MBHB-Webinar-PTAB-Williams-Schafer-FINAL-02.25.15

Prevailing Before the PTAB “Death Squad”: Practical Considerations for

Petitioners and Patent Holders(Live MBHB Webinar)

Andrew W. Williams, Ph.D.John M. Schafer

February 25, 2015

Part 1The Road to Alexandria

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The Road to Alexandria

Two Paths to Petitioning for IPR of a Patent Path #1 – Proactive Petitions Path #2 – Reactive Petitions

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Proactive Petitions

Petitioner has prior knowledge of a potentially challengeable patent Cease and Desist Letter Prior Art Search Orange Book

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Proactive Petitions

Things to consider before preparing a petition Odds of being sued for infringement Budget for defending an infringement suit Value of potentially accused products Claims to challenge Importance to the patent owner Related patents Invalidity Positions

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Reactive Petitions

An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner, real party in interest, or privy of the petition is served with a complaint alleging infringement of the patent.

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35 U.S.C. §315(b)

Reactive Petitions

Keyword in the statute is served When service is waived, the time for

petitioning does not begin to toll until the waiver is filed

1-year bar does not apply if a complaint is dismissed without prejudice

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See, e.g., Motorola Mobility LLC v. Arnouse, IPR2013-00010, Paper No. 20 (Jan. 30, 2013)

See, e.g., Macuto U.S.A. v. Bos GmbH & KG, IPR2012-00004, Paper No. 18 (Jan. 24, 2013)

Reactive Petitions

Determining which claims to challenge Challenge asserted claims What about the other claims?

•8

Samsung Elecs. Co. LTD v. Fractus, S.A.

Fractus asserted claims in 4 patents against Samsung in complaints filed in 2009 and 2013 Samsung filed petitions for IPR of each

patent within 1 year of the service of the 2013 complaint PTAB denied Samsung’s petitions based

on the 2009 complaint

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IPR2014-00008, Paper No. 19 (Jan. 2, 2014)

Reactive Petitions

Determining which claims to challenge 1-year bar date applies to all claims in a

patent, not just the claim(s) asserted in district court litigation Should consider the patent’s potential impact

on the accused product(s) and future product(s)

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Reactive Petitions

Things to consider before preparing a petition How many claims to challenge Prior art search Budget for litigation and IPR Value of the accused products and potentially

accused products Likelihood of the district court staying the

litigation

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Reactive Petitions

Determining when to file the petition File as early as possible Could increase the likelihood of the District Court

staying the litigation pending institution/resolution of the IPR

File later Can evaluate the strength of non-infringement

positions More time for prior art searching and evaluation Insight into the patent owner’s claim construction

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Reactive Petitions

Considerations for determining when to file a petition for IPR Prior art search timeline District Court procedures for patent

infringement suits Risk/reward of filing earlier rather than later

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Reactive Petitions

Two doors into the PTAB for reactive petitions Front door – filing within 1-year of service of a

complaint alleging infringement of a patent Back door – filing after the 1-year window

closes by joining the petition to an instituted trial

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Target Corp. v. Destination Maternity Corp.

The PTAB confirmed that the joinder statute applies to parties and petitions

While the Target decision is theoretically precedential, there is a split among the PTAB judges as to the scope of the §315(c)

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IPR2014-00508, Paper No. 28 (Feb. 12, 2015)

Joinder

To join a petition, the Petitioner should demonstrate that joining the petition will not unduly burden the Patent Owner or delay the instituted trial Use same prior art Limit the total number of challenges File motion to join within one month of

institution

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Joinder

Patent Owner’s objections should attack the motion to join on all fronts Additional cited art will cause delays Time to respond Differences in scope of claims or meanings of

claim terms

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FOR ATTENDANCE TRACKING PURPOSES PLEASE ENTER THE

PHRASE

“PTAB"

INTO THE WEBEX POLL

Part 2Nobody Puts the Patent Owner

in a Corner

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Patent Owner Responses

Patent Owner Preliminary Response Patent Owner Response Motion to Amend Claims

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Patent Owner Preliminary Response

Ability to challenge institution of trial Patent Owner’s are overwhelming filing

preliminary responses

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http://www.uspto.gov/ip/boards/bpai/stats/021915_aia_stat_graph.pdf

Patent Owner Preliminary Response

Grounds to Challenge Petition Petitioner is statutorily barred from pursuing an IPR Petition contains prior art or arguments that were

previously presented at the Office Petition fails to identify all real parties-in-interest Highlight weaknesses in petitioner’s case of

unpatentability Petitioner’s claim construction is improper Citation of supporting evidence

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http://www.uspto.gov//blog/aia/entry/deep_dive_into_a_patent

Statutory Bar

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“An inter partes review may not be instituted if, beforethe date on which the petition for such a review is filed,the petitioner or real party in interest filed a civil actionchallenging the validity of a claim of the patent.”

35 U.S.C. § 315(a)(1)

Dismissal with prejudice bars trial institution

Dismissal without prejudice does not bar institution

See, e.g., Anova Food, LLC v. Sandau, IPR2013-00114, Paper No. 17 (Sept. 13, 2013)

See, e.g., Cyanotech Corp. v. Bd. of Trs. of the Univ. of Ill.,IPR2013-00401, Paper No. 17 (Dec. 19, 2013) (involuntary);Clio USA, Inc. v. The Procter and Gamble Co., IPR2013-00438, Paper No. 9 (Jan. 9, 2014) (voluntary)

Statutory Bar

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“A counterclaim challenging the validity of a claim of apatent does not constitute a civil action challenging thevalidity of a claim of a patent for purposes of thissubsection.”

35 U.S.C. § 315(a)(3)

“A civil action for a declaratory judgment of non-infringement is not a civil action challenging the validity of a patent.”

“[A]sserting an affirmative defense of invalidity is treated differently than a counterclaim for invalidity, and thus for the purposes of 315(a)(1) cannot be considered a filing of a civil action for invalidity

Ariosa Diagnostics v. Isis Innovation Ltd., IPR2012-00022, Paper No. 20 (Feb. 12, 2103)

Statutory Bar

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“An inter partes review may not be instituted if thepetition requesting the proceeding is filed more than 1year after the date on which the petitioner, real party ininterest, or privy of the petitioner is served with acomplaint alleging infringement of the patent.”

35 U.S.C. § 315(b)

Dismissal without prejudice does not bar institution.

A Motion for Leave to file an amended complaint does not start the clock.

See, e.g., Macuto U.S.A. v. Bos GmbH & KG, IPR2012-00004, Paper No. 18 (Jan. 24, 2013)

See, e.g., TRW Auto. US v. Magna Elecs., Inc.,IPR2014-00293, Paper No. 18 (June 27, 2014)

Statutory Bar

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Infringement counterclaim is “a complaint alleging infringement of the patent.”

An intervening reexamination certificate is not a new patent for the purposes of the statutory bar.

A second served complaint does not reset the clock for the purposes of the statutory bar.

See, e.g., St. Jude Med., Cardiology Div., Inc. v. Volvano Corp., IPR2013-00258, Paper No. 29 (Oct. 16, 2013)

See, e.g., BioDelivery Scis. Int’l, Inc. v. Monosol RX, LLC, IPR2013-00315, Paper No. 31 (Nov. 13, 2013)

See, e.g., Accord Healthcare, Inc., USA v. Eli Lilly & Co., IPR2013-00356, Paper No. 13 (Oct. 1, 2013)

Previously Presented Arguments

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“In determining whether to institute or order aproceeding . . . the Director may take into accountwhether, and reject the petition because, the same orsubstantially the same prior art or arguments previouslywere presented to the Office.”

“The practice of . . . . filing serial petitions challenging claims already involved in an instituted proceeding and asserting arguments and prior art previously considered by the Board is contrary to the goals set forth in our statutory mandate and implementing rules. ”

But, presenting different arguments and new supporting evidence can shed light on previously considered art.

SAS Inst., Inc. v. Complementsoft, LLC, IPR2013-00581, Paper No. 15 (Dec. 30, 2013)

See, e.g., Oracle Corp. v. Clouding IP, LLC, IPR2013-00100, Paper No. 8 (May 16, 2013)

35 U.S.C. § 325(d)

Real Party-In-Interest

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“A petition filed under section 311 may be consideredonly if – the petition identifies all real parties in interest.”

35 U.S.C. § 312(a)(2)

“[A]t a general level, the ‘real party-in-interest’ is the party that desires review of the patent. Thus, the ‘real party-in-interest’ may be the petitioner itself, and/or it may be the party or parties at whose behest the petition has been filed. ”

“A common consideration is whether the non-party exercised or could have exercised control over a party’s participation in a proceeding.”

Office Patent Trial Practice Guide, 77 Fed. Reg. 48,680, 48,759 (August 14, 2012)

Office Patent Trial Practice Guide, 77 Fed. Reg. at 48,759


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“SEL has not shown, for example, that the co-defendants CMO USA, Acer America, ViewSonic, VIZIO, and Westinghouse necessarily co-authored the Petition or otherwise exerted control over its contents, or will exert any control over the remaining portions of this proceeding. SEL has failed to provide persuasive evidence that each of the co-defendants in the CMI Case provided funding for the instant Petition, let alone exercised control and funding.”

Chimei Innoulux Corp. v. Semiconductor Energy Lab. Co., IPR2013-00068, Paper No. 7 (April 24, 2013) (emphasis added)


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“While Gevo contends that, for example, Gevo ‘believes’ DuPont exercised or could have exercised control over Butamax’s participation in this proceeding through its involvement in the filing of the Petition; that Butamax’sboard of directors includes at least one or more members that are also directors at DuPont; and that Butamax’sdeclarant is a paid consultant for, and has an ongoing relationship with DuPont, these allegations do not establish DuPont’s control over or funding of this proceeding.”

ButamaxTM Advanced Biofuels LLC v. Gevo, Inc.,IPR2013-00214, Paper No. 11 (Sept. 30, 2013)(citations omitted) (emphasis added))


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GEA Process Eng’g, Inc. v. Steuben Foods, Inc.,

GEA and GEA Procomac S.p.A (“Procomac”) are related companies within the same family of companies.

Steuben Foods had filed a complaint against both. Procomac did not file, and was not identified in, the petition. Procomac inadvertently paid all of the expenses of the petition,

although it refunded payment to GEA. Alleged Procomac had no control or evolvement over petition. Board found that Procomac had the “opportunity to control that

might reasonably be expected between two formal coparties.” Terminated already instituted trial.

IPR2014-00041, Paper No. 135 (Dec. 23, 2014)

New Testimony Evidence

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“The preliminary response shall not present newtestimony evidence beyond the already of record, exceptas authorized by the Board.”

37 C.F.R. § 42.107(c)

New evidence may include existing declarations, trial testimony, deposition testimony, and expert reports

Can even include testimony evidence created for a related litigation

Unless the testimony relates to the patentability of any claim

See, e.g., Anova Food, LLC v. Sandau, IPR2013-00114, Paper No. 11 (June 25, 2013)

See, e.g., B/E Aerospace, Inc. v. Mag Aerospace Indus., LLC, IPR2014-01510, Paper No. 13 (Jan. 20, 2015)

Motion to Amend Claims

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“The Director shall prescribe regulations – setting forthstandards and procedures for allowing the patent ownerto move to amend the patent . . . to cancel a challengedclaim or propose a reasonable number of substituteclaims.”

35 U.S.C. § 316(a)(9)

“During an inter partes review instituted under thischapter, the patent owner may file 1 motion to amendthe patent in 1 or more of the following ways: (A) Cancelany challenged patent claim. (B) For each challengedclaim, propose a reasonable number of substituteclaims.

35 U.S.C. § 316(d)


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Nevertheless, only two sets of motions to amend granted (at least in part):

Int’l Flavors & Fragrances Inc. v. U.S.,IPR2013-00124, Paper 12 (May 20, 2014)

Riverbed Tech., LLC v. Silver Peak Sys., Inc.,IPR2013-00402, Paper 35 (Dec. 30, 2014)


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Guidance from the Office Idle Free Systems, Inc. v. Bergstrom, Inc.,

IPR2012-00027, Paper 26 (June 11, 2013) USPTO Message From PTAB: How to Make Successful Claim

Amendments in an AIA Trial Proceeding, AIA BLOG (May 5, 2014, 3:57 PM), http://www.uspto.gov/blog/aia/entry/uspto_ptab_message_how_to.

Corning Optical Comms. RF, LLC v. PPC Broadband, Inc.,IPR2014-00441, Paper 19 (Oct. 30, 2014)


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Substitute Claim Set Be responsive to a ground of unpatentability Presumption that for every claim at issue, only one substitute claim

is reasonable

Burden of Proof The patent owner bears the burden of establishing that it is entitled

to amended claims Must meet every ground of patentability

Patentability Not limited to references cited by the petition

Although need not be aware of everything

Should explain the level of skill in the art and how it relates to the newly added limitations


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Substitute Claim Set

Riverbed Tech., LLC v. Silver Peak Sys., Inc., IPR2013-00402, Paper 35 (Dec. 30, 2014)


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Riverbed Tech., LLC v. Silver Peak Sys., Inc.,IPR2013-00402, Paper 35 (Dec. 30, 2014)


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Int’l Flavors & Fragrances Inc. v. U.S., IPR2013-00124, Paper 12 (May 20, 2014).


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FOR ATTENDANCE TRACKING PURPOSES PLEASE ENTER THE

PHRASE

“PTAB"

INTO THE WEBEX POLL

Part 3The Sign Says

“No Fishing Allowed”

•42

Discovery at the PTAB

PTAB has taken a very restrictive approach to discovery “Routine” discovery is very limited “Additional” discovery only granted “in the

interest of justice

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37 C.F.R §42.51

Routine Discovery

Routine discovery is very limited Exhibits cited in a paper or testimony Cross-examination of affidavit testimony Relevant information that is inconsistent with a

position advanced by a party

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Additional Discovery

No right to additional discovery[A] party may move for additional discovery. The moving party must show that such additional discovery is in the interests of justice….

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37 C.F.R §42.51(b)(2)


To meet the “interest of justice” standard, need to meet the Garmin factors:1. More than a possibility and mere allegation2. Litigation positions and underlying basis3. Ability to generate equivalent information by other means4. Easily understandable instructions5. Requests not overly burdensome to answer

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Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC,IPR2012-00001, Paper No. 26 (Mar. 5, 2013)


Motions for additional discovery denied Commercial success, copying, and praise by others

Communications between the petitioner and an alleged real party-in-interest

Clinical data underlying studies described in the challenged patent

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Riverbed Tech., Inc. v. Silver Peak Sys., Inc., IPR2014-00245, Paper No. 19 (Aug. 22, 2014)

Petroleum Geo-Servs. Inc. v. Westerngeco LLC, IPR2013-00358, Paper No. 78 (May 16, 2014)

Amneal Pharms., LLC v. Endo Pharms. Inc., IPR2014-01475, Paper No. 10 (Nov. 26, 2014)


Motions for additional discovery denied Documents relied on by a witness in ITC

testimony

Deposition testimony directed to a date a reference was publicly available

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Silicon Labs., Inc., v. Cresta Tech. Corp.,IPR2014-00728, Paper No. 27 (Dec. 10, 2014)

Alt. Legal Solutions, Inc. v. Emp’t Law Compliance, Inc.,IPR2014-00728, Paper No. 27 (Dec. 10, 2014)


Motions for additional discovery granted Document relied on by the patent owner’s expert

witness to project petitioner’s sales

Documents relating to claims made to a third-party funded litigation fund

Email communications between Petitioner’s expert witnesses regarding the prior art

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Schott Gemtron Corp. v. SSW Holding Co., IPR2013-00358, Paper No. 78 (May 16, 2014)

VMWare, Inc. v. Good Tech. Software, Inc., IPR2014-01324, Paper No. 7 (Dec. 5, 2014)

Apple Inc. v. Achates Reference Publ., Inc., IPR2013-00080, Paper No. 66 (Jan. 31, 2014)


Motions for additional discovery granted Lab notebooks showing Petitioner’s testing

Intercompany agreement and deposition of official

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Corning Inc. v. DSM IP Assets B.V., IPR2013-00046, Paper No. 27 (June 21, 2013)

Zerto, Inc. v. EMC Corp., IPR2014-01245, Paper No. 15 (Nov. 11, 2014)


Rethinking the approach to discovery More about getting known information than

discovering potentially useful information Realistically assess what you expect to get

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Considerations to improve chances of getting additional discovery Request authorization as soon as possible Identity of specific documents or information Nexus between the requested discovery and a

material position Other means of getting the requested

discovery

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Depositions

Rethinking the approach to depositions Unlike litigation, the deposition is the trial

testimony Do not want to give the opposing party a

chance to bolster witness’s direct testimony or credibility Should consider whether you really want to

know the answer to a question

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Depositions

Re-direct Examination Might be the last chance to respond to

challenges raised during cross-examination Can also help establish witness’s credentials

and credibility

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Part 4Appeals of Final Written

Decisions or:How I Learned to Stop Worrying

and Love the Federal Circuit

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Appeal to the Federal Circuit

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“A party dissatisfied with the final written decision of thePatent Trial and Appeal Board under section 318(a) mayappeal the decision pursuant to sections 141 through144. Any party to the inter partes review shall have theright to be a party to the appeal.”

35 U.S.C. § 319

To date, over 160 notices of appeal have been filed at the PTAB!

Determination to Institution

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“The determination by the Director whether to institutean inter partes review under this section shall be finaland nonappealable”

35 U.S.C. § 314(d)

April 24, 2014 Decisions

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St. Jude Med., Cardiology Div., Inc. v. Volcano Corp., 749 F.3d 1373 (Fed. Cir. 2014)

The Board did not institute because infringement counterclaim constituted “a complaint alleging infringement of the patent.”

St. Jude argued that §314(d) does not bar immediate review by the Federal Circuit.

“The statute provides for an appeal to this court only of the Board’s decision at the second step [Final Written Decision], not the Director's decision at the first step.”


•59

In re Dominion Dealer Solutions, LLC., 749 F.3d 1379 (Fed. Cir. 2014)

The Board did not institute because of a failure to demonstrate a reasonable likelihood that the petitioner would prevail.

Dominion petitioned for a writ of mandamus vacating non-institution decision and ordering institution of review.

“At a minimum, given our conclusions about the statutory scheme, Dominion has no ‘clear and indisputable’ right to challenge a non-institution decision directly in this court, including by way of mandamus.”


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In re Procter & Gamble Co., 749 F.3d 1376 (Fed. Cir. 2014)

The Board instituted because declaratory judgment of invalidity dismissed without prejudice.

P&G petitioned for a writ of mandamus vacating institution of review.

“Our analysis in St. Jude and Dominion . . . applies equally to the Director’s decision to institute such a review.”


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“The determination by the Director whether to institutean inter partes review under this section shall be finaland nonappealable”

35 U.S.C. § 314(d)

Statute bars appeal of decision not to institute review. Statute bars mandamus for decision not to institute. Statute bars mandamus for decision to institute.

Does statute bar appeal and review of decision to institute after Final Written Decision?

In re Cuozzo Speed Techs., LLC (Fed. Cir. 2015)

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The first appeal of the first Final Written Decision for the first IPR petition filed

U.S. Patent No. 6,778,074


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Garmin USA had been sued in district court and filed petition IPR2012-00001


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10. A speed limit indicator comprising:a global positioning system receiver;a display controller connected to said global

positioning system receiver, wherein said display controller adjusts a colored display in response to signals from said global positioning system receiver to continuously update the delineation of which speed readings are in violation of the speed limit at a vehicle's present location; and

a speedometer integrally attached to said colored display.


•65

Aumayer

Evans

Wendt disclosed a suction cup attachable speed limit indicator.

In re Cuozzo Speed Technologies, LLC (Fed. Cir. 2015)

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Cuozzo argued that the Board improperly instituted trial The institution grounds were not those presented in the petition The prior art was all identified, but not in that combination

“The Director may not authorize an inter partes reviewto be instituted unless the Director determines that theinformation presented in the petition . . . and anyresponse [by the patent owner] . . . shows that there is areasonable likelihood that the petitioner would prevailwith respect to at least 1 of the claims challenged in thepetition.”

35 U.S.C. § 314(a)


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Federal Circuit concluded “that §314(d) prohibits review of the decision to institute IPR even after a final decision. Cited a reexamination case (In re Hiniker Co., 150 F.3d 1362

(Fed. Cir. 1998)) for the proposition that a flawed decision to institute was not a basis for setting aside a final decision.

“The fact that the petition was defective is irrelevant because a proper petition could have been drafted.”

Did not decide the question whether the decision to institute would be reviewable by mandamus after final decision.

Judge Newman in dissent: “Does this mean that such decisions can never be judicially

reviewed, even if contrary to law, even if material to the final appealed judgment?”


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Claim construction standard:

Broadest reasonable construction in light

of specificationPhillips Standardvs.


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The Federal Circuit concluded “that Congress implicitly adopted the broadest reasonable interpretation standard in enacting the AIA.” “It can therefore be inferred that Congress impliedly adopted the

existing rule of adopting the broadest reasonable construction.”

Failing that, the Court determined that “even if the broadest reasonable interpretation standard were not incorporated into the IPR provisions of the statute, the standard was properly adopted by the PTO regulations.


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Judge Newman in dissent: BRI standard frustrates the goal of inter partes review to be a

surrogate for district court litigation Reference to other office proceedings cannot justify standard

“It is reported that the ability to amend claims in Inter Partes Review proceedings, as administered by the PTO, is almost illusory”

Noted that the House “Innovation Act” contains a section amending the standard: “each claim of a patent shall be construed as such claim would be in a civil

action to invalidate a patent under section 282(b), including constructing each claim of the patent in accordance with the ordinary and customary meaning of such as understood by one of ordinary skill in the art and the prosecution history pertaining to the patent . . . .”


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The Court concluded that the Board did not err in construing the claims Use of Teva v. Sandoz standard: underlying factual

determinations concerning extrinsic evidence for substantial evidence, and ultimate claim construction de novo

The Court also held that “claim 10 would have been obvious over Aumayer, Evans, and Wendt because it encompasses the analog embodiment of the invention discussed in the specifiction.” Reviewed factual findings for substantial evidence, and legal

conclusions de novo

Future Appeals

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Versata Development Gp., Inc. v. SAP Am., Inc.(No. 2014-1194)

At least two oral arguments scheduled for March Related to at least four Final Written Decisions

At least four oral arguments scheduled for April Related to at least six Final Written Decisions

www.patentdocs.org

Andrew W. Williams, [email protected]

(312) 913-3301

John “Jay” M. [email protected]

(312) 935-2353

Connect with MBHB!

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THANK YOU!

MBHB-Webinar-PTAB-Williams-Schafer-FINAL-02.25.15

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