Tag Archives: FederalCircuit

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.

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 →

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 →

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.