USPTO Precedential Opinion Panel (POP) Addresses What Evidence Is Required to Establish That a Reference Qualifies as a “Printed Publication” at the Institution Stage
by Melissa R. Gibson & C. Brandon Rash
Patent Trial and Appeal Board, Inter Partes Review
January 2, 2020
On December 20, 2019, the Precedential Opinion Panel (POP) reversed the decision of the Patent Trial and Appeal Board (“Board”) in Hulu, LLC v. Sound View Innovations, LLC that had denied institution of an inter partes review (IPR) for insufficient evidence of public accessibility of an asserted textbook reference. The POP addressed what is required for a petitioner to establish that an asserted reference qualifies as a “printed publication.” The POP concluded that, “at the institution stage, the petition must identify, with particularity, evidence sufficient to establish a reasonable likelihood that the reference was publicly accessible before the critical date of the challenged patent.” The POP decided that the totality of the evidence in Hulu—including copyright, printing and ISBN dates on the face of the book; publication by an established publisher; and being part of a well-known book series—was sufficient for institution.
Petitioner Hulu challenged claims as obvious over a textbook, Dougherty. Hulu relied on a fourth printing of the book, which identified a 1990 copyright date and an “8/94” ISBN date. The book also listed four printing dates—November 1990, March 1991, July 1992 and November 1992—with “Minor Corrections” appearing next to the three latter dates. Although not relied on before the POP, Hulu also submitted with its petition a date-stamped excerpt of the second printing of Dougherty from the Cornell University Library and a librarian affidavit averring that this printing was publicly available by September 1992. In its preliminary response, Patent Owner Sound View Innovations (“Sound View”) challenged Petitioner’s showing that Dougherty was publicly available before the critical date in 1995. The Board agreed and denied institution. Hulu requested rehearing and POP review, which the POP granted, setting a briefing schedule and inviting briefing from amicus curiae.
On rehearing, the parties agreed that “reasonable likelihood” was the appropriate standard at institution and could be met by presenting a prima facie case. The parties, however, disagreed on the timing of the evidence. Hulu argued that the full evidentiary record is developed during the trial phase, and that evidence of “conventional markers” of publication is sufficient for institution. Sound View argued that the petitioner is required to present its case in chief in the petition, including all evidence that will be used after institution, with limited exceptions. Several amici argued that 37 C.F.R. § 42.108 provides a presumption in favor of institution generally and therefore a presumption in favor of finding a reference to be a printed publication.
The POP agreed that the institution standard is “reasonable likelihood.” Under 35 U.S.C. § 312(a), the petition must identify with particularity evidence sufficient to establish a reasonable likelihood that the reference was publicly accessible before the critical date. The POP described the “reasonable likelihood” standard as higher than the “plausible” standard for notice pleading but lower than the “preponderance” standard for a final written decision. The POP noted that, while a petitioner cannot change theories, a petitioner has limited opportunities to present new evidence after the petition, including: (1) a reply to the patent owner preliminary response; (2) a reply to the patent owner response; and (3) a motion to file supplemental information. The POP also rejected any presumption in favor of finding public accessibility, reasoning that § 42.108 provides no such presumption and it is the petitioner’s burden to identify sufficient evidence.
The POP rejected that any particular indicia per se, such as a copyright date, is sufficient for institution. Instead, the POP explained that public accessibility is a case-by-case inquiry and that indicia are considered as part of the totality of the evidence. Here, the POP considered all the evidence, including: (1) the face of the book bears copyright, printing and ISBN dates, all before the critical date; (2) the book was from an established publisher, O’Reilly & Associates, Inc.; and (3) it is part of a well-known book series. The POP also considered evidence cited by an amicus of a trade magazine touting that “The Internet Was Built With O’Reilly Books.” Based on this evidence, the POP concluded that there was sufficient evidence to establish a reasonable likelihood that Dougherty is a printed publication that a publisher made publicly available before the critical date. Sound View disputed Hulu’s use of an affidavit addressing a different version of Dougherty. But the POP noted that Hulu was no longer relying on the affidavit and found that the affidavit was not necessary to their decision that Hulu presented sufficient evidence for purposes of institution.
Practice Tip: When drafting an IPR petition, a petitioner should include all available evidence, including declarations, to demonstrate that an asserted reference was publicly accessible before the critical date. The petitioner, however, may have limited opportunities after the petition to present further evidence of public accessibility, either in a reply before or after institution or in a motion to file supplemental information. To challenge public accessibility at institution, the patent owner must show that the totality of the evidence fails to establish a reasonable likelihood that the reference was publicly accessible before the critical date.
PTAB Casts Doubt on Judicial Estoppel Challenge at Institution Stage of IPR But Does Not Foreclose it for Trial
by Jonathan James Underwood & Rubén H. Muñoz
Patent Trial and Appeal Board, Inter Partes Review
January 10, 2020
The Patent Trial and Appeal Board (PTAB) has rejected a patent owner’s argument that judicial estoppel should prevent a petitioner from making obviousness arguments in support of its petition for inter partes review (IPR).
Precision Planting, LLC filed a petition for IPR against a patent owned by Deere & Co. that is directed to a machine for sowing seeds. Precision asserted four obviousness grounds that all included the combination of a U.S. patent (Koning), which is directed to a machine for planting bulbs, with a German patent (Holdt), which is directed to a machine for planting seeds.
In its Patent Owner Preliminary Response, Deere argued that Precision was taking a position that was “diametrically opposite” to one it had taken several years earlier when Precision was prosecuting its own patent application. According to Deere, Precision had sought to overcome an obviousness rejection by arguing that the examiner was improperly combining Koning with a patent directed to a machine for planting seeds (Walters) because the two patents were not in the same field. The claims were subsequently allowed by the examiner. According to Deere, Precision was judicially estopped from arguing in its petition that Koning was in the same field as Holdt, a patent in the same field as Walters.
The PTAB rejected Deere’s arguments. The PTAB first noted that Deere had failed to cite “any authority squarely holding that judicial estoppel” applies to PTAB proceedings. The PTAB then explained that even if judicial estoppel were assumed to apply, Precision had made an adequate showing to defeat its applicability at the institution stage. According to the PTAB, the arguments that Precision made during prosecution occurred under an obviousness regime that was abrogated by the Supreme Court’s KSR decision, meaning that Precision’s position in its petition was not necessarily inconsistent with its earlier position during prosecution.
Moreover, because judicial estoppel only applies when a party was successful, the PTAB explained, the record did not show that Precision had successfully persuaded the examiner that Koning was in a different field because Precision had also made claim amendments that could have been the basis for the examiner allowing the claims to issue. Although the PTAB declined to apply estoppel at the institution stage, the PTAB allowed the parties to further address the issue during the trial stage of the IPR proceeding.
Practice Tip: Parties to a PTAB proceeding should be aware of potential challenges arising from inconsistent arguments presented not just to the PTAB, but across proceedings before the Patent Office. When faced with such challenges, parties should assess—and leverage—the impact of changed circumstances, including changes undergone by the governing caselaw.
Precision Planting, LLC v. Deere & Co., Case IPR2019-01052, Paper 19 (Jan. 7, 2020)
Eastern District of Texas Rejects Apple’s Request for a Stay Under the Customer-Suit Exception to the First-to-File Rule Based in Part on Apple’s Decision to File IPR Petitions
by Anthony David Sierra, Clayton N. Matheson & Daniel L. Moffett
District Court, Inter Partes Review, Patent Infringement, Eastern District of Texas
January 13, 2020
Chief Judge Rodney Gilstrap of the Eastern District of Texas issued a decision addressing motions to stay a patent infringement case under the “customer-suit exception” to the general first-to-file rule. Judge Gilstrap largely focused the opinion on his conclusion that granting a stay would have been inequitable under the circumstances, and thus would have contravened the fundamental purposes underlying the customer-suit exception. In particular, he found that the defendant’s decision to pursue parallel inter partes review (IPR) proceedings “violates the express policy and purpose of the customer-suit exception,” namely, to relieve the customer of the burdens of litigation. But he also reasoned that, regardless of the movant’s decision to pursue parallel IPR proceedings, the defendant was not entitled to a stay under the exception, or under the general factors courts normally consider when deciding stay motions.
Factual Background and Relevant Legal Standards
On January 24, 2019, Rembrandt Wireless Technologies, LP sued Apple Inc. for infringing two patents related to systems and methods of wireless data communication. The Accused Products that Rembrandt has targeted with its infringement claims are Apple devices that incorporate certain Bluetooth chipsets to deliver the accused communication functionality. Although Apple purchases many of the chipsets from third-party manufacturers—specifically, Broadcom and Qualcomm—Apple itself also manufactures some of the chipsets. Apple additionally developed the software that is necessary for integrating and using the chipsets in the Accused Products.
Apple filed a motion to stay the lawsuit because on April 15, 2019, Rembrandt sued Broadcom and Qualcomm in the Central District of California for infringing on the same two patents. Apple argued in its motion that the court should grant a stay pursuant to the customer-suit exception, on the ground that Apple is merely a reseller of the chipsets, rather than the manufacturer.
The customer-suit rule is an exception to the normal first-to-file rule, under which a court will generally choose to stay, transfer, or dismiss a duplicative later-filed action. The exception allows a court to stay an earlier-filed case against a customer, so that a later-filed case against the manufacturer may proceed first. In determining whether the exception applies, courts consider three factors, including: (1) whether the customer in the first-filed action is a mere reseller of products manufactured by the defendant in the second-filed action; (2) whether the customer has agreed to be bound by any decision in the second-filed action; and (3) whether the defendant in the second-filed action is the only source of the allegedly infringing product. But as Judge Gilstrap stressed in his Order, “the guiding principles in the customer suit exception cases are efficiency and judicial economy.”
As Judge Gilstrap further explained, there are also three factors that courts generally consider in deciding motions to stay. Those factors include (1) whether a stay will unduly prejudice, or present a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify the issues in question and the trial of the case; and (3) whether discovery is complete and a trial date has been set.
Judge Gilstrap’s Analysis
In deciding not to grant Apple’s stay motion, Judge Gilstrap conducted a three-part analysis. First, he held that, because Apple had filed three IPR petitions against the Asserted Patents after filing the motion, a stay would have been inconsistent with the customer-suit exception’s “guiding principles” and therefore was not warranted, regardless of whether Apple could satisfy the three factors of the customer-suit test. Judge Gilstrap reasoned that if he stayed the action, he would not be relieving Apple of the burdens of litigation (and thereby promoting judicial economy) since Apple had actively embraced those burdens by bringing additional litigation in another setting. Instead, a stay would merely deprive Rembrandt of the ability to seek redress in the forum, and under the procedural rules, of its choosing. Judge Gilstrap therefore concluded that granting a stay under the guise of efficiency and judicial economy would be inequitable where Apple continued to pursue litigation elsewhere.
Second, Judge Gilstrap explained that, even setting aside Apple’s inequitable conduct, the customer-suit factors still did not warrant a stay. For the Accused Products containing Apple-manufactured chipsets, the customer-suit exception did not apply because Apple was the manufacturer rather than the customer. Therefore, these products did not satisfy the first and third customer-suit factors, as Apple was the manufacturer and served as an additional source for the allegedly infringing products.
The outcome was the same for Accused Products containing Broadcom and Qualcomm chipsets. The patents-in-suit recited communication devices “configured to” or “capable of” performing certain functions. So, the question of whether Apple’s source code that integrates the chipsets enabled the accused functionality was directly relevant to infringement. As such, Apple’s role in integrating the chipsets prevented it from being a “mere reseller,” and its contribution to the development of the Accused Products showed that Broadcom and Qualcomm were not the sole source of those products.
Judge Gilstrap also found that the second factor did not support a stay, even though Apple agreed to be bound by the decision in the California litigation. With respect to the Apple-made chipsets, Judge Gilstrap explained that Apple’s agreement to be bound was both impractical and unreasonable, since Apple’s chipsets were not identical to the ones at issue in the later-filed action, and Rembrandt had not agreed to be bound by a decision in the California litigation. As for the Broadcom and Qualcomm chipsets, Judge Gilstrap found Apple’s stipulation sufficient, but that the overall balance of the factors still weighed against a stay.
Finally, Judge Gilstrap concluded that none of the three general stay factors supported a grant of Apple’s motion either. Regarding the first factor, he observed that granting a stay “would present a tactical disadvantage to Rembrandt in view of the recently filed IPR proceedings initiated by Apple.” On the second factor, he explained that a stay of a customer-suit generally will not simplify the issues where the customer is sued for direct infringement, while the manufacturer is sued for indirect infringement—especially where, as here, the allegedly infringing devices in the two cases are not identical. Turning to the third factor, Judge Gilstrap stressed that discovery was almost complete, the claim construction hearing was only a week away, and trial was scheduled to begin in only six months. Judge Gilstrap thus concluded that the general stay factors also weighed against granting Apple’s motion. Rembrandt Wireless Technologies, LP v. Apple Inc., 19-CV-00025 (E.D. Tex. November 27, 2019) (Gilstrap, C.J.)
Practice Tip: Defendants looking to stay an earlier-filed patent infringement case under the customer-suit exception should be aware of its grounding in equity, and in the principles of efficiency and judicial economy, such that a court may shut down attempts to use the exception merely to gain a tactical advantage. More specific to the facts of this case, “customer” defendants should carefully weigh the value of filing an IPR petition against the value of obtaining a stay. Although there were multiple bases for the Court’s decision, Judge Gilstrap’s rationale suggests that merely filing an IPR Petition may be sufficient grounds to deny a stay under the customer-suit exception.
Calling a Printed Publication a “System” is Not Enough to Avoid IPR Estoppel
by Hannah D. Price, Matthew George Hartman & Daniel L. Moffett
Patent Trial and Appeal Board, Prior Art, 35 U.S.C. § 315(e)(2) estoppel, Inter Partes Review
January 27, 2020
A Central District of California judge recently granted summary judgment of no obviousness based on inter partes review (IPR) estoppel because the only prior art references used to challenge patent validity could have been asserted during IPR proceedings.
On January 10, 2017, Plaintiff filed a complaint for patent infringement against Defendant. In response, Defendant filed IPR petitions against the patents-in-suit. The district court stayed the litigation pending resolution of the IPRs. After the Board issued its final written decisions in the IPRs—which invalidated only some of the patents—the court partially lifted the stay of the action as to the patents that survived the IPR. On November 12, 2019, Plaintiff and Defendant filed cross-motions for summary judgement. Among the motions was Plaintiff’s motion for partial summary judgment of no obviousness based on IPR estoppel under § 35 USC 315(e)(2).
Under § 315(e)(2), IPR estoppel applies when “(1) a final written decision is issued in an IPR; (2) the contention at issue asserts invalidity under §§ 102 or 103 based only on prior art consisting of patents or printed publications; and (3) the contention at issue either was raised or reasonably could have been raised during the IPR.”
Plaintiff argued that § 315(e)(2) applied because all of the prior art references asserted in Defendant’s expert’s report were classified as either patents or printed publications and, thus, should have been asserted in the IPR proceeding. In response, Defendant argued that each of its expert’s obviousness combinations included at least one “system” prior art reference—i.e., the Microsoft Outlook Software System reference, the Microsoft Server System reference, the Nokia 7xxx Series Mobile Phone System reference and the Pocket PC Phone System reference—which could not have been raised during the IPR proceeding because they are not patents or printed publications.
The Court agreed with Plaintiff and held that IPR estoppel applies. In doing so, the Court noted that “‘if a patent challenge is simply swapping labels for what is otherwise a patent or printed publication invalidity ground in order to ‘cloak’ its prior art ground and ‘skirt’ estoppel,’ then § 315(e)(2) estoppel still applies.” The Court explicitly rejected Defendant’s argument that using the term “system” to refer to the relevant prior art references in its invalidity contentions was sufficient to avoid estoppel. In fact, the court noted that Defendant described the alleged “system” references as “patents and publications” in its contentions and even explained that the reference names were merely a “short name” for the reference and not the actual description of the reference. As a result, the court found that Defendant relied only on printed publications in its obviousness theories of invalidity, specifically ones that “reasonabl[y] could have been raised during the IPR.” Defendant was therefore estopped under § 315(e)(2) from asserting invalidity based on obviousness.
Practice Tip: A district court defendant that wants to rely on a prior art system in order to avoid IPR estoppel should make clear in its invalidity contentions that it is relying on the actual system itself, rather than a patent or printed publication describing the system. Moreover, practitioners should take care when labeling types of prior art references, as courts may not allow labels to be swapped in order to avoid § 315(e)(2) estoppel.
Vaporstream, Inc. v. Snap, Inc., No. 2:17-cv-00220-MLH (KSx) (C.D. Cal. Jan. 13, 2020)
Far-Reaching Effect of IPR Estoppel Dooms Invalidity Defense Based on Prior Art Product
by Jonathan James Underwood, Matthew George Hartman & Rubén H. Muñoz
Patent Trial and Appeal Board, Infringement, Obviousness, 35 U.S.C. § 315(e)(2) estoppel, Inter Partes Review
January 29, 2020
Chief Judge Stark granted a patent owner’s motion for summary judgment of inter partes review (IPR) estoppel, holding that obviousness defenses based on a prior art product could not be asserted because a prior art publication disclosing all of the product’s relevant features could have been raised during an IPR that reached a final written decision.
The case began in 2013 when Wasica filed a patent infringement suit against Schrader for allegedly infringing claims related to monitoring air pressure in tires. In response, Schrader filed petitions for IPR challenging the claims of the asserted patent. The district court stayed the case pending IPR resolution. Following a final written decision and appellate review by the Federal Circuit, several claims survived the IPR. The district court then lifted the stay, and Wasica proceeded on allegations of infringement of only one of the surviving patent claims. Schrader raised three obviousness defenses, each relying on a prior art product—namely, tire pressure sensors manufactured for the Chevrolet Corvette—in combination with a patent or a combination of patents and printed publications.
Wasica moved for summary judgment on all of Schrader’s obviousness defenses, arguing that Schrader was estopped under 35 U.S.C. § 315(e)(2) from asserting obviousness grounds that could have been raised in the IPR. Wasica argued that all of the patents and printed publications relied on by Schrader either were, or could have been, raised during the IPR. Wasica further contended that one of the printed publications disclosed all of the relevant features of the prior art product. Schrader countered that estoppel did not apply because the IPR statute does not allow challenges based on prior art products and that, as such, its obviousness defense could not have been raised in the IPR.
The district court agreed with Wasica. First, the court acknowledged the split among district courts regarding the scope of § 315(e)(2) estoppel. Next, the court explained that the IPR statute distinguishes between the grounds that may be raised (under § 102 and § 103) and the evidence that can be used to support those grounds (patents and printed publications). The court then found that the prior art product was “materially identical (i.e., disclose[d] the same claim elements)” to a printed publication that reasonably could have been raised in the IPR. Thus, the court ruled that the grounds reasonably could have been raised, and so Schrader’s obviousness defenses were estopped.
Practice Tip: Courts continue to wrestle with how to apply IPR estoppel under § 315(e)(2) to prior art products asserted in support of defenses raised under § 102 or § 103. Several decisions have construed estoppel narrowly and have held that it cannot be applied to prior art products, while other decisions have considered whether there are substantive differences between the prior art product and printed publication that would preclude the application of estoppel. This area of law continues to develop, but until the Federal Circuit rules on the issue, litigants should consider their strategies carefully. Patent owners who can file suit in more than one district should consider how the potential forums have applied estoppel to a prior art product. in previous rulings. Accused infringers should consider whether pursuing an IPR may subsequently foreclose defenses that are based on a prior art product.
Wasica Fin. GmbH v. Schrader Int’l, Inc., 13-cv-01353 (D. Del. Jan. 14, 2020) (Stark, C.J.)
PTAB: Collateral Estoppel Precludes Patent Owner from Advancing Arguments Previously Rejected in IPRs Involving Different but Related Patents
by Melissa R. Gibson, Clayton N. Matheson & Rubén H. Muñoz
Patent Trial and Appeal Board, 35 U.S.C. § 103, Inter Partes Review
January 31, 2020
A recent ruling from the Patent and Trial Appeal Board (PTAB) highlights the critical role that collateral estoppel (also known as issue preclusion) can play in inter partes review (IPR) proceedings. In a final written decision issued on January 13, 2020, the Board determined that Petitioner Rimfrost AS had shown, by a preponderance of the evidence, that the challenged claims of Aker Biomarine Antarctic AS’s U.S. Patent No. 9,375,453 (the “’453 Patent”) are obvious. (The Board reached the same conclusion with respect to Aker’s proposed substitute claims and therefore also denied Aker’s contingent motion to amend.) The Board based its decision in part on its finding that Aker was collaterally estopped from asserting two “reasonable expectation of success” arguments against Rimfrost’s obviousness attack, since Aker had unsuccessfully raised those same arguments, no less against the same prior art, in previous IPR proceedings involving different patents within the ’453 Patent’s family.
The ’453 Patent is directed to methods for extracting and processing polar krill oil from Antarctic krill, which are small fish that contain bioactive fatty acids. According to the ’453 Patent, krill oil compositions have been found effective for treating several conditions, including (among others) high cholesterol, plaque formation, hypertension, arthritis and skin cancer. Representative independent Claim 1 recites a method for producing polar krill oil by (1) treating the krill to denature its lipid enzymes; (2) using a polar solvent to extract oil comprising specific ratios of ether phospholipids, non-ether phospholipids, triglycerides and astaxanthin esters; and (3) formulating the processed oil in capsules suitable for oral consumption.
Rimfrost filed an IPR challenging the patentability of claims 1 through 32 of the ’453 Patent, arguing that they are obvious under 35 U.S.C. § 103(a). In its Petition, Rimfrost identified four different prior art combinations that purportedly disclosed the recited method of producing krill oil with the recited composition. The Board instituted trial on all four combinations.
In its Patent Owner Response, Aker did not dispute whether the asserted prior art references individually disclosed the methods and recited components of the krill oil, as set forth in the ’453 Patent. Aker instead contended that a person of ordinary skill in the art would not have thought to combine those references with a reasonable expectation of successfully arriving at the claimed invention. Specifically, Aker presented three arguments for why an ordinarily skilled artisan would not have held a reasonable expectation of success, including (as the Board labeled them), (1) the “no triglycerides” argument, (2) the “PAF teaching away” argument, and (3) the “combining extraction techniques” argument. In its Reply, Rimfrost asserted that Aker was collaterally estopped from raising the first two arguments because it previously advanced them—unsuccessfully—in separate IPRs involving related patents. (Rimfrost did not attack the third argument on collateral estoppel grounds, but rather challenged it on the merits.)
The Board ultimately agreed with Rimfrost regarding the applicability of collateral estoppel to Aker’s “no triglycerides” and “PAF teaching away” arguments. The Board explained that collateral estoppel precludes a party from relitigating an issue if “(1) [a] prior action present[ed] an identical issue; (2) the prior action actually litigated and adjudged that issue; (3) the judgment in that prior action necessarily required determination of the identical issue; and (4) the prior action featured full representation of the estopped party.” Paper 34 at 1-2 (quoting VirnetX Inc. v. Apple, Inc., 909 F.3d 1375, 1377 (Fed. Cir. 2018)). As the Board further stressed, “[t]he application of collateral estoppel is not limited to patent claims that are identical.” Id. at 31. “Rather, it is the identity of the issues that were litigated that determines whether collateral estoppel should apply,” such that “[i]f the differences between the unadjudicated patent claims and the adjudicated patent claims do not materially alter the question of invalidity, collateral estoppel applies.” Id. (quoting Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333, 1342 (Fed. Cir. 2013)) (emphases added).
Applying these standards, the Board found collateral estoppel applicable even though the prior IPRs involved different patents and claims. The Board observed that the patents in the prior proceedings were part of the same family and recited many of the same limitations as the ’453 Patent. The prior proceedings also involved the same prior art references. And Aker had made the exact same obviousness arguments. The Board thus determined that, for purposes of collateral estoppel, the identical issues had been actually litigated and adjudged in the prior IPRs. The Board next found that the patentability analyses in the prior proceedings necessarily required rejection of Aker’s “no triglycerides” and “PAF teaching away” arguments. And since Aker indisputably had been fully represented in those proceedings, the Board concluded that Aker was estopped from relitigating its “no triglycerides” and “PAF teaching away” theories.
The Board then considered Aker’s third “combining extraction techniques” argument and rejected it on the merits, for many of the same reasons that it was rejected in the previous IPRs. The Board therefore ruled that Rimfrost had met its burden in proving that the claims of the ’453 Patent are obvious.
Practice Tip: Where an IPR concerns a patent within the same family as, or otherwise related to, a patent that was at issue in a prior IPR, the patent owner should be careful not to rely too heavily (if at all) on arguments that the Board rejected in the earlier proceeding. Even if the challenged claims are not identical to those asserted in the prior IPR, there is a good chance that the Board will bar any such arguments in the new proceeding under the doctrine of collateral estoppel, so long as the Board finds that the issues previously adjudicated are the same.
Rimfrost AS v. Aker Biomarine Antarctic AS, IPR2018-01178, Paper 34 (PTAB Jan. 13, 2020)
PTAB: Correction to Claim of Priority Has No Impact Following a Final Written Decision in an IPR
by Matthew George Hartman & Rubén H. Muñoz
Patent Trial and Appeal Board, Inter Partes Review
February 04, 2020
A panel at the Patent Trial and Appeal Board (PTAB) recently held that a certificate of correction fixing an error in a patent’s claim of priority did not apply retroactively in light of an already issued final written decision in an inter partes review (IPR).
Petitioner Emerson Electric Co. filed a petition for IPR challenging a patent owned by SIPCO, LLC (Patent Owner). The Board instituted the IPR and ultimately issued a final written decision finding obvious all challenged claims. A Federal Circuit appeal ensued, and while the appeal was pending, the Patent Office issued a certificate of correction changing the claim of priority in the challenged patent. Patent Owner had sought that correction in an attempt to remove as prior art a particular reference asserted in the IPR. Upon issuance of the certificate, the Federal Circuit granted Patent Owner’s motion for remand with instructions for the Board to consider what effect, if any, the certificate had on the final written decision in the IPR.
On remand, Petitioner argued to the Board that the Petitioner argued to the Board that the certificate of correction had no impact on the final written decision because under 35 U.S.C. § 255, which governs certificates of correction for errors such as that in a claim of priority, a certificate applies only prospectively to actions that arise after the certificate issues. In support of its argument, Petitioner pointed to the express language of § 255 which states that any certificate of correction that issues shall have an effect on “trial of actions . . . thereafter arising” (emphasis added). Petitioner further contended that allowing Patent Owner to change its patent at this stage of the proceeding essentially creates a “moving target” that would unfairly prejudice Petitioner. In response, Patent Owner countered that the language of § 255 instructing that a certificate of correction only applies prospectively does not apply to IPRs because an IPR is not a “trial of actions” under the statute. Patent Owner further argued that failing to give retroactive effect to a certificate of correction would waste Patent Office resources because “it would be illogical . . . to cancel claims of an uncorrected patent if the [Patent Office] has issued a certificate correcting the patent.”
After considering the parties’ positions, the Board sided with Petitioner and held that the certificate of correction had no impact on the final written decision in this proceeding. The Board began its analysis by explaining that it would reach the same outcome whether or not the IPR proceeding qualifies as a “trial of actions” under § 255. Thus, if the IPR were a “trial of actions,” under the express wording of the statute, the certificate of correction would only apply if the IPR arose after the certificate issued. This was not the case because by the time the certificate of correction issued, the IPR had already commenced and the Board had issued its final written decision. Conversely, the Board held that even if the IPR were not a “trial of actions” under § 255, the certificate of correction would still only apply prospectively, citing the absence of affirmative language in the statute indicating any intent to retroactively apply a certificate of correction. The Board also noted that its ruling was consistent with the interpretation given to § 255’s “sister provisions” including § 256, which allows for correction of named inventor errors. Section 256 explicitly states that inventorship errors “shall not invalidate the patent in which such error occurred,” thereby indicating that certificates issued under this section have retroactive effect. This is in contrast to § 255, which does not include any similar provision. Finally, the Board found that its ability to exercise discretion to stay or prohibit the filing of a certificate of correction during an IPR supports its determination, stating that it would be “inconsistent” to grant the Board this discretion “yet mandate retroactive effect when a certificate issues.”
Practice Tip: A patent owner should be diligent in checking for, and correcting, errors in a patent when it issues, including any errors relating to a claim of priority. Any delay creates a risk that corrections made later during the pendency of a post-grant proceeding, such as an IPR, will not be effective.
Emerson Elec. Co. v. SIPCO, LLC, IPR2016-00984, Paper 52 (PTAB January 24, 2020)
District Court Rejects Plaintiff’s Bid to Extend IPR Estoppel to Institution Denials
by Melissa R. Gibson, Jason Weil & Rubén H. Muñoz
District Court, Patent Trial and Appeal Board, Invalidity, Patentability, 35 U.S.C. § 315(e)(2) estoppel
February 21, 2020
A federal judge in the Northern District of California recently rejected an argument that would have expanded inter partes review (IPR) estoppel seemingly beyond the plain reading of 35 U.S.C. § 315(e)(2). The plaintiff had sought summary judgment that its asserted claims were valid based on the defendant’s failed IPR petition, arguing that no reasonable jury could find the asserted claims invalid by clear and convincing evidence in the district court based on defendant’s alleged “second-string” art that defendant did not assert in the IPR. In denying the motion for summary judgment, the court explained that the plaintiff had not even addressed the strength of defendant’s invalidity theories, and as such, there remained material issues of fact for trial.
Specifically, Plaintiff Finjan, Inc. sued Defendant Cisco Systems, Inc. for patent infringement based on patents related to computer and network security. Those patents have survived numerous validity and patentability challenges by multiple parties in various venues. Defendant served invalidity contentions and then filed two IPR petitions challenging the patentability of the asserted claims based on a subset of the art identified in its contentions. The Patent and Trial Appeal Board (PTAB) declined to institute review. Defendant then served its expert reports challenging the validity of the patents based on references and combinations of references that it had not asserted in the IPR.
Plaintiff moved for summary judgment that the asserted claims are valid over that prior art as a matter of law. Plaintiff argued that no reasonable jury could find that the “second-string” prior art asserted in the litigation would invalidate the patents under the “clear and convincing standard” when the PTAB declined to even institute review under the lower “reasonable likelihood” standard. Plaintiff reached that conclusion by inferring that Defendant would have used its “best” prior art in the IPR petition because: (1) IPRs are expensive; (2) there are serious estoppel considerations; and (3) the standard required to invalidate claims in IPRs is lower than in district court litigations. In response, Defendant argued that Plaintiff was effectively asking the court to invent a new estoppel arising from a denied IPR petition, and that the estoppel law does not support the labeling of prior art that was not used in a non-instituted IPR as inferior.
The court agreed that the practical implication of Plaintiff’s theory is that whenever a defendant files an IPR petition that is not instituted, the petitioner/defendant will not be able to assert any prior art challenges in a district court because the challenges are presumably based on “second-string” references that cannot meet the higher burden of proof applied in district court. Such a holding would circumvent the statutory requirement that only final written decisions trigger estoppel. According to the court, it was irrelevant that the patents had survived previous validity challenges by other parties because none of those proceedings triggered estoppel against Defendant in this litigation.
Plaintiff did not address the substance of Defendant’s invalidity theories, and instead pointed out that some of the references in Defendant’s expert reports were considered and rejected by the PTAB. But Defendant stressed that most of its invalidity theories have never been considered by the Patent Office, PTAB, or a jury, and for the combinations that were previously considered, its expert’s analysis differed from anything presented before. The court held that Plaintiff failed to establish that there was no material dispute of fact as to the validity of the patents and thus the court denied Plaintiff’s motion for summary judgment of validity.
Practice Tip: Evidence and argument that a patent has survived prior validity and patentability challenges may be insufficient to support a motion for summary judgment of validity. When seeking summary judgment of no invalidity, a patent owner should also consider addressing the merits of the accused infringer’s invalidity theories and identify why those theories fail as a matter of law.
Finjan, Inc. v. Cisco Sys. Inc., No. 17-cv-00072-BLF (N.D. Cal. Feb. 3, 2020) (J. B. L. Freeman)
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