The Impact of PTAB Trials on Litigation Strategy - Winston · PDF fileThe Impact of PTAB...

The Impact of PTAB Trials on Litigation Strategy Court Decisions Showing How PTAB Proceedings Impact Patent Litigation

Presented by Drew Sommer

April 20, 2016

Today’s eLunch Presenter

Drew Sommer Partner

[email protected]

+1 (202) 282-5896

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Overview

• 10-minute primer on IPR, CBM, and PGR • PTAB claim constructions and the district courts • PTAB decisions and substantive motions • Estoppel effects of Final Written Decisions • Admissibility of PTAB decisions at trial • IPRs and procedural issues in district court • IPRs and ITC proceedings: some strategy considerations

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10-Minute Primer on PTAB Trials

What is an IPR?

• 1 of 4 types of trials created by the AIA; first available Sept. 16, 2012

• Evidentiary proceedings adjudicated primarily on the written record

• Replace inter partes reexamination • Proceedings require written and oral advocacy skills as well

as technical and litigation skills • Many procedural pitfalls, quickly evolving area of the law

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What is an IPR?

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Google Inc. v. Jongerius Panoramic Techs, LLC IPR2013-00191, Paper 50

(PTAB Feb. 13, 2014).

Types of Validity Challenges in IPR

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35 U.S.C. § 311(b) – Scope. A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications

§ 102 § 103 OR

AND

patents printed pubs

OR

anticipation obviousness

What is a CBM Review?

• Another of the 4 types of trials created by the AIA; first available Sept. 16, 2012

• A “transitional program” to address business method patents • No prior analog in the Patent Act • Also an evidentiary proceeding • Specific standing requirements (e.g., suit or a threat of a

suit; patent must be a CBM patent)

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Definition of a CBM Patent

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AIA, § 18(d).

Definition of a CBM Patent

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37 C.F.R. § 42.301

CBM vs. IPR

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Inter Partes Review Covered Business Method Review

Any patents* Patents to methods, apparatus used in providing financial products or services

Filed at any time* Only if post-grant review unavailable; only if petitioner or privy charged with infringement

Effective September 16, 2012 Effective September 16, 2012

Patents and printed publications only Any grounds for invalidity (§§ 101, 102, 103, 112, 251, except § 102(e))

“reasonable likelihood” standard “more likely than not” standard

Discovery limited to deposition of declarant, or other discovery in the interest of justice

Discovery related to factual assertions

Allows for settlement Allows for settlement

Estoppel after PTAB decision Narrower Estoppel after PTAB decision

-- Sunsets Sept. 16, 2020

* If patent is subject to first-to-file, need to wait for 9 months

Trial Timeline

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USPTO Trial Timeline, available at http://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/trials (last visited Apr. 18, 2016).

Institution Decision

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GSI Tech., Inc. v. Cypress Semiconductor, Corp., IPR2014-00121 (PTAB Apr. 16, 2014).

Institution Decision

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GSI Tech., Inc. v. Cypress Semiconductor, Corp., IPR2014-00121 (PTAB Apr. 16, 2014).

Final Written Decision

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Liberty Mutual Ins. Co. v. Progressive Cas. Ins. Co., CBM2013-00004, Paper 53 (PTAB Mar. 13, 2014).

Estoppel After IPR

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See 35 U.S.C. § 315(e)(2).

Who?

• Petitioner; or • Real party in interest; or • Privy of the petitioner

What? • “May not assert . . . in a civil action arising in whole or in part under section 1338

of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 . . . that the claim is invalid . . . .”

Scope?

• On any ground raised; or • On any ground that reasonably could have been raised during the inter

partes review

When? • After final written decision

Estoppel After CBM

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See AIA § 18(a)(1)(D).

Who? • Petitioner

What?

• “May not assert . . . in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 . . . that the claim is invalid . . . .”

Scope? • On any ground raised during the proceeding

When? • After final written decision

Over 4700 Petitions Filed

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Patent Trial and Appeal Board Statistics (Mar. 31, 2016) available at http://www.uspto.gov/sites/default/files/documents/2016-3-31%20PTAB.pdf) (last visited Apr. 18, 2016)

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PTAB Claim Constructions at the District Courts

PTAB’s Construction Gets No Deference

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Depuy Orthopaedics, Inc. v. Orthopaedic Hosp.

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Depuy Orthopaedics, Inc. v. Orthopaedic Hosp. No. 3:12-cv-299-CAN, 2016 WL 96164, at *5

(N.D. Ind. Jan. 8, 2016).

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Kroy IP Holdings, LLC v. Autozone, Inc.

Kroy IP Holdings, LLC v. Autozone, Inc., Case No. 2:13-cv-888-WCB, 2015 WL 557123

(E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designation)

PTAB’s Construction Gets Some Deference

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GoDaddy.com, LLC v. Rpost Comms, Ltd.

GoDaddy.com, LLC v. Rpost Communications Ltd. Case No. CV-14-00126-PHX-JAT,

2016 WL 212676, at *30-31 (D. Ariz. Jan. 19, 2016).

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Memory Integrity, LLC v. Intel Corp.

Memory Integrity, LLC v. Intel Corp. Case No. 3:15-cv-00262-SI,

2016 WL 1122718, at *19 (D. Or. Mar. 22, 2016).

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Polaris Indus., Inc. v. CFMOTO Powersports, Inc.

Polaris Indus., Inc. v. CFMOTO Powersports, Inc. Case No. 10-4362 (JNE/HB),

2016 WL 727109, at *5 (D. Minn. Feb. 23, 2016).

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Polaris Indus., Inc. v. CFMOTO Powersports, Inc.

Polaris Indus., Inc. v. CFMOTO Powersports, Inc. Case No. 10-4362 (JNE/HB),

2016 WL 727109, at *5 (D. Minn. Feb. 23, 2016).

Anglefix, LLC v. Wright Medical Tech., Inc.

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Anglefix, LLC v. Wright Medical Tech., Inc., Case No. 2:13-cv-02407-JPM-tmp

2015 WL 9581865 at *8 (W.D. Tenn. Dec. 30, 2015)

The court relied on the PTAB’s construction of the term “non-threaded” from an IPR on a related patent to frame the claim construction analysis:

“To accept Plaintiff’s construction” would be “inconsistent with the plain and ordinary meaning, the patent specification, the patent owner’s assertion before the PTAB, the construction the PTAB itself adopted, and dictionary definitions.” But, Defendant’s construction “is too broad and eliminates functionality as a consideration, which is inconsistent with the PTAB’s construction.”

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ContentGuard Holdings, Inc. v. Amazon.com, Inc.

ContentGuard Holdings, Inc. v. Amazon.com, Inc., Case No. 2:13-cv-1112-JRG,

2015 WL 1289321, at *4-6, 10 (E.D. Tex. Mar. 20, 2015).

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PTAB Construction Supports Indefiniteness

Grobler v. Apple Inc., Case No. 12-cv-1534-JST,

2014 WL 1867043, at *8 (N.D. Cal. Mar. 6, 2014).

Patent Owner’s Statements

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Patent Owner Should be Held to Position at PTAB

Cellular Communications Equip. LLC v. Samsung Elecs. Co., Ltd.., Case No. 6:14-cv-759

2016 WL 1237429 (E.D. Tex. Mar. 29, 2016).

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Patent Owner’s Silence Not Admission

Kroy IP Holdings, LLC v. Autozone, Inc., Case No. 2:13-cv-888-WCB

(E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designation)

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Institution Decision Not Preclusive

adidas AG v. Under Armour, Inc., No. 14-130-GMS, slip op. at 2 n. 1 (D. Del. Dec. 15, 2015)

PTAB Construction: Intrinsic or Extrinsic Evidence?

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PTAB Decisions: Intrinsic or Extrinsic Evidence?

Fairfield Indus., Inc. v. Wireless Seismic, Inc., Civ. A. No. 4:14-CV-2972, 2015 WL 1034275, *5

(S.D. Tex. Mar. 10, 2015).

Depuy Orthopaedics, Inc. v. Orthopaedic Hosp. No. 3:12-cv-299-CAN, 2016 WL 96164, *5

(N.D. Ind. Jan. 8, 2016).

But see:

PTAB Decisions and Substantive Motions

IPR Denial Leads to SJ of No Infringement

SunPower Corp. v. PanelClaw, Inc., C.A. No. 12-1633-MPT,

2016 WL 1293479, at *6-7 (D. Del. Apr. 1, 2016).

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Aylus Networks, Inc. v. Apple Inc., C.A. No. 13-cv-4700,

2016 WL 270387, at *5-6 (N.D. Cal. Jan. 21, 2016).

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Aylus Networks, Inc. v. Apple Inc., C.A. No. 13-cv-4700,

2016 WL 270387, at *7 (N.D. Cal. Jan. 21, 2016).

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IPR Denial Leads to SJ of No Invalidity

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The Procter & Gamble Corp. v. Team Techs., Inc. Case No. 1:12-cv-552 (S.D. Ohio). Jul. 20, 2012

Complaint

Jul. 12-15, 2013 IPR Petitions

Jan. 9, 2014 Institution Decisions

* PTAB denied institution on many challenged claims

Jul. 3, 2014 SJ of No Invalidity

IPR Denial Leads to SJ of No Invalidity

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The Procter & Gamble Corp. v. Team Techs., Inc. Case No. 1:12-cv-552, Dkt. 130, slip op. at 21-24

(S.D. Ohio Jul. 3, 2014).

Institution of IPR = “Objectively Reasonable” Invalidity Defense?

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No IPR instituted unless “the petition . . . and any [preliminary] response . . . shows that there is a reasonable likelihood that the petitioner would prevail” on at least 1 claim

35 U.S.C. § 314(a)

The objective recklessness determination “entails an objective assessment of potential defenses . . . [and] can be expected in almost every case to entail questions of validity . . . .”

Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc.,

682 F.3d 1003, 1006 (Fed. Cir. 2012)

Does an instituted IPR provide sufficient evidence for summary judgment of no willful infringement since it is decided under the “reasonable likelihood” of prevailing standard?

Institution of IPR ≠ “Objectively Reasonable” Invalidity Defense

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Ultratec, Inc. v. Sorenson Communications, Inc., 45 F. Supp. 3d 881, 920-23

(W.D. Wisc. 2014).

IPR Leads Court to Conclude Defense was Objectively Reasonable

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XY, LLC v. Trans Ova Genetics, LC, No. 13-cv-0876-WJM-NYW,

2016 WL 1391615 (D. Colo. Apr. 8, 2016).

Estoppel Effects and District Court Litigation

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35 U.S.C. § 315(e)(1): Estoppel

“The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318 (a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”

35 U.S.C. § 315(e)(2)

Redundant Grounds Cannot Lead to Estoppel

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Shaw Indus. Group, Inc. v. Automated Creel Sys., Inc.., -- F.3d --, 2016 WL 1128083 (Fed. Cir. Mar. 23, 2016);

see also Synopsys, Inc. v. Mentor Graphics Corp., 814 F.3d 1309, 1316 (Fed. Cir. 2016).

ClearLamp, LLC v. LKQ Corp.

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Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, slip op. at 10-11 (N.D. Ill. Mar. 18, 2016).


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Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, slip op. at 15, 18 (N.D. Ill. Mar. 18, 2016).


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Clearlamp, LLC v. LKQ Corp., No. 12 C 2533, slip op. at 15-16 (N.D. Ill. Mar. 18, 2016).

Other Cases of Note On Estoppel Issues

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• Synopsys, Inc. v. Mentor Graphics, Case No. 3:12-cv-1500 (D. Oregon) • IPR challenged claims 1-15 and 20-33 • PTAB instituted trial of claims 1-9, 11, 28, and 29 (43% of

challenged claims) • Final Written Decision issued on February 19, 2014, finding claims

5, 8, and 9 invalid (25% of instituted claims) • In parallel litigation, patent owner dropped claims except for 1, 24,

26, 27, and 28 • Validity not sent to the jury • Judgment of $36.4M returned for patent owner


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• Nat’l Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., No. 1:12-cv-773-SS, Dkt. 62 (W.D. Tex. Dec. 2, 2013) • Defendant filed petition for IPR • PTAB denied petition as to all claims • Court held that “the statutory doctrine of estoppel DOES

NOT APPLY to this case” and noted that the “panel did not think much of the contentions that prior art invalidated the patent by finding that the petitioner . . . ‘has not demonstrated a reasonable likelihood of prevailing’ in any of its contentions.”


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•ROY-G-BIV Corp. v. ABB, Ltd., 6:11-cv-00622-0624-LED (E.D. Tex.) • IPRs instituted covering all claims • All claims found patentable in final written decision • Day final written decision issued, patent owner filed letter

brief requesting summary judgment as to all invalidity defenses, and a finding of privity for all defendants

• Motion allowed, remained pending at time of settlement

ROY-G-BIV v. ABB, Ltd. – Estoppel

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ROY-G-BIV v. ABB, Ltd. – Estoppel

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Star Envirotech, Inc. v. Redline Detection, LLC

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Star Envirotech, Inc. v. Redline Detection, LLC., No. SAVC 12-011861 JGB (DFNx),

2015 WL 4744394 (C.D. Cal. Jan. 29, 2015).

Admissibility of PTAB Decisions at Trial

Use for Rebutting Willfulness?

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Ultratec, Inc. v. Sorenson Communications, Inc., Case No. 13-cv-346-bbc, 2014 WL 5023098

(W.D. Wisc. Oct. 8, 2014).

Use to Rebut Presumption of Validity?

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(W.D. Wisc. Oct. 1, 2014).

Use to Rebut Presumption of Validity?

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(W.D. Wisc. Oct. 8, 2014).

Can Patent Owner Use a Denial of Trial?

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Universal Elecs., Inc. v. Universal Remote Control, Inc., Case No. SACV 12-00329 AG

2014 WL 8096334 (C.D. Cal. Apr. 21, 2014).

IPRs and Other Procedural Issues

Notifying Court of IPR Proceeding

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Virginia Innovation Sciences v. Samsung Elecs. Co., 983 F. Supp. 2d 713, 760

(E.D. Va. 2014).

Protective Orders: Prosecution Bars

• Prosecution Bar in N.D. Cal. Model Protective Order Applies to PTAB Trial Proceedings, Even for Expired Patents • Software Rights Archive, LLC v. Facebook, Inc., Case No. 5:12-cv-

3970-RMW-PSG, 2014 WL 116366 (N.D. Cal. Jan. 13, 2014)

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• Litigation counsel permitted to participate in IPR, but not claim amendments • Paice, LLC v. Hyundai Motors Co., WDQ-12-0499, 2014 WL 4955384

(D. Md. Sept. 29, 2014) • Endo Pharms., Inc. v. Actavis Inc., No. 12 Civ. 8985 (TPG), 2014 WL

3950900 (S.D.N.Y. Aug. 13, 2014) • LifeScan Scotland, Ltd. v. Shasta Techs., LLC, Case No. 11-cv-4494

(N.D. Cal. Nov. 4, 2013) • EPL Holdings, LLC v. Apple Inc., No. C-12-4306 JST (JSC), 2013 WL

2181584 (N.D. Cal. May 20, 2013) • Prolitec Inc. v. Scentair Techs., 945 F. Supp. 2d 1007 (E.D. Wis. May

17, 2013)

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• Litigation counsel permitted to participate in IPR without restriction: • PPC Broadband, Inc. v. Times Fiber Communications, Inc., C.A. No.

5:13-cv-460 (GLS/DEP), 2014 WL 859111 (N.D.N.Y. Mar. 5, 2014)

• Cases prohibiting counsel having access to source code from participating in IPR: • Versata Software Inc. v. Callidus Software, Inc., Case No. 12-931-

SLR, 2014 WL 1117804 (D. Del. Mar. 12, 2014) • Inventor Holdings, LLC v. Wal-Mart Stores Inc., Case No. 1:13-cv-96

(GMS), 2014 WL 4370320 (D. Del. Aug. 27, 2014)

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Protective Order Violations

• Disclosure of confidential information received under district court protective order during conference call with PTAB results in monetary sanctions: • Lunareye, Inc. v. Gordon Howard Associates, Inc., Civ. Action No. 9-

13-cv-91 (E.D. Tex. Feb. 2, 2013) • “The law regarding the interplay between proceedings before the PTAB and

district courts is not yet developed. Counsel should therefore have taken care to avail themselves of procedures to avoid inadvertent disclosure of protected confidential information such as a motion to seal under 37 C.F.R. § 42.14 or a request that the protective order be modified.”

• The court then held that a monetary sanction of $2,500 was appropriate because it “is the least onerous sanction that is sufficient to remind counsel of this duty, deter future violations in this suit, and serve as an adequate general deterrent for similar conduct.”

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Third Party Discovery

• Discovery into real-party-in interest or privity through third-party subpoena denied: • Personal Audio LLC v. Togi Entertainment, Inc., Case No. 14-cv-80025

RS(NC), 2014 WL 1318921 (N.D. Cal. Mar. 31, 2014) – subpoena seeking information about EFF and its relationship with defendants denied because whether EFF will be estopped is irrelevant because it is premature

• Callwave Communications, LLC v. Wavemarket, Inc., No. C 14-80112 JSW(LB), 2015 WL 831539 (N.D. Cal. Feb. 25, 2015) – subpoena seeking information related to privity between petitioner and defendants in litigation denied

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IPR Strategies for Parallel Litigation

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Strategy Considerations for Parallel Proceedings

• Best practices for “reasonable” prior art search

Prior Art

• Ensure “best” patents / printed publications are presented in the first petition for IPR; document new art

Selection of Grounds

• Understand risk; either (1) “all-in” approach; or (2) understand and develop defenses that cannot be presented in IPR (e.g., public use, on sale)

Availability of Other Defenses

IPRs and Litigation Before the ITC

Impact of IPRs in the ITC: Stats

• Complaints Filed Between Sept. 16, 2012 and December 31, 2014: • Number of Complaints: 84 • Number of Patent Assertions: 283 patents • Number of IPRs filed: 73 • Average time between filing of complaint and filing of IPR: 6.7 months • Median time between filing of complaint and filing of IPR: 5 months • Minimum time between filing of IPR and complaint: -2.0 months • Maximum time between filing of IPR and complaint: 23 months

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IPRs and High-Low Settlements in the ITC

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In the Matter of Certain Omega-3 Extracts from Marine or Aquatic Biomass and Products Containing the Same,

337-TA-877 (ITC May 13, 2014).

File Early • If filed early enough, could

have a final PTAB decision before exclusion order issues

• May obtain usable admissions

• Institution decision may be useful at the hearing if favorable

• Opportunity for creative resolutions

File Late • Lower risk of denial of

institution impacting ID • Increased settlement

leverage if petitioner receives favorable ID

• After favorable ID for petitioner, will have adequate time to complete IPR pending commission review and appeal

• All cards on the table as to key prior art

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IPR Timing Strategies in the ITC

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IPR Timing Strategies in the ITC File IPR Early

Pros: 1. If filed early enough, could have a

final PTAB decision before exclusion order issues

2. Usable admissions 3. Institution decision may be useful at

the hearing if favorable 4. Opportunity for creative resolutions Cons: 1. Highly unlikely to have a final

decision before ID 2. Institution decision may harm

invalidity defenses 3. Gives Patent Owner additional

leverage if institution denied 4. Fodder for cross-examination

File IPR Late Pros: 1. Lower risk of denial of institution

impacting ID 2. Increased settlement leverage if

petitioner receives favorable ID 3. May have adequate time to

complete IPR pending review and appeal if ID is favorable

4. All cards on the table as to key prior art

Cons: 1. Unlikely to be relevant to ID 2. May not be in the record at all 3. No impact if an adverse ID but extra

cost 4. Might not even be useful for

Commission review

What’s Next?

Thank You.

Drew Sommer Partner

[email protected]

+1 (202) 282-5896

82

The Impact of PTAB Trials on Litigation Strategy - Winston · PDF fileThe Impact of PTAB...

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