January 31, 2017
Law360
By Thomas L. Irving; Amanda K. Murphy, Ph.D.; *Stacy D. Lewis
The patent bar has been anticipating the arrival of post-grant reviews since the America Invents Act’s passage in September 2011. Because PGRs are only applicable to patents containing at least one claim with an effective filing date after March 15, 2013,1 there was a natural delay to their appearance in the post-grant arena. But PGRs are no longer lying in wait—they have now entered the arena in full force.
Despite their availability, however, PGR petition filings are extremely low compared to inter partes review petition filings: 35 PGR petitions were filed in fiscal year 2015 and FY 2016, compared to 3,302 IPR petitions filed in the same time period.2 This difference may be due to the smaller universe of patents that are PGR-eligible compared to those that are IPR-eligible, or it could due to the broader grounds available for PGR challenges and the resulting broader estoppel.3
When the new post-grant proceedings were first introduced, there was some speculation by practitioners and commentators that the estoppel provisions, which bar a petitioner from raising in a subsequent proceeding any issue that was raised or could have been raised in a post-grant proceeding, would deter potential petitioners from seeking post-grant review of issued patents. But as it turns out, at least with respect to IPRs, the estoppel provisions do not appear to have been a significant deterrent. And the estoppel provisions may have even less of a deterrent effect in view of recent Federal Circuit case law that narrowly interpreted the estoppel provisions.
In Shaw Indus. Group v. Automated Creel Sys., 817 F.3d 1293 (Fed. Cir. 2016) and HP Inc. v. MPHJ Tech. Investments, LLC, 817 F.3d 1339 (Fed. Cir. 2016), for example, the Federal Circuit held that noninstituted grounds do not create estoppel. And though district court judges have followed the Federal Circuit case law, some appear to be doing so reluctantly in some cases. See Intellectual Ventures I LLC et al v. Toshiba Corp., F. Supp.2d__ (D. Del. Dec. 19, 2016),4 supplemented after reconsideration on Jan. 11, 2017; Depomed Inc. v. Purdue Pharma LP, Civ. No. 13-571, at *16 (D. N.J. Nov. 4, 2016). Nevertheless, it is possible that the potentially broader estoppel provisions associated with PGRs are having a deterrent effect on the filing of PGR petitions.
Although the PGR numbers are still quite small, this article takes a close look at some of the PGR petitions, institution denials, and final written decisions that we have seen to date.
If we compare petitions by related technology, we see that there is a slight difference in the targets of PGR and petitions overall. Of course the numbers of PGR petitions remain too small to be statistically significant, this analysis provides an initial snapshot of PGR activity by technology.
Source of IPR data: https://www.uspto.gov/sites/default/files/documents/aia_statistics_november2016.pdf (as of Nov. 30, 2016, cumulative FY 2015, FY 2016, and FY 2017 to date). Source of PGR data: Finnegan research; 39 PGR Petitions filed. As of Jan. 11, 2017.
With respect to chemical and bio/pharma claims, the higher percentage of PGR petitions compared to total AIA petitions may be due to greater confidence by petitioners in the challenges available under a PGR, which include §112 challenges (an area that has been particularly active recently in the chemical and bio/pharma fields), and nonprinted publication prior art challenges, such as on sale and public use. In contrast, only prior art challenges based on printed publications are available in IPRs.
Petitioners may be hoping that PGRs will prove to be a more fruitful pathway for knocking out chemical and bio/pharma patents than IPRs have proven to be thus far. Specifically, petitioners may hope that enablement and written description attacks, not fully available in an IPR, will be more fruitful in a PGR. The data is simply not available now to evaluate any such hope.
To date, the PGR petition institution rate is numerically lower than the IPR petition institution rate but probably not statistically significantly lower. Notably, however, the PGR institution rate is lower even when compared to the IPR petition rate from the fall of 2014, after IPRs had been available for two years (79 percent (457/576)).5
Source of IPR rate: (2335 granted + 231 joinder), (FY 2014-FY 2017 to date), USPTO stats as of Nov. 30, 2016. Source of PGR rate: (16 granted/partially granted), (FY 2014-FY 2017 to date), Finnegan research.
One potential threshold argument that may be available patent owners to prevent institution of a PGR, that is that the claims are not PGR-eligible. In Front Row Tech. LLC v. MLB Advanced Media LP, PGR2015-00023 (P.T.A.B. Feb. 22, 2016), for example, the patent owner successfully argued that the claims were not eligible for PGR. The challenged patent resulted from a pre-AIA application, but the petitioner argued that the claims nevertheless were PGR-eligible because of amendments submitted after the AIA went into effect. The PTAB rejected that argument, holding the claims were not eligible for PGR and denied the petition:
Nowhere does the statute contemplate that the effective filing date might depend on the date of a later-filed amendment to a claim. …[A]s a matter of law, if a claim in the application is not entitled to an earlier filing date, then the effective filing date is the actual filing date of the application (per subparagraph (A)), regardless of whether a later-filed amendment to a claim finds sufficient support in the application. Accordingly, without any evidence to the contrary, we hold that the effective filing date for claims 1–17 of the '638 patent is January 29, 2010, which hereby takes the ’638 patent out of the purview of post-grant review.
Paper 8 at 3-4.
Amended claims were again at issue in David O.B.A. Adepbimpe v. Johns Hopkins Univ., PGR2016-00020 (P.T.A.B. July 25, 2016). There, the patent owner requested and obtained permission to brief the issue of PGR eligibility prior to filing a patent owner preliminary response. The challenged patent issued from an application that claimed priority to two pre-AIA applications, but like the patent in Front Row Tech., the claims were then amended after the AIA went into effect.
Consistent with the holding in Front Row Tech, the PTAB held that the challenged claims in David O.B.A. Adepbimpe were not eligible for PGR:
Section 100(i)(1) does not make any provision for the effective filing date to be later than the actual filing date of the application in question, even when the application is amended later, and even when the later amendment introduces claims that lack written-description support in the original specification.
Paper 14 at 3-4.
The patent owner in Mylan Pharms. Inc. v. Yeda Research & Development Co. Ltd., PGR2016-00010 (P.T.A.B. Aug. 16, 2016), was similarly successful in obtaining denial of the PGR petition in that case. The challenged patent issued from a continuation application that was filed after the AIA went into effect, but which directly descended from a pre-AIA parent application. The petition asserted that the claims were PGR-eligible because they lacked written description support in the specification under 35 U.S.C. § 112, and therefore, were only entitled to their actual filing date of May 22, 2015.
The PTAB held that the claims were not eligible for PGR. In reaching this determination, the panel noted that the examiner had specifically determined during prosecution that the claims were supported by the priority documents and, therefore, pre-AIA law applied to claims. The panel further noted that the petitioner had not shown a break in the priority chain: "Petitioner has not demonstrated that it is more likely than not that the '776 patent has at least one claim having an effective filing date on or after March 16, 2013." Paper 9 at 10. See also, Amneal Pharmaceuticals LLC v. Yeda Research & Development Co., Ltd, PGR2016-00028, Paper 10 (P.T.A.B. Oct. 13, 2016) (same patent as challenged in PGR2016-00010).
In contrast, in US Endodontics LLC v. Gold Standard Instruments LLC, PGR2015-00019 (P.T.A.B. Jan. 29, 2016), the patent owner was not successful in arguing that the claims were not eligible for PGR. As in Mylan, the challenged patent in US Endodontics resulted from a patent had issued from an application that was filed after the AIA went into effect, but that claimed priority to a series of applications that were filed under pre-AIA law. Here, however, the PTAB accepted Petitioner’s arguments that the challenged claims were not supported by the priority document and were therefore only entitled to the actual filing date of the continuation application that led to the challenged patent:
[A} patent that issues from an application filed after March 16, 2013, that claims priority to an application filed before March 16, 2013, is available for post-grant review "if the patent contains ... at least one claim that was not disclosed in compliance with the written description and enablement requirements of § 112(a) in the earlier application for which the benefit of an earlier filing date prior to March 16, 2013 was sought." Inguran, LLC v. Premium Genetics (UK) Ltd., Case PGR2015-00017, slip op. 11 (PTAB Dec. 22, 2015) (Paper 8).
Paper 17 at 8.
The PTAB noted that the initial burden is on petitioner to show that the claims are eligible for post-grant review. Id. at 11-12. In this case, the PTAB concluded that the petitioner had met this burden. It is also interesting to note that petitioner’s arguments as to why the claims lacked the necessary § 112 support in the pre-AIA documents to support an earlier effective filing date were then also used as a ground of unpatentability for lack of written description in the PGR. Eventually, the instituted claims were held unpatentable for failure to comply with § 112 and for anticipation by an article that qualified as prior art because the claims were not entitled to an earlier benefit of priority.
Patent owners can also bolster their chances of achieving denial of a PGR petition during prosecution by drafting a compelling invention story in the application itself, and then submitting persuasive and compelling arguments during prosecution. The PGR petition denials in Dr. Reddy’s Laboratories Ltd. v. Helsinn Healthcare SA, PGR2016-00008 (P.T.A.B. Aug. 17, 2016) and Dr. Reddy’s Laboratories Ltd. v. Helsinn Healthcare SA, PGR2016-00007 (P.T.A.B. Aug. 17, 2016), for example, reflected, in part, successful efforts by the patent owner during the application drafting and prosecution stages that laid the groundwork for defending against the petitioner’s subsequent attacks under §§ 102, 103, and 112.6
In PGR2016-00008, Dr. Reddy’s Laboratories challenged claims reciting pharmaceutical formulations comprising palonosetron on § 112 written description and § 102(a)(1) on-sale bar grounds. Not only were the claims PGR-eligible, the claims were subject to the new AIA prior art definitions.
The PTAB rejected both asserted grounds of unpatentability. With respect to written description, the PTAB held that the petitioner failed to show it was more likely than not that the claims lacked written description support:
Here, it is undisputed that the specification describes formulations comprising the same ingredients, in the same amounts, concentrations, and combinations required by the challenged claims. Given this disclosure, one of ordinary skill in the art could hardly fail to recognize a description of the claimed formulations in the specification[.] … lack of disclosure is not relevant because the specification describes formulations comprising the same ingredients, in the same amounts and concentrations, required by the challenged claims—and moreover, describes them as optimal or preferred for stability.
Paper 11 at 12-13.
The petitioner’s § 102(a)(1) argument was based on a prefiling date agreement between the patent owner and its third-party vendor to supply palonosetron hydrochloride. The patent owner argued that under the U.S. Patent and Trademark Office's interpretation of the AIA, only sales that make the claimed invention available to the public qualify as prior art. Since the supplier agreement did not make the invention publicly available, the patent owner argued that the petitioner’s on-sale argument must fail.
The PTAB agreed with the patent owner:
§ 102(a)(1) requires a public sale or offer for sale of the claimed invention, … Petitioner has not shown that the heavily redacted SEC filings or the press releases, devoid of detail, made the claimed invention available to the public. Thus, we determine that the Supply and Licensing Agreements did not make the claimed invention available to the public one year prior to the critical date at issue here.
Id. at 19-20.
The petition in PGR2016-00007 challenged the same claims in the same patent as PGR2016-00008, but on various § 103 grounds. At least one of the asserted references was before the examiner during prosecution, as noted by the patent owner in its patent owner preliminary response.
The PTAB concluded that the petitioner had not sufficiently established that a person of ordinary skill in the art would have been motivated to combine the cited references to arrive at the claimed invention:
[W]e agree with Patent Owner that Tang would not have led a person of ordinary skill in the art to expect that a solution of palonosetron at a concentration of 0.05 mg/mL would be effective in treating emesis. … If anything, Tang would have suggested amounts and concentrations still higher than the highest dose and concentration evaluated by Tang.
Paper 12 at 21.
We agree with Patent Owner that Petitioner has not established that one of ordinary skill in the art would have had a reason to formulate a pharmaceutical sterile intravenous solution comprising "palonosetron hydrochloride ... at a concentration of 0.05 mg/mL," as required by all the challenged claims.
Id. at 22. Thus, patent owner’s careful prosecution strategy bolstered by strong arguments for patentability contributed to the denial of institution in both cases.
At this very early stage in PGR history, the current claim survival rate to date in PGR final written decisions is virtually identical to the IPR claim survival rate. Whether or not this will prove out statistically significant remains to be seen. Perhaps this is an indication of consistency from the PTAB, where the same administrative patent judges hear both IPRs and PGRs.
Source of PGR data: Finnegan research; As of Jan. 11, 2017. In addition, two instituted PGRs settled prior to final written decision and one was dismissed as improperly filed. Source of IPR data: As of Dec. 1, 2016, http://www.aiablog.com/claim-and-case-disposition/, "all instituted claims survived." Also, 13.59 percent (153/1126) cases had mixed outcome (some instituted claims survived, some held unpatentable).
To date, there have been five PGR final written decisions in which all instituted claims were held unpatentable. In three of those final written decisions, the Patent Trial and Appeal Board held that the claims failed to recite statutory subject matter under § 101. The other two PGR final written decisions in which all instituted claims were held unpatentable, US Endodontics and Telebrands, will be discussed below.
After holding that the challenged patent in US Endodontics was not entitled to any of its pre-AIA priority dates and therefore was eligible for PGR, the PTAB then held that the instituted claims were unpatentable for lack of enablement and lack of written description support in the specification under § 112. The board also held that the claims were anticipated by a publication that qualified as prior art because instituted claims were not entitled to the benefit of any of the earlier priority dates.
In Telebrands Corp. v. Tinnus Enterprises LLC, PGR2015-00018 (P.T.A.B. Dec. 30, 2016), the PTAB instituted PGR on § 112(b) and § 103 grounds. It then proceeded to hold all of the instituted claims unpatentable for indefiniteness because neither the specification nor the claims provided an objective standard for measuring the claim limitation "filled."
In one PGR final written decision, Altaire Pharms. Inc. v. Paragon Bioteck Inc., PGR2015-00011 (P.T.A.B. Nov. 14, 2016), all of the instituted claims survived. The PTAB rejected the petitioner’s obviousness challenge because, among other things, it found that "the tests and data submitted with the Petition do not meet the requirements of 37 C.F.R. § 42.65." And in the absence of such evidence, the board held that there was no proof that all of the recited claim limitations were met by the prior art.
Although the total number of PGR filings is still quite small, this article considered certain PGR petitions, institution denials, and final written decisions that have become available thus far. From this early sampling, it appears that arguments relating to PGR eligibility may be new tools for patent owners to use in trying to obtain a petition denial.
PGRs, like IPRs, provide yet another reason for practitioners to build a strong record in drafting and prosecuting patent applications that will be helpful (not hurtful) if patents are ultimately challenged.7
The low number of PGR petitions filed so far may be due to the broader potential risk of petitioner estoppel, or it could simply be due to the fact that fewer PGR-eligible patents have issued. It will be interesting to watch whether PGRs remain in the shadow of IPRs over the next few years, or if PGRs eventually rise to the gale-force levels that IPRs have achieved since the post-grant tsunami struck land.
1 AIA § 6(f)(2)(A): The amendments made by subsection (d) shall take effect upon the expiration of the 1-year period beginning on the date of the enactment of this Act and, except as provided in section 18 and in paragraph (3), shall apply only to patents described in section 3(n)(1). (emphasis added). AIA § 3(n(1): IN GENERAL.—Except as otherwise provided in this section, the amendments made by this section shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, and shall apply to any application for patent, and to any patent issuing thereon, that contains or contained at any time—
(A) a claim to a claimed invention that has an effective filing date as defined in section 100(i) of title 35, United States Code, that is on or after the effective date described in this paragraph; or
(B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim. (emphasis added)
2 Source: https://www.uspto.gov/sites/default/files/documents/aia_statistics_september2016A.pdf
3 See 35 U.S.C. §311(b), §321(b), §315(e), §325(e).
4 At *13: "Although extending the above logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding, the court cannot divine a reasoned way around the Federal Circuit's interpretation in Shaw."
5 Source: www.uspto.gov
6 In the interest of full disclosure, Mr. Irving was backup counsel for Helsinn in both these PGRs and Dr. Murphy and Ms. Lewis assisted Mr. Irving with both PGRs.
7 See also, Carron, Virginia and Ashley Winkler, "Trends In IPR Institution: Part 1—Ex Parte Art Or Arguments," Law360 (Jan. 12, 2017), https://www.law360.com/ip/articles/866959/trends-in-ipr-institution-part-1-ex-parte-art-or-arguments?nl_pk=fadbdcbf-842c-4a52-b6ab-4e311e0ed1f4&utm_source=newsletter&utm_medium=email&utm_campaign=ip
*Stacy Lewis is a law clerk at Finnegan.
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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