February 5, 2014
Law360
By Jeffrey C. Totten; Rachel L. Emsley
Authored by Rachel L. Emsley and Jeffrey C. Totten
Choosing can be difficult, whether it is ice cream toppings or arguments to present before the U.S. Patent and Trademark Office. Recent Patent Trial and Appeal Board orders make clear, however, that parties seeking to invalidate a patent in post-grant proceedings must choose their arguments carefully. The board has instituted over 100 petitions for inter partes review or covered business method review on only selected grounds, rejecting alternative arguments made by petitioners as "redundant."
In determining whether to institute a post-grant review, the board, at its discretion, may "deny some or all [of a petitioner's proposed] grounds for unpatentability or some or all of the challenged claims." 37 CFR 42.108(b). Given the scope of the estoppel that applies to inter partes review proceedings,1 petitioners may be tempted to include multiple grounds and permutations of similar arguments, as they might in district court. But, the board has made clear that it will deny grounds it perceives as redundant, and the decisions leave practitioners with more questions than answers as to what constitutes redundancy. While a petitioner may ask the board to reconsider its decision, a petitioner cannot appeal from the board's denial to institute a ground of unpatentability.2
The board first refused to institute redundant grounds for invalidity in Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., CBM-2012-00003. Citing the regulatory and statutory mandates for "just, speedy, and inexpensive" resolution of its proceedings, the board explained that "multiple grounds, which are presented in a redundant manner by a petitioner who makes no meaningful distinction between them, are . . . not all entitled to consideration."3
Liberty Mutual presented an extreme case. The petition asserted over 400 separate invalidity grounds. For example, with respect to claim 1, the petitioner asserted obviousness over the Kosaka reference, over the Herrod reference, over the combination of Kosaka and the Bouchard reference, and also over the combination of Herrod and Bourchard.4 Then, for each of these obviousness grounds, the petitioner added three additional references to teach one claim feature.5 The petitioner provided substantively identical descriptions of these three secondary references, providing the board with little guidance as to which proposed combination best illustrated invalidity.
The board criticized the Liberty Mutual petition for both "horizontal redundancy"—presenting multiple prior art references as alternatives without meaningful distinction—and "vertical redundancy"—applying the same references in both full combination (all of the references) and partial combination (some of the references).6 Refusing to institute these alternative grounds, the Board ordered the petitioner to identify the arguments it wanted to pursue.
Although the extreme number of alternative grounds presented in Liberty Mutual may cast the case as an outlier, over 100 subsequent board decisions have denied institution of alternative grounds deemed "redundant." This trend continues. On Jan. 2, 2014, the board issued its decision in Permobil v. Pride Mobility Products, IPR2013-00407, instituting review based on two of 13 proposed combinations of prior art. The board denied the petitioner's proposed alternate grounds as redundant "in light of the determination that there is a reasonable likelihood that the claims are unpatentable based on the [instituted grounds]."7 The board selected the combinations of references that, in its view, most clearly disclosed the elements of the claims, and did not institute review based on any other proposed reasons for unpatentability.
Board institution decisions often include little analysis to support the board's redundancy conclusion. In Volkswagen Group of America v. Farlight LLC, IPR2013-00238, for example, the board instituted review for all seven challenged patent claims, but refused to adopt proposed grounds of unpatentability for the same claims based on other prior art references. In explaining its refusal to adopt these proposed grounds, the board stated:
[Petitioner] VGA proposes additional grounds of unpatentability for claims 1-3 of the
[challenged] '959 patent based on Muller and Naka . . . . The grounds based on Muller and Naka are redundant to those based on Brown. We do not authorize inter partes review on these redundant grounds.8
The board provided no further explanation of its conclusion, and did not specify whether the denied grounds were horizontally or vertically redundant. Nor did it give the petitioner any opportunity to select which alternative grounds they wished to pursue. Instead, the board selected the grounds to institute and left the others out of the inter partes review. Other board decisions similarly provide little explanation for the board's conclusion that the proposed grounds were redundant.9
Despite its concerns over redundancy, the board does not necessarily limit challengers to one argument per claim. In SDI Technologies v. Bose Corp., IPR2013-00465, for example, the board instituted two proposed grounds for each of the challenged claims, but refused to institute six other proposed invalidity positions.10 Another recent decision, NuVasive v. Warsaw Orthopedic, IPR2013-00395, instituted two separate bases of patentability for each of the challenged six claims, but rejected a third proposed ground as redundant.11 Thus, while the board does not always institute two or more bases for invalidity for each claim—see, for example, Volkswagen Group—it is willing to do so in some cases.
In our view, petitioners are best served by not relying on large numbers of alternate bases for unpatentability. While the board may institute one or two strong grounds for unpatentability, it will not entertain multiple alternatives that are perceived as weak or are not clearly different. A focused approach also allows the petitioner to craft more detailed and persuasive arguments within the limited space allotted to petitions—a mere 60 pages (including claim charts) for inter partes review proceedings. Such presumably stronger arguments regarding claim construction and unpatentability increase the likelihood that review will be instituted.
A petition that does include alternative grounds for challenging patentability should explain the differences between the references, and why the proposed grounds are not redundant—more specifically, the petitioner should "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."12 This can be uncomfortable for petitioners, who would prefer to avoid characterizing or criticizing their references, but will increase the chances that the board will institute the alternative grounds.
Oracle Corp. v. Clouding IP, IPR2013-00088, however, illustrates that merely pointing out differences between references may not be sufficient to gain institution of multiple invalidity arguments. In denying the petitioner's request for rehearing, the board explained that it had not erred in denying institution despite the petitioner's arguments that the references were fundamentally different with respect to certain claim limitations.13
The board deemed these arguments insufficient, in "the absence of the Petition's explanation of why [one reference] is more preferred for satisfying some elements, while [another reference] is more preferred for satisfying some other elements."14 Because the petitioner alleged that all of the features were disclosed by the first reference, the board concluded that another ground based on a combination of that reference with other prior art was redundant.
In NuVasive, the petitioner unsuccessfully made several arguments as to why the grounds were not cumulative—that the grounds rely on different primary references that assert "unique benefits" in practice, that the references address the dependent claims in different ways, and that one reference might be removed if sworn behind.15 The board commented that "except for stating that [the one reference] may be removed if sworn behind, Petitioner [did] not provide further explanation why the grounds are not redundant." Thus, the fact that a reference might be sworn behind by the patent owner might present a viable argument for asserting that the grounds are not redundant. But merely pointing to differences between references may not suffice.
The board has also rejected arguments that alternate grounds are justified by possible future developments during review. In EMC Corp. v. Personal Web Technologies, IPR2013-00082, and ScentAir Technologies v. Prolitec Inc., IPR2013-00180, for example, the board refused to institute what it considered redundant grounds due to the possibility that the patent owner might amend its claims during the inter partes review.
In denying these arguments, the board noted that the petitioner may rely on the prior art contained in the noninstituted grounds in opposing any future amendment, but that distinctions based on how the patent owner might amend the claims are "speculative and should not be the basis of our decision to institute."16 Similarly, in Shaw Industries Group Inc. v. Automated Creel Systems Inc., IPR2013-00584, the board refused to institute alternative unpatentability grounds in view of a potential claim construction that differed from the board's interpretation.17 And in EMC Corp., the board declined to hold the denied grounds in abeyance, noting that such a procedure could complicate the record and jeopardize the statutory [one year] timeline for review.18
Arguments regarding the limited practical impact of instituting additional grounds have also been unpersuasive. In Oracle Corp., for example, the board rejected the petitioner's argument that the one additional ground for unpatentability sought in that case would not significantly burden the board. While the number of grounds presented is "a factor in determining redundancy," the board explained that "it is not alone determinative."19 In short, according to the board, "there is no magical number that defines the floor in determining redundancy."20
At the end of the day, a petitioner proposing multiple bases for unpatentability should anticipate that the board may reject its alternative arguments, even if it finds all proposed grounds of unpatentability persuasive. Thus, if the petitioner prefers one of its proposed invalidity or claim construction positions, it should identify the preferred ground to the board. Otherwise, the board may choose between the proposed bases for unpatentability without the petitioner's input.
Finally, as a tactical matter, a petitioner may want to encourage the board to choose between alternative arguments. For example, where one prior art reference aligns with the patent owner's infringement-focused claim construction and a second reference aligns with the petitioner's narrower litigation claim construction position, the petitioner may want to present both references to the board. Encouraging a decision between these alternatives will benefit the petitioner, no matter which one is selected.
Endnotes
1 Following a final written decision, a Petitioner is estopped in the USPTO and in the district court from bringing arguments it raised or could have raised in the inter partes review. 35 U.S.C. § 315.
2 35 U.S.C. 314(d) and 35 U.S.C. 324(e).
3 Liberty Mutual, CBM2012-00003, paper 7, at 2 (Oct. 25, 2012).
4 Id. at 4.
5 Id. at 4.
6 Id. at 3.
7 Permobil, IPR2013-00407, paper 13, at 22 (Jan. 4, 2014).
8 Volkswagen, IPR2013-00238, paper 15 (Sept. 26, 2013).
9 See, e.g., Blackberry Corp. v. NXP, Inc., IPR2013-00233, paper 9, at 18 (Oct. 1, 2013) Becton, Dickinson, & Co. v. One StockDuq Holdings, IPR2013-00235, paper 10, at 25 (Oct. 1, 2013); SDI Techs. v. Bose Corp., IPR2013-00465, paper 14, at 26 (Dec. 13, 2013).
10 SDI Techs., IPR2013-00465, paper 14, at 26-27 (Dec. 13, 2013).
11 NuVasive, IPR2013-00395, paper 12, at 16-17 (Dec. 20, 2013).
12 Oracle, IPR2013-00082, paper 33, at 4 (June 13, 2013).
13 Id. at 3.
14 Id.
15 NuVasive, IPR2013-00395, paper 12, at 16 (Dec. 20, 2013).
16 Scentair, IPR2013-00180, paper 18, at 3-4 (Aug. 26, 2013); see also EMC Corp., IPR2013-00082, paper 33 at 4 (June 5, 2013).
17 Shaw, IPR2013-00584, paper 16, at 25 (Dec. 31, 2013).
18 EMC Corp., IPR2013-00082, paper 33, at 4 (June 5, 2013).
19 Oracle, IPR2013-0088, paper 13, at 5 (June 13, 2013).
20 Id. at 5.
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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