Preparing for and Navigating PTAB Appeals Before the Federal Circuit - - PowerPoint PPT Presentation

Preparing for and Navigating PTAB Appeals Before the Federal Circuit

Conducting PTAB Trials With Eye to Appeal, Determining Errors for Appeal, Understanding PTO Practice and Federal Circuit Law

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WEDNESDAY, JANUARY 6, 2016

Presenting a live 90-minute webinar with interactive Q&A Erika H. Arner , Partner, Finnegan Henderson Farabow Garrett & Dunner, Reston, Va. Michael J. Flibbert, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

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Preparing for and Navigating PTAB Appeals Before the Federal Circuit

January 6, 2016 Presented by Erika H. Arner and Michael J. Flibbert

5

Sources of PTAB Appeals

• IPR, CBM and PGR appeals under 35 U.S.C. §141:
• “A party to an inter partes review or a post-grant review

who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318 (a) or 328 (a) (as the case may be) may appeal the Board’s decision only to the United States Court of Appeals for the Federal Circuit.”

• Interlocutory appeals of CBM stay denials

under AIA § 18

• Mandamus?

6

Tsunami of PTAB Appeals?

• As of October 31, 2015:
• 3,684 inter partes review (IPR) petitions
• 393 covered business method review (CBM) petitions
• 13 post-grant review (PGR) petitions
• PTAB instituting at high rate and holding claims

unpatentable at high rate

• Very few motions to amend granted
• Related district court litigation is common
• Compared to . . .

7

Tsunami of PTAB Appeals?

8

Commencing a PTAB Appeal

• Must file a timely Notice of Appeal:
• “[n]o later than sixty-three (63) days after the date of the

final Board decision.” 37 CFR § 90.3(a).

• “[m]ust be filed with the Director,” 37 CFR § 90.2(a), with

copy of notice to PTAB, 37 CFR § 90.2(a), and three copies to Federal Circuit clerk, Fed. Cir. R. 15(a)(1)

• Must provide sufficient information to allow the Director to

determine whether to intervene. 37 CFR 90.2(a)(3)(ii).

• Cross-appeals:
• Within 14 days of the Notice of Appeal. FRAP 4(a)(3).

9

First Rulings: Appeal of Institution Denials

• Appeal of institution denials:
• After PTAB refused institution and party appealed directly

to CAFC, Federal Circuit held that institution decision could not be appealed because of Section 314(d)’s ‘‘broadly worded bar on appeal.’’ St. Jude v. Volcano, 749 F.3d 1373, 1376 (Fed. Cir. 2014).

• Court noted that Section 314(d) “may well preclude all

review [of a noninstitution decision] by any route,” but it “need not decide” that issue here. Id.

• See also Zoll v. Phillips, 2014 WL 4179887 (Fed. Cir. Aug

25, 2014).

10

Review of FWDs

• In re Cuozzo Speed Technologies LLC, 793 F.3d

1268 (Fed. Cir. 2015)

• PTAB instituted IPR of claims based on grounds not in

the Petition; patent owner appealed.

• 35 U.S.C. § 314(d) states: ‘‘The determination by the

Director whether to institute an inter partes review under this section shall be final and nonappealable.’’

• Majority held § 314(d) prohibits all review of the

institution decision, even if it was wrong.

• Left open option of mandamus if the Board “clearly and

indisputably exceeded its authority.”

11

Review of FWDs

• Versata Development Group, Inc. v. SAP America,

Inc., 793 F.3d 1306 (Fed. Cir. 2015)

• PTAB instituted CBM review; following a FWD, patent
• wner appealed determination that patent is a CBM

patent

• 35 U.S.C. § 324(e) states: ‘‘The determination by the

Director whether to institute an inter partes review under this section shall be final and nonappealable.’’

• Court can review the PTAB’s threshold determination that

a patent is a CBM patent in an appeal from a FWD

12

Review of FWDs

• Versata Development Group, Inc. v. SAP America,

Inc., 793 F.3d 1306 (Fed. Cir. 2015) (continued)

• Majority reasoned that § 324(e) does not apply to “limits
• n the authority to enter a ‘final written decision’

invalidating a patent” because “institution and invalidation are two distinct actions by the PTAB.”

13

Review of FWDs

• Achates Reference Publishing, Inc. v. Apple Inc,

803 F.3d 652 (Fed Cir. 2015)

• Achates filed suit against several companies and joined

Apple as a codefendant a year later

• Apple filed petitions for IPR of the asserted patents
• Achates argued that the PTAB lacked authority to

institute the IPRs because Apple was time-barred

• Court held that the PTAB’s determination on whether a

petition is timely is part of the decision to institute and is therefore nonappealable, even after a FWD

• Distinguished Versata: “time bar does not itself give the

Board the power to invalidate a patent”

14

Mandamus

• Mandamus remains an option if, after the Board’s FWD, the

Board “clearly and indisputably exceeded its authority.” In re Cuozzo Speed Technologies LLC, 793 F.3d 1268, 1274 (Fed. Cir. 2015).

• But mandamus is this context has still not been directly

addressed: “However, we did not decide the question of whether the decision to institute review is reviewable by mandamus after the Board issues a final decision or whether such review is precluded by § 314(d). . . . Nor do we do so now.” Id.

15

First Rulings: Mandamus

• Mandamus petitions relating to institution:
• PTAB refused to institute IPR proceedings on five

patents, and Federal Circuit found that Petitioner had no “‘clear and indisputable right’ to challenge a non- institution decision directly in this court, including by way

• f mandamus.” In re Dominion Dealer Solutions, 749

F.3d 1379, 1381 (Fed. Cir. 2014).

• See also In re Procter & Gamble, 749 F.3d 1376 (Fed.
• Cir. 2014).

16

First Rulings: Mandamus

• Mandamus petitions relating to institution

(continued):

• Party argued that IPR should have been barred under

Section 315(b)’s one-year deadline because IPR petitioner was in privity with a third party from a previous

• lawsuit. In re MCM Portfolio, LLC, 2014 WL 595366 (Fed.
• Cir. Feb. 18, 2014).
• Federal Circuit denied mandamus “without prejudice to

MCM attempting to raise its section 315(b) arguments on appeal after final decision by the Board.” Id.

17

First Rulings: Interlocutory Appeal of Stay Denials

• CBM-related stay requests (AIA § 18(b))
• Four factors district courts “shall” consider when a stay

related to a CBM is requested

• Immediate interlocutory appeal
• De novo standard of review
• Federal Circuit has reversed district court denials of

stays

• VirtualAgility, Inc. v. Salesforce.com, Inc.
• Versata Software, Inc. v. Callidus Software, Inc.

18

Standing

• The PTO is an administrative agency
• Party need only meet the requirements laid out by the

agency and congress to commence PTO proceeding

• Article III courts require standing
• Article III of the U.S. Constitution limits the jurisdiction of

federal courts to actual “Cases” and “Controversies.” Art. III, § 2.

• Standing is immutable and non-waivable
• No requirement to show Article III standing before an

agency, but standing must be demonstrated on direct appeal from agency action to a federal court of appeals

19

Standing

• Standing – Consumer Watchdog v. Wisconsin

Alumni Research Foundation:

• Petitioner-Appellant, Consumer Watchdog, was a

nonprofit taxpayer and consumer-rights organization

• Filed inter partes reexamination, was unsuccessful, and

appealed

• CAFC asked for supplemental briefing on Appellant’s

standing

20

Standing

• Standing – Consumer Watchdog v. Wisconsin

Alumni Research Foundation (continued):

• To establish standing must show injury that is:
• Concrete and particularized
• Imminent or actual
• Caused by the defendant and
• Is likely redressable by a favorable decision

21

Standing

• Standing – Consumer Watchdog v. Wisconsin

Alumni Research Foundation (continued):

• For standing, Consumer Watchdog relied on the Board’s

denial of its requested administrative action—namely, the Board’s refusal to cancel claims in the patent

• Consumer Watchdog did not claim to make, use, or sell

the patented invention; was not threatened with suit; and did not name another real party in interest

22

Standing

• Standing – Consumer Watchdog v. Wisconsin

Alumni Research Foundation (continued):

• Court held that the Board’s denial of Consumer

Watchdog’s requested action did not confer standing

• Not enough that 35 U.S.C. § 315(b) allows a third-party

requester to appeal decisions favorable to patentability. A statutory grant of a right to appeal does not eliminate requirements of Article III.

• Consumer Watchdog had not “identified a particularized,

concrete interest in the patentability of the ’913 patent, or any injury in fact flowing from the Board’s decision.” Slip

• Op. at 8.

23

Claim Amendments

• Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292

(Fed. Cir. 2015)

• Proxyconn appealed denial of motion to amend.
• 37 C.F.R. § 42.20(c): “The moving party has the burden
• f proof to establish that it is entitled to the requested

relief.”

• 37 C.F.R. § 42.121(a)(2): “A motion to amend may be

denied where: (i) The amendment does not respond to a ground of unpatentability involved in the trial; or (ii) The amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter.”

24

Claim Amendments

• Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292

(Fed. Cir. 2015) (continued)

• PTAB previously addressed several important

requirements for a patent owner’s motion to amend claims in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027, 2013 WL 5947697 (PTAB June 11, 2013).

• Court affirmed the Board’s decision to require a showing

that the amended claims are patentable over all prior art

• f record—not just the prior art that the Board relied upon

when instituting review.

25

Claim Construction

• In re Cuozzo Speed Technologies LLC, 793 F.3d

1268 (Fed. Cir. 2015)

• The claim construction in IPR should be the broadest

reasonable interpretation for unexpired patents.

• “Although the opportunity to amend is cabined in the IPR setting,

it is nonetheless available.”

• Review underlying factual determinations concerning

extrinsic evidence for substantial evidence and the ultimate construction of the claim de novo, following the Supreme Court’s Teva Pharms. USA, Inc. v. Sandoz, Inc.

26

CBM and § 101

• Versata Development Group, Inc. v. SAP America,

Inc., 793 F.3d 1306 (Fed. Cir. 2015)

• Versata appealed whether the PTAB is authorized to

invoke § 101 as a test of validity in CBM proceedings.

• 35 U.S.C. § 328(a) states: The PTAB "shall issue a final

written decision with respect to the patentability of any patent claim challenged . . . .”

• “[W]e so hold that, looking at the entirety of the statutory

framework and considering the basic purpose of CBM reviews, the PTAB acted within the scope of its authority delineated by Congress in permitting a § 101 challenge under AIA § 18.”

27

Constitutionality

• MCM Portfolio LLC v. Hewlett-Packard Co., No.

2015-1091, 2015 WL 7755665 (Fed. Cir. Dec. 2, 2015)

• Patent holder argued that IPR is unconstitutional

because any action revoking a patent must be tried in an Article III court with the protections of the Seventh Amendment.

• Court held that IPR provisions do not violate Article III.
• “Because patent rights are public rights, and their validity

susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury.”

28

Rule 36 Judgments

• Federal Circuit Rule 36 specifies that “[t]he court

may enter a judgment of affirmance without

• pinion” when certain conditions exist and an
• pinion would have no precedential value.
• From December 2013 to November 2015, 50% of

decisions in IPR appeals were Rule 36 judgments.

• Possible explanations:
• Rule 36 decisions are made public faster, so the

numbers may appear inflated.

• Substantial evidence standard of review for factual

determinations is highly deferential.

29

Strategic Tips: Make a Record

• Make a record
• Introduce facts into the record to support theme:
• Expert declarations
• Factual declarations and
• Discussion of prior art references
• Balance theme development with discovery

repercussions

• Witnesses submitting affidavits or declarations can be

deposed; other discovery allowed based on the interest

• f justice

30

Strategic Tips: Preserve Issues for Appeal

• Preserve Arguments:
• When seeking to challenge a specific rule, cite the rule to

the PTAB. Lingamfelter v. Kappos, No. 2011-1449, 2012 WL 3218529, at *2 (Fed. Cir. Aug. 9, 2012).

• Specifically articulate arguments at every step – before
• rehearing. In re Avid Identification Sys., Inc., No. 2012-

1092, 2013 WL 69102, at *6 (Fed. Cir. Jan. 23, 2013).

• Requests for Rehearing: opportunity to bolster your

record, but also gives PTAB a chance to bolster its reasoning

31

Strategic Tips: Third-Party Involvement

• Government participation in appeals from PTAB is

discretionary

• The USPTO and the United States may only participate

in significant cases

• The Federal Circuit may request government briefing
• May third parties intervene in the appeal?
• What about estoppel?
• Will Court permit third parties to file an amicus brief?

32

Strategic Tips: Positioning the Appeal

• Narrow the issues – only present strongest grounds

for reversal

• One issue is better than two, etc.
• Consider the applicable standard(s) of review
• Issues of law reviewed de novo – greatest chance
• E.g., obviousness, enablement, statutory interpretation
• Issues of fact reviewed for substantial evidence – difficult

to reverse

• E.g., written description, anticipation, facts underlying
• bviousness
• Procedural issues (e.g., denial of discovery) are

unlikely to be reversible even if appealable

33

Strategic Tips: Appeal Brief

• Most appeals turn on briefs, not oral argument
• Clarity is key
• Preliminary statement is helpful
• Explain technology but avoid unnecessary detail
• Headings provide a useful roadmap
• Statement of facts
• Must tell a compelling story
• Avoid arguments or case citations
• Include accurate record cites; don’t overstate
• Court should want to rule for you after reading facts

34

Strategic Tips: Appeal Brief

• Argument section
• Prioritize – strongest argument usually goes first
• Don’t leave the Court guessing at your best precedent –

identify key cases and fully develop them

• Address any adverse precedent
• Avoid string cites or block quotes
• Avoid making substantive arguments in footnotes

35

Strategic Tips: Oral Argument

• Start by concisely identifying the reversible error (or

the key reasons for affirmance)

• Purpose is to allow Court to ask questions
• Listen carefully, be flexible, answer questions

directly

• Thorough familiarity with record and relevant case

law is essential

• Advance preparation should include brainstorming

to identify possible questions

• Don’t interrupt judges; adhere to time limits

36

A Look Ahead: Redundancy

• Shaw Industries Group, Inc. v. Automated Creel

Systems, Inc., Nos. 15-1116, -1119 (Fed. Cir.)

• PTAB often eliminates alternative grounds challenging

the same patent claims as “redundant.”

• Petitioner raised a three-reference obviousness ground

and a single-reference anticipation ground.

• The PTAB instituted the obviousness ground and denied

the anticipation ground as redundant.

• Petitioner argues that the PTAB’s denial of the

anticipation ground was unlawful.

• PTO argues that the Federal Circuit lacks jurisdiction to

review institution decisions.

37

Questions?

38

Thank You

Erika Harmon Arner Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Two Freedom Square 11955 Freedom Drive Reston, VA 20190-5675 Tel +1 571 203 2754 Fax +1 202 408 4400 erika.arner@finnegan.com Michael J. Flibbert Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 901 New York Avenue, NW Washington, DC 20001-4413 Tel +1 202 408 4493 Fax +1 202 408 4400 michael.flibbert@finnegan.com

39

Speaker Information

Erika Arner chairs Finnegan’s patent office practice. She focuses on patent office trials, patent prosecution management, client counseling, and litigation, with an emphasis on electronic technology, computer software, and the Internet. She has also served as lead counsel before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (PTAB) in more than 20 post-grant review and inter partes review proceedings. Mike Flibbert is a partner in Finnegan's chemical practice group, which he has chaired. With more than 20 years of experience, he serves as lead counsel in district court litigations, IPRs before the PTAB, and Federal Circuit appeals. Mike handles cases involving pharmaceuticals, biotechnology, chemistry, and chemical engineering. He has particular experience representing pharmaceutical patent holders in Hatch- Waxman Act litigations.

40

Disclaimer

These materials have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. and European intellectual property law. These materials reflect only the personal views of the authors and are not individualized legal advice. It is understood that each case is fact specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the authors, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm) cannot be bound either philosophically

• r as representatives of their various present and future clients to the

comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with these authors. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.