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Updating PTAB Strategies post-SAS Institute

Following the SAS Institute decision by the Supreme Court (which we covered in a separate post on the PTAB Law blog), the U.S. Patent and Trademark Office (“PTO”) must now address every challenged claim in a trial if a trial is instituted as to any one claim.  The PTO has further decided that it will address every ground raised where trial is instituted even though SAS does not appear to require as much.

Now that all challenged claims will be involved post-institution, Patent Owners should consider limiting their preliminary response to focusing at most on the independent claims that are challenged. Prior to SAS Institute, there could be strategic value in challenging institution of a dependent claim if that claim were at issue in a related litigation. For example, denial of institution as to even one claim could affect the calculus involving a stay, and could also promise to keep litigation alive following a Patent Trial and Appeal Board (“PTAB” or “the Board”) trial. However, as the PTO must now consider all claims challenged if any one claim results in institution, then saying anything about a dependent claim at the preliminary response stage would only give the Petitioner a preview of the Patent Owner’s eventual arguments and also potentially make those arguments less effective if the Board rejects them at the institution phase. Additionally, there is little reason to argue for dependent claims.  If any claim is instituted, all claims will be instituted; so arguments that affect only a subset of the claims will not affect the Board’s institution decision.

That said, while this is the conventional wisdom so far, in the immediate aftermath of SAS Institute there is at least one reason why addressing some dependent claims could be strategic at the preliminary response stage.  In particular, where the PTO’s discretion under Section 325(d) is a basis for challenging institution, there may be strategic value in arguing for dependent claims.  The PTO can no longer deny institution as to particular challenged claims, but if it decides under Section 325(d) that there is a discretionary basis to deny institution, , then arguably the Board ought to deny institution as to all claims under SAS Institute.

An example of this would be where there is a follow-on IPR petition that addresses additional claims and that comes after previous institution decisions addressing some of those claims. One factor that the Board uses in exercising its discretion to deny institution is if a Petitioner has used a previous institution decision as a roadmap in crafting a follow-on petition. This is thought to be prejudicial to the Patent Owner and improper gamesmanship by the Petitioner.

Accordingly, if a follow-on petition challenges a claim that was previously denied institution (e.g. from a pre-SAS Institute institution decision denying a specific claim), or otherwise seeks to use another IPR proceeding to tactically gain an improper advantage, a Patent Owner may argue that the entire petition should be denied.  That is, because the Board no longer has the power to deny as to a specific claim, and because the Patent Owner would be prejudiced by institution as to a specific claim, then the Board may use its discretion to deny institution of all claims.

Strategies following SAS Institute are still being refined, and it remains to be seen how the Board will implement the PTO’s post-SAS Institute guidance in practice. But Patent Owners and Petitioners alike should consider the interplay between Section 325(d) and SAS Institute as one variable affecting their respective strategies.