Author Archives: ipcounsellor

SANOFI WINS RARE MOTION TO AMEND AT THE PTAB AFTER FED. CIR. REMAND

By Siew Chong
On remand from the Federal Circuit, the Patent Trial and Appeal Board (PTAB) has granted a motion to amend in a patent directed to methods of treatment using cabazitaxel, a taxane compound. Mylan Labs. Ltd. v. Aventis Pharma S.A., IPR 2016-00712, Paper 112 (Oct. 22, 2019).

Mylan filed a petition requesting inter partes review of claims 1-5 and 7-30 of U.S. Patent No. 8,927,592 (the ‘592 patent) on Mar. 14, 2016. After the PTAB instituted review of all challenged claims on obviousness grounds, Sanofi (the parent of Aventis Pharma) filed a contingent motion to amend in conjunction with the Patent Owner’s Response. In a final written decision, the PTAB held that the challenged claims were unpatentable and denied Sanofi’s motion to amend the claims after finding that Sanofi had not met its burden of proving that the proposed amended claims were patentable. Mylan, Paper 99 (Sep. 21, 2017).

The Board’s decision was based on its construction of Sanofi’s proposed amended claim, which recites, “[a] method of increasing survival comprising administering to a patient in need thereof . . . .”   Sanofi argued that the preamble “increasing survival” is a limitation that confers patentability to the claim as the prior art did not suggest that the recited method of treatment would increase patient survival. The Board instead held that the preamble merely provides an additional description to the claim and does not give an “intentional purpose” for performing the method of treatment.

Shortly after, the Federal Circuit issued an en banc decision holding that the petitioner in an IPR, not the patent owner, bears the burden of persuasion on the patentability of challenged claims, original or amended. Aqua Products, Inc. v. Matal, 872 F.3d 1290, 1325 (Fed. Cir. 2017). Sanofi then appealed the Board’s claim construction and denial of the motion to amend to the Federal Circuit.

On review, the Federal Circuit vacated the Board’s denial of Sanofi’s motion and remanded for further proceedings. Writing for the panel, Judge O’Malley held that the Board improperly placed the burden on Sanofi to prove patentability of the proposed amended claims. Sanofi Mature IP v. Mylan Labs. Ltd., 757 Fed. Appx. 988, 991 (Fed. Cir. 2019). Continue reading →

TRICK OR TREAT: PTAB JUDGE APPOINTMENTS ARE UNCONSTITUTIONAL

By Tom Engellenner
A Halloween decision by the U.S. Court of Appeals for the Federal Circuit ruled has concluded that the way administrative patent judges (APJs) are appointed to the Patent Trial and Appeal Board (PTAB) is unconstitutional and vacated the decision before the court with a remand that the case be heard again by another PTAB panel. The case is Arthrex v. Smith & Nephew No. 2018-2140 (Fed. Cir., Oct. 31, 2019).

The decision cures this problem going forward by severing a portion of the enabling legislation that prevents the administrative judges from being fired except for cause. The Fed. Circuit decision essentially makes all PTAB judges subject to dismissal by the secretary of Commerce without cause.

The Arthrex decision, however, does appear to create a class of litigants who have already received a final written decision on a patent challenge and are still in their pre-appeal period. Those parties — if they choose to appeal and raise this “appointments” issue — may also be able to get their decisions vacated and remanded.

According to the Fed. Cir. decision by Judges Moore, Chen and Reyna, PTAB judges do not receive enough oversight and supervision from the Director of the U.S. Patent and Trademark Office (USPTO) to be considered “inferior” officers under the U.S. Constitution and, hence, exempt from the Senate confirmation process. (“Principal” officers must be appointed by the president and confirmed by the Senate, while “inferior” officers can be appointed by heads of departments.)

The Fed. Cir. Panel chose the “narrowest remedy” by stripping the PTAB administrative judges of their exemption from dismissal without cause, rather than applying its ruling to the entirety of cases rendered so far by the PTAB:

Thus, we conclude that the appropriate remedy to the constitutional violation is partial invalidation of the statutory limitations on the removal of APJs. Continue reading →

PTAB PROPOSES RULES ON BURDEN OF PROOF FOR AMENDMENTS DURING AIA TRIALS

By Tom Engellenner
In a proposed rule published in the Federal Register on October 22, 2019, the U.S. Patent and Trademark Office (USPTO) has finally moved to codify a change in the way its Patent Trial and Appeal Board (PTAB) conducts administrative patent challenge proceedings (inter partes reviews, covered business method patent reviews, and post-grant reviews) established by the 2011 America Invents Act (AIA).

Under the proposed rule, the petitioner who initiates a patent challenge will not only have the burden of persuading the PTAB that a patent owner’s claims as issued are invalid but will also have the same burden with regard to new claims that the patent owner may present by amendment during the proceeding.

The proposed new rule is hardly a change in practice since the PTAB has essentially been following this practice for the past two years after the Court of Appeals for the Federal Circuit rejected its old rule placing the burden of proof for amendments on the patent owner.

During the first five years of administrative trials under the AIA, the tactic of amending claims to overcome prior art was largely an illusory exercise in part at least because of the original USPTO rule. However, an en banc Federal Circuit decision in Aqua Products v. Matel, 872 F. 3d 1290 (Fed. Circ. 2017) threw out the original USPTO rule.

Continue reading →

FEDERAL CIRCUIT FINDS A TECHNOLOGICAL INVENTION IN SIPCO’S TELECOM PATENT AND REVERSES PTAB DECISION THAT THE PATENT IS SUBJECT TO CBM REVIEW

By Reza Mollaaghababa
Under the administrative trial rules of the America Invents Act (AIA) a patent is eligible for covered business method (CBM) review if it only claims “a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service.” 37 C.F.R. 42.301(a). Notwithstanding, such a patent is exempt from CBM review if it includes a “technological invention.” Id.

In determining whether a patent includes a technological invention for the purposes of CBM review, U.S. Patent Office rules require the Patent Trial and Appeal Board (PTAB) consider “whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art, and solves a technical problem using a technical solution.” 37 C.F.R. 42.301(b).

In SIPCO LLC v. Emerson Electric Co. (IPR 2017-0001), the PTAB concluded that SIPCO’s U.S. Patent No. 8,908,842 was not excluded from CBM review under the statutory “technological exception.” The CAFC disagreed and vacated the PTAB’s decision. Continue reading →

PTAB’S “PRECEDENTIAL OPINION PANEL” RULES ON TIME-BAR TRIGGER

By Tom Engellenner
The “Precedential Opinion Panel” of the Patent Trial and Appeal Board (PTAB) ruled earlier this month that even a faulty complaint asserting patent infringement can start the clock running on a petitioner’s one-year time period for administratively challenging the validity of the patent under the America Invents Act (AIA).  See, GoPro, Inc. v. 360Heros, Inc., Case IPR2018-01754 POP decision.  According to the precedential panel:

“The service of a pleading asserting a claim alleging infringement, including where the serving party lacks standing to sue or the pleading is otherwise deficient, triggers the one-year time period for a petitioner to file a petition.” Continue reading →

FEDERAL CIRCUIT SLAMS THE DOOR ON SOVEREIGN IMMUNITY DEFENSE IN IPRS

By Tom Engellenner

If there was any doubt that the sovereign immunity defense was dead for administrative patent invalidity trials after the Supreme Court declined to review the Saint Regis Mohawk case earlier this year, last month’s decision by the Federal Circuit in Regents of University of Minnesota v. LSI Corporation makes it clear that sovereign immunity does not apply to patent challenges brought pursuant to the 2011 America Invents Act (AIA), regardless of whether the immunity claim is raised by a Native American tribe or a state university trying to avoid  patent adjudication.

Continue reading →

PTAB INCREASINGLY USING ITS DISCRETION TO DECLINE IPR INSTITUTIONS

By Reza Mollaaghababa

Under 35 U.S.C. §314(a), the PTAB has discretion to deny institution of an inter partes review. Cuozzo Speed Techs, LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (”[T]he agency’s decision to deny a petition is a matter committed to the Patent Office’s discretion”).  The PTAB is increasingly relying on its discretion to deny institution of IPR challenges to patents.  In some cases, the PTAB has denied institution of a follow-on petition that presented substantially similar grounds as those presented in an earlier petition, even when filed by a different petitioner.  In other cases, the PTAB has denied institution of an IPR challenge reasoning that institution in view of the advanced stage of a parallel district court trial would not be efficient use of the Board’s and the court’s resources. In other cases, the PTAB has denied institution in cases where it deemed only a small subset of petitioner’s arguments would be likely to establish invalidity of challenged claims. Continue reading →

NEW FINAL RULES FOR POST GRANT PROCEEDINGS PUBLISHED BY USPTO

By Tom Engellenner
The USPTO has finalized new rules for post-grant proceedings under the America Invents Act (AIA). The new rules were published at 81 FR 18750 on April 1, 2016 and go into effect on May 2, 2016.

Technically this “final rulemaking” amends various portions of 37 C.F.R. 42, the rules that govern post-grant proceedings under the AIA, including inter partes review (IPR), covered business method review (CBM), and post-grant review (PGR).

Perhaps the most significant change is that under the new rules the patent owner will be able to submit testimonial evidence, such as an expert declaration, as part of a patent owner’s preliminary response to a patent challenge before the Patent Trial and Appeal Board (PTAB) decides to institute an IPR, CBM, or PGR trial. (Under the existing rules, the Patent Owner usually cannot present testimonial evidence until after the institution decision and the PTAB makes its decision to institute trial after hearing only one side of the story, e.g., from the petitioner’s expert.)

However, 37 CFR 42.108(c) has been revised such that if the patent owner presents testimonial evidence as part of a preliminary response, any “genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.” An analogous new rule in 37 CFR 42.208(c) for a post grant review has also been finalized. Under the new rules petitioners may also seek leave to file a reply to any preliminary response filed by the patent owner.

These changes beg the questions: what do the patent owners have left to say after institution if their experts’ opinions have already been considered and found unpersuasive, and will the PTAB judges ever change their minds during trials when the petitioner’s evidence is not viewed in its most favorable light?

It has also been suggested that this new scheme runs contrary to the norm in American jurisprudence in that a party seeking some sort of relief from a court typically has the burden of persuasion. Normally, American courts view facts in the light most favorable to the non-moving party (i.e., in AIA proceedings, that would be the patent owner not the petitioner). Instead of leveling the playing field, the new rules may lead to even higher trial institution rates and higher rates of patent invalidity.

According to the USPTO’s own acknowledged statistics, if a patent owner does not get a petition dismissed before trial and doesn’t settle with the petitioner before a final written decision, the patent will be (at least partially) invalidated 96% of the time.

Several other aspects of the rule changes address things that practitioners have not even identified as real problems. For example, the new rules modify the limits on the length of briefs that the parties can file from a “page count” to a “word count.” Rule 42.24 will be amended so that a “14,000 word” limit replaces the current 60-page limit for IPR petitions. Similar changes from page limits to word limits will be applied to patent owner responses and petitioner replies.

Another new rule change purportedly will ensure that practitioners do not pursue frivolous petitions or responses. Rule 42.11 will be amended to require that registered patent attorneys, who file papers in IPR, CBM, or PGR proceedings sign certifications akin to the statements require in federal district court proceedings (under Fed. R. Civ. Proc. Rule 11). Specifically, counsel signing any paper in an AIA proceeding must certify that

(i) the paper is not being presented for any improper purpose, such as to harass someone or to cause unnecessary delay or needless increase in the cost of any proceeding before the Office; (ii) the other legal contentions therein are warranted by existing law or by a nonfrivolous argument for the extension, modification, or reversal of existing law or the establishment of new law; (iii) the allegations and other factual contentions have evidentiary support or, if specifically so identified, are likely to have evidentiary support after a reasonable opportunity for further investigation or discovery; and (iv) the denials of factual contentions are warranted on the evidence, or if specifically so identified, are reasonably based on a lack of information or belief.”

Apparently, the USPTO considered this to be a very important rule change to adopt despite its inability to identify a single instance of frivolous papers filed in the nearly 10,000 petitions, responses and replies filed in AIA proceedings to date. The USPTO commentary accompanying the new rules describes the new certification requirement as “preventive in nature.”

The new rules also drop a measure advocated by patent owners, namely that the judges who make the institution decision be different than those who render the final written decision after trial. The draft rules had proposed a “pilot program” where a single judge could render the institution decision and then two additional judges would be added to form a three-member panel to hear the trial. According to the commentary published with the new final rules, the USPTO “has decided not to go forward with proposed pilot program at this time.”