Tag Archives: AIA

CONSEQUENCES OF AN UNSUCCESSFUL ADMINISTRATIVE PATENT CHALLENGE – JUST GOT A LOT MORE TROUBLESOME

By Tom Engellenner
In a precedential opinion handed down last month by the Court of Appeals for the Federal Circuit, the court overruled its own prior decisions and greatly expanded the scope of estoppel applied against petitioners who are unsuccessful in challenging patents in an inter partes review proceeding (IPR) before the Patent Trial and Appeal Board (PTAB) of the US Patent and Trademark Office.  In California Institute of Technology v. Broadcom Limited, No. 20-2222 (Fed. Cir. Feb. 4, 2022), the court found that “estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all claims and grounds not in the IPR but which reasonably could have been included in the petition.”

At issue in the Caltech case was section 35 U.S.C. § 315(e)(2) of the America Invents Act (AIA) of 2011, which authorized new types of administrative hearings to review the validity of issued patents.  Since 2012, thousands of trials, primarily inter partes review or IPR trials, has been held by PTAB panels of administrative judges.  While many of these trials have resulted in partial or complete victories for the petitioners that challenged patent claims, patent owners have also been successful in defending their patents some of the time.  Section 315(e)(2) of the AIA provides:

The petitioner in an inter partes review of a claim in a patent . . . may not assert either in a civil action . . . or in a proceeding before the International Trade Commission . . . that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

Early on in the course of AIA trials, it was not clear what Congress meant by “any ground that the petitioner raised or reasonably could have raised” in an IPR.  The scope of estoppel applied against a defendant following an unsuccessful IPR challenge in parallel patent infringement cases before Federal district courts was hotly contested.  Some courts adopted a narrow approach to the scope of section 315(e)(2) estoppel, basically only precluding the re-litigation of arguments raised in any earlier IPR.  Other courts gave a broader interpretation to the “reasonably could have raised” wording of section 315 and precluded anything prior art arguments that defendant knew (or should have known) about and chose not to raise by way of an IPR proceeding.

All these views seemed to be put to rest in a 2016 Federal Circuit decision in Shaw Industries Group v. Automated Creel Systems, 817 F.3d 1293.  In the Shaw decision, the Federal Circuit noted that the rules adopted by the USPTO to govern AIA trials gave PTAB panels the authority to not only deny or institute a trial, but also to “partially” institute a trial.  The court then concluded if the PTAB can pick the arguments to be litigated in an IPR proceeding, then any argument not chosen by the PTAB for trial could not have been “reasonably” raised.  Following the Shaw decision, federal district courts seemed to fall into line with a narrow view of section 315(e)(2) estoppel.

But then came a Supreme Court decision in 2018 that essentially threw out the USPTO “partial institution” rules for PTAB trials.  In SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court held that any time an IPR trial is conducted, the PTAB must render judgment on all patent claims contested by the petitioner.  Federal District courts again began to diverge in their interpretation of section 315(e)(2) estoppel in patent infringement trials.

A court decision later in 2018 in the District of Massachusetts was perhaps the bellwether for reconsideration of the Shaw case and its narrow interpretation of estoppel.  In SiOnyx LLC v. Hamamatsu Photonics K.K., 330 F. Supp. 3d 574, 601 (D. Mass. 2018) District Court Judge Saylor found a pre-SAS narrow view decision in his own district “cannot be correct” after the Supreme Court’s SAS decision and applied a broad estoppel instead.   Because partial institutions are improper after the SAS decision, Judge Saylor reasoned, “for the words ‘reasonably could have raised’ to have any meaning at all,” they must include prior art arguments that were not raised in the petition.

Indeed, last month’s decision by the Federal Circuit in the Caltech case has come to the same conclusion.  The judges of the Federal Circuit panel that decided the Caltech case further took the extraordinary step of explicitly overruling the Shaw case.  Typically, a panel decision on the same fact pattern is considered binding on other panels in the same circuit but the Caltech court relied upon an exception to the general rule when a court of last resort (i.e., the U.S. Supreme Court) takes a position that “undercuts the theory or reasoning underlying the prior circuit precedent in such a way that the cases are clearly irreconcilable.”  In such circumstances overruling of a panel precedent is permissible.  Thus, the panel in the Caltech case held:

“Accordingly, we take this opportunity to overrule Shaw and clarify that estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all claims and grounds not in the IPR but which reasonably could have been included in the petition. In a regime in which the Board must institute on all grounds asserted and the petition defines the IPR litigation, this interpretation is the only plausible reading of “reasonably could have been raised” and “in the IPR” that gives any meaning to those words.”

Thus, the Caltech case, (unless reversed by the Federal Circuit en banc or the Supreme Court – both unlikely scenarios) has ushered in a new era of broad estoppel to be applied against unsuccessful IPR petitioners.  It appears that defendants in subsequent patent infringement cases will not be able to present any prior art-based invalidity argument that they knew about – or should have been aware of based on a reasonable search for prior art – following an unsuccessful IPR challenge to the patent(s)-in-suit.

One strategy for escaping this broad estoppel, at least for well-heeled defendants, may be to concurrently present multiple IPR petitions if they choose to go the AIA administrative invalidity trial route.  Flooding the PTAB deck, so to speak, with many different petitions is unlikely to result in multiple proceedings because the PTAB rarely grant two separate trials on the same patent claims (and, in fact, PTAB rules require petitioners to rank parallel petitions in order of preference).  However, if only one trial is instituted, the grounds presented in the other denied petitions may remain available as defenses in parallel patent infringement litigation. 

The Caltech case may have an even bigger impact on another type of AIA trial, namely “post grant review” (PGR) proceedings.  This type of proceeding is available for newly issued patents during the first nine months follow the patent’s issuance.  Unlike IPR proceedings, where challenges to a patent’s validity are limited to patents and printed publications as prior art, petitioners for a PGR trial can raise virtually any ground in the patent statute as a basis for invalidating a patent, e.g., other types of prior art such as prior use or sale of the claimed invention, indefiniteness, or lack of written description – as well as prior patents and publications.  Section 325(e)(2), the section of the AIA that provides for petitioner estoppel following an unsuccessful challenge in a PGR proceeding, contains identical language to section 315(e)(2) that governs IPR proceedings.  Thus, an unsuccessful PGR determination excludes defenses on “any ground that the petitioner raised or reasonably could have raised.”  Since the scope of invalidity arguments that can be made in a PGR petition is broader, based on the Caltech decision reasoning, the unsuccessful petitioner runs of risk on being stripped of all invalidity defense in subsequent patent infringement litigation.

Post script: On February 22, 2022, The Federal Circuit panel that handed down the Caltech decision issued a clarification to its opinion.  In its original opinion, the panel stated that estoppel applies “to all claims and grounds not stated in the IPR but which reasonably could have been included in the petition” (emphasis added). The errata modified the decision by deleting the term “claims.”  The original holding failed to acknowledge that section 315(e) limits estoppel to the challenged claims that were the subject of the IPR final written decision (i.e., not other claims that could have been challenged but were not).

FED. CIR. SLAMS DOOR ON “ADMITTED PRIOR ART” — OR DOES IT?

By Tom Engellenner
A recent decision by the Court of Appeals for the Federal Circuit (Fed. Cir.) in Qualcomm Incorporated v. Apple, Inc., Nos. 2020-1558, 2020-1559 (February 1, 2022) has held that “applicant admitted prior art” (AAPA) does not fall within the category of “patents or printed publications” and, hence, cannot be used by petitioners in inter partes review (IPR) proceedings as a basis for challenging issued U.S. patents.  Although the decision holds that admissions by patentees in their patent applications (or during patent prosecution at the Patent Office) cannot be a primary reference for proving a lack of novelty or obviousness, the decision leaves the door open for challengers to use such admissions to show the “general knowledge of a skilled artisan” during the IPR administrative trial.

The Applicant Admitted Prior Art (“AAPA”) doctrine has been used for many years both during examination of claims at the USPTO and by defendants in patent infringement suits.  Basically, the AAPA doctrine asserts that anything you say is prior art in your application can be used against you as prior art.  

This doctrine has been also used for nearly a decade in the administrative trials established by the America Invents Act (AIA), most notably in IPR proceedings where the AIA statute explicitly limits challenges to issued U.S. patents to those based on “prior art consisting of patents or printed publications.”  Various panels of administrative patent judges (APJs)  – there are over 300 APJs – have been all over the map on the issue of whether so-called “applicant admitted prior art” can be the basis for a novelty or obviousness determination, e.g. can prior art Reference A and AAPA be combined to render a claim obvious?

In the Qualcomm case, Apple challenged a Qualcomm patent on a power supply device that could supply power at two different voltages depending upon network needs.  The prior art asserted by Apple consisted of Figure 1 from the challenged Qualcomm patent itself, labelled “prior art,” and second reference (a prior published patent application “Majcherczak”).  Apple’s argued that it would have been obvious to add a feedback circuit as shown in Majcherczac into the overall circuit shown in Figure 1 and arrive at the claimed invention.  Quialcomm argued that it was impermissible to use Figure 1 of its own patent as prior art. 

The Federal Circuit panel agreed with Qualcomm, stating:

[The AIA] does not permit AAPA in this case to be the basis of a ground in an inter partes review, because it is not contained in a document that is a prior art patent or prior art printed publication. 

The Federal Circuit panel that decided this case also deemed it to be “precedential,” meaning that the three judges assigned this case concluded that the decision “significantly adds to a body of law.”

The Qualcomm decision should not be surprising.  Another Federal Circuit panel had broadly hinted at the limits of using AAPA back in January 2021 in the case of Koninklijke Philips v. Google, 948 F.3d 1330, (Fed. Cir. 2020), in which the judges held that “general knowledge” was not a patent or printed publication and, hence such general knowledge could not form the basis for invalidating a claim in an IPR proceeding.

Moreover, the Director of the U.S. Patent and Trademark Office (USPTO) had also issued a guidance memorandum on August 18, 2020 instructing PTAB judges that statements of the applicant in the challenged patent, e.g., AAPA, do not qualify as “prior art consisting of patents or printed publications,” but fall into the category of evidence the Board may consider for more limited purposes:

[W]hile a variety of evidence is admissible for limited purposes, the focus-“the basis”-of every IPR must be “prior art consisting of patents or printed publications.” 

The memorandum further explains that “[s]tatements in a challenged patent’s specification may be used, however, when they evidence the general knowledge possessed by someone of ordinary skill in the art. That evidence, if used in conjunction with one or more prior art patents or printed publications forming “the basis” of the proceeding under § 311, can support an obviousness argument. 

The Fed. Circuit’s Qualcomm decision echoes this memorandum in noting that:

As a patentee’s admissions about the scope and content of the prior art provide a factual foundation as to what a skilled artisan would have known at the time of invention, it follows that AAPA may be used in similar ways in an inter partes review. . . .  Such uses include, for example, furnishing a motivation to combine, or supplying a missing claim limitation.  Thus, even though evidence such as expert testimony and party admissions are not themselves prior art references, they are permissible evidence in an inter partes review for establishing the background knowledge possessed by a person of ordinary skill in the art. “  [citations omitted]

Accordingly, AAPA is not useless in challenging a patent in an IPR or other AIA proceeding.  Petitioners challenging a patent should not use AAPA as a reference in formulating an obviousness rejection.  Instead, the challenger should find something that is truly a patent or printed publication that discloses the same thing (or something analogous) and then use AAPA to bolster the argument that the skilled artisan would have been motivated to combine the cited references.

NO ARTHREX DO-OVER FOR PETITIONERS DENIED AIA TRIALS

By Tom Engellenner
Petitioners in administrative patent challenges under the America Invents Act (AIA) that are denied a trial are not entitled to an Arthrex do-over according to a recent Federal Circuit panel holding in United Fire Protection v. Engineered Corrosion Solutions, Appeal No. 2020-1272 (Fed. Cir. May 19, 2020).

Late last year we reported on the Federal Circuit’s Arthrex decision that send shock waves through the IP community by holding that the way administrative patent judges (APJs) were appointed to the Patent Trial and Appeal Board (PTAB) pursuant to the AIA was unconstitutional.  Arthrex v. Smith & Nephew, No. 2018-2140 (Fed. Cir., Oct. 31, 2019).

The Arthrex decision devised a cure for this problem going forward by severing a portion of the enabling AIA legislation that prevents the administrative judges from being fired except for cause. The Federal Circuit’s Arthrex  decision essentially made all PTAB judges subject to dismissal by the secretary of Commerce without cause.  The Federal Circuit panel then remanded the Arthrex case back to the PTAB for a rehearing before a different panel of judges that had been cleansed by severing their job security.

The Arthrex decision create a class of litigants who, like Arthrex, had already received a final written decision on a patent challenge but were still in their pre-appeal period. Those parties — if they chose to appeal and raise the “appointments” issue — would also allowed to get their decisions vacated and remanded.

But the Arthrex decision also cut-off another class of litigants whose cases had not yet reached a PTAB final written decision.  Because the problem was “fixed” by taking away the job security of the PTAB judges, the judges would be deemed properly appointed after the Arthrex ruling and their decisions going forward would no longer be unconstitutional.

Following the Arthrex decision, the Federal Circuit expanded the class of litigants entitled to a remand and rehearing of their cases to include patent owners who lost appeals at the PTAB in inter partes reexamination, and ex parte reexamination proceeding during the pre-Arthrex window of time.  (See, Virnetx Inc. v. Cisco Systems, Inc., Appeal No. 2019-1671 (Fed. Cir., May 13, 2020 – inter partes reexamination) and In re JHO Intellectual Property Holdings LLC, Appeal No. 2019-2330 (Fed. Cir. June 18, 2020 – ex parte appeals)).

It remains to be seen whether the Anthrex decision will also apply to patent applicants who lost appeals of examiner rejections at the PTAB during the pre-Arthrex time window.  This issue is being argued in In re: Boloro Global Ltd., Appeal No.1209-2349. Continue reading →

CAN THE FEDERAL CIRCUIT REVIEW PTAB JOINDER PRACTICE AFTER THE SUPREME COURT’S THRYV DECISION?

By Tom Engellenner
In its recent decision in Facebook v. Windy City Innovations, No. 2018-1400 (March 18, 2020), a Federal Circuit panel concluded that the Patent Trial and Appeal Board (PTAB) cannot permit Facebook to join another Inter partes review (IPR) petition to its own earlier-filed IPR petition, on which a trial had already been instituted. The Federal Circuit panel concluded that section 315(c) of the America Invents Act (AIA) does not authorize either: (A) same-party joinder or (B) joinder of new issues. Facebook is currently seeking en banc review by the full Federal Circuit bench and the Supreme Court’s decision last month in Thryv, Inc. v. Click-to-Call Technologies, LP, No. 18-916 (April 20, 2020) may force the appeals court to reconsider this issue.

In the Facebook v. Windy City case the Federal Circuit panel found that the PTAB erred in allowing Facebook to join 2 IPR petitions to its earlier-filed IPR petitions. In June 2015 Windy City filed a complaint accusing Facebook of infringing several of its patents. In June 2016 – exactly one year after being served with Windy City’s complaint – Facebook filed its first IPR petitions against each patent. The PTAB instituted IPR trials on each patent. In January 2017, Facebook filed two additional IPR petitions which, standing on their own, would have been time-barred.

The PTAB panel that allowed Facebook’s secondary IPR petitions and joinder requests had been following the PTAB’s so-called precedential opinion in Proppant Express v. Oren Techs, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019). In Proppant, a “Precedential Opinion Panel” (POP) found that § 315(c) authorized same-party joinder because this section states that the Patent and Trademark Office (PTO) Director “may join as a party to that inter partes review any person who properly files a petition“ and the phrase “any person” in § 315(c) encompasses “every person who properly files a petition that warrants institution,” including oneself.

The Federal Circuit panel in the Facebook v. Windy City case gave short shrift to the notion that the PTAB could anoint its decision with “precedential” status by declaring the decision to be a POP opinion, sanctioned by a special super-panel that included the Patent Office Director or his designate. The Federal Circuit panel found POP decisions were not entitled to Chevron deference or even Skidmore deference (lesser standards of review for official rule making or close-call interpretations by administrative agencies of ambiguous statutory provisions). In fact, the Facebook Federal Circuit panel found POP decisions to be entitled to no deference at all and reviewed the PTAB joinder practice de novo as a matter of law.

Facebook filed for en banc review by the full Federal Circuit bench on April 17, 2020. In its en banc review petition, Facebook argues that the panel’s restrictive interpretation of “any person” was contrary to the legislative history of the AIA and the panel’s restriction on raising new issues was contrary to ordinary joinder principles where “joinder is permissible when the claims are ‘’reasonably related’ and arise out of ‘the same series of transactions or occurrences.’”

Surprisingly, Facebook’s en banc petition also raised a jurisdictional issue: whether the Federal Circuit has the authority to review institutional and joinder issues at all? The Facebook petition cited the Thryv, Inc. v. Click-to-Call Technologies case, which had been argued before the Supreme Court in December, 2019 but not yet decided at the time Facebook’s en banc petition was filed.

Facebook’s en banc petition proved to be quite prescient. Three day later the Supreme Court issued its opinion in the Thryv case, holding that §314(d) of the AIA bars judicial review of PTO decisions to institute inter partes review, and specifically, the PTO’s conclusions as to time-bars on IPR petitions (i.e., applications of §315(b)’s one-year time limit on petitions) were closely related to its decisions on whether to institute IPR trials and therefore such findings are also rendered nonappealable by §314(d).

The Federal Circuit has taken this issue seriously and issued a request to the parties, including Windy City Innovations and the PTO Director, to provide additional briefing to address “the effect, if any, of the Supreme Court’s decision in Thryv on our decision in this case.” The parties now have until June 10, 2020 to submit their additional briefing.

Ultimately, the viability of the Facebook v Windy City decision may hinge on whether the Federal Circuit sees joinder decisions as part and parcel of an IPR trial institution (and, hence, non-reviewable) or actions taken by the PTAB after institution (reviewable). And, of course, any conclusion by the full Federal Circuit bench could the subject of yet further Supreme Court scrutiny.

FEDERAL CIRCUIT SHEDS (SOME) LIGHT ON WHAT CONSITUTES A NEW ARGUMENT AT PTAB ORAL HEARING

By Siew Chong
A recent Federal Circuit decision in The Chamberlain Group, Inc v. One World Technologies, Inc. (Fed. Cir. December 17, 2019), is notable in that it clarifies what a patent owner may permissibly raise for the first time at an oral hearing. Despite acknowledging that Chamberlain argued a claim limitation for the first time at oral argument before the Patent Trial and Appeal Board (PTAB), the Federal Circuit panel still found that the argument acceptable because the new citation merely clarified Chamberlain’s previously articulated position.

Nonetheless, the Federal Circuit panel affirmed a Patent Trial and Appeal Board’s final written decision that found claims 8-15 of U.S. Patent No. 7,196,611 (the ’611 patent) – directed to garage door and gate operator systems – unpatentable as anticipated by U.S. Patent No. 4,638,422 (Schindler). The challenged claims were directed to methods of “teaching” barrier movement systems, e.g., garage door systems, to set various limits for operating the systems. One World Technologies, Inc. successfully petitioned for the inter partes review of claims 8-15 in the ’611 patent for being anticipated by Schindler, and claims 23 and 25 for being obvious over the combination of Schindler and “Liftmaster,” an owner’s manual for a door operator system. One World Technologies asserted that Schindler disclosed a method that sets the upper and lower limits for door positions, and thus anticipates the challenged claims. Chamberlain disagreed, and stated in its patent owner’s response that contrary to Schindler, which taught programming a “single” activity at a time, the ’611 patent was directed to a system that required identifying and guiding “multiple activities.”

At the oral hearing, Chamberlain argued for the first time that the claim limitation for the final step of the learning mode, “responsive to the first and second identifying step,” required identifying multiple activities before transmitting any guidance responsive to the identifying step. That limitation, according to Chamberlain, was not anticipated by Schindler, which disclosed transmitting a guidance signal after identifying a single activity. In its final written decision, the Board found that Chamberlain waived this argument because it was raised for the first time at the oral hearing. The Board, however, went on to address the merits of the argument and ultimately found it unpersuasive.

In its appeal, Chamberlain asserted that the Board’s finding of waiver was erroneous because Chamberlain’s argument was responsive to new arguments made in One World’s petitioner reply, and the argument was merely a clarification of its position, which had been consistent throughout the IPR. The Federal Circuit panel agreed with Chamberlain, explaining Federal Circuit case law allows parties to “elaborate” their arguments on previously raised issues.   The panel found that Chamberlain did not raise new issues or evidence, but instead tracked its previous argument and “merely pointed to different portions of the claim language” to clarify its previously stated position in response to One World’s reply. Continue reading →

2019 PTAB Year In Review Part IV: THE PRECEDENTIAL OPINION PANEL (POP)

The Precedential Opinion Panel (POP), formed in September 2018, began rendering opinions in 2019. The POP is intended to provide two main functions: rehear matters in pending trials and appeals of exceptional importance; and assist the Director in determining whether a previously issued decision should be designated as precedential or informative. Its decisions are binding authority on the PTAB. In 2019, the POP issued 3 decisions, designated 8 decisions as precedential, and designated another 13 decisions informative. The three POP decisions are summarized below.

In Proppant Express Investments LLC v. Oren Technologies LLC, IPR2018-00914 (March 2019; Paper 38, precedential), the POP addressed discretionary joinder under §315(c). The POP held that (a) a petitioner may be joined to a proceeding in which it is already a named party, and (b) new issues may be added to an existing proceeding, irrespective of whether the petitioner is already a named party. The POP also advised that the one-year time bar under 35 USC §315(b) is one of several factors to consider when exercising its discretion.

In GoPro Inc. v. 360Heroes Inc., IPR2018-01754 (August 2019; Paper 38, precedential), the POP addressed the one-year time bar under § 315(b). It concluded that § 315(b)’s language, “served with a complaint alleging infringement” is plain and unambiguous. Thus, the service of a pleading alleging patent infringement triggers the one-year time period for filing an IPR petition under 35 U.S.C. § 315(b), regardless of whether the serving party lacked standing to sue or the pleading was otherwise deficient.

Notably, six days after the POP issued the GoPro decision, it also designated as precedential the decision in Cisco Systems, Inc. v. Chrimar Systems, Inc. IPR2018-01511 (PTAB Jan. 2019; Paper 11, designated precedential August 2019).. In that case, the PTAB held that that § 315(a)(1) bars institution of an inter partes review of a patent in which petitioner voluntarily dismisses its earlier civil action challenging the validity of that patent prior to filing the petition.  Continue reading →