Post-Grant Procedures – Where do Things Stand for Patentees

and Petitioners?

Andrew Crainandrew.crain@thomashorstemeyer.com

September 15, 2016

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(as of July 31, 2016)

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(as of July 31, 2016)

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1537(Projected)

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The PTAB’s Most Loyal Customers

289

205

55144

Top IPR & CBM Filers

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Can an IPR/CBM Buy Some Time?

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6-8 mos. 12 mos. 15 mos.

Appeal to Fed. Cir.

~ 3 years

Can an IPR/CBM Buy Some Time?

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6-8 mos. 12 mos. 15 mos.

Appeal to Fed.

> 3 years

Remandat PTAB

4 mos.

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(as of July 31, 2016)

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IPR Institution Rate

60%

70%

80%

90%

FY13 FY14 FY15 FY16

87%

75%

68% 67.7%

IPR(as of July 31, 2016)

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CBM Institution Rate

30%

50%

70%

90%

FY13 FY14 FY15 FY16

82%75%

70%

50%

CBM(as of July 31, 2016)

Unpatentable in FWD or canceled by POPatentable in FWD

83% of IPR Instituted Claims Canceled/Unpatentable

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as of 3/1/15(as of July 31, 2016)

Claims canceled in FWD/conceded by POClaims that survived

97% of CBM Instituted Claims Canceled/Unpatentable

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(as of July 31, 2016)

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• Over 4850 trials, 1539 instituted completed, with 192 MTAs

- Success Rate ~ 3%

- Reasons MTAs denied:- 56% because of prior art- 15% b/c §101 and §112- 8% formality issues

PTAB’s Motions to Amend Study

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• Will consider amendment practices at PTAB

• Will explore where burdens of persuasion & production lie

• To date, burden of persuasion lies w/ patentee

• Likely to shift burdens away from patentee

• Unlikely to increase MTAs

CAFC to Hear In re Aqua Prods En banc

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Harness & Dickey’s 14th Volume of IPR-PGR Report

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Harness & Dickey’s 14th Volume of IPR-PGR Report

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CAFC Taking Harder Look at PTAB

• First IPRs reached CAFC in 2015- 43 decisions in 2015- 55 decisions Jan. through June in 2016

• 80% affirmance rate from Jan. - June 2016- Other 20% reversed, vacated, or mixed

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Parties Must Have Fair Notice

• Dell v. Acceleron, 15-1513 (Fed. Cir. Mar. 15, 2016)

- PTAB’s FWD based on improperly allowed argument first raised at oral argument- Due process requires fair notice and opportunity

for response

- Cannot read limitation out of claim term/phrase

Message: It’s gotta be in the Petition

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Parties Must Have Fair Notice

• In Re Magnum Oil Tool Int’l, Ltd., 15-1300 (Fed. Cir. July 25, 2016)

- PTAB cannot raise, and decide patentability issues never raised by Petitioner or supported by evidence

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PTAB: Show Your Work• Cutsforth Inc. and MotivePower Inc., 15-1316 (Fed.

Cir. Jan. 22, 2016)- CAFC vacated PTAB decision for not adequately describe

reasons for finding patent invalid- PTAB only made "broad, conclusory statements."

• See also:- Black & Decker v. Positec (15-1646)- Nike v. Adidas (14-1719)

- No discussion of secondary considerations

Message: PTAB, you cannot merely be conclusory

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PTAB Cannot Change Theories Midstream

• SAS Institute v. Complementsoft, 15-1346 (Fed. Cir. Jun. 10, 2016)

- PTAB adopted one construction in Institution Decision, and another in FWD

- CAFC: Can’t be moving target and change theories mid-stream

Message: PTAB, call balls and strikes and stay out of the batter’s box.

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No No No!

• Arendi S.A.R.L. v. Apple Inc., 15-2073 (Fed. Cir. Aug. 10, 2016)

- PTAB erred in applying “common sense” to supply missing limitation in prior art

• In re Natural Alternatives LLC, 15-1513 (Fed. Cir. Aug. 31, 2016)

- Things-you-do-to-a-car-in-winter view of analogous art to be too abstract (anti-freeze v. tire ballast art)

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BRI is not Dictionary’s Broadest Definition

• PPC Broadband v. Corning Optical, 15-1364 (Fed. Cir. Aug. 10, 2016)

- PTAB erred by construing claim based on broadest definition in dictionary

- May not be broadest reasonable definition in view of specification

Message: CAFC unlikely to let reallyproblematic claim constructions gounchecked

(see also Dell v. Acceleron re claim 20)

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Aylus Networks v. Apple, 13-cv-04700 (N.D. Calif. Jan. 21, 2016)

• Aylus argued in Preliminary Response against IPR Institution• Said claim 2 applied only in certain instances• Aylus prevailed on claim 2

• USDC applied statements as prosecution history disclaimer for claim 2

Statements in IPR Can Be Pros. Hist. Disclaimer

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Estoppel

§ 315(e)(2) - petitioner cannot assert invalidity in subsequent litigation/ITC action on any ground that the petitioner “raised or reasonably could have raised” during IPR.

Also applies to subsequent proceedings at PTO.— § 315(e)(1) - for IPRs— § 325(e)(1) - for CBMs

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Apotex v Wyeth - IPR2015-00873• A ground denied as redundant in a first

petition • Question whether estoppel applied to same

ground in second petition by same petitioner 

• PTAB: a redundant ground could not have been raised, so not barred.

Estoppel: Does Not Include Redundant Grounds

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CAFC Decisions

Shaw Industries Group Inc. v. Automated Creel Systems Inc. - (15-1116)

HP Inc. v. MPHJ Technology Investments LLC - (15-1427)

Estoppel: Does Not Include Redundant Grounds

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1. File on Many Grounds - non-instituted redundant grounds safe for assertion latera. Cost more $$b. May be denied for other reasonsc. PTAB may miss “best” ground

What’s That Mean for Petitioners?

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Praxair v. INO Therapeutics, - IPR2016-00781• 1st IPR estopped 2nd IPR with additional

references that could have been raised in 1st• Claimed missed art in first search• PTAB found Praxis failed to engage “a

skilled searcher conducting a diligent search”

Estoppel: Scope is Broad at PTO

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IBM v. Intellectual Ventures - IPR2014-01465• PTAB: scope includes “prior art which a

skilled searcher conducting a diligent search reasonably could have been expected to discover.”

• PTAB terminated IPR b/c of estoppel- PTAB said didn’t have to terminate

Note: Will be interesting to see ifUSDCs adopt this standard

Estoppel: Scope is Broad at PTO

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Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176

• Not Instituted claims in CBM #1 do not trigger estoppel for other claims in CBM #2 (on same patent).- Petitioner filed second CBM after Alice on

claims denied institution in first CBM- PTAB: no problem

Estoppel: Claim-by-Claim Basis

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PTAB Designates Decisions as Presidential

• Garmin Int’l v. Cuozzo Speed Techs LLC, IPR2012-00001, Paper 26 (Mar. 5, 2013).• Discusses the distinct standards for “routine” and

“additional” discovery requests• Explains the factors for evaluating motions for

additional discovery.

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PTAB Designates Decisions as Presidential

• Bloomberg, Inc. v. Markets-Alert Pty, Ltd., CBM2013-00005, Paper 32 (May 29, 2013). • Compares the more lenient “good cause” standard for

additional discovery in covered business method review (as well as post-grant review) with the slightly stricter “interests of justice” standard

• Explains the factors for evaluating motions for additional discovery in CBM review.

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PTAB Designates Decisions as Presidential

• Oracle Corp. v. Click-to-Call Techs, LP, IPR2013-00312, Paper 26 (Oct. 30, 2013).• Precedential only as to Section III.A. • § 315(b) does not trigger the one-year bar for filing IPR

petition where the entire complaint in the prior civil action was voluntarily dismissed without prejudice.

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PTAB Designates Decisions as Presidential

• LG Electronics, Inc. v. Mondis Tech Ltd., IPR2015-00937, Paper 8 (Sept. 17, 2015)• § 315(b) does trigger the one-year bar for filing IPR

petition when prior complaint dismissed partially with prejudice and partially without.

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PTAB Designates Decisions as Presidential

• MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 42 (July 15, 2015).• Elaborating on PO’s burden to show substitute claims

patentable over prior art in view of Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027 (June 11, 2013) (Paper 26)

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PTAB Designates Decisions as Presidential

• Lumentum Holdings, Inc. v. Capella Photonics, Inc., IPR2015-00739 (Paper 38) (Mar. 4, 2016)• Explains that the requirement to identify all real parties

in interest is not jurisdictional.• Failure to comply does not deprive PTAB authority to

hear case • PTAB can allow failure to be rectified.

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PTAB Designates Decisions as Presidential

• Westlake Services, LLC v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (May 14, 2015)• CBM estoppel provisions apply on a claim-by-claim

basis, so that a new CBM petition is not necessarily barred if it addresses no claims that were the subject of a prior final written decision.

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PTAB Rule Changes

• PO can submit new testimonial evidence with preliminary response

• Rule 11-type certification for papers filed in proceeding

• Phillips claim construction standard for patents expiring during proceeding; all else BRI

• Replaced page limit with word count

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PTAB Takeaways

• With declining institution rates, Petitioners must make petition as strong as possible

• Prefer §103 over §102 grounds in petition

• Filing multiple IPR petitions increases institution rate b/c makes easier for PTAB judges to meet quota (http://www.ipwatchdog.com/2016/09/06/pto-statistics-hide-broken-ptab/id=72513/)

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PTAB Takeaways

• If petition denied, consider ex parte reexam (possibly even rolling reexam strategy)

• If PO and petition granted, consider ex parte reexam with amendment at filing that cancels instituted claims• Reexam is faster, eliminates Petitioner, is easier to

amend, and does not restartIPR clock (like reissue).

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Andrew Crainandrew.crain@thomashorstemeyer.com