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PTAB Issues First PGR Institution Decisions in Months

Post-grant review (PGR) is the least common post-issuance trial proceeding before the Patent Trial and Appeal Board (PTAB). Only 1% of petitions filed for post-issuance trial proceedings since the institution of the America Invents Act have been for PGRs, while 92% and 7% have been for inter partes review (IPR) and covered business method (CBM) proceedings, respectively.[1] For a span of nearly three months this year, the PTAB did not issue a single PGR institution decision.[2] This streak came to an end with the recent issuance of four PGR institution decisions.

The most recent of these institution decisions was a single decision entered in two cases involving the same patent and parties: Merck Sharp & Dohme Corp. v. Wyeth LLC, Nos. PGR2017-00016 and PGR2017-00017. This decision denied institution of a PGR in both cases based on a common dispositive issue—specifically, the PGR ineligibility of Wyeth’s U.S. Patent No. 9,399,060, as Merck Sharp & Dohme failed to establish that this patent issued from an application that, at one point, contained at least one claim with an effective filing date on or after March 16, 2013. See No. PGR2017-00016, Paper 9 at 1 n.1, 5–7.

The recent PGR institution decisions include a decision issued in Crescendo Bioscience, Inc. v. L. Douglas Graham, No. PGR2017-00020. See Paper 8. Crescendo Bioscience and the two Merck Sharp & Dohme cases are part of the recent increase in PGR challenges to pharmaceutical and biological patents.[3] Of the 21 PGR petitions filed to date that implicate a patent from the USPTO Technology Center 1600 for Biotechnology and Organic fields, 11 have been filed in 2017 thus far, compared to seven in 2016, two in 2015, and one in 2014.[4]

In Crescendo Bioscience, the PTAB denied institution of a PGR without entering an adverse judgment because the patent owner, Graham, had filed with the USPTO a statutory disclaimer of the challenged claims after the petition was filed. Graham explained in his Preliminary Response that, as an independent inventor, he disclaimed the challenged claims “to avoid costly litigation,” where two pending continuation applications of the challenged patent were pending. Paper 6 at 1–2 n.1. A patent owner may consider such disclaimers to obviate expending time and resources in a post-grant proceeding if, for example, the patent owner can rely on claims in a continuation application that are less likely to be invalidated than claims in the challenged patent.

Another of the recent PGR institution decisions was issued on October 11, 2017, in Telebrands Corp. v. Tinnus Enterprises, LLC, No. PGR2017-00015. See Paper 16. The parties in this case are prevalent figures in the PGR world, as Telebrands has filed eight PGR petitions against Tinnus, constituting almost 10% of the 81 total PGR petitions filed since the creation of the PTAB.

In this particular PGR, Telebrands challenged Tinnus’s U.S. Patent No. 9,527,612, which is directed to an apparatus for simultaneously filling multiple containers with fluid through a housing and system of hollow tubes, where each container is removably attached to a hollow tube by an elastic fastener such that when the container is filled, it detaches from the hollow tube and is sealed with the fluid inside by the elastic fastener. For example, the apparatus can be used to fill and seal multiple water balloons substantially simultaneously.

Telebrands challenged all four claims of the patent as obvious under 35 U.S.C. § 103 and challenged claim 3 in particular for lack of written description under § 112(a) and for indefiniteness under §112(b). The PTAB denied institution based on the § 103 and § 112(a) grounds. The PGR was instituted, however, because Telebrands demonstrated that it was more likely than not to prevail on its challenge to claim 3 under § 112(b).

The PTAB exercised its discretion under 35 U.S.C. § 325(d) to deny institution of the § 103 grounds because it found that the prior art and arguments asserted by Telebrands were “the same art and arguments … considered by the Examiner during the original prosecution.” Paper 16 at 10. Institution was also denied regarding the § 112(a) grounds, in which Telebrands argued that the written description of the ’612 patent does not mention that the containers “may push against each other” before the filling process and thus does not support the claim 3 limitation: “at least first and second ones of the plurality of containers are disposed sufficiently close to each other such that they press against each other … in a filled state or an unfilled state.” Citing a CCPA opinion from 1967, the PTAB stated that the written description requirement functions like “blaze marks on the trees” to guide one through the woods, and it held that Figure 1 of the ’612 patent and its accompanying description provide sufficient “blaze marks” to guide a person of ordinary skill with reasonable clarity to an embodiment in which the balloons are touching. Of note, this finding was predicated on the “level of skill and the predictability of this art,” as the PTAB acknowledged that it was “dealing with a person having a general knowledge about, and experience with, expandable containers, including, without limitation, balloons, and at least an associate’s degree in mechanical engineering, or the equivalent.” Id. at 18–19.

Institution of the PGR was based on the petition’s showing that the term “filled state” in the following limitation of claim 3 is more likely than not indefinite: “regardless whether the first and second ones of the plurality of containers are in a filled state or an unfilled state.” The PTAB reasoned, in part, that the specification of the ’612 patent teaches that a “filled state” depends, subjectively, on a container reaching a desired size or volume. The specification makes repeated and express use of the word “desired” in this regard, which the PTAB declared “[it] can only characterize as a subjective word.” Id. at 22–23. This preliminary determination regarding the indefiniteness of claim 3 is consistent with the PTAB’s positions with respect to the terms “filled” and “filled state” in PGR2016-00031 and PGR2015-00018, respectively. The PTAB acknowledged that findings in the U.S. District Courts and the Federal Circuit regarding the indefiniteness of claim terms in related patents weigh against its preliminary determination but noted the differences in claims at issue, evidentiary records, and procedural burdens.

Another of the recent PGR institution decisions was also issued on October 11, 2017, but in contrast to Telebrands, the case involves first-time PGR parties: Bayer CropScience LP v. Exosect Limited, No. PGR2017-00018. See Paper 9. This PGR is one of only seven PGRs filed to date that involves a patent from the USPTO Technology Center 1700, which provides for examination of patent applications in the Chemical and Material Engineering fields, and is the only one of these seven to have a filing date or institution decision date in 2017.[5] The patent at issue is Exosect’s U.S. Patent No. 9,380,739, which relates to “[m]ethods and uses of controlling the flowability of a population of seeds and dust drift therefrom by placing individual seeds in contact with particles of a flowability enhancing agent.”

Bayer challenged claims in the ’739 patent as anticipated under § 102, as obvious under § 103, for lack of written description and lack of enablement under § 112(a), and for indefiniteness under § 112(b). Exosect did not file a Preliminary Response. The PTAB instituted the PGR on both of Bayer’s § 112(a) grounds and one of Bayer’s three separate 112(b) grounds.

Aside from timing,[6] why might a party petition to challenge a patent in a PGR rather than the more common IPR proceeding? PGR proceedings can be instituted based on grounds of invalidity under §§ 101, 102, 103, and 112, as well as double patenting.[7] In contrast, an IPR is limited to grounds under §§ 102 and 103 and only on the basis of prior art consisting of patents and printed publications.[8] This distinction can prove meaningful for petitioners such as Telebrands and Bayer CropScience, for example, whose PGR petitions were instituted on § 112 grounds, but denied institution on § 102 and/or § 103 grounds, because these § 112 grounds would not have been permitted in an IPR.

However, while this difference in permitted grounds favors PGRs over IPRs, the different institution standards of these two proceedings act as a counterbalance.  Institution of a PGR requires a petitioner to demonstrate that it is more likely than not that at least one of the challenged claims is unpatentable.[9] For institution of an IPR, on the other hand, a petitioner must demonstrate a reasonable likelihood that he/she would prevail as to at least one of the challenged claims.[10] The USPTO explains that in “[c]omparing the two standards, the ‘reasonable likelihood’ standard is lower than the ‘more likely than not’ standard.”[11] Thus, the § 102 and § 103 grounds that were denied institution in the PGRs discussed above could have potentially met the lower institution standard in an IPR.

In addition to timing, petitioners should evaluate and consider the strength and availability of potential invalidity grounds in developing a strategy for challenging patents in the different post-grant proceedings available before the PTAB.

 

[1] USPTO Trial Statistics through September 2017, available at https://www.uspto.gov/sites/default/files/documents/Trial_Stats_2017-09-30.pdf.

[2] PTAB public search engine, available at https://ptab.uspto.gov/#/public/publicsearch. No PGR institution decision was issued between 7/19/2017 and 10/11/2017.

[3] http://www.ptablaw.com/2017/08/03/ptab-institutes-post-grant-review-pharmaceutical-patent/.

[4] PTAB public search engine, available at https://ptab.uspto.gov/#/public/publicsearch. See also https://www.uspto.gov/patent/contact-patents/patent-technology-centers-management.

[5] Id.

[6] Under 35 U.S.C. § 321, a petition for PGR must be filed no later than 9 months after the patent at issue is granted or reissued. Under 35 U.S.C. § 311, a petition for IPR can only be filed after the later of either: (i) 9 months after the patent at issue is granted or reissued; or (ii) the termination of any PGR of the patent at issue. Generally speaking, it is in a petitioner’s interest to have the patent invalidated sooner rather than later.

[7] 35 U.S.C. § 321; see also USPTO chart of “Major Differences between IPR, PGR, and CBM,” available at https://www.uspto.gov/sites/default/files/ip/boards/bpai/aia_trial_comparison_chart.pptx.

[8] 35 U.S.C. § 311; see also USPTO chart of “Major Differences between IPR, PGR, and CBM,” available at https://www.uspto.gov/sites/default/files/ip/boards/bpai/aia_trial_comparison_chart.pptx.

[9] 35 U.S.C. § 324(a).

[10] 35 U.S.C. § 314(a).

[11] “Message from Chief Judge James Donald Smith, Board of Patent Appeals and Interferences: USPTO Discusses Key Aspects of New Administrative Patent Trials,” available at https://www.uspto.gov/patent/laws-and-regulations/america-invents-act-aia/message-chief-judge-james-donald-smith-board.