Tag: PTAB

Federal Circuit Issues First Reversal & Remand of an Inter Partes Review in Microsoft Corporation v. Proxyconn, Inc. Addressing Claim Construction and Amendment Standards

The Federal Circuit issued its first reversal and remand of a final decision in an inter partes review issued by the Patent Trial and Appeal Board (“PTAB”). In Microsoft Corporation v. Proxyconn, Inc., No. 14-1543, a panel composed of Chief Judge Prost, Judge Lourie, and Judge Gilstrap (sitting by designation) held that the PTAB’s constructions of the phrases “two other computers,” “sender/computer,” and “receiver/computer” were unreasonably broad, and remanded for further proceedings consistent with its opinion. The Court’s decision marks the first ever reversal of an inter partes review decision by the PTAB, after 18 straight affirmances. Of the 18, fifteen have been affirmances without opinion issued under Federal Circuit Rule 36.

In brief, the Court upheld the PTAB’s use of the broadest reasonable interpretation (“BRI”) standard, but explained that the standard does not justify giving claims an unreasonably broad or legally incorrect interpretation. The Court then examined the statute and regulations governing amendment practice and concluded that the PTAB’s interpretation was not plainly erroneous or inconsistent with them. Last, in reference to the PTAB’s case-by-case interpretation of the same statute and regulations, the Court explained that while “[a] fluid, case-based interpretation by the PTO of its own regulations risks leaving interested members of the public in a state of uncertainty, without ascertainable standards and adequate notice to comply . . . we cannot say that the PTO has abused its discretion in choosing adjudication over rulemaking.”

In the underlying proceedings before the PTAB, Microsoft challenged Proxyconn’s patent directed to a system for increasing access speed in a packet-switched network. The PTAB concluded that all of the challenged claims, with the exception of one, were unpatentable. Both parties appealed. In addition to contesting the merits, Proxyconn challenged the PTAB’s used of the BRI standard, as well as the PTAB’s denial of Proxyconn’s motion to amend. We discuss each aspect in more detail below.

Broadest Reasonable Interpretation

With respect to BRI generally, the Court stated that it was bound by the panel decision in In re Cuozzo – the first appeal of an inter partes review decided earlier this year, which blessed the Office’s adoption of the hundred year old standard for use in inter partes review. In re Cuozzo is pending a decision on Cuozzo’s request for rehearing en banc, and several amici have submitted briefs expressing concern about the outcome. But practitioners troubled by the Office’s adoption and application of BRI can take some consolation. In this case, the panel rejected the PTAB’s construction as “unreasonably broad,” relying on precedent that constrains the Office’s application of the BRI to interpretations that are legally correct under the canons set forth in Phillips v. AWH Corp. Indeed, the panel dropped a footnote stating that its construction would have come out the same under the Phillips standard.

On the merits, the Court reviewed the Board’s claim constructions de novo. The Court carefully analyzed the technical merits and set forth a detailed interpretation of the claim terms appealed by both parties. This suggests that a meritorious claim construction dispute appealed to the Federal Circuit is likely to receive the same careful consideration and attention to detail that appellants have come to expect from the Court. It also shows that “unreasonably broad” claim interpretations that are inconsistent with settled principles of claim construction are reversible on appeal.

Proxyconn’s Motion to Amend

This appeal also presented the question of whether the PTAB impermissibly relied on the requirements it set forth in Idle Free Systems, Inc. v. Bergstrom, Inc., in denying Proxyconn’s motion to amend. In this case, the panel was not troubled by the PTAB’s reliance on its own decisions, like Idle Free, to promulgate standards for motions to amend. The Court agreed with the Office that the regulation itself “is not an exhaustive list of grounds upon which the Board can deny a motion to amend.” The Court also agreed that it is permissible for the Office to use adjudicative decisions like Idle Free, rather than traditional notice and comment rule-making, to set forth all the conditions that a patentee must meet in order to satisfy its burden of amendment. In that regard, the Court recognized that:

Some question the wisdom of the PTO’s approach. Since IPRs were created, they have rapidly become a popular vehicle for challenging the validity of issued patents. Patentees who wish to make use of the statutorily provided amendment process deserve certainty and clarity in the requirements that they are expected to meet. A fluid, case-based interpretation by the PTO of its own regulations risks leaving interested members of the public in a state of uncertainty, without ascertainable standards and adequate notice to comply. Despite such concerns, we recognize that ‘the choice between rulemaking and adjudication lies in the first instance within the [agency’s] discretion.’ . . . [W]e cannot say that the PTO has abused its discretion in choosing adjudication over rulemaking.

Slip. Op. at 24 (internal citations omitted).

The Court ultimately concluded that the PTAB reasonably interpreted the amendment rules as requiring the patentee to show that its substitute claims are patentable over the prior art of record. But the Court also stressed that “this case does not call on us to decide whether every requirement announced by the Board in Idle Free constitutes a permissible interpretation of the PTO’s regulations.” Slip. Op. at 25, n.4. It noted that the Idle Free decision itself was not before the Court, and expressly declined to address the other requirements that the Board relied upon—highlighting in particular Idle Free’s requirement that the patentee show patentable distinction over all “prior art known to the patent owner.” Idle Free, 2013 WL 5947697, at *4.

Practical Takeaways

Microsoft v. Proxyconn demonstrates the Court’s willingness to give appellants a meaningful review of PTAB decisions despite its track record of issuing summary affirmances. This applies particularly to claim construction appeals, which in most cases will be afforded de novo review – subject to Teva.4 This case also clarifies that remands to the PTAB are possible, though it remains unclear how the PTAB will deal with that remand. Those concerned about the PTAB’s use of the BRI should take heart that its application must still be both reasonable and legally correct. The Court acknowledged the uncertainty parties face when the Office uses adjudication rather than rulemaking to set standards and practices in these new proceedings. However, the Court’s willingness to analyze the PTAB’s application of Idle Free suggests that such decisions themselves are reviewable and should be appealed if their interpretation is improper.

ARTICLE BY Jon E. Wright & Pauline M. Pelletier of Sterne, Kessler, Goldstein & Fox P.L.L.C.
© 2015 Sterne Kessler

Target Wins Rehearing of IPR Joinder Decision with Expanded Panel

Schwegman Lundberg Woessner

Last fall, the Patent Trial and Appeal Board (PTAB or Board) interpreted the IPR joinder provision, 35 U.S.C. § 315(c), to require joinder requests by a non-party to an ongoing proceeding.  (Target Corp. v. Destination Maternity Corp., IPR2014-00508 and IPR2014-00509.)  Prior to that decision,  the Board had interpreted § 315(c) to allow for issue joinder by the petitioner of the original proceeding (see, for example Microsoft v. Proxyconn, IPR2013- 00109).  Of course, joinder was decided on a case-by-case basis, but had not previously been denied because the request was made by the petitioner of the original proceeding.

Target Corp. filed rehearing requests in both affected IPR proceedings in an effort to have the Board reconsider its interpretation of  35 U.S.C. § 315(c) with an expanded panel.  Target’s arguments are quite clearly stated in its Motion for Rehearing.  The Board granted Target’s rehearing request.  In a 4:3 decision,  the majority agreed that § 315(c) had been overly narrowly interpreted in the prior decision:

Turning now to the merits of the Request for Rehearing, the contention at the heart of Petitioner’s request for rehearing is that the denial of its Motion for Joinder was “based on an erroneously narrow interpretation of 35 U.S.C. § 315(c).” Paper 22, 1. We agree with Petitioner.

The majority read § 315(c)’s reference to “any person who properly files a petition under section 311” in conjunction with § 311′s requirement that the petition filer not be the patent owner, to broadly interpret § 315(c) to include any person except the patent owner.  This interpretation is at odds with the dissent’s analysis, which reads § 315(c)’s reference to “may join as a party” to literally require a new party for joinder:

The statute under which Petitioner seeks relief provides:

(c) JOINDER.—If the Director institutes an inter partes review, the Director, in his or her discretion, may join as a party to that inter partes review any person who properly files a petition under section 311 that the Director, after receiving a preliminary response under section 313 or the expiration of the time for filing such a response, determines warrants the institution of an inter partes review under section 314.

35 U.S.C. § 315(c) (emphasis added). The statute does not refer to the joining of a petition or new patentability challenges presented therein. Rather, it refers to the joining of a petitioner (i.e., “any person who properly files a petition”). Id. Further, it refers to the joining of that petitioner “as a party to [the instituted] inter partes review.” Id. Because Target is already a party to the proceeding in IPR2013-00531, Target cannot be joinedto IPR2013-00531.

While the majority decision does align with panel decisions on joinder prior to Target, one must ask whether this issue is finally resolved by this expanded panel decision.  For example, what happens if another panel does not follow this interpretation § 315(c)?  Or suppose this decision is appealed; would the Federal Circuit reverse a Board decision on joinder as it relates to institution given its recent interpretation of 35 U.S.C. § 314(d) in In re Cuozzo Speed Technologies? (“We conclude that § 314(d) prohibits review of the decision to institute IPR even after a final decision. . . . Section 314(d) provides that the decision is both ‘nonappealable’ and ‘final,’ i.e., not subject to further review. 35 U.S.C. § 314(d).”)  Would a Federal Circuit appeal have to be in the form of a petition for writ of mandamus?  If so, how would that square with the mandamus decisions in In re Dominion Dealer Solutions, LLC, 749 F.3d 1379, 1381 (Fed. Cir. 2014)(mandamus relief not available to challenge the denial of a petition for IPR) and in In re Proctor & Gamble Co., 749 F.3d 1376, 1378–79 (Fed. Cir. 2014)(mandamus relief not available to provide immediate review of a decision to institute IPR)?

ARTICLE BY

Timothy Bianchi
OF
Schwegman, Lundberg & Woessner, P.A.

Timeliness – The Devil Is in the Details (a.k.a. Rules)

Mcdermott Will Emery Law Firm

GEA Process Engineering, Inc. v. Steuben Foods, Inc.

In an order issued by the Patent Trial and Appeal Board (PTAB or Board), the Board expunged exhibits from the records of five related cases on the basis of timeliness. GEA Process Engineering, Inc. v. Steuben Foods, Inc., Case Nos. IPR2014-00041, IPR2014-00043, IPR2014-00051, IPR2014-00054, IPR2014-00055 (PTAB, Sept. 29, 2014) (Elluru, APJ).

In post-grant proceedings, it is important to note that there are two different deadlines for objecting to evidence.  Prior to institution, a patent owner is required to object to evidence submitted to the PTAB with the petition within 10 business days of institution of a trial. Once the trial has begun, i.e., after institution, a party seeking to object to the introduction of evidence or an exhibit must raise its objection within five business days of service of the evidence or exhibit. The objections should be served on the offering party and not filed with the PTAB.

In GEA Process Engineering v. Steuben Foods, following the institution of trial, the petitioner filed what it characterized as exhibits entitled “Petitioner’s Objections” to the patent owner’s evidence. However, the PTAB expunged the exhibits from the records of all five cases. As the Board explained, the applicable rule, 37 C.F.R. § 42.64(b)(1), requires that “[o]nce a trial has been instituted, any objection [to evidence] must be served within five business days of service of evidence to which the objection is directed.” As such, the petitioner’s filingits objections to the patent owner’s evidence, at the Board was improper—a potentially costly mistake.

ARTICLE BY

Ryan Edmond Vachon
OF
McDermott Will & Emery

Patent Trial and Appeal Board (PTAB) Issues First Precedential Opinion

Armstrong Teasdale Law firm

In its first precedential opinion, the Patent Trial and Appeal Board has denied  institution of a covered business method review based on a prior-filed civil suit. Except for provisions specifically excluded, the CMB statute incorporates all the statutory standards and procedures of a post-grant review.  These standards include the provision barring review if the petitioner has instituted a civil action before filing its petition for review.  35 USC § 325(a)(1).  In Securebuy, LLC v. Cardinal Commerce Corporation, No. CBM 2014-00035, petitioners filed a declaratory judgment action 2 weeks prior to filing for CBM review.  Relying on the above-cited provision of the AIA, the Board denied SecureBuy’s petition.   Despite the apparent clear language of the statute, several CBM petitions have been filed after institution of civil actions.  In each case, petitioners have argued that this section of the AIA does not apply to CBM petitions.

PTO copy of the order: http://www.uspto.gov/ip/boards/bpai/decisions/prec/cbm2014-00035_4-25-2014_325a.pdf

ARTICLE BY

Jennifer E. Hoekel
OF:
Armstrong Teasdale

First Written Decision Pertaining to Pharmaceuticals

ArmstrongTeasdale logo

Practitioners monitoring the use of inter partes review (IPR) proceedings to challenge pharmaceutical patents may want to note what appears to be a pair of first-time events.  The Patent Trial and Appeal Board (PTAB) recently issued the first Final Written Decision in an IPR proceeding involving a pharmaceutical-related patent. In addition, the first petition for covered business method review challenging an Orange Book-listed patent for a marketed drug was recently filed.

On June 20, 2014, the PTAB issued Final Written Decisions in four related IPR proceedings (IPR2013-00116; IPR2013-00117; IPR2013-118; and IPR2013-00119)  involving U.S. Patent Nos.  5,997,915; 6,011,040; 6,673,381; and 7,172,778, respectively. The patents generally disclose compositions for supplementing dietary folate and the challenged claims were directed to compositions comprising natural isomers of reduced folates and corresponding methods of using such compositions.  Petitioner Gnosis SpA initiated the IPR proceedings after it was sued for infringement of the patents by a group of plaintiffs including Merck KGaA (licensee of three of the patents) and Merck & Cie (owner of the remaining patent).  The decision to challenge the patents in an IPR proceeding was a successful one for Gnosis as the PTAB found all of the challenged claims to be unpatentable, holding that certain claims were anticipated and the remaining claims were obvious.

Several days later, on June 24, 2014, Amneal Pharmaceuticals, LLC, Par Pharmaceutical, Inc., and Roxane Laboratories, Inc. (Petitioners) filed a petition for covered business method of a patent listed in the Food and Drug Administration’s Orange Book for the prescription drug product Xyrem®, which is marketed by Jazz Pharmaceuticals, Inc. The patent, U.S. Patent No. 7,895,059, generally discloses methods for controlling the distribution of, and access to, hazardous or abuse-prone drugs and the challenged claims are directed to “[a] computerized method of distributing a prescription drug under the exclusive control of an exclusive central pharmacy.”

Each of the Petitioners had previously filed an Abbreviated New Drug Application with the Food and Drug Administration seeking approval of a generic version of Xylem and been sued by Jazz for infringement of several Orange Book-listed patents including U.S. Patent No. 7,895,059. In their petition for covered business method review, the Petitioners asserted that the challenged method claims involve the verification of an insurance payment for the drug and therefore are related to a “financial product or service” (a requirement for covered business method review). Should the PTAB accept this argument and grant the petition, that determination could potentially encourage others to file petitions for covered business method review of additional Orange Book-listed patents containing similar “Risk Evaluation and Mitigation Strategies (REMS)”-type claims.

Article By:

B. Scott Eidson
Of:
Armstrong Teasdale

Apple Inc. v. Rensselaer Polytechnic Institute and Dynamic Advances, LLC, Decision Denying Institution

DrinkerBiddle

Takeaway: A voluntary dismissal of a litigation without prejudice will not nullify service of a complaint for purposes of 35 U.S.C. § 315(b) if that litigation is immediately continued in a consolidated case.

In its Decision, the Board denied institution of the Inter Partes Review as time-barred under 35 U.S.C. § 315(b) because it was not filed within the statutory period of 35 U.S.C. § 315(b).  The date of service of two different complaints was an issue of primary focus by the Board.

In a first patent litigation, Patent Owner (Dynamic Advances) filed a complaint on October 19, 2012. Dynamic Advances, LLC v. Apple Inc., No. 1:12-cv-01579-DNH-CFH (N.D.N.Y.)(Dynamic I).  The complaint for the first litigation was served on Petitioner (Apple) on October 23, 2012.  In a second patent litigation, Rensselaer Polytechnic Institute and Dynamic Advances jointly filed a complaint on June 3, 2013. Rensselaer Polytechnic Inst. & Dynamic Advances, LLC v. Apple Inc., No. 1:13-cv-00633-DNH-DEP (N.D.N.Y.)(Dynamic II).  The complaint for the second litigation was served on Petitioner (Apple) on June 6, 2013.

The Petition in the instant proceeding was filed on January 3, 2014.  Thus, the service date of October 23, 2012 for the first litigation (Dynamic I) was more than 12 months prior to the filing of the Petition, whereas the service date of June 6, 2013 for the second litigation (Dynamic II) was less than 12 months prior to the filing date of the Petition.  The Board found that service of the first complaint on October 23, 2012, rather than service of the second complaint on June 6, 2013, controlled for purposes of determining whether the requested inter partes review was time-barred under 35 U.S.C. § 315(b).  Because the service date of October 23, 2012 for the first litigation (Dynamic I) was more than 12 months prior to the filing of the Petition, the Board found that the Petition was not filed within the statutory period of 35 U.S.C. § 315(b).

The Board’s rationale in reaching this conclusion related to the fact that on July 22, 2013, the court ordered consolidation of Dynamic I and Dynamic II under Fed. R. Civ. P. 42.  In doing so, the court ordered that pursuant to a joint stipulation of the parties, Dynamic I was “dismissed without prejudice and the parties would proceed to litigate their claims and defenses in [Dynamic II].”

Petitioner argued that under the decision in Macauto U.S.A. v. BOS GmbH & KG, IPR2012-0004 (“holding that a voluntary dismissal without prejudice nullified service of the complaint for purposes of 35 U.S.C. § 315(b)”), service of the first complaint on October 23, 2012 was not effective.  According to Petitioner, as in Macauto, the facts of the present case have the effect of leaving the parties as if the first action had never been brought.

The Board disagreed, finding that “Dynamic I cannot be treated as if that case had never been filed under the rationale of Macauto.”  Instead, the Board found that it was “persuaded that the circumstances in the instant case weigh in favor of close scrutiny of the effect of the dismissal of Dynamic I, because that cause of action, although dismissed, was continued immediately in Dynamic II.”

This proceeding was the third time that Petitioner had petitioned for inter partes review against the ‘798 patent.  In IPR2014-00077, institution was denied.  IPR2014-00320 was filed concurrently with the petition for this proceeding.

Apple Inc. v. Rensselaer Polytechnic Institute and Dynamic Advances, LLC,IPR2014-00319
Paper 12: Decision Denying Institution of Inter Partes Review
Dated: June 12, 2014
Patent 7,177,798 B2
Before: Josiah C. Cocks, Bryan F. Moore, and Miriam L. Quinn
Written by: Moore
Related proceedings: IPR2014-00077; IPR2014-00320; Dynamic Advances, LLC v. Apple Inc., No. 1:12-cv-01579-DNH-CFH (N.D.N.Y.); Rensselaer Polytechnic Inst. & Dynamic Advances, LLC v. Apple Inc., No. 1:13-cv-00633-DNH-DEP (N.D.N.Y.)

Article By:

Christopher Bruenjes
Of:
Drinker Biddle & Reath LLP

PTO Litigation Center Report – April 11, 2014

Sterne Kessler Goldstein Fox

Listed below are all new filings before PTAB of requests for inter partes review (IPR) and covered business methods review (CBM).  Also listed are any newly-posted requests for ex parte reexamination at the USPTO.  This listing is current as of 9:45 AM on Friday, April 11, 2014.

New IPR Requests

Trial Number – IPR2014-00604
Filing Date – 4/10/2014
Patent # – 6,896,775
Title – HIGH-POWER PULSED MAGNETICALLY ENHANCED PLASMA PROCESSING
Assignee –  ZOND, INC.
Petitioner – THE GILLETTE COMPANY
Status – Pending
Tech Center – 1700

Trial Number – IPR2014-00605
Filing Date – 4/10/2014
Patent # – 7,348,723
Title – EMISSION DEVICE, SURFACE LIGHT SOURCE DEVICE, DISPLAY AND LIGHT FLUX CONTROL MEMBER
Assignee –  ENPLAS CORPORATION
Petitioner – Seoul Semiconductor Co., Ltd.
Status – Pending
Tech Center – 2800

Trial Number – IPR2014-00606
Filing Date – 4/10/2014
Patent # – 6,833,404
Title – HOT MELTS UTILIZING A HIGH GLASS TRANSITION TEMPERATURE SUBSTANTIALLY ALIPHATIC TACKIFYING RESIN
Assignee –  H.B. FULLER COMPANY
Petitioner – HENKEL CORPORATION
Status – Pending
Tech Center – 1700

Trial Number – IPR2014-00607
Filing Date – 4/10/2014
Patent # – 7,870,249
Title – NETWORKED SYSTEM FOR INTERACTIVE COMMUNICATION AND REMOTE MONITORING OF INDIVIDUALS
Assignee –  ROBERT BOSCH HEALTHCARE SYSTEMS, INC.
Petitioner – Medtronic, Inc.
Status – Pending
Tech Center – 2400

Trial Number – IPR2014-00610
Filing Date – 4/10/2014
Patent # – 7,490,151
Title – ESTABLISHMENT OF A SECURE COMMUNICATION LINK BASED ON A DOMAIN NAME SERVICE (DNS) REQUEST
Assignee –  VIRNETX INC.
Petitioner – Microsoft Corporation
Status – Pending
Tech Center – 2100

New CBM Review Requests

Trial Number – CBM2014-00115
Filing Date – 4/10/2014
Patent # – 7,970,674
Title – AUTOMATICALLY DETERMINING A CURRENT VALUE FOR A REAL ESTATE PROPERTY, SUCH AS A HOME, THAT IS TAILORED TO INPUT FROM A HUMAN USER, SUCH AS ITS OWNER
Assignee –  ZILLOW, INC.
Petitioner – TRULIA, INC.
Status – Pending
Tech Center – 3600

Newly-Posted Reexam Requests

Control # – 90/013,207
Date – 4/10/2014
Patent # – 7,489,423
Inventor –  Nachman, Marvin J. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,208
Date – 4/10/2014
Patent # – 6,894,811
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,209
Date – 4/10/2014
Patent # – 8,040,574
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Control # – 90/013,210
Date – 4/10/2014
Patent # – 8,294,915
Inventor –  Nachman, Bruce G. et al.
Assignee –  INFINITY COMPUTER PRODUCTS, INC.
Title – INTERFACE CIRCUIT FOR UTILIZING A FACSIMILE MACHINE COUPLED TO A PC AS A SCANNER OR PRINTER
Co-pending Litigation – Infinity Computer Products, Inc. v. Toshiba America Business Solutions, Inc., No. 2:12-cv-06796-LDD (E.D. Pa.) and 11 other litigations.

Article By:

PTO Litigation Center
Of:
Sterne, Kessler, Goldstein & Fox P.L.L.C.