Rehearing Roundup – December 2014

In International Business Machines Corporation v. Intellectual Ventures II LLC, IPR2014-00672, Paper 14 (December 23, 2014), the Board denied Pettioner’s request for rehearing of the Board’s decision not to institute IPR.

In Handi Quilter, Inc. v. Bernina International AG, IPR2014-00270, Paper 17 (December 31, 2014), the Board granted petitioner’s request for rehearing of the Board’s decision denying institution of inter partes review.


December 31, 2014

New Petitions (3)

Zhuhai Seine Technology Co., Ltd. filed IPR2015-00508 challenging U.S. Patent No: 8,688,008.

Apotex, Inc. filed  IPR2015-00518 challenging U.S. Patent No: 8,324,283.

Micron Technology, Inc. filed IPR2015-00519 challenging U.S. Patent No. 5,839,108.

Dispositions (3)

In Groupon, Inc. v. Online News Link LLC, IPR2014-01326,   IPR2014-01327,   IPR2014-01328,  (December 31, 2014), the Board terminated the inter partes reviews on the joint motion of the parties.

Pennywise and Ground Foolish

In  Redline Detection, LLC v. Star Envirotech, Inc., [2015-1047] (December 31, 2015) the Federal Circuit affirmed the PTAB’s denial of the Redline’s motion to submit supplemental information (an expert declaration) and the PTAB’s determination that Redline failed to show claims 9 and 10 of U.S. Patent No. 6,526,808 were obvious.

Redline filed its petition for IPR on January 2013, which was instituted on July 1, 2013.  On July 30, 2013, Redline filed a Motion for Supplemental Disclosure of New Exhibits, requesting submission of four pieces of evidence. In August 2013, the PTAB denied Redline’s request to submit supplemental information and expunged the submitted evidence.

37 CFR §42.123(a) states:

Motion to submit supplemental information.  Once a trial has been instituted, a party may file a motion to submit supplemental information in accordance with the following requirements:

   (1) A request for the authorization to file a motion to submit supplemental information is made within one month of the date the trial is instituted.

(2) The supplemental information must be relevant to a claim for which the trial has been instituted.

The PTAB concluded Redline did not establish a sufficient basis for submitting new evidence and its “‘supplemental evidence’ is in essence something more than just supplemental evidence.  On Appeal Redline argued that §42.123(a) stated the only conditions on the admission of supplemental evidence, and that the PTAB had no discretion to reject its Expert declaration.  Before the Federal Circuit Redline explained that its failure to submit the expert was a cost savings strategy, so that the Expert did not waste time on grounds for which trial was not instituted.

The Federal Circuit found that the PTAB’s interpretation of its governing regulations was “not plainly erroneous”:

Its interpretation of § 42.123(a) is consistent with the regulation’s plain language and the USPTO’s intent in promulgating § 42.123. The plain language of § 42.123(a) does not exclude the application of other general governing regulations.

The Federal Circuit said that the guiding principle for the PTAB in making any determination is to “ensure efficient administration of the Office and the ability of the Office to complete IPR proceedings in a timely manner,” and that requiring admission of supplemental information so long as it was timely submitted and relevant to the IPR proceeding would cut against this mandate and alter the intended purpose of IPR proceedings.

Redline pointed to Pacific Market Int’l, LLC v. Ignite USA, LLC, IPR2014-00561, Paper 23 at 3 (P.T.A.B. Dec. 2, 2014)) as a case where the Board accepted an expert declaration as supplemental information.  However, the Federal Circuit reiterated that the timeliness and relevancy requirements of §42.123(a) are additional requirements that must be construed within the overarching context of the PTAB’s regulations governing IPR and general trial proceedings.  The Federal Circuit further noted that “the PTAB has discretion to grant or deny motions as it sees fit.” citing 37 C.F.R. § 42.5(a), (b).

The Federal Circuit further pointed out that in Pacific Market the PTAB cautioned that:

“[a]lthough a party may meet the [37 C.F.R. § 42.123] requirements . . . that does not, itself, guarantee that the motion will be granted.” 3 (emphasis added). This provision does not offer “a routine avenue for bolstering deficiencies in a petition raised by a patent owner in a Preliminary Response.  . . . Petitioner should not expect . . . a ‘wait-and-see’ opportunity to supplement a petition after initial comments or arguments have been laid out by a patent owner.” Id.

The Federal Circuit found that Redline’s characterization of Pacific Market was “inaccurate and misleading”. The PTAB expressly stated 37 C.F.R. § 42.123(a) is not a routine avenue to pursue, nor does the regulation require an automatic acceptance of, supplemental information. The Federal Circuit said “[t]his is the exact opposite of having an obligation to allow the supplementary information.” The Federal Circuit concluded “Redline fails to appreciate the stark difference between the short, supplemental expert report, which the PTAB reasonably permitted in Pacific Market International, and its de novo expert report submitted for the first time. Pacific Market International is inapposite.”

Expert declarations are an important part of a Petition for inter partes review, used about 90% of the time.  Waiting to submit an expert declaration until after institution to save costs is not an effective strategy.

Federal Circuit Approves Placing Burden on Patent Owner to Show Patentability Over Prior Art Cited in Original Prosecution History

In Prolitec, Inc. v. Scentair Technologies, Inc., [2015-1020] (December 4, 2015), the Federal Circuit affirmed the PTAB’s decision that claims of U.S. Patent No. 7,712,683 were unpatentable as anticipated under 35 U.S.C. §102 alone and as obvious under 35 U.S.C. §103, and denying the patent owner’s motion to amend.

Prolitic argued that the PTAB construed the term “mounted” and “fixed in position” too broadly, arguing with the support of export testimony that the claims should be limited to the preferred embodiments which showed a single use device.  The Federal Circuit rejected these arguments, noting that the description specifically contemplated reusable devices as well.  The Federal Circuit rejected Prolitic’s expert’s testimony that the invention related to single use devices with a permanent mounting, noting that an expert  “cannot rewrite the intrinsic record of the . . .patent to narrow the scope of the patent, saying Phillips instructs that a court should discount any expert testimony ‘that is clearly at odds with the written record of the patent.

Prolitic also appealed the PTAB’s denial of its motion to amend the claims to comport with its proffered constructions.  Prolitec initially argued that it was improper for the Board to place the burden on the patentee to show patentability of the proposed claim amendments, but the Federal Circuit  disposed of this argument in Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015). Prolitec then tried to argue that it did not have the burden to establish patentability over prior art references cited in the patent’s original prosecution history because they are not prior art of record in the IPR.  The Federal Circuit noted that the in MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040 (PTAB July 15, 2015), the Board stated, that “prior art of record” includes “any material art in the prosecution history of the patent.”  The Federal Circuit found this construction reasonable:

We conclude that the PTO’s approach is a reasonable one at least in a case, like this one, in which the Board’s denial of the motion to amend rested on a merits assessment of the entire record developed on the motion, no just on the initial motion itself. The Board’s position—that the patentee’s burden on a motion to amend includes the burden to show patentability over prior art from the patent’s original prosecution history—is not in conflict with any statute or regulation. Moreover, it is not unreasonable to require the patentee to meet this burden.

The Federal Circuit discerned no reversible error in the Board’s denial of Prolitec’s motion to amend.