How the PTAB Landscape Shifted in 2023

The year 2023 swiftly passed by with significant developments for Patent Trial and Appeal Board practice. New legislation and rules were proposed, and procedural changes were implemented to reform the PTAB — in addition to the issuance of guidance memorandums and updates of internal procedures.

U.S. Patent and Trademark Office Director Kathi Vidal continued policymaking through designated precedential decisions and director reviews, aiming at promoting certainty, consistency and efficiency at the PTAB.

We present a glimpse of noteworthy developments, including PTAB precedential decisions, director review decisions, Federal Circuit reviews of PTAB decisions and proposed rulemaking and legislation that affected PTAB practice. We hope that this brief overview serves as a useful reference for examining future PTAB practices and litigation strategies.

Notable Developments at the PTAB

PTAB Precedential Decisions

The PTAB designated five precedential decisions relating to discretionary denial, expert testimony, multiple dependent claims and priority requirements of America Invents Act patent references:

• The December 2022 Apple Inc. v. Zipit Wireless Inc. decision, designated Jan. 4, that the board should confirm whether the patent owner's contingent nonopposition indeed abandoned the contest or issue a final written decision addressing the patentability of the challenged claims, noting the petitioner shall have the burden of proving unpatentability by "a preponderance of the evidence" and "with particularity" in an inter partes review;[1]
• The August 2022 Xerox Corp. v. Bytemark Inc. decision, designated Feb. 10, that declaration testimony that merely repeats, verbatim, conclusory assertions from petition regarding obviousness of a limitation missing from the prior art, without citing additional evidence or reasoning, is entitled to little weight;[2]
• The Feb. 23, 2023, Nested Bean Inc. v. Big Beings USA Pty Ltd. decision, designated Feb. 23, that the board must consider multiple dependent claim patentability with respect to all alternatively referenced independent claims;[3]
• The Feb. 27 CommScope Technologies LLC. v. Dali Wireless Inc. decision, designated Feb. 27, that compelling merits determination is not to serve as a substitute for the Fintiv analysis, but rather as a final consideration to be used after Fintiv factors 1-5 are determined to weigh in favor of a discretionary denial;[4] and
• The March 10 Penumbra Inc. v. RapidPulse Inc. decision, designated Nov. 15, that the priority requirements for proving earlier priority date for a reference patent set forth in Dynamic Drinkware do not apply to AIA patents.[5]

Notable Director Review Decisions

In 2023, patent owners and petitioners filed a total of 62 director review requests — 32 from patent owners, 30 from petitioners — 49 of which were denied, or 80%; two were granted, or 3%; two were withdrawn; and seven are pending.[6]

Last month, the director delegated two requests to the recently created delegated rehearing panel to consider whether to rehear the board's decisions to deny institution.[7]

The director sua sponte ordered 21 director reviews.[8] Three of the sua sponte director review decisions were designated as precedential and were discussed above,[9] and a majority of the rest addressed Fintiv, Section 325(d) discretionary denial and sanctions.

We briefly summarize some noteworthy director review decisions or orders below:

Fintiv Application

In the March 2 AviaGames Inc. v. Skillz Platform Inc. decision, the board erred in denying institution under Fintiv because most of the challenged claims were held patent-ineligible under Title 35 of the U.S. Code, Section 101 in the parallel district court case and should reconsider institution under the compelling merits standard.[10]

The May 2 decision in Volvo Penta of the Americas LLC v. Brunswick Corp. determined collateral estoppel does not bar review of IPR grounds based on the district court's nonfinal invalidity determination under Section 101, and Fintiv applies to district court cases under appeal.[11]

Discretionary Denial Under Section 325(d)

The Feb. 24 Boehringer Ingelheim Animal Health USA Inc. v. Kansas State University Research Foundation decision determined that the board erred in denying institution under Section 325(d) because "the mere finding of adequate written description by an examiner can never on its own and without more constitute 'the same or substantially the same arguments' under Advanced Bionics as a challenge for lack of enablement."[12]

The March 29 decision in Google LLC v. Valtrus Innovations Ltd. determined that it was not reasonably foreseeable for the petitioner to anticipate a Section 325(d) argument with respect to the asserted U.S. patent reference, based on the inclusion of the European patent counterpart on an information disclosure statement considered during prosecution where the two references do not point to each other.[13]

The March 30 decision in Wolfspeed Inc. v. The Trustees of Purdue University determined that the board erred by failing to sufficiently consider material differences between previously considered and newly presented references in a decision denying institution under Section 325(d).

The Aug. 24 decision in Keysight Technologies v. Centripetal Networks Inc. determined the board erred by declining to conduct an error analysis under Step 2 of Advanced Bionics where the petition establishes substantial overlap between the challenged claims and the claims of the parent patent that the board found unpatentable in a prior IPR.[15]

PTAB Sanctions

In the December 2022 OpenSky Industries LLC v. VLSI Technology LLC director review decision, the director dismissed OpenSky from the case, leaving Intel as the sole petitioner, and ordered VLSI to show cause as to why it should not be required to pay Intel reasonable attorney fees Intel incurred responding to VLSI's rehearing request.

In the February 2023 director review decision, the director restored OpenSky as petitioner but sanctioned OpenSky to pay VLSI reasonable attorney fees incurred in addressing the issue of OpenSky's misconduct during the proceeding and the director review process. In the June 2023 director review decision, the director "strongly admonishes" VLSI for presenting misleading statements of law and fact before the board.[16]

In the December 2022 Patent Quality Assurance LLC v. VLSI Technology LLC decision, the director dismissed petitioner PQA from the IPR and later joined Intel, holding that PQA abused the IPR process and made misrepresentations of fact and misleading arguments to the board. After ordering additional briefing on rehearing, the director restored PQA as a petitioner to resolve the rehearing requests.

In the August 2023 director review decision, the director determined that PQA's "conduct in discovery rises to the level of sanctionable conduct," and gave the parties notice that she is "contemplating imposing an attorney-fee order or an admonishment as a sanction."[17]

In the June 12 Spectrum Solutions LLC v. Longhorn Vaccines & Diagnostics LLC decision, the director ordered sua sponte review of the board's sanctions decision of adverse judgment against the patent owner in five IPRs for failing to meet its duty of candor and fair dealing in actions before the board.

The reason was that the board found the patent owner "selectively and improperly withheld material results that were inconsistent with its arguments and the patentability of both original and proposed substitute claims."[18]

Delegating to a Delegated Rehearing Panel

In the Nov. 7 DK Crown Holdings Inc. v. Diogenes Ltd. decision, the director ordered the delegated rehearing panel to reconsider the fact-intensive issues presented in this case and determine whether to grant the petitioner's request of rehearing of the board's split decision to deny institution.[19]

In the Nov. 16 SynAffix BV v. Hangzhou DAC Biotech Co. Ltd. decision, the director ordered the delegated rehearing panel to reconsider the board's decision to deny institution and determine whether the board misapprehended or overlooked any issue raised in the director review request.[20]

Notable Federal Circuit Reviews of PTAB Decisions

Obviousness Rationale

The Federal Circuit handed two notable decisions relating to the obviousness rationale, one of the most litigated issues at the PTAB:

• The March 13 Intel Corp. v. PACT XPP Schweiz AG decision that under KSR's known-technique rationale, a motivation to combine two prior art references exists when the references address the same known problem and the secondary reference provides a suitable solution that would address that problem in the primary reference.[21]
• The July 10 Axonics Inc. v. Medtronic Inc. decision that the motivation to combine inquiry focuses on combining the prior art references to reach the claimed invention rather than the purpose described in the prior art references, to which the claimed invention is not limited.[22]

Double Patenting

In the Aug. 28. decision in In re: Cellect LLC, the Federal Circuit addressed, for the first time, the interplay between the doctrine of obviousness-type double patenting and patent term adjustment holding that ODP analysis for a patent that has received PTA must be based on the expiration date of the patent after the PTA has been added.

This is regardless of whether a terminal disclaimer is required or has been filed.

This decision has drawn significant attention, prompting numerous amici to weigh in both before and after the decision issued. Cellect has petitioned a rehearing en banc.

The Federal Circuit has not ruled on the petition, but a rehearing is possible given the significant attention the decision received.

Judicial Reviews Under the Administrative Procedure Act

After Arthrex, parties in IPR proceedings continue to bring administrative and constitutional challenges to PTAB's decisions, which may ultimately bring more certainty and consistency in future proceedings:

• Apple Inc. v. Vidal: Although the director's IPR institution decision is not subject to judicial review, the APA does not bar judicial review of the challenge concerning the absence of notice-and-comment rulemaking to announce IPR institution instructions.[24]
• Axonics Inc. v. Medtronic Inc.: IPR petitioners must, under the APA, be afforded a reasonable opportunity to respond to a new construction, whether that construction was first proposed by the patent owner or the board.[25]
• Apple Inc. v. Corephotonics Ltd.: The board's final written decision focusing on "typographical error" in Petitioner's expert declaration, mentioned only in passing in Patent Owner's response, rather than on the merits in the parties' arguments, violated the notice requirements of the APA.[26]
• Medytox Inc. v. Galderma SA.: The preliminary guidance under the PTAB's pilot program for motions to amend is non-binding and preliminary; the board has given patent owner requesting such guidance an opportunity to be heard and thus did not violate the APA and due process.[27]

Judicial Reviews Under the America Invents Act

IPR Estoppel

In the April 3 Ironburg Inventions Ltd. v. Valve Corp.[28] decision, the Federal Circuit determined that the party asserting IPR estoppel bears the burden of proving that a "skilled and diligent searcher" could have been reasonably expected to discover prior art that could have formed the basis of an invalidity challenge in an IPR petition.

The burden of proof was that "by a preponderance of the evidence, that a skilled searcher exercising reasonable diligence would have identified an invalidity ground," not "what an actual researcher in fact did find through whatever level of diligence she exercised."

Previously in 2022, in California Institute of Technology v. Broadcom Ltd.[29], the Federal Circuit held that IPR estoppel applies to "all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition."

Apple petitioned for certiorari in Apple Inc. v. California Institute of Technology,[30] presenting the question on whether IPR estoppel applies to all grounds that reasonably could have been raised in the petition filed before IPR is instituted or only to grounds that reasonably could have been raised during the IPR. In June 2023, the U.S. Supreme Court declined to hear Apple's bid, leaving in place the IPR estoppel standard established by the Federal Circuit in 2022.

AIA Deadlines

The Federal Circuit also rejected the parties' challenges to PTAB's authorities following the expiration of AIA deadlines as a matter of first impression in:

The March 6 CyWee Group Ltd. v. Google LLC[31] decision that director review is not constrained by deadlines provided in IPR statute and associated rules; and

The Nov. 21 Purdue Pharma LP v. Collegium Pharmaceutical Inc.[32] decision that the board had authority to issue a final written decision even after the deadline proscribed in the AIA had passed absent any contrary indication in the language, structure, or legislative history of the statute.

USPTO Rulemaking, PTAB Internal Procedures and Guidance

On April 21, the USPTO issued an advance notice of proposed rulemaking[33] to request feedback on a variety of topics, including certain existing and new discretionary denial practices, Advanced Bionics framework, serial petitions, multiple simultaneous petitions, settlements, sanctions, among others. Comments were submitted by June 20.

On May 23, the USPTO issued a request for comments regarding the PTAB's Motion to Amend Pilot Program and rules related to amendments during PTAB proceedings.[34] Comments were submitted by July 23.

On July 24, the USPTO announced updated procedures for the interim director review of PTAB decisions,[35] with notable changes including:

• Retiring the Precedential Opinion Panel;
• Expanding director review to institution decisions;
• Creating a new appeal review panel to review PTAB appeal decision;
• Creating an advisory committee to provide recommendations to the director on whether review should be instituted; and
• Creating a new delegated rehearing panel to which the director may delegate review.

In addition to updating the director review process, the USPTO also provided guidance concerning ex parte appeals, including a guidance memorandum[36] and internal operating procedures for ex parte appeals.[37]

On Oct. 6, the USPTO issued a notice of proposed rulemaking regarding the board's pre-issuance internal circulation and review of decisions,[38] issued a new Standard Operating Procedure 4 concerning its interim process for internal PTAB circulation and review,[39] and updated Standard Operating Procedure 9, now SOP3,[40] concerning PTAB decisions remanded from the Federal Circuit.

Patent owners and petitioners should keep abreast of the USPTO's evolving regulatory framework and procedural updates as these may have a significant impact on PTAB proceedings.

Proposed Legislation

In July 2023, Congress introduced the Promoting and Respecting Economically Vital American Innovation Leadership, or PREVAIL, Act.[41]

The PREVAIL Act includes a number of significant reforms to the PTAB, including:

• Creating a standing requirement to limit IPR petitioners to only those that have been sued or threatened with a patent infringement lawsuit;
• Limiting the number of petitions against the same patent;
• Prohibiting parallel litigation of invalidity based on patents or printed publications at the PTAB and in the district court;
• Specifying that estoppel applies when a petition is filed rather than when a final decision issues; and
• Introducing a "clear and convincing evidence" standard for proving patent invalidity at the PTAB, among other proposed reforms.

Whether the PREVAIL Act can be passed, practitioners and businesses should be considering the issues targeted by the proposed bill and be more strategic when navigating between district court litigation and PTAB proceedings.

Endnotes

[1] Apple Inc. v. Zipit Wireless Inc., IPR2021-01124 to -01126 and IPR2021-01129, Paper14(December 21, 2022) (designated: January 4, 2023).

[2] Xerox Corp. v. Bytemark Inc., IPR2022-00624, Paper 9(August 24, 2022) (designated: February 10, 2023).

[3] Nested Bean Inc. v. Big Beings USA Pty Ltd., IPR2020-01234, Paper 42(February 24, 2023) (designated: February 24, 2023).

[4] CommScope Techs. LLC. v. Dali Wireless Inc., IPR2022-01242, Paper 23 (February 27, 2023) (designated: February 27, 2023).

[5] Penumbra Inc. v. RapidPulse Inc., IPR2021-01466, Paper 34 (March 10, 2023) (precedential as to section II.E.3) (designated: November 15, 2023).

[6] As of November 15, 2023, according to the USPTO website. See https://www.uspto.gov/patents/patent-trial-and-appeal-board/status-director-review-requests

[7]The USPTO's Director Review data as of November 15, 2023 does not include SynAffix B.V. v. Hangzhou DAC Biotech Co. Ltd., IPR2022-01531, Paper 19 (November 16, 2023).

[8] We added two Director Review decisions that appear not included in USPTO's Director Review data: Apple Inc. v. Zipit Wireless Inc., IPR2021-01124 to -01126 and IPR2021-01129, Paper 14 (December 21, 2022), and AviaGames Inc. v. Skillz Platform Inc., IPR2022-00530, Paper 14 (March 2, 2023).

[9] Apple Inc. v. Zipit Wireless Inc., IPR2021-01124 to -01126 and IPR2021-01129, Paper 14 (December 21, 2022) (designated: January 4, 2023); Xerox Corp. v. Bytemark Inc., IPR2022-00624, Paper 9 (August 24, 2022) (designated: February 10, 2023); CommScope Techs. LLC. v. Dali Wireless Inc., IPR2022-01242, Paper 23 (February 27, 2023) (designated: February 27, 2023).

[10] AviaGames Inc. v. Skillz Platform Inc., IPR2022-00530, Paper 14 (March 2, 2023).

[11] Volvo Penta of the Americas LLC v. Brunswick Corporation, IPR2022-01366, -01367, -01368, -01369, -01424, Paper 15 (May 2, 2023).

[12] Boehringer Ingelheim Animal Health USA Inc. v. Kansas State University Research Foundation, PGR2022-00021, Paper 11 (February 24, 2023).

[13] Google LLC v. Valtrus Innovations Ltd., IPR2022-01197, Paper 12 (March 29, 2023).

[14] Wolfspeed Inc. v. The Trustees of Purdue University, IPR2022-00761, Paper 13 (March 30, 2023).

[15] Keysight Techs. v. Centripetal Networks Inc., IPR2022-01421, Paper 14 (August 24, 2023).

[16] OpenSky Indus. LLC v. VLSI Tech. LLC, IPR2021-01064, Paper 121 (December 22, 2022), Paper 127 (February 3, 2023), and Paper 138 (June 27, 2023).

[17] Patent Quality Assurance LLC v. VLSI Technology LLC, IPR2021-01299, Paper 102 (December 22, 2022), Paper 108, 4 (January 27, 2023). Paper 131 (August 3, 2023).

[18] Spectrum Sols. LLC v. Longhorn Vaccines & Diagnostics LLC, IPR2021-00847, Paper 126 (June 12, 2023).

[19] DK Crown Holdings Inc. v. Diogenes Ltd., IPR2023-00268, Paper 11 (November 7, 2023).

[20] SynAffix B.V. v. Hangzhou DAC Biotech Co. Ltd., IPR2022-01531, Paper 19 (November 16, 2023).

[21] Intel Corporation v. PACT XPP Schweiz AG, 61 F.4th 1373, 1379-81 (Fed. Cir. 2023).

[22] Axonics Inc. v. Medtronic Inc., 73 F.4th 950, 958 (Fed. Cir. 2023).

[23] In re: Cellect LLC, 81 F.4th 1216, 1229 (Fed. Cir. 2023).

[24] Apple Inc. v. Vidal, 63 F.4th 1, 14 (Fed. Cir. 2023).

[25] Axonics Inc. v. Medtronic Inc., 75 F.4th 1374, 1381 (Fed. Cir. 2023).

[26] Apple Inc. v. Corephotonics Ltd., 81 F.4th 1353, 1360 (Fed. Cir. 2023).

[27] Medytox Inc. v. Galderma S.A., 71 F.4th 990, 1000 (Fed. Cir. 2023).

[28] Ironburg Inventions Ltd. v. Valve Corp., 64 F.4th 1274 (Fed. Cir. 2023).

[29] California Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976 (Fed. Cir. 2022).

[30] Apple Inc. v. California Institute of Technology, Case No. 22-203 (U.S.).

[31] CyWee Grp. Ltd., v. Google LLC, 59 F.4th 1263 (Fed. Cir. 2023).

[32] Purdue Pharma L.P. v. Collegium Pharm. Inc., No. 2022-1482, 2023 WL 8043047 (Fed. Cir. Nov. 21, 2023).

[33] https://www.govinfo.gov/content/pkg/FR-2023-04-21/pdf/2023-08239.pdf.

[34] https://www.federalregister.gov/documents/2023/05/23/2023-10565/request-for-comments-regarding-the-motion-to-amend-pilot-program-and-rules-of-practice-to-allocate.

[35] https://www.uspto.gov/patents/ptab/decisions/revised-interim-director-review-process.

[36] https://www.uspto.gov/sites/default/files/documents/guidance_memorandum_for_the_ex_parte_appeals_process_20230713_.pdf.

[37] https://www.uspto.gov/sites/default/files/documents/iop_processing_procedures_for_ex_parte_appeals_20230717_.pdf.

[38] https://www.govinfo.gov/content/pkg/FR-2023-10-06/pdf/2023-22218.pdf.

[39] https://www.uspto.gov/sites/default/files/documents/ptab_sop_4-2023-oct.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.

[40] https://www.uspto.gov/sites/default/files/documents/ptab_sop_3-2023-oct.pdf?utm_campaign=subscriptioncenter&utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=.

[41] https://www.govinfo.gov/app/details/BILLS-118s2220is.