On October 18, 2022, the United States Patent and Trademark Office (USPTO) posted two notices on Regulations.gov seeking public input on the requirements to practice before the USPTO and Patent Trial and Appeal Board (PTAB). The goal is to expand admission criteria so “more Americans, including those from traditionally under-represented and under-resourced communities, can participate in Office practice.”[1]

The first notice, titled “Expanding Opportunities To Appear Before the Patent Trial and Appeal Board,”[2] requests public comments on four topics.

Request 1: Expanding Opportunities To Practice Before the PTAB by Allowing Non-Registered Practitioners To Be Admitted To Practice Before the PTAB. Currently, non-registered practitioners must be admitted pro hac vice in each AIA proceeding, such as Inter Partes Review (IPR) and Post Grant Review (PGR). The USPTO is now considering other procedures and standards for non-registered attorneys. The Notice suggests a fitness-to-practice standard which would only require a familiarity with the rules of the PTAB and no prior disciplinary actions.

Request 2: Expanding Opportunities for Non-Registered Practitioners To Appear as the Lead Counsel. As of today, non-registered practitioners may only serve as back-up counsel at the PTAB. However, the USPTO is requesting comments on whether non-registered attorneys who are admitted to practice before the PTAB may serve as lead counsel. In addition, the USPTO is considering the level of experience needed for a non-registered lead counsel.

Request 3: Other Considerations Regarding Non-Registered Practitioners. The USPTO is requesting comments about whether non-registered practitioners must be accompanied by registered practitioners as their lead or backup counsel.

Request 4: Training and Development Programs and Potential Changes to LEAP. The Legal Experience and Advancement Program (LEAP) provides training to less experienced advocators before the PTAB. The USPTO may provide additional development opportunities to encourage lawyers to practice at the PTAB.

The second notice titled “Expanding Admission Criteria for Registration To Practice in Patent Cases” requests public comments on five topics. [3]

Request 1: Require the USPTO To Periodically Review Applicant Degrees and Add Commonly Accepted Category B Degrees to Category A on a Predetermined Timeframe. The USPTO is seeking comments on how often it should review which degrees demonstrate the requisite scientific and technical qualifications. The USPTO will likely include more degrees into Category A with each review increasing the number of people eligible for the patent bar exam.

Request 2: Modify the Accreditation Requirement for Computer Science Degrees Under Category A To Accept Bachelor of Science Computer Science Degrees. The USPTO is considering whether to accept Bachelor of Science degrees in computer science without considering the ABET accreditation status of the program.

Request 3: Possible Creation of a Separate Design Patent Practitioner Bar. This additional exam would not impact those already registered.

Request 4: Clarifying Instructions in the GRB for Limited Recognition Applicants. The process for limited recognition would not change.

Request 5 General Request for Additional Suggestions on Updating the Scientific and Technical Requirements for Admission To Practice in Patent Matters.

For those interested in commenting, the USPTO is accepting comments until January 17, 2023.

[1]Expanding Opportunities To Appear Before the Patent Trial and Appeal Board, 87 FR 63047.

[2] Id.

[3] Expanding Admission Criteria for Registration To Practice in Patent Cases Before the United States Patent and Trademark Office, 87 FR 63044.

Last month, in OpenSky Industries v. VLSI Technology LLC, IPR2021-01064 (Oct. 4, 2022), the Director of the Patent Trial and Appeal Board (PTAB) issued a precedential decision regarding abuse of process.

The decision from the Director held that Petitioner OpenSky had abused the IPR process by (1) filing an IPR in an attempt to extract payment from both Patent Owner VLSI and joined Petitioner Intel, and (2) offering to undermine the proceeding in exchange for a monetary payment from VLSI.

The Director has the authority to impose sanctions against a party for misconduct. 35 U.S.C. § 316(a); 37 C.F.R. § 42.12(a).  The determination of whether sanctions are appropriate “is a highly fact-specific question and the relevant considerations will vary from case to case.”

In this instance, the Director analyzed the totality of OpenSky’s conduct to find that it “evince[d] a singular focus on using an AIA proceeding to extort money, from any party willing to pay, and at the expense of the adversarial nature of AIA proceedings.”  Specifically, the Director listed six factors supporting its conclusion. Those factors were: (1)OpenSky’s interest in the proceeding, (2) the recent trial verdict against Intel awarding VLSI significant damages, (3) the proximity of OpenSky’s formation to jury award, (4) OpenSky’s attempt to seek compensation from both parties, (5) Opensky’s failure to meaningfully pursue merits, and (6) OpenSky’s filing of a copycat petition.

OpenSky was a non-practicing entity that was unable to point to any potential threat of being sued for patent infringement of the patent-at-issue. While there is not a standing requirement for a Petition in an IPR proceeding, the Director emphasized that questions regarding the Petitioner’s motivation arise when the Petitioner is not under a threat of being sued and is a non-practicing entity.  The Director was ultimately unconvinced (given OpenSky’s conduct) that it had filed its petitions in order to (as it claimed) maintain the integrity of the patent system.

OpenSky was formed after a recent trial verdict against Intel in a U.S. district court. The verdict involved two patents asserted by VLSI, each of which was challenged by IPR petitions filed by OpenSky (including the present petition). Further, OpenSky had no other known business activity other than filing its two petitions against VLSI.

After filing its petition, OpenSky undertook negotiations that sharply differed from “conventional settlement negotiations that take place in an adversarial proceeding.” OpenSky sought payment from both VLSI and Intel. More troubling, though, was that OpenSky, through its counsel, was willing to offer its advocacy to either side depending on who was willing to pay. The Director was particularly troubled by OpenSky counsel’s proposal to VLSI to intentionally undermine the proceeding, stating that OpenSky “violate[d] the duty of good faith and candor to the Board.”

Further, once Intel and VLSI refused OpenSky’s settlement offers, OpenSky further sought payment from Intel by claiming to lack the funds to further pursue the matter. The Director concluded, “OpenSky’s behavior and complaints about budgeting establish that it did not intend to pursue the patentability merits but instead intended to leverage the IPR’s existence only to extract payout from one side or the other.”

Additionally, OpenSky failed to actively pursue the merits of its petition. For example, OpenSky filed a reply brief that Intel had drafted and relied on Intel’s deposition outline. Moreover, OpenSky did not request oral argument and did not meaningful participate in the oral hearing.

Lastly, OpenSky’s petition directly copied an earlier petition filed by Intel against VLSI that was denied institution under the Fintiv factors. The Director emphasized that while filing a “copycat” petition is not always improper, under certain circumstances it can indicate an abuse of process. In this instance, OpenSky (in addition to copying Intel’s petitions) filed a copy of Intel’s expert declaration without notifying the expert or seeking to have the expert to testify.

Thus, the Director concluded that OpenSky sought to abuse the IPR process in order to extract payment. As part of the sanctions imposed by the Director, OpenSky is precluded from actively participating in the IPR. Further, OpenSky must show cause as to why it should not be ordered to pay compensatory damages to VLSI. Intel was temporarily elevated to the active party in the IPR. Additionally, the Board was instructed to issue an order within two weeks determining  whether the petition, based only on the record before the Board prior to institution, presents a compelling, meritorious challenge.

On October 4, 2022, the United States Patent and Trademark Office (USPTO) announced that it would be extending the Motion to Amend (MTA) Pilot Program at the Patent Trial and Appeal Board (PTAB) for a second time—now set to run through September 16, 2024.[1]

The MTA Pilot Program was initiated on March 15, 2019, following a 5-month period during which the USPTO sought written public comments on a proposed amendment process in AIA trials. The proposed amendment process would involve preliminary guidance from the PTAB on the merits of a MTA and provide an opportunity for a patent owner to file a revised MTA.[2]

The Pilot Program provides two options not previously available: (1) a patent owner may choose to receive preliminary guidance from the Board on a MTA; and (2) a patent owner may choose to file a revised MTA after receiving petitioner’s opposition to the original MTA and/or after receiving the Board’s preliminary guidance (if requested). See id.

Under option (1), the preliminary guidance from the Board typically will be in the form of a short paper (or oral guidance provided in a conference call) that provides preliminary, non-binding guidance from the Board to the parties about the MTA. The focus of the preliminary guidance will be the limitations added in the patent owner’s MTA—notably, it will not address the patentability of the originally challenged claims. See id.

Under option (2), a revised MTA includes one or more new proposed substitute claims in place of previously presented substitute claims. A revised MTA is required to provide amendments, arguments, and/or evidence in a manner that is responsive to the issues raised in the preliminary guidance and/or petitioner’s opposition to the MTA. Additionally, a revised MTA may also include substitute claims, arguments, or evidence previously presented in the original MTA—notably, it may not incorporate any material by reference from the original MTA. See id.

To note, the MTA Pilot Program is optional. If the patent owner so wishes, they are able to pursue a MTA in effectively the same way as the unaltered, pre-Pilot Program process—i.e., if a patent owner does not elect to receive preliminary guidance or to file a revised MTA, the AIA practice is essentially unchanged from the practice prior to the implementation of the MTA Pilot Program. The only slight difference is that the due dates for certain later-filed papers will be extended slightly compared to the prior rules. See id.

The USPTO has published the results of the MTA Pilot Program through March 31, 2022. A few highlights are shown below:[3]

Graph V above depicts the final outcomes of 434 pre-pilot and pilot MTAs that the Board substantively decided. Graph VI above depicts the final outcomes of the pilot MTAs that the Board decided, and reveals an uptick in the percentage granted.

Graph VII above further depicts the uptick in grant rate (calculation includes both granted and granted-in-part).

Graph XIII above compares a patent owner’s next filing based on whether the pilot MTA requested preliminary guidance. As expected, a patent owner is much more likely to file a revised MTA after receiving preliminary guidance compared to not receiving preliminary guidance.

In sum, the results of the study indicate an increased filing of MTAs and revised MTAs following preliminary guidance, as well as increased grant of MTAs during the MTA Pilot Program period.

The USPTO is further considering making the MTA Pilot Program permanent through notice-and-comment rulemaking, subject to stakeholder feedback and suggestions on the program and on amendment practice generally. Given the previous extensions of the program, it is likely that the USPTO will adopt a more permanent form of the MTA Pilot Program.

[1] See Notice Regarding Extension of the Patent Trial and Appeal Board Motion to Amend Pilot Program, 87 FR 60134 (Oct. 4, 2022).

[2] See Request for Comments on MTA Practice and Procedures in Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board, 83 FR 54319 (Oct. 29, 2018); see also Notice Regarding a New Pilot Program Concerning Motion To Amend Practice and Procedures in Trial Proceedings Under the America Invents Act Before the Patent Trial and Appeal Board, 84 FR 9497 (Mar. 15, 2019).

[3] See Report on Motion to Amend Study (updated Mar. 2022). https://www.uspto.gov/patents/ptab/motions-amend-study

Since its inception, the PTAB has gained a negative reputation among patent owners, even being referred to as “patent death squads.”[1] However, in the past year the Federal Circuit has provided a glimmer of hope for patent owners through the expansion of inter partes review (IPR) estoppel. Because of Cal. Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976 (U.S. Fed. Cir. 2022) and the more recent case Click-to-Call Techs. LP v. Ingenio, Inc., 45 F.4th 1363 (Fed. Cir. 2022), a patent which survives an initial IPR petition now has greater protection in later validity challenges.

Generally, section 35 U.S.C. § 315(e)(2) estops parties from relitigating invalidity arguments in civil proceedings which were previously raised during an IPR. In recent years, the scope of 35 U.S.C. § 315(e)(2) was in flux after Shaw Indus. Grp. v. Automated Creel Sys., 817 F.3d 1293 (Fed. Cir. 2016). The Shaw court emphasized that § 315(e) applies to grounds “during that inter partes review.” Id. at 1300; 35 U.S.C.S. § 315(e). A first portion of district courts held estoppel applies to arguments that could have been raised in the petition.[2] While other district courts, in comparison, applied IPR estoppel only to arguments that could have been raised during the actual IPR proceeding.[3]

Earlier this year, the Federal Circuit clarified the scope of IPR estoppel in Cal. Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976 (U.S. Fed. Cir. 2022). Before beginning litigation, Apple filed multiple IPR petitions challenging the validity of claims related to data encoding. Id. at 982. The PTAB held Apple failed to show the claims were unpatentable as obvious. Id. at 983. Afterward, Apple asserted, in district court, a new obvious validity challenge using prior art not previously asserted during the IPR proceedings. Id.  Ultimately, the district court held the defendants were estopped under 35 U.S.C § 315(e)(2) as they could have raised the claims in the IPR petitions. Id.

While reviewing the case, the Federal Circuit took the opportunity to overrule Shaw and clear up the dispute in the lower courts. Cal. Inst. of Tech., 25 F.4th 976, 991 (U.S. Fed. Cir. 2022). The Federal Circuit held “estoppel applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition.” Id. Since it was undisputed that the defendants were aware of all prior art of the time of filing the IPR petition, the Federal Circuit affirmed the district court. Id.

As mentioned above, the Federal Circuit continued this trend in Click-to-Call Techs. LP v. Ingenio, Inc., 45 F.4th 1363 (Fed. Cir. 2022). Here, the PTAB Board partially instituted an IPR petition in 2013 for patent challenger Ingenio. See id. at 1366. However, after partial review was granted, the Supreme Court held the PTAB must address every patent challenge in an IPR petition. See SAS Inst., Inc. v. Iancu, 138 S. Ct. 1348, 1354 (2018). As such, Ingenio had an opportunity to seek remand at the PTAB, but instead proceeded in district court. Click-to-Call Techs. LP v. Ingenio, Inc., 45 F.4th 1363, 1365 (Fed. Cir. 2022). The Federal Circuit held Ingenio was estopped by the partial institution because they did not seek remand at the PTAB. See id. at 1366.

The expansion of IPR estoppel is potentially a win for patent holders. If the claims can survive the first IPR petition, the patent holder is in a much greater negotiating position. Before any future challenges, the challenging party must first prove they could not have reasonably raised the argument during the IPR. Though the trend of expanding IPR estoppel may be halted in the next few months as Apple has since filed a writ of certiorari seeking to overturn the Cal. Inst. of Tech decision.

[1]Peter Pitts, Patent Death Squads’ vs. Innovation, WALL ST. J. (June 10, 2015, 7:23 PM), http://www.wsj.com/articles/patent-death-squads-vs-innovation-1433978591.

[2]See, e.g., Biscotti Inc. v. Microsoft Corp., No. 213CV01015JRGRSP, 2017 WL 2526231, at *7 (E.D. Tex. May 11, 2017).

[3]See, e.g., Verinata Health, Inc. v. Ariosa Diagnostics, Inc., Case No. 12-cv-5501, 2017 WL 235048, at *3 (N.D. Cal. Jan 19, 2017).

In Polaris Innovations Ltd. v. Brent, No. 2019-1483, 2022 WL 4241665 (Fed. Cir. Sept. 15, 2022), the Federal Circuit faced an appeal that had bounced back and forth between the Court and Patent Trial and Appeal Board (“the Board”) several times while it was caught in the administrative ambiguity resulting from the Arthrex decision. Although the Court made several substantive decisions about the patents at issue in the two inter partes review (“IPR”) proceedings, this article will focus on the interaction of settlement, attempted termination, and appeal resulting from the unusual procedural posture of the case.

The timing of the IPR decisions underlying the Federal Circuit appeal created an unusual situation. NVIDIA challenged two patents owned by Polaris Innovations Limited, U.S. Patent Nos. 6,532,505 and 7,405,993, in two IPR proceedings. Polaris appealed to the Federal Circuit after the Patent Trial and Appeal Board determined that all challenged claims were unpatentable. During the appeal, NVIDIA and Polaris settled. As a result of this, the Patent Office intervened to defend the Board’s decision. In this first round of appeals to the Federal Circuit, the Court vacated the decision and remanded in light of Arthrex, Inc. v. Smith & Nephew, Inc., 941 F.3d 1320 (Fed. Cir. 2019), which raised Appointments Clause issues affecting IPRs generally. On remand, the IPRs were administratively suspended pending Supreme Court review of the Arthrex decision. When the Supreme Court vacated the Arthrex decision, the Board’s decisions in the IPRs were reinstated.

After the parties settled, Polaris had sought to terminate the IPRs. Now that the IPR decisions were reinstated, Polaris asked the Board to grant Polaris’ still-pending motion to terminate the IPRs. The Board determined that the Final Decisions in each IPR were no longer vacated so no further action by the Board was necessary, and therefore termination was inappropriate. Instead, Polaris could request review by the Director. The Director denied rehearing. Polaris appealed, asking the Federal Circuit to vacate the Board’s final decisions and remand for termination of the IPRs. The Court disagreed.

The Federal Circuit agreed with the Board’s decision that the motions to terminate were untimely. The Board addressed settlement under 35 U.S.C. 317(a):

An inter partes review instituted under this chapter shall be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. If the inter partes review is terminated with respect to a petitioner under this section, no estoppel under section 315(e) shall attach to the petitioner, or to the real party in interest or privy of the petitioner, on the basis of that petitioner’s institution of that inter partes review. If no petitioner remains in the inter partes review, the Office may terminate the review or proceed to a final written decision under section 318(a).

Here, settlement and the motions to terminate occurred after a final written decision of the Board.

The Court found that Polaris was incorrect on a few points. First, regardless of the timing, the Board was not obligated to terminate the proceeding. Under certain conditions, the mandatory termination is with respect to “any petitioner,” not the proceeding itself. The statute permits the Board to proceed to a final written decision, even if no petitioner remains in the proceeding.

Second, the Court found the Board correctly identified Polaris’ motion to terminate as untimely. The final written decisions of the IPRs issued more than a year earlier. The decisions were vacated for a period of time while the Supreme Court considered Arthrex, but afterward, the decisions were no longer vacated and were reinstated. When the Board considered the motion to terminate, no new final written decision by the Board was needed. Accordingly, termination of an already completed IPR was not appropriate.

The Federal Circuit also rejected Polaris’ other arguments that the Board’s decision was arbitrary. For example, one such argument was the arbitrariness of the extended time it took the Board to act on the motions to terminate. The Court did not view this as the type of arbitrary decision contemplated by the Administrative Procedure Act.

As the Federal Circuit succinctly summarized “the Board had already decided the merits of the cases in final written decisions that were not vacated at the time the Board made its decision denying Polaris’s motions to terminate. This determination was not arbitrary.” Polaris Innovations Ltd. v. Brent, No. 2019-1483, 2022 WL 4241665, at *7 (Fed. Cir. Sept. 15, 2022).

Recently, the Patent Trial and Appeal Board (PTAB) announced a new interim procedure for decision circulation and internal review. This interim procedure is aimed at promoting feedback, eliminating inconsistencies, and increasing transparency during the decision pre-issuance process. The push for increased transparency comes as a result of last year’s Supreme Court decision in United States v. Arthrex, Inc. In response to the Arthrex decision, the USPTO emphasizes that “the interim process makes clear that the Director is not involved, pre-issuance, in directing or otherwise influencing panel decisions, and the PTAB panel has final authority and responsibility for the content of a decision.”

For its decision circulation and internal review procedures, the PTAB now utilizes a body of judges called the Circulation Judge Pool (CJP). The CJP is modeled after the Federal Circuit’s former Senior Technological Assistant Office and the Federal Circuit’s 10-day circulation process for precedential decisions. The CJP is made up of at least eight non-management PTAB judges intended to be representative of the technical and legal experience of the body of PTAB judges as a whole. Previously, before adopting the new interim process, the Board utilized of one of two internal review procedures: (1) peer review of AIA decisions prior to issuance and (2) PTAB management review of decisions addressing USPTO policy prior to issuance.

Under the new CJP model, before the PTAB issues a decision, a draft decision is circulated to the CJP and at least two CJP judges are required to review the draft decision. The type of decisions reviewed by the CJP include all AIA institution decisions; AIA final written decisions; AIA decisions on rehearing; decisions on remand from the Federal Circuit; inter partes reexamination appeal decisions; and certain categories of ex parte appeal, ex parte reexamination appeal, and reissue appeal decisions as designated by PTAB management.

The role of the CJP is to inform the panel of any inconsistencies with relevant authority, including existing case law, statutes, Director-written guidance, or USPTO policy. The CJP also provides edits and suggestions to improve readability and stylistic consistency. After the CJP reviews the draft, it is within the panel’s discretion to decide whether to incorporate the CJP’s feedback. Under this new model the Director does not participate in the review process prior to issuance of the decision, whereas previously it was required that drafts be review by Board Management.

The USPTO intends for the interim process to promote open decision making by emphasizing that the panel is not required to adopt the CJP’s suggestions and by making it so that members of Board Management do not provide feedback on decisions unless a member of the panel requests such.

Further details about the Board’s interim procedure can be found here.

In Everstar Merch. Co. v. Willis Elec. Co., No. 2021-1882, 2022 WL 1089909 (Fed. Cir. Apr. 12, 2022), the Federal Circuit provided guidance to distinguish between raising a new argument and elaborating on previously raised arguments in proceedings before the Patent Trial and Appeal Board (“Board”). Here it was decided that a minor point in a petition, fleshed out much more during the remaining of the proceeding, was sufficiently raised such that it must be considered by the Board in its final decision.

Everstar Merchandise Co. (“Everstar”) sought Post Grant Review of U.S. Patent No. 10,222,037, owned by Willis Electric Company, Ltd. (“Willis”). Among its arguments, Everstar asserted that two prior art references, Kumada and Debladis ’120, rendered the patent obvious. The parties agreed that the prior art references disclosed all elements of the claims, but disagreed about the motivation to combine the references and whether the prior art references were analogous art. The Board was unwilling to consider Everstar’s arguments that the desire to reduce costs would motivate one to combine the prior art references because the Board found that those arguments were not part of Everstar’s petition, but only raised in its later briefings.

On appeal, the Federal Circuit noted that a petitioner may not assert an entirely new rationale in a post-institution reply, but may elaborate on their arguments on issues previously raised. The court found the Board abused its discretion by declining to consider Everstar’s argument that cost, in addition to increased strength and durability, provided sufficient motivation to combine. Several reasons supported the court’s holding. The patent stated among its benefits were increased wire strength and reduced material costs. Related to this, Everstar noted in its petition that Kumada teaches the inverse relationship between cost and the amount of material used. Willis addressed this relationship in its preliminary response and associated expert testimony. Furthermore, the Board discussed that the prior art references showed a desire to reduce manufacturing costs.

The Federal Circuit further noted that 37 C.F.R. § 42.23(b) allows a petitioner to “respond to arguments raised in the corresponding opposition, patent owner preliminary response, patent owner response, or decision on institution.” A legitimate reply to arguments in these situations is not a new argument. Willis raised cost reduction in its preliminary response and post-institution response. Even if there were ambiguity about whether Everstar’s arguments were present in the petition, Everstar was permitted to respond the arguments presented by Willis and in the Board’s institution decision. Therefore, the Board erred by not fully considering the arguments raised.

Background

In 2018, Hunting Titan, Inc. filed a petition for inter partes review (“IPR”) of U.S. Patent No. 9,581,422 (“the ’422 patent”), which is owned by DynaEnergetics Europe GmbH, a manufacturer of industrial explosives. In pertinent part, Hunting Titan asserted in its petition that claims 1-15 of the ’422 patent were unpatentable because they were anticipated by U.S. Patent No. 9,689,223 to Schacherer et al. (“Schacherer”). After the Patent Trial and Appeal Board (“the Board”) instituted the IPR, DynaEnergetics moved to amend the ’422 patent to add proposed substitute claims 16-22. In opposing DynaEnergetics’s motion to amend, Hunting Titan advanced grounds based only on obviousness, not anticipation. The Board found for Hunting Titan and determined that all of the original claims of the ’422 patent, as well as the proposed substitute claims, were unpatentable as anticipated by Schacherer.[1]

DynaEnergetics requested that the Precedential Opinion Panel (“POP”) rehear and review the Board’s denial of the motion to amend. In particular, DynaEnergetics asked the POP to review the circumstances under which the Board may raise a ground of unpatentability against substitute proposed claims in a motion to amend, when said ground was insufficiently developed or not advanced by the petitioner. In its review, the POP concluded that “only under rare circumstances should the need arise for the Board to advance grounds of unpatentability to address proposed substitute claims that the petitioner did not advance, or insufficiently developed, in its opposition to the motion.” The POP vacated the Board’s denial of DynaEnergetics’s motion to amend, found that Hunting Titan had not shown by a preponderance of the evidence that substitute claims 16-22 were unpatentable, and granted the motion to amend the ’422 patent.

Both parties appealed to the Court of Appeals for the Federal Circuit (“the CAFC”). Hunting Titan appealed the POP’s decision to vacate the Board’s decision denying the motion to amend. DynaEnergetics cross-appealed the Board’s finding that the original claims were anticipated by Schacherer.

CAFC Decision

After affirming the Board’s finding of anticipation with respect to original claims 1-15, the CAFC turned to the larger issue of the POP’s decision to grant DynaEnergetics’s motion to amend.

Hunting Titan contended that the Board had a duty to determine, sua sponte (essentially, on its own initiative), whether the substitute claims were patentable based on the whole record, and that it was an error for the POP to vacate the Board’s decision. The CAFC acknowledged that the Board has a duty to sua sponte raise patentability challenges to proposed substitute claim, but the court stopped short of saying whether the Board must sua sponte raise patentability challenges for amended claims. The CAFC also found it “problematic” that the POP stated the Board should raise patentability issues sua sponte in only “rare” circumstances, and it emphasized the “basic purpose of IPR proceedings: to reexamine an earlier agency decision and ensure ‘that patent monopolies are kept within their legitimate scope.’”

The CAFC agreed with the POP that the Board should advance grounds of unpatentability that a petitioner did not advance or insufficiently developed if the evidence is “readily identifiable.” It noted that the POP highlighted “readily identifiable evidence” as being a situation “where the record readily and persuasively establishes that substitute claims are unpatentable for the same reasons that corresponding original claims are unpatentable.” It seemed to indicate that anticipation based on Schacherer would fall into this “readily identifiable evidence” category. However, on appeal, Hunting Titan did not challenge the POP’s decision to consider only evidence of unpatentability advanced by Hunting Titan in its opposition to DynaEnergetics’s motion to amend. Because Hunting Titan did not challenge that decision, the CAFC ruled the challenge forfeit.

Therefore, the CAFC affirmed the POP’s decision granting the motion to amend, but it emphasized that the affirmance was to be narrowly construed. It further noted that it was not determining the patentability of the proposed substitute claims, nor was it deciding whether the POP abused its discretion in determining anticipation by Schacherer was not readily identifiable. Additionally, the CAFC clarified that it was not making a determination as to whether the Board has an obligation to, sue sponte, determine patentability of proposed substitute claims.

Conclusion

With the issue of sua sponte rejections of substitute claims still an open question, both petitioners and patent owners should take care whenever the issue arises before the Board. Petitioners should be scrupulous about what unpatentability grounds they wish to bring in their opposition motions, while patent owners should be wary that the Board may still sua sponte reject their proposed substitute claims in light of readily identifiable evidence.

[1] IPR2018-00600.

On the first of February, in Qualcomm Inc. v. Apple Inc., the Court of Appeals for the Federal Circuit (“the CAFC”) vacated and remanded the Patent Trial and Appeal Board (“the Board”) on two inter partes review (“IPR”) decisions that held claims 1, 2, 5-9, 12, 13, and 16-22 of Qualcomm’s U.S. Patent No. 8,063,674 (“the ’674 Patent”) unpatentable as obvious.[1]

Background

Qualcomm’s ’674 Patent describes integrated circuit devices containing power detection circuits that can be used for systems with multiple supply voltages. For devices that operate multiple networks at different supply voltages (some of which may be quite high), the devices can save power by turning the power off for certain networks when they are not in use. For example, a device’s core logic network may require a low voltage, while a device’s input/output network may require a high voltage. The ’674 Patent in particular describes “level shifters” that communicate between input/output devices and core logic devices, and it identifies various problems that the level shifters may engender. Stray currents, for instance, may result in level shifters erroneously triggering input/output devices for transmission.

The “Background” section of the ’674 Patent describes a prior art method to solve the stray current problem through the use of power-on and power-off detectors and a power-on/power-off control (POC) signal. However, as expected, the ’674 Patent then goes on to diagnose various problems with this prior art solution and claim its own, ostensibly superior solution.

In 2018, Apple filed two petitions for inter partes review (IPR), each based on the same grounds but challenging different claims in the ’674 Patent. For ground one, Apple challenged the claims as unpatentable as obvious in view of two U.S. patents (Steinacker and Doyle) and one printed publication (Park). In a final written decision, the Board found Apple had not shown the claims to be unpatentable with ground one. For ground two, however, Apple relied on the aforementioned “Background” section of the ’674 Patent (the “applicant admitted prior art” or “AAPA”) in view of a U.S. Patent Application Publication 2002/0163364 to to Majcherczak et. al. (“Majcherczak”).

In response to the second ground, Qualcomm conceded that the combination of Majcherczak and the AAPA taught each element of the challenged claims, but Qualcomm contended AAPA cannot be used to challenge patent validity during IPR. The Board disagreed, stating, in pertinent part, that AAPA is included in Section 311 of the patent statute’s definition of “prior art consisting of patents or printed publications” because AAPA is prior art contained in a patent.

Qualcomm appealed.[2]

 

Discussion

Although Qualcomm’s initially argued that AAPA cannot be considered at all in IPRs, it later stepped back its position to contend that AAPA cannot form the basis of a ground in an IPR. Related to this proceeding, the United States Patent and Trademark Office (“USPTO”), issued Director’s guidance agreeing with Qualcomm that AAPA does not fall within “prior art consisting of patents or printed publications,” while still allowing the use of AAPA in IPRs as evidence of the general knowledge of a skilled artisan. The USPTO did not take a position as to whether Apple’s use of AAPA in this case was impermissible, but instead requested the CAFC to remand to the Board to address the question in the first instance.

The main argument on appeal was whether AAPA constitutes “prior art consisting of patents or printed publications” such that it may form “the basis” of a ground in an IPR under Section 311(b) of the Patent Act. The CAFC agreed with Qualcomm, holding that AAPA does not fall within such a definition of “prior art” and cannot form the basis of a ground in an IPR.

In forming its analysis, the CAFC began with the Section 311(b) of the Patent Act, and the above-quoted language regarding what constitutes “the basis” of any “ground” in an IPR, and that the definition excludes any descriptions of prior art contained within the challenged patent. The CAFC noted that the Supreme Court and the CAFC itself have previously interpreted “patents and printed publications” under Section 311(b) as meaning prior art itself (not descriptions contained within a challenged patent). The CAFC referenced multiple cases supporting its proposition, including Return Mail, Inc. v. U.S. Postal Serv., 139 S. Ct. 1853 (2019) and In re Lonardo, 119 F.3d 960 (Fed. Cir. 1997).

The CAFC also referenced Congress’s intentions in enacting the America Invents Act, which created IPRs. Specifically, the CAFC considered Congress’s intentions when it drafted Section 311(b), which codified IPRs and uses identical language to Section 301(a). At the time of the AIA’s enactment, Section 301(a) had been interpreted as meaning “prior art consisting of patents or printed publications.” The CAFC reasoned that because Section 301(a) had been interpreted as such, and because Congress had based 311(b) on 301(a), that therefore Congress intended the same definition for “prior art and printed publications” to apply to Section 311(b).

The CAFC clarified that AAPA is not categorically excluded from an IPR proceeding. For example, admissions in a patent specification may be relied upon to determine whether a patent’s claims would have been obvious. As the CAFC noted in its opinion, “[T]he assessment of a claim’s patentability is inextricably tied to a skilled artisan’s knowledge and skill level.” Furthermore, relying on admissions in a patent specification maintains the “streamlined administrative proceeding” that Congress intended with IPRs because “[h]olding a patentee to descriptions of the prior art made in its specification does not implicate the type of fact-intensive inquiries Congress was seeking to avoid.”

Subsequently, the CAFC remanded to the Board to determine whether Majcherczak forms the basis of Apple’s challenge, or whether the AAPA forms the basis, which would impermissible violate the statutory limit of Section 311.

 

Conclusion

The exclusion of applicant admitted prior art as a basis for an IPR petition may come as a boon to patent owners, who may now be slightly less concerned about what they disclose in the “Background” section of their patent applications. However, applicants should take care that just because AAPA may not form the basis of an IPR petition does not mean it cannot play a pivotal evidentiary role in the proceeding.

[1] As the CAFC notes, the application that led to the ’674 Patent never contained a claim with an effective filing date on or after March 16, 2013 – therefore, the pre-AIA law of obviousness applies to the patent at issue.

[2] Qualcomm also challenged the constitutionality of the Board, but Qualcomm withdrew its request for relief after the Supreme Court’s decision in United States v. Arthrex, Inc., 141 S. Ct. 1970 (2021).

In late December,  in Intel Corp. v. Qualcomm Inc., 2020-1828 (Fed. Cir. Dec. 28, 2021), the Federal Circuit found the PTAB erred by accepting Intel’s stipulation concerning the indefiniteness of a means-plus-function claim term. In this opinion, the Federal Circuit explains that in Inter Partes Review (IPR) proceedings, patentability determinations cannot be circumvented due to a party stipulation. Instead, the Board is required to carry-out patentability determinations unless it is logically impossible to do so.

Background

At issue here is U.S. Patent No. 8,838,949 (the “’949 patent”) owned by Qualcomm. Intel challenged all of the claims of the ’949 patent as unpatentable for obviousness in a series of three IPRs. The Board found that Intel proved claims 10, 11, 13-15, and 18-23 were unpatentable but not claims 1-9, 12, 16, and 17. Intel subsequently appealed this finding.

Claims 16 and 17 are means-plus-function claims governed by 35 U.S.C. § 112(f). During the IPR related to these claims, IPR2018-01335, Intel agreed with the Board’s suggestion in the institution decision that two of the means-plus-function terms in claim 16 (and dependent claim 17) were indefinite for lack of supporting structure. In the Final Written Decision, the Board interpreted Intel’s agreement as meaning it had not met its burden in demonstrating the unpatentability of these claims. The Board did not engage in any further patentability determination with respect to these claims. On appeal, Intel challenged the merits of the Board’s findings.

Federal Circuit Decision

In an opinion written by Judge Taranto, the Federal Circuit held that the Board’s conclusion that Intel did not meet its burden in demonstrating the unpatentability of the claims was erroneous and thus remand was necessary. The Federal Circuit particularly pointed out that the Board erred by not deciding for itself whether the required structure was present in the specification or, in the alternative, whether the absence of the structure precludes resolution of Intel’s prior art challenges.

The Federal Circuit cited to the Supreme Court to support its holding. In SAS Institute, Inc. v. Iancu, 138 S. Ct. 1348 (2018), the Supreme Court construed 35 U.S.C. § 318 as obligating the Board to “issue a final written decision with respect to the patentability of” every claim challenged by the petitioner. The Federal Circuit noted that 35 U.S.C. § 318 does not require the Board reach a determination of patentability if such determination is rendered impossible because of indefiniteness of an essential claim limitation. However, the indefiniteness of a claim does not always preclude the Board from addressing the patentability of these claims. Therefore, indefiniteness of a limitation should only preclude a patentability determination when the indefiniteness makes it logically impossible for the Board to render such a decision. Thus, the Board erred by failing to do so or at least by failing to clearly state in the Final Written Decision that it was impossible to do so.

Judge Taranto points to the overall IPR scheme in support of this holding. In the opinion he explains that the IPR scheme protects the interests of the petitioner, the patentee, and the judicial system by avoiding duplication. Even more, the interests of the public are protected by the IPR scheme as reflected by 35 U.S.C. § 317 which authorizes the Board to answer patentability questions even after a petitioner has withdrawn. According to the Federal Circuit, accepting Intel’s agreement without performing a patentability determination ran contrary to the principles reflected in the IPR scheme that were designed to protect interests beyond that of the petitioner.