The PTAB Kiss of Death to University of Illinois Patents

Micron Technologies recently achieved complete victories in three inter partes reviews (IPRs) filed against three University of Illinois patents. The patents now lost by the University of Illinois are U.S. Patent Nos. 5,872,387, 6,444,533, and 6,888,204.

The case dates back to December 2011, when the University of Illinois— at the time, an academic partner with Micron— sued Micron in the U.S. District Court for the Central District of Illinois. The complaint alleged patent infringement of the three aforementioned patents, which pertain to the use of deuterium in the fabrication of semiconductor devices. In August 2012, the district court granted Micron’s request for a stay of litigation in anticipation of filing IPR petitions under the then recently effective provisions of the America Invents Act (AIA), which went into effect in September 2012. Micron’s three IPRs against the University patents were filed on October 2, 2012, making them among the first petitions to be filed under the new post-grant review procedures.

The Patent Trial and Appeal Board (PTAB) held each claim of the University of Illinois’ semiconductor patents unpatentable, and as a result ordered each claim cancelled. See IPR2013-00005, IPR2013-00006 and IPR2013-00008. The PTAB also found in Micron’s favor on every instituted ground of rejection, including a four-way obviousness rejection of one of the claims in a challenged patent – claim 10 of the ‘204 patent.

“This is a huge victory for Micron and for our experienced post-grant team at Fish,” said Tim Riffe, a principal at Fish & Richardson who, along with Adam Shartzer and Brian Livedalen, handled the IPRs. “We were confident that the University patents were invalid, so we leveraged the inter partes review proceedings as an important tool in our overall strategic litigation defense,” added Shartzer.

While the University asserted a subset of claims against Micron in its patent infringement suit, Fish constructed an aggressive strategy with the IPRs. It sought to invalidate every claim, in every asserted patent, so that the University could no longer harass Micron with patent infringement claims, which Micron and their attorneys believed were unfounded.

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One of the unique aspects of inter partes review is that there is no presumption of validity. For example, it does not matter how many times a prior art reference might have been previously considered by a USPTO examiner. The PTAB has shown a willingness to reconsider prior prosecution arguments anew, particularly in view of a well-crafted IPR petition with a supporting expert declaration.

“IPR proceedings are different from prosecution proceedings and companies seeking to use them effectively need counsel who truly understands the intricacies of the Rules and how they can affect your strategic positioning throughout a trial,” added Riffe. “The PTAB generally resolves these proceedings within a year of institution, so the process moves quickly and there is little margin for error if the Rules are misconstrued or misapplied,” noted Shartzer.

While it is undeniably true that any defendant in a patent infringement lawsuit should absolutely file an inter partes review petition seeking to kill the relevant patent claims, I have to say that these cases show rather clearly how and why the Patent Trial and Appeal Board is being characterized as a patent death squad by Chief Judge Randall Rader of the Federal Circuit.

Specifically, in two decisions, the one relative to the ‘533 patent (IPR2013-00005) and the one relative to the ‘204 patent (i.e., IPR2013-00006) the PTAB issued rejections of claims as being obvious over a single reference. How is that possible? Obviousness is supposed to be about a combination of prior art references together that render one or more claims invalid. Yes… and no. Still, it would have been better if there had been greater analysis, and what analysis is present will likely shock many.

Relative to the ‘533 patent, here is what passed for analysis that lead to claim 1 being declared obvious over a single reference:

The Supreme Court has held that the obviousness analysis “need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 418 (2007). In that regard, we credit the testimony of Micron’s witness, Dr. Reed, that, at the time of filing the ’533 patent, it would have been apparent to one of ordinary skill in the art to reduce the thickness of the gate insulating film of Lisenker to 55 Angstroms or less, consistent with the general, decades-long trend of device miniaturization in the semiconductor industry.

We also credit Dr. Reed’s testimony that, at the time of filing the ’533 patent, others already had made gate insulating films having thicknesses of 55 Angstroms or less. Ex. 1001 ¶¶ 39, 43. The combination of familiar elements according to known methods to achieve predictable results, such as reducing the thickness of the gate insulating film of Lisenker to 55 Angstroms or less, would have been obvious. See KSR, 550 U.S. at 416.

This lead the PTAB to conclude that claim 1 is unpatentable as being “obvious over Lisenker.” In other words even though the PTAB acknowledged that Lisenker does not teach the step of “forming said insulating layer with a thickness not exceeding about 55 Angstroms beneath said contact,” the claim is obvious because of some vague statement by an expert that the industry was trying to miniaturize. Frankly, I don’t know whether this should have been obvious to one of skill in the art or not, but I do know that a vague desire to miniaturize ought not to be enough. If a general desire to make things smaller is enough to render a realized invention that is smaller obvious then what is left that can be patented exactly?

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This type of vague, generalized knowledge is not enough to render a claim obvious under Federal Circuit precedent. Such a combination rejection (i.e., a single reference plus general knowledge that it is desirable to give something a try) is not an appropriate obviousness rejection, at least according to the Federal Circuit in In re Kubin. But is that the KSR rationale being applied here? I don’t see where the PTAB explains the legal rational, they just cite to extraordinarily broad language from KSR. Is this what we have come to now? The PTAB doesn’t have to show their work and can merely say “this reference plus what we believe to be known generally desire at the time renders your claim unpatentable as obvious.”

Incidentally, just because there is a desire to miniaturize doesn’t mean that it is easy to do. It almost seems like the PTAB just assumed that scaling down is trivial. Such an assumption is erroneous as a general matter. Perhaps there is reason to believe it would have been appropriate and predictable, but the decision is silent on that point. What is curious, however, is that the University presented evidence that the Lisenker disclosure was inoperative, but the PTAB didn’t believe it. But wouldn’t questions raised contemporaneously be relevant to determine whether someone of skill in the art would have relied on Lisenker in the first place? It seems as if it would.

With any fact based determination like obviousness there can always be questions raised and room for differences of opinion. The problem is that the PTAB seems only interested in killing patents by declaring all claims unpatentable. With that being the collective experience so far it cause more critical review of decisions, and holes in the explanation that seem to violate logic and precedent loom much larger.

Regardless of this particularly case, was this what you thought inter partes review or other forms of post grant challenge would be used for? I thought Congress wanted to provide a means for allowing defendants frivolously sued by patent trolls to invalidate troll patents? That was how it was presented, yet we see a University innovator lose their patents. It seems no patents are safe from the jaws of the PTAB! Universities, pharmaceutical companies, biotech companies and any other innovator engaged in research and development must pay attention. Any patent is susceptible to challenge, and if challenged you have to anticipate losing.

What seems to be happening is that the PTAB is literally applying KSR v. Teleflex in a way that many initially feared it would be applied, but in a way it has never been interpreted by the Federal Circuit. Under a literal reading of KSR nothing is patent eligible unless you are an accidental inventor because the Supreme Court says that if you set out down a path and you achieve something that could have been predicted then the resulting invention is obvious. Such an expansive statement is why the Federal Circuit was compelled to place important boundaries on “obvious to try” rejections, otherwise it could be argued that it would be obvious to vary each one of tens of thousands of parameters, or it would be obvious because a research paper invited further work on a defined question.

The decisions of the PTAB are leading many in the patent community to wonder how much longer the patent system can survive when Administrative Patent Judges never see a patent that has a valid claim. If every commercially valuable patent claim is invalid then why bother with examination, or the many years one must wait to obtain a patent? Oddly, only garbage patents will remain because the patent owners ask so little to settle those cases that it makes no sense to spend the funds to institute an inter partes review.

Whether Congress or the Supreme Court wants patents any more can be debated I suppose, but the PTAB is speaking very loudly. The Patent Office will take many years to finally award you a patent, only after great expense. After further great expense the PTAB will take that patent away and you will lose all claims if it is ever challenged. It just feels wrong, and it has to mean that the patent examiners are wholly incapable of doing their job properly if every claim is declared unpatentable.

If you are a defendant in a patent infringement litigation and you haven’t filed an inter partes review, what are you waiting for? The Patent Office giveth with the examiners allowance and taketh away with a PTAB decision.  As long as the PTAB is killing patents can you blame defendants and their lawyers? It would be practically malpractice for a defense attorney in a patent infringement case to fail to recommend seriously considering inter partes review.

In any event, congratulations to Fish & Richardson, and congratulations to Micron.