Precedential Opinion Panel Exercises Restraint in Deciding Not to Review New Grounds of Unpatentability

On July 6, 2020, the Precedential Opinion Panel (“POP”) held that the Board may raise a new ground of unpatentability against substitute claims in a motion amend, even when a petitioner does not advance or insufficiently develop that ground—but that it should only do so in rare circumstances.  In doing so, the POP granted Patent Owner DynaEnergetics GmbH’s request for rehearing under 37 C.F.R. § 42.71(d) and granted its Motion to Amend under 35 U.S.C. § 316(d)(1).

Petitioner Hunting Titan, Inc. (“Petitioner”) filed a petition requesting inter partes review of claims 1–15 of U.S. Patent No. 9,581,422 (“the ’422 patent”), directed towards fracking technology.  The Petition presented sixteen grounds of unpatentability based on anticipation and obviousness, including a ground alleging that claims 1–15 were anticipated.  During trial, Patent Owner filed a Motion to Amend presenting substitute claims 16–22.  Petitioner opposed the Motion to Amend, but only presented obviousness arguments—not anticipation. 

The Board issued a Final Written Decision finding the original claims anticipated and denying Patent Owner’s Motion to Amend because the proposed substitute claims were also anticipated.  The Board did not address any of Petitioner’s numerous obviousness challenges.  Patent Owner requested rehearing and POP review of the Board’s decision.  The POP granted Patent Owner’s request to review the following issues:

1. Under what circumstances and at what time during an IPR may the Board raise a ground of unpatentability that a petitioner did not advance or insufficiently developed against substitute claims proposed in a motion to amend?
2. If the Board raises such a ground of unpatentability, whether the Board must provide the parties notice and an opportunity to respond to the ground of unpatentability before the Board makes a final determination.

On rehearing, the POP determined that the Board may, in certain rare circumstances, raise a ground of unpatentability against substitute claims proposed in a motion to amend that a petitioner did not advance or insufficiently developed.  But such circumstances are were not present in this case, the POP found, and thus the Board should not have raised its own ground of unpatentability.  Further, the POP found that the grounds raised by Petitioner were not enough to support a finding of unpatentability.

In reviewing whether the Board should raise its own new ground of unpatentability in a motion to amend, the POP considered Congress’s intention in creating the inter partes review process, noting that it was meant to be a party-directed, adversarial process.  The POP referred to Supreme Court precedent, in which the Court noted that it is the petitioner’s contentions, not the Director’s discretion, which defines the scope of litigation.  See SAS Inst., v. Iancu, 138 S. Ct. 1348, 1355 (2018).  However, the POP recognized that the ability to amend claims distinguishes AIA proceedings from those in other venues. 

The Federal Circuit’s opinion in Nike, Inc. v. Adidas AG, 955 F.3d 45 (Fed. Cir. 2020), issued after oral argument in this case, had a significant impact on the POP’s rationale.  In Nike, the court determined that the “Board may sua sponte identify a patentability issue for a proposed substitute claim based on the prior art of record.”  The POP emphasized the word “may,” finding that the Board is not required to identify patentability issues for substitute claims but may do so if necessary.

Although Nike did not address the circumstances in which the Board should advance new unpatentability decisions for substitute claims, the POP determined that the Board should do so only rarely.  The Petitioner contended that the Board had an obligation to raise its own grounds of unpatentability in any appropriate case and to independently examine the patentability of every proposed substitute claim.  But that practice would require the Board to raise, develop, and resolve every possible argument supported by the record, the POP recognized, even if the petitioner has never raised or developed each argument.  And a rule mandating the Board to evaluate all possible arguments that may be supported by the record would greatly undermine the efficiency of AIA proceedings, putting the onus on the Board to develop arguments for the petitioner.  Again relying on Nike, the POP determined that the Board is not required in every circumstance to raise and then address additional arguments.  

However, there may be circumstances where the Board should step in and raise its own grounds of unpatentability, the POP found.  Such situations include when the petitioner has ceased to participate in the proceeding or has chosen not to oppose the motion to amend.  The Board should also raise its own new grounds of unpatentability when that evidence is readily identifiable and persuasive, such that the Board should take it up in the interest of supporting the integrity of the patent system.

The POP determined that the Board could give notice to a patent owner in one of two ways: either the Board may request supplemental briefing from the parties regarding its proposed ground for unpatentability or it may request that the parties be prepared to discuss the prior art in connection with the substitute claim.

Moving to the merits of the case, the POP held that the Board’s anticipation theory against the proposed claims was not advanced, much less sufficiently developed, by the Petitioner.  Further, the Petitioner was still a party to the case, had opposed the motion to amend, and chose not to raise an anticipation ground.  This case was thus not one of the rare instances, the POP found, where the Board should have advanced a new ground of unpatentability on its own.  

Finally, the POP determined that even if this were a rare case, the parties lacked adequate notice of the new ground.  Raising a ground of unpatentability for the first time in a Final Written Decision, after the parties have exhausted their ability to submit briefing and argument to the Board, does not provide sufficient notice of, and opportunity to respond to, a new ground, the POP found.

Hunting Titan v. DynaEnergetics encourages the Board to exercise restraint in becoming involved in a proceeding.  While this decision gives the Board the power to identify new grounds of unpatentability in an IPR, it also limited that power to only rare occasions.  Petitioners should focus on their best arguments—and not rely on the Board to fill in any gaps where their own arguments may be unsuccessful.