November 24, 2014
Law360
By Jason E. Stach; Elliot C. Cook; James D. Stein
Authored by Elliot C. Cook, Jason E. Stach, and James D. Stein
The post-institution phase of an inter partes review, covered business method review or post-grant review is not where a patent owner wants to be. The Patent Trial and Appeal Board has already found that the petitioner made a threshold showing of unpatentability—"reasonable likelihood" for an IPR, "more likely than not" for a CBM or PGR—for at least one claim.1 The patentee may be fighting on multiple fronts simultaneously, particularly if a court declines to stay a copending litigation, and costs may be escalating. The historical win rates are also concerning: As of Oct. 6, 2014, all instituted claims were canceled in 73 percent of IPRs and in 100 percent of CBMs.2
A patent owner has every incentive to avoid this predicament. While every case is unique and deserves an individualized strategy, certain tactics for avoiding or limiting the scope of an instituted America Invents Act proceeding have proven successful to date. As early as possible, patent owners should consider whether the following avenues of attack may help their cause. Equally, petitioners should do what they can to avoid the issues noted below.
Section 315(b) precludes institution of an IPR if the petitioner, a real party in interest (RPI), or a privy of the petitioner was served with a complaint alleging infringement of the challenged patent more than one year before the petition is filed.3 Patent owners who successfully prove that this bar applies can avoid institution entirely.4 The board, however, recognizes an exception that nullifies the effect of a served complaint if the complaint was dismissed without prejudice and left "the parties as though the action had never been brought."5
But according to the board, service of a second complaint asserting the same patent does not nullify service of the original complaint or otherwise reset § 315(b)'s one-year clock.6 Nor does serving an amended complaint7 or consolidating8 two actions, where the earlier complaint is dismissed without prejudice but the patent remains asserted in the consolidated case.
And because § 315(b) mentions only an infringement complaint, the board has found that the type of dismissal for counterclaims and affirmative defenses is irrelevant.9 Thus, the board has applied the bar where the complaint was dismissed with prejudice but the defendant's counterclaims and affirmative defenses regarding invalidity were dismissed without prejudice.10 Some believe that the board's exceptions (and exceptions to those exceptions) are not supportable in light of the statutory language, so a patent owner may still wish to raise them to ensure they are preserved if the Federal Circuit takes a different approach than the board.
Because the one-year bar to file an IPR petition also applies to privies and RPIs of the petitioner, a third party's bar may be imputed to the petitioner.11 Whether a third party is a privy or an RPI is "a highly fact-dependent question" that is "handled by the Office on a case-by-case basis."12 Patent owners may attempt to leverage any evidence of connections between the third party and the named petitioner to help support a finding that the third party is a privy or an RPI. Patent owners may also seek routine or additional discovery to address a privity or RPI issue.
One example where the board denied institution based on an RPI issue came after finding that a time-barred parent company had "aligned interests and sufficient opportunity . . . to control the challenge" petitioned by its wholly owned subsidiary.13 The board also denied institution where the petitioner was indemnified by a barred third party who, as part of the indemnification, funded the petition, "had every opportunity and right" to control the petition, had an interest in review of the patent, and allowed its counsel to "communicate[] with counsel for Petitioner about initiating an IPR, including discussing what prior art to assert."14 In another example, the board denied institution where it found that the petitioner brought the proceeding as a proxy for a time-barred third party.15
Statutes and rules separately require a petitioner to name all RPIs in the proceeding, which aids the board and district courts in applying appropriate estoppels.16 In some circumstances, the board may allow a petitioner to correct the omission of an RPI.17 But the board has found that correction requires granting a new filing date.18 If the new filing date of the corrected petition falls outside the one-year window for filing a petition, the board has found that the entire petition is barred.19
A petition typically proposes constructions for certain claim terms that support its invalidity positions. But the petition may leave an opening for the patent owner by overlooking or avoiding a dispositive construction for a problematic claim term. To avoid or limit institution, the patent owner can use its preliminary response to convince the board to adopt the patent owner's construction for a key term and explain how the asserted prior art does not satisfy the construction.20
IPR challenges must be based on "prior art consisting of patents or printed publications."21 CBM and PGR challenges may also involve patents or printed publications. In some cases, petitioners rely on documents whose "printed publication" status is questionable. If the patent owner can show that the petitioner has not met its burden of proving publication, it may avoid institution of all grounds based on that document.
For example, the board has denied institution where the petitioner relied on a draft Institute of Electrical and Electronics Engineers technical standard available only to a standards working group,22 a brochure about an amusement park ride,23 and a patent owner's confidential submissions to the U.S. Food and Drug Administration retrieved by the petitioner years after the challenged patent's priority date.24 Patent owners may also wish to challenge a petitioner's allegations of prior public knowledge or use in the CBM/PGR context.
Patent owners should also be on the lookout for impermissible invalidity grounds. As an example, the board has held that challenges based on references that only qualify as prior art under pre-America Invents Act 35 U.S.C. § 102(e) are impermissible in a CBM proceeding.25 And, as discussed above, IPRs are limited to challenges under 35 U.S.C. §§ 102 and 103 based on "prior art consisting of patents or printed publications."26 While permissible in CBMs and PGRs, challenges based only on prior art in public use, on sale or otherwise available to the public are prohibited in IPRs.
Several board panels have construed the time bar of § 315(b) to not prohibit institution of an otherwise untimely petition that is accompanied by a motion for joinder.27 In these circumstances, if the patent owner can explain why joinder is inappropriate, it can avoid institution entirely. If the proposed joinder would involve new grounds or disrupt the schedule of an ongoing proceeding, joinder may be denied.28 Similarly, joinder may be inappropriate if it would involve new declarant testimony, even if there is significant overlap between the two proceedings.29
Statutes and rules require that certain issues be explained with "particularity," requiring some level of detail and specificity in a petition.30 In cases where a petition lacks sufficient "detail and explanation," the board may deny institution.31 To support an obviousness combination, for example, a petition may be vulnerable if it does not explain "the exact combination of teachings" in the prior art it relies on.32 And for any type of validity challenge, quoting a prior art reference at length without specifying which portions correspond to specific claimed features may be insufficient to warrant institution.33
While a petition may rely on outside documents as part of its explanation, the petition itself must contain the required explanation. So when a petition relies on expert testimony for support, the petition itself must identify "specific portions" of the testimony that "support the challenge."34 Uncited portions of a declaration may lend no support to a petition's substantive grounds.35 And when an expert declaration contains testimony that the petition does not "meaningfully" develop, the testimony may be given little or no weight.36
In situations where multiple petitions challenge the same patent, some or all grounds may be denied pursuant to the board's discretionary authority.37 Particularly where a second petition asserts the same prior art and arguments as the first petition, in some instances the board has found the second petition duplicative and denied institution on that basis.38 Even where previous petitions were filed by third parties, a petitioner may still be prevented from instituting a new proceeding if it asserts substantially the same prior art and where efficiency counsels against institution.39 In some cases, a petition may be denied based on other types of previous office proceedings involving substantially the same arguments, including original examination.40
When a petition raises multiple grounds of rejection for common claims, the board will often limit the instituted grounds to those it finds not to be redundant. The board explained the theory underlying this practice in the early days of AIA proceedings, and has continued to apply it to manage the size of instituted trials.41 Important for patent owners, the board has placed the burden on the petitioner to explain why overlapping grounds of rejection are not redundant.42 So when the petitioner does not "articulate[] a meaningful distinction in terms of relative strengths and weaknesses with respect to application of the prior art disclosures to one or more claim limitations," the board may find one or more proposed grounds redundant and decline to institute on those grounds.43
Every AIA proceeding involves unique facts, and different strategies may be effective (or not) in different scenarios. While the 10 strategies noted above have proven successful in some cases before the board, additional strategies will undoubtedly prove successful in the future. Practitioners should treat these strategies as both historical guidance and inspiration for creative new approaches to defending against AIA petitions.
Endnotes
1 35 U.S.C. §§ 314(a), 324(a).
2 Daniel F. Klodowski & Jonathan R.K. Stroud, Claim and Case Disposition, Finnegan America Invents Act Blog, http://www.aiablog.com/claim-and-case-disposition.
3 35 U.S.C. § 315(b).
4 Apple Inc. v. VirnetX Inc., IPR2013-00393, Paper No. 21 (Feb. 12, 2014).
5 Macauto U.S.A. v. BOS GmbH & KG, IPR2012-00004, Paper No. 18 at 15 (Jan. 24, 2013).
6 Universal Remote Control Inc. v. Universal Elecs. Inc., IPR2013-00168, Paper No. 9 (Aug. 26, 2013).
7 Apple Inc. v. Rensselaer Polytechnic Inst., IPR2014-00319, Paper No. 12 (June 12, 2014).
8 Amneal Pharm., LLC v. Endo Pharm. Inc., IPR2014-00361, Paper No. 14 (July 25, 2014).
9 Amkor Tech. Inc. v. Tessera Inc., IPR2013-00242, Paper No. 98 at 6-7 (Jan. 31, 2014).
10 Microsoft Corp. v. VirnetX Inc., IPR2014-00401, Paper No. 10 (July 23, 2014).
11 35 U.S.C. § 315(b).
12 Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012).
13 ZOLL Lifecor Corp. v. Philips Elecs. N. Am. Corp., IPR2013-00606, Paper No. 13 at 10 (Mar. 20, 2014).
14 First Data Corp. v. Cardsoft LLC, IPR2014-00715, Paper No. 9 at 7-8 (Oct. 17, 2014).
15 RPX Corp. v. VirnetX Inc., IPR2014-00171, Paper No. 57 (June 5, 2014).
16 35 U.S.C. §§ 312(a)(2), 322(a)(2); 37 C.F.R. § 42.8(b)(1).
17Petroleum Geo-Servs. Inc. v. WesternGeco LLC, IPR2014-00678, Paper No. 15 (July 24, 2014); ZOLL Lifecor, IPR2013-00606, Paper No. 13.
18 Petroleum Geo-Servs., IPR2014-00678, Paper No. 15; ZOLL Lifecor, IPR2013-00606, Paper No. 13.
19 ZOLL Lifecor, IPR2013-00606, Paper No. 13 at 12.
20 BioDelivery Scis. Int'l, Inc. v. MonoSol Rx, LLC, IPR2014-00794, Paper No. 7 (Nov. 5, 2014).
21 35 U.S.C. § 311(b).
22 Samsung Elecs. Co. v. Rembrandt Wireless Techs. LP, IPR2014-00514, Paper No. 18 at 6-10 (Sept. 9, 2014).
23 A.R.M. Inc. v. Cottingham Agencies Ltd., IPR2014-00671, Paper No. 10 (Oct. 3, 2014).
24 Medtronic Inc. v. NuVasive Inc., IPR2014-00035, Paper No. 10 (Apr. 8, 2014).
25 AIA § 18(a)(1)(A), (C); Trulia Inc. v. Zillow Inc., CBM2013-00056, Paper No. 19 at 2-3 (Apr. 10, 2014).
26 35 U.S.C. § 311(b).
27 Microsoft Corp. v. Proxyconn Inc., IPR2013-00109, Paper No. 15 at 3-4 (Feb. 25, 2013).
28 NetApp Inc. v. PersonalWeb Techs. LLC, IPR2013-00319, Paper No. 18 at 5-8 (July 22, 2013).
29 Id.
30 35 U.S.C. § 312(a)(3); 37 C.F.R. §§ 42.22(a), 42.104(b).
31 Tasco Inc. v. Pagnani, IPR2013-00103, Paper No. 6 at 10 (May 23, 2013).
32 TRW Auto. US LLC v. Magna Elecs. Inc., IPR2014-00293, Paper No. 21 at 3-5 (Aug. 28, 2014).
33 Heart Failure Techs. LLC v. CardioKinetix Inc., IPR2013-00183, Paper 12 at 12 (July 31, 2013); Atrium Med. Corp. v. Davol Inc., IPR2013-00186, Paper 34 at 3 (Oct. 23, 2013); Synopsys Inc. v. Mentor Graphics Corp., IPR2012-00041, Paper 16 at 14-15 (Feb. 22, 2013).
34 37 C.F.R. § 42.104(b)(5).
35 Panel Claw Inc. v. SunPower Corp., IPR2014-00388, Paper No. 14 at 4 (Aug. 7, 2014).
36Dominion Dealer Solutions LLC v. AutoAlert Inc., IPR2013-00225, Paper No. 15 at 3-4 (Oct. 10, 2013).
37 35 U.S.C. §§ 315(d), 325(d).
38 SAS Inst. Inc. v. ComplementSoft LLC, IPR2013-00581, Paper No. 15 at 20-23 (Dec. 30, 2013).
39 Unified Patents Inc. v. PersonalWeb Techs. LLC, IPR2014-00702, Paper No. 13 at 6-9 (July 24, 2014).
40 Prism Pharma Co. v. Choongwae Pharma Corp., IPR2014-00315, Paper No. 14 at 12-13 (July 8, 2014).
41 Liberty Mut. Ins. Co. v. Progressive Cas. Ins. Co., CBM2012-00003, Paper No. 7 (Oct. 25, 2012).
42 Oracle Corp. v. Clouding IP LLC, IPR2013-00088, Paper No. 13 at 2-3 (June 13, 2013).
43 EMC Corp. v. PersonalWeb Techs. LLC, IPR2013-00087, Paper No. 25 at 3-4 (June 5, 2013).
DISCLOSURE: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP represented the patent owner in the following cases cited in this article: Apple Inc. v. VirnetX Inc., IPR2013-00393; Microsoft Corp. v. VirnetX Inc., IPR2014-00401; ZOLL Lifecor Corp. v. Philips Elecs. N. Am. Corp., IPR2013-00606; RPX Corp. v. VirnetX Inc., IPR2014- 00171.
Originally printed in Law360 (www.law360.com). Reprinted with permission. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.
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