December 15, 2022
Authored and Edited by Yieyie Yang, Ph.D.; Angeline L. Premraj; Thomas L. Irving; Taylor L. Stark; Amanda K. Murphy, Ph.D.; Stacy Lewis†
In Scientific Design Co. v. Shell Oil Co., IPR2021-01537, Paper 7 (P.T.A.B. Mar. 18, 2022) and IPR2022-00158, Paper 7 (P.T.A.B. Apr. 4, 2022), the Patent Trial and Appeal Board (“the Board”) granted institution on Scientific Design’s IPR petitions upon finding that discretionary denial of institution under 35 U.S.C. § 325(d) was not warranted.
In IPR2021-01537, Scientific Design challenged Shell’s U.S. Patent No. 8,084,390 (“the ’390 patent”). Subsequently, in IPR2022-00158, Scientific Design challenged U.S. Patent No. 8,357,813 (“the ’813 patent”)—another patent in the same family that Shell also owned. Each IPR petition asserted multiple obviousness grounds, relying on European Patent Publication No. 0480538 B1 to Liu et al. (“Liu”) as the primary 35 U.S.C. § 103 reference and combining it with various secondary references to contend that certain dependent claims were obvious.
In the IPR2021-01537 Petition, Scientific Design briefly noted that “[a]lthough the [asserted] references were cited in a December 5, 2007 IDS, together with 91 references, none of them was used in any rejections, or otherwise addressed by the examiner.” IPR2021-01537, Paper 1 at 5. And in the IPR2022-00158 Petition, Scientific Design similarly argued that “[a]lthough the [asserted] references were cited in an IDS, together with 111 references, none of them was used in any rejections, or otherwise addressed by the examiner.” IPR2022-00158, Paper 1 at 5. Scientific Design provided no additional detail or analysis under § 325(d) or the Advanced Bionics framework.
In Shell’s Preliminary Responses in both cases, Shell argued that “[t]he Petition[s’] grounds rel[ied] entirely on prior art Shell submitted to the Office and the Examiner initialed as considered during prosecution of” the patents-at-issue, and that the “Petition[s] ma[de] ‘no attempt’ to explain why the Examiner purportedly erred in allowing” the ’813 Patent or the ’390 patent “over the Petition[s’] prior art.” IPR2021-01537, Paper 6 at 3; IPR2022-00158, Paper 6 at 3. Shell accordingly contended that discretionary denial of institution was warranted under § 325(d). IPR2021-01537, Paper 6 at 3; IPR2022-00158, Paper 6 at 3. Shell separately argued that Ground 4 of each Petition was cumulative of art and arguments the Examiner asserted in various rejections that Shell had overcome during prosecution. IPR2021-01537, Paper 6 at 60-61; IPR2022-00158, Paper 6 at 59-60.
The Board found that Scientific Design showed a reasonable likelihood of success with respect to the obviousness grounds in both cases. On the issue of § 325(d), the Board conducted a two-part analysis under the Advanced Bionics framework. First, the Board considered whether the art presented in the Petitions was the same or substantially the same as the art previously presented to the Office during examination. The Board acknowledged that the Examiner initialed IDSs that contained the asserted references during prosecution and concluded that “the art relied upon in the Petition[s] was presented to the Office in . . . IDS[s] during examination.” IPR2021-01537, Paper 7 at 24; IPR2022-00158, Paper 7 at 25.
Second, the Board considered whether Scientific Design demonstrated that the Office erred in a manner material to the patentability of the challenged claims. The Board concluded that “Petitioner appear[ed] to address the error[s] by explaining the prosecution history of the ’813 patent [and the ’930 patent], clarifying that the asserted art was not substantively evaluated during examination (apart from being initialed in . . . IDS[s]) or a basis for rejection.” IPR2021-01537, Paper 7 at 24-25; IPR2022-00158, Paper 7 at 25. The Board found that “[t]he Examiner, apart from initialing the asserted art in . . . IDS[s], did not indicate a substantive evaluation of the asserted art” and therefore “credit[ed] Petitioner’s argument” that the Examiner failed to use those references in any rejections or otherwise address them. IPR2021-01537, Paper 7 at 24-25; IPR2022-00158, Paper 7 at 25. Based on this, the Board reasoned that “the additional evidence and facts presented in the petition[s] warrant[ed] reconsideration of the prior art or arguments” and concluded that “Petitioner sufficiently demonstrate[d] that the Examiner erred in overlooking the relevant disclosures of the cited references.” IPR2021-01537, Paper 7 at 25 (citing Becton Dickinson factor (f)); IPR2022-00158, Paper 7 at 25 (same).
The Board noted Shell’s separate arguments that Ground 4 in each Petition was cumulative of art and arguments the Examiner considered during prosecution but found that “[t]his argument d[id] not persuade [it] to exercise [its] discretion to deny the Petition[s].” IPR2021-01537, Paper 7 at 25; IPR2022-00158, Paper 7 at 26.
Accordingly, the Board concluded that “Petitioner demonstrate[d] a material Examiner error and decline[d] to exercise [its] discretion to deny institution under 35 U.S.C. § 325(d).” IPR2021-01537, Paper 7 at 25; IPR2022-00158, Paper 7 at 26.
In these cases, Scientific Design only briefly noted in its Petitions that the references it asserted were cited in conjunction with many other references in IDSs that the Examiner initialed, without making further substantive arguments under the Advanced Bionics framework. The Board, however, did not seem to mind the terseness of Scientific Design’s discussions on this issue, instead noting only that Shell’s 35 U.S.C. § 325(d) arguments were “brief.” And despite Scientific Design’s silence on Examiner error per se, it seems that the strength of its arguments on the merits of its obviousness grounds persuaded the Board that the Examiner materially erred in ignoring those cited references and their teachings during prosecution.
If references asserted in IPR petitions have been cited in IDSs initialed by Examiners during prosecution, irrespective of whether the petitioners address the Advanced Bionics framework, patent owners should be prepared to explain in detail (1) the cumulative nature of the petitioners’ asserted art and arguments as compared to what the Examiners already considered, and (2) why the Examiners did not materially err in allowing the challenged claims. After all, the burden is on patent owners to persuade the Board to exercise its discretion to deny institution, and the mere fact that asserted references were cited in initialed IDSs may not be sufficient to convince the Board that denial is warranted.
† Stacy Lewis is a Law Clerk at Finnegan.
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