PTAB Finds No Derivation in First Derivation Proceeding

The PTAB issued a final written decision in Andersen Corp. v. GED Integrated Solutions, Inc., DER2017-00007, concluding its first derivation proceeding instituted under 37 C.F.R. § 42.400 et seq.  (Paper 57.)  Andersen had not demonstrated, by a preponderance of the evidence, that an inventor of GED’s patent had derived any of the inventions recited in claims 1-22 from an inventor of Andersen’s patent application.  (Id. at 66.)  Accordingly, the Board denied Andersen’s request to cancel the challenged claims.

While there is no statutory requirement to complete a derivation proceeding within a year, the final written decision issued within one year of the March 21, 2018 institution date.  (Paper 32.)  We previously discussed this case’s institution decision here and oral argument here on the AIA Blog.

Of the 18 petitions for a derivation proceeding reported on the PTAB’s End-to-End (E2E) filing system, this is the first to be instituted and have a final written decision.  Fourteen have so far been denied or terminated, including a later petition by Andersen against GED (DER2018-00008), with the rest pending an institution decision.

In a derivation proceeding, the Board must determine whether the Petitioner proved one of its inventors had a prior conception of the claimed subject matter and had communicated that conception to an inventor of the Respondent.  Here, the Board found that the point of novelty was a stop spaced away from a corner of the frame and that Andersen’s Mr. Oquendo had conceived of a frame structure with a stop.  However, the Board was not persuaded that Mr. Oquendo had communicated his conception.  (Paper 57 at 41-43.)  Among the evidence discussed, the Board considered that the timing of events supported GED’s position that the filing of its provisional application was the result of its own Mr. Briese’s conception.  (Id. at 61- 63.)

In addition to these case-specific questions, the PTAB addressed the burden of proof placed on the Petitioner.  While the statutory provisions for IPRs and PGRs specify that unpatentability is to be proven by a “preponderance of the evidence,” the statutory provisions for derivation proceedings do not provide an evidentiary standard.  (Id. at 17.) However, the PTO’s regulations provide that a derivation proceeding is a trial subject to provisions that include the default evidentiary standard, which is a “preponderance of the evidence.”  (Id., citing 37 C.F.R. §§ 42.1(d), 42.400(a).)  The Board rejected GED’s argument that the “clear and convincing” evidence standard applied to proceedings with issued patents, as GED had alleged would have applied in interference proceedings.  The Board noted that even if interference law carried over to derivation proceedings, the timing of the patent applications in this case would have resulted in the interference requiring the preponderance evidentiary standard, not the “clear and convincing evidence” standard. (Id. at 18-19, citing cases.)  

Now that a derivation proceeding has reached a final written decision, we wait to see if the new guidance the decision provides will lead to an increase in the number of petitions.