The Federal Circuit will apply a relaxed standard for review of the Patent Office’s post grant patent review proceedings and will give a good deal of deference to PTAB “findings of facts.”
Continue Reading Federal Circuit Affirms Invalidity Of A Merck Patent Based On Substantial Evidence Standard

Two recent cases show that simply avoiding a post-grant review proceeding at the U.S. Patent Office’s Patent Trial and Appeal Board (PTAB) not only does not preclude a defendant in underlying patent infringement litigation in a federal district court from raising the same invalidity arguments again, it also may not even influence the court’s claim construction. Moreover, the patent owner may not be allowed to make reference to its prior success in avoiding an administrative trial at the Patent Office as well.

Although 35 U.S.C. § 315(e)(2) provides an estoppel binding on a petitioner (or any party in privity with the petitioner) from raising the same issue in federal court patent infringement litigation if they lose in a PTAB final written decision, it is increasingly clear that a PTAB decision not to institute a trial is not likely to carry much weigh in federal court.

In Adidas AG v. Under Armour Inc. et al, C.A. No. 14-130, slip op. (D. Del. Dec. 15, 2015), the District Court of Delaware denied a defendants’ motion to modify the court’s claim construction order based on a PTAB decision denying institution of an inter partes review (IPR). The patent at issue covers “location aware” fitness trackers, which Addidas has alleged are infringed by Under Armour’s fitness and exercise monitoring systems. Even though Under Armour didn’t get a trial initiated on the Addidas patent at the PTAB, it did like the way the board construed the claims and urged Judge Sleet of the Delaware federal district court to adopt the same construction.

The Delaware District Court declined to change its construction of the term “with respect to a route path.”  Judge Sleet noted in a footnote that the “PTAB’s choice not to institute an IPR is not the type of adjudication that leads to issue preclusion.” The order further noted that the PTAB had not reached a final decision on the claim construction and consequently, the Court “is not bound by a preliminary claim construction used by the PTAB for the limited purpose of denying an IPR request.”
Continue Reading A Decision Not to Institute a Trial at the PTAB Does Not Carry Much Weight in Federal Court

Note: This article is adapted from a longer guest post on Forbes.com last week. To view the Forbes article click here.

Inter partes review (IPR) is a process established by Congress to permit defendants in patent infringement suits to quickly and inexpensively challenge patents asserted against them in an administrative trial at the U.S. Patent Office – and this process has proved to a potent weapon for patent challengers. In the roughly three-years that inter partes review has been available, over 80 percent of the trials have found patent claims to be invalid. Some in Congress are now questioning whether the IPR rules are perhaps skewed too far in favor of the challengers.

At the time the new patent law was enacted in 2012, it was assumed that the IPR process would be used primarily against so-called “patent trolls” rather than the holders of life science patents. And it is safe to say that no one in Congress intended this process to be an opportunity for Wall Street to get into the pharmaceutical patent-busting business. But the law of unintended consequences seems to have come into play.

Over the past five months, Kyle Bass, the manager of the Texas-based Hayman Capital Management, has launched at least seven new hedge funds for investors to challenge patents on FDA approved drugs. The funds, named the “Coalition for Affordable Drugs” (Series I – VII), have launched at least 16 challenges to patents owned by Acorda Therapeutics, Shire, Jazz Pharmaceuticals, Pharmacyclics, Celgene, Biogen and Pozen.

The scheme seems too simple to be true: short the stock of a publicly traded pharmaceutical company, file an IPR with the Patent Trial and Appeal Board (PTAB) that sends the stock price tumbling and then cover your short position by buying the stock at a hefty discount caused by the patent challenge.


Continue Reading Bass Goes Fishing: Troubles Ahead for Pharma?

Newly appointed USPTO Director Michelle Lee has responded to public criticism of the post-grant patent review mechanisms provided by the America Invents Act (AIA) by announcing in her blog last week that the government will implement several rule changes. The new rules, which will be implemented in three stages, have not yet been finalized but Director Lee strongly hinted these changes should benefit Patent Owners.

One of the rule changes apparently will make it easier for patent owners to amend their claims that are challenged by petitioners in inter partes review (IPR), covered business method (CBM) review and post grant review (PGR) proceedings.

According to the Director Lee, a first round of “quick fixes” will be released in the spring, followed by a second round of more substantial changes that will be published in the Federal Register for public comment in the summer. A third round of changes will follow involving revisions to the PTAB Trial Practice Guide, which governs the conduct of IPR, CBM and PGR proceedings.
Continue Reading USPTO Responds To Criticism By Promising PTAB Rule Changes That Should Benefit Patent Owners

The America Invents Act (AIA) allows a petitioner to request joinder of an inter partes review (IPR) of a patent with an IPR proceeding previously instituted with respect to that patent so long as the request for joinder is filed “no later than one month after the institution date of any inter partes review for which joinder is requested.” 37 C.F.R. 42.122(b). The joinder provision (35 U.S.C. 315(b)) provides:

If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under Section 311 that the Director, after receiving a preliminary response under Section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

In many cases, a petitioner requesting joinder is the same petitioner who had filed the previously-instituted proceeding. Such requests for joinder are typically made to circumvent the time bar imposed by 35 USC 315(b), which bars the institution of an IPR based on a petition that is “filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.” This time bar does not, however, apply to a request for joinder.
Continue Reading PTAB Panels Are Divided Regarding Interpretation Of The Joinder Provision

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

In a decision this month (IPR2013-00308), the Patent Trial and Appeal Board (PTAB) has ruled against Stanford University’s patented method for detecting Down’s syndrome and other chromosomal defects, finding all of the challenged claims 1-13 invalid. The Stanford patent, U.S. Patent Number 8,296,076, is licensed to Verinata Health Inc., and is the subject of patent infringement litigation initiated by Verinata and Stanford against Ariosa Diagnostics in 2012 (Verinata Health Inc. et al. v. Ariosa Diagnostics Inc. et al., case no. 3:12-cv-05501, N.D. California). (Verinata is now owned by genetic instruments maker, Illumina, which acquired it in 2013 for over $350 million dollars.) The remaining two claims of US Patent 8,296,076, independent claim 14 and its dependent claim 15 directed to a “method of testing for an abnormal distribution of chromosome in a sample comprising a mixture of maternal and fetal DNA,” were not challenged in the IPR2013-00308.

In two other recent decisions in October, 2014, Verinata’s own IP survived challenges by Ariosa. In final decisions on IPR 2013-00276 and IPR2013-00277, the PTAB decided that Ariosa had failed to meet its burden of showing by a preponderance of evidence that the claims of U.S. Patent Number 8,318,430 were invalid, representing a rare outcome where all of the challenged claims in a IPR proceeding were successfully defended. The Verinata ‘430 patent is the subject of separate pending litigation in the Northern District of California between Verinata and Ariosa (Illumina, Inc. v. Ariosa Diagnostics, Inc., case no. 3:14-cv-01921, N.D. California).
Continue Reading Stanford Patent Found Invalid in IPR proceedings but Licensee’s IP Survives

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

After nearly a dozen false starts, it appears that the first genuine “Post Grant Review” (PGR) petition may have been filed with the Patent Trial and Appeal Board (PTAB) under the America Invents Act (AIA).

Petition PRG2014-00008 was filed on August 5, 2014 by LaRose Industries, Inc. and Toys “R” Us – Delaware, Inc., challenging U.S. Patent 8,684,420 owned by Choon’s Design Inc. (Apparently, several earlier PGR petitions had been filed in error and have not been made public; hence the assignment of number 00008 to this petition.)

The patent at-issue was based on a series of continuing applications, some of which predated the changeover in U.S. patent laws that provides for Post Grant Review. Under the AIA, Post Grant Review is available to challenge a newly-issued patent – so long as its effective filing date is on or after March 16, 2013. The Petitioners will need to show that Choon was not entitled to any priority date earlier than its actual filing.
Continue Reading First Post Grant Review Petition Filed