owner will be able to submit testimonial evidence, such as an expert declaration, as part of a patent owner’s preliminary response to a patent challenge before the Patent Trial and Appeal Board (PTAB) decides to institute an IPR, CBM, or PGR trial. (Under the existing rules, the Patent Owner usually cannot present testimonial evidence until after the institution decision and the PTAB makes its decision to institute trial after hearing only one side of the story, e.g., from the petitioner’s expert.)

However, 37 CFR 42.108(c) has been revised such that if the patent owner presents testimonial evidence as part of a preliminary response, any “genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.” An analogous new rule in 37 CFR 42.208(c) for a post grant review has also been finalized. Under the new rules petitioners may also seek leave to file a reply to any preliminary response filed by the patent owner.

These changes beg the questions: what do the patent owners have left to say after institution if their experts’ opinions have already been considered and found unpersuasive, and will the PTAB judges ever change their minds during trials when the petitioner’s evidence is not viewed in its most favorable light?
Continue Reading New Final Rules for Post-Grant Proceedings Published by USPTO on April Fools Day

According to 35 U.S.C. §315(a), an inter partes review may not be instituted if, before the date on which the petition for such a review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of the patent.  In a recent decision, the Patent Trial and Appeal Board dealt with the issue of whether a petition would be barred under Section 315(a) when the petitioner previously had raised an affirmative invalidity defense as part of a motion to intervene as a defendant in a federal patent infringement suit.  The Board decided that the petition was not barred by Section 315(a) and instituted a trial on the merits.  (IPR2015-01872, Paper 10, March 14, 2016.)

Ericsson Inc. (the Petitioner) filed a petition to institute an inter partes review of claims 1-25 of U.S. Patent No. 7,385,994 of Intellectual Ventures II LLC (the Patent Owner).  In a preliminary response, the Patent Owner argued that the Petition was time barred under Section 315(a) because prior to the IPR Petition Ericsson had filed a motion to intervene as a defendant in a patent infringement litigation, initiated by the Patent Owner against AT&T and Cingular Wireless, along with an Answer in Intervention, in which the Petitioner had raised an affirmative defense of invalidity of the ‘994 patent.  The Patent Owner characterized the intervention initiated by the Petitioner as “initiating a new dispute,” when none existed beforehand.

The Board disagreed with the Patent Owner and relied on the reasoning put forth in Ariosa Diagnostics v. Isis Innovation Limited (IPR2012-00022) to hold that Ericsson’s answer did not constitute a civil action challenging the validity of a claim of a patent.
Continue Reading Affirmative Defense of Invalidity As Part of a Motion to Intervene Does Not Bar Filing of a Subsequent IPR Petition

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

Earlier this month, the Patent Trial and Appeal Board (PTAB) added two decisions to its list of “precedential” opinions for the USPTO’s new proceedings for challenging patents under the America Invents Act. The list (which now consists of three decisions out of the over 1000 opinions that have been rendered) is intended to bring to public’s attention cases that the PTAB has concluded settle aspects of the evolving law governing inter partes review (IPR), covered business method (CBM) review, supplemental examination and post grant review (PRG) proceedings.

With over 200 administrative patent judges and over 2000 pending proceedings being handled by a myriad of different panels of judges, precedential decisions are intended to resolve conflicts. However, the process for designating an opinion as “precedential” is quite cumbersome. The process starts by nomination of an opinion by a PTAB judge (or a member of the public within 60 days of the rendering of the opinion). The Chief Judge of the PTAB then circulates the opinion to all members of the PTAB with an invitation to comment (typically within 10 days) and then vote on whether the opinion should be designated as precedential. If a majority of the PTAB judges agrees, the Chief Judge notifies the Director of the Patent Office, who can concur or reject the recommended designation. If the Director concurs, then the opinion labeled as precedential and publishes as such on the USPTO website (http://www.uspto.gov/patents-application-process/appealing-patent-decisions/decisions-and-opinions/precedential).

In the first new precedential opinion, LG Electronics, Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015), the PTAB found LG’s petition for inter partes review was barred by 35 U.S.C. § 315(b), even though LG had filed its petition within one year of being served with an infringement complaint in 2014. The opinion concluded that the one-year bar of section 315(b) applies because petitioner had also been served with an earlier infringement complaint in 2008 on the same patent. There’s a certain irony in this decision because IPR proceedings did not come into existence until 2012 – so LG could never have petitioned for IPR the first time around. The effect of this decision apparently is that anyone sued more than a year before the AIA proceedings became available is effectively barred from petitioning for inter partes (or CBM) review.

The LG opinion notes but does not necessarily endorse an earlier PTAB decision (Oracle Corp. v. Click-to-Call Techs., LP, Case IPR2013-00312, Paper 40 (PTAB Dec. 18, 2013) ) in which a panel held that the 315(b) bar is not triggered by an earlier complaint – more than one-year before the petition – if the action is dismissed without prejudice. The panel in the LG case distinguished the Oracle decision because in the present case the dismissal of Mondis’s 2008 complaint was dismissed partial with prejudice and partially without prejudice.

In the second decision designated as precedential on January 12, 2016, Westlake Services, LLC v. Credit Acceptance Corp., (CBM2014-00176, Paper 28 (PTAB May 14, 2015) the Board interpreted the estoppel provision of 35 U.S.C. § 325(e)(1), ruling that the estoppel that prevents a petitioner from bringing a second CBM or PGR proceeding following “a final written decision” in the statute refers only to a decision on the specific claims on which the proceeding was instituted. Westlake was thus not estopped from bringing a second petition and challenging different claims.
Continue Reading Patent Trial and Appeal Board Adds Two More Cases to its List of Precedential and Informative Decisions