PTAB Abused Discretion by Failing to Consider Material Evidence

Ultratec, Inc. v. CaptionCall, LLC, Nos. 2016-1706, 2016-1707, 2016-1710, 2016-1712, 2016-1708, 2016-1709, 2016-1715, 2016-1713, 2016-2366, 2017 U.S. App. LEXIS 16363 (Fed. Cir. Aug. 28, 2017) (Before Newman, Linn, and Moore, J.) (Opinion for the court, Moore, J.).

CaptionCall petitioned for IPRs of eight Ultratec patents that disclose and claim systems for assisting deaf or hard-of-hearing users to make phone calls. The parties are also litigating in district court. CaptionCall retained the same invalidity expert, who testified about the same issues and references in court and in the IPRs.

In the IPRs, Ultratec sought to submit trial testimony from CaptionCall’s expert, which Ultratec alleged was in conflict with the expert’s declaration in the IPRs. The Board denied Ultratec’s request and failed to review the expert’s trial testimony when deciding the IPRs. Additionally, the Board did not address Ultratec’s request for a written decision explaining the exclusion of this evidence.

The Board relied on the expert’s IPR testimony and invalidated every challenged claim of Ultratec’s patents. Ultratec appealed from the Board’s denial of its request to submit supplemental evidence.

The Federal Circuit reviews the Board’s management of its proceedings for abuse of discretion. Redline Detection, LLC v. Star Envirotech, Inc., 811 F.3d 435, 442 (Fed. Cir. 2015). The Board abuses its discretion if the decision: (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision. Id. (quoting Abrutyn v. Giovanniello, 15 F.3d 1048, 1050-51 (Fed. Cir. 1994).

Under Patent Office regulations, a party seeking to submit supplemental information more than one month after the date an IPR is instituted must request authorization to file a motion to submit the information. 37 C.F.R. § 42.123(b). The request to submit new information must show: (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice. Id. The Court found that Ultratec’s motion to admit the expert’s trial testimony satisfied both requirements. First, the evidence could not have been obtained earlier. Ultratec submitted its request to supplement the request the week after the trial concluded. Second, the Board “offered no reasoned basis why it would not be in the interest of justice to consider sworn inconsistent testimony on the identical issue.” The Court could not supply the Board’s reasoning, and therefore, Ultratec satisfied it’s §42.123(b) burden.

Next, the Court found that the Board’s decision was unreasonable because: (1) a reasonable adjudicator would have wanted to review this evidence, (2) any such inconsistency would likely bear on the overall credibility of the expert, and (3) the inclusion of the evidence would have placed minimal additional burden on the Board.

Additionally, the Court found a number of problems with the Board’s procedures that prevented a proper review of its decision. First, the Board lacked the information necessary to make a reasoned decision because it failed to review the evidence it was denying. Second, the Board made “significant evidentiary decisions without providing an explanation or a reasoned basis for its decision.” Third, the Board’s procedures “impede meaningful appellate review of the agency decision-making.” Thus, the Board abused its discretion when it refused to admit and consider the expert’s trial testimony and when it refused to explain its decision. The Federal Circuit vacated, remanded, and ordered that the Board admit and consider the expert’s trial testimony.

Belated evidence in an IPR may be admitted when the evidence was not available sooner and would serve justice to be considered. It is an abuse of discretion for the Board to reject such evidence without a reasonable basis and without explanation.




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Join the Discussion

15 comments so far.

  • [Avatar for HeartPTAB]
    September 5, 2017 05:14 pm

    Gene – I disagree, if the patent was issued improperly DOES provide justification for cheaply invalidating the patent. We’ve all seen too many software patents that covered something that was implemented in code prior to filing the patent.

  • [Avatar for Gene Quinn]
    Gene Quinn
    September 4, 2017 03:01 pm


    Whether or not a patent has issued improperly doesn’t provide justification for the PTAB, which is a rogue tribunal that doesn’t provide due process to anyone, ignores evidence at their pleasure, doesn’t explain their reasoning, has judges that decided cases when there is a clear conflict of interest. The list of transgressions is too numerous to list.

    There has been a mechanism to deal with patents that so clearly shouldn’t have issued since at least the early 1980s. The PTAB was not required for the problem you cite. Reexamination worked very well. So you might want to inform yourself before commenting.

  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 4, 2017 02:57 pm


    Do you realize that the lawsuit was filed in 2015 which was FOUR YEARS after PTAB was created?
    No one cared before then because Max Out wasn’t suing anyone until 2015.

    Whether or not PTAB existed, those patents could’ve easily been invalidated given the prior art.

    Nice try though. This was obvious fraud (or poor examination and prosecution) and trying to get money for nothing which is not what we independent inventors are talking about. Our cases are never that easy.

  • [Avatar for Bemused]
    September 1, 2017 09:59 pm

    Let’s pause for a moment to recap this case and to examine the practical consequences to the patent holder in this case:

    The PTAB abused its discretion by failing to consider material evidence such as conflicting district court testimony (duh!). The original panel hearing probably cost the patent holder $250,000 to $500,000 in legal fees and likely chewed up 12-18 months of patent term. The appeal to the CAFC likely cost the patent holder an additional $100,000 to $250,000 and likely chewed up another 12-18 months of patent term. Note, I’m really low-balling these legal fees in light of the fact that there were eight patents at issue. The actual legal fees were likely double.

    Now the case gets remanded to the same exact panel which doesn’t have any statutory requirement on how quickly they need to issue a new opinion. Let’s say (to be nice/generous to the PTAB) that the panel does not request any additional briefing on this issue and they write a new opinion in 12 months (as an aside, I’m very skeptical on the no additional briefing/new opinion in 12 months).

    Assuming that the patents at issue survive this remand (and you know what they say about assuming anything), what were the consequences of this inter partes review to the patent holder?

    Costs borne by patent holder: Between $350,000 to $750,000 in PTAB and CAFC legal fees;
    Loss of patent term: 36 months to 48 months while the patents at issue were before the PTAB, the CAFC and then on remand back to the PTAB.


    Downright hysterical, isn’t it?

  • [Avatar for HeartPTAB]
    September 1, 2017 05:41 pm

    Is this article being serious? Because the PTAB was long overdue. Take for example yesterday’s news that 2 golf patents were invalidated:

    To quote:

    “in its petition to invalidate the Max Out patents was a Golf Digest article from 2001, six years before the Max Out patents were originally filed. Ultimately, the USPTO board focused on a previously existing patent, as well as a 1995 technical paper from the American Journal of Physics and noted clubmaker and club fitting expert Ralph Maltby’s 1995 book, Golf Club Design, Fitting, Alteration & Repair. Those documents predate the specific Max Out patent in question by more than a decade.”

    Hurray because patents should not be allowed on anything preexisting. Unfortunately, it’s still too costly to invalidate something that should not have issued in the first place.

  • [Avatar for The Time Is Now To Act]
    The Time Is Now To Act
    September 1, 2017 04:37 pm

    @Dan Hansen – thanks for posting the summary.

    In many ways, the decisions you note are, in combination, more notable than the one presented in the post.

    In combination w the post, your references certainly prompt discussion.

    Like I almost felt a small wind luft the sails of the SS Patent.

    One does wonder in light of Oil States timing, where o where is that pesky Aqua Products file..

  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 1, 2017 12:55 pm


    Yes! Exactly.

    And, losing respect for the law can lead to losing respect for all law.
    In my mind, law=equality and it is only brought about through reasoning.

    In American, all are not equal under the law so what is the point of having law at all?
    It’s hand-waving.

  • [Avatar for Dan Hanson]
    Dan Hanson
    September 1, 2017 12:37 pm

    The Federal Circuit has issued the following decisions within the past seven days:

    Stepan: The Board may not erroneously reject, without explanation or opposing evidence, the applicant’s evidence of nonobviousness.

    Ultratec: The Board may not refuse, without reasoned explanation, to admit and consider conflicting sworn testimony from a single expert.

    Vicor: The Board must not ignore some of the Graham v. John Deere factors if they are in issue.

  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 1, 2017 11:23 am

    This is the equivalent of some president pardoning Charles Manson, him walking the streets, and then DOJ or FBI going, “Wait. Let’s undo this.”

    We need checks before actions are taken.

  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 1, 2017 11:21 am

    I was defining ‘unlawful’ as such: Contrary to accepted morality or convention; illicit.

    Might as well get rid of the Constitution if PTAB has powers not even the President has.
    Powers = ability to just decide whatever with no checks and balances.

    Congress gave PTAB judges more ‘powers’ than they have.

  • [Avatar for Bemused]
    September 1, 2017 11:17 am


    I believe you are somewhat echoing a French economist once wrote “When law and morality contradict each other, the citizen has the cruel alternative of either losing his moral sense or losing his respect for the law.”


  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 1, 2017 11:12 am


    I understand. I just think it’s ‘unlawful’ to just be able to decide anything that you want on a whim.

    The purpose of law is reasoning for equality, right?
    Because the opposite of it is anarchy and favoritism.

  • [Avatar for Anon]
    September 1, 2017 11:04 am

    PTAB is a rogue board. Nothing about them is constitutional or lawful.

    I “get” what you are saying Tesia, but to pick a nit, the PTAB is entirely “lawful.”

    They operate under the law as currently written.

    Whether or not THAT law is Consitutional is a separate question.

    I note this nit because this leads to a less-nit aspect: one must ask the right questions.

    OFTEN, the angst with the PTAB comes up in review at the CAFC, but the wrong questions are asked of the CAFC.

    For example, a question may come up in the manner of “Can the PTAB do that?”

    The distinction of what the PTAB doing being “lawful” provides the unsatisfactory answer from the CAFC of “yes, the PTAB can do that.”

    The better question (of course), is: Can Congress write a law that permits the PTAB to do that?

    With Oil States, we (finally) see some asking the right question.

  • [Avatar for Tesia Thomas]
    Tesia Thomas
    September 1, 2017 09:12 am

    Why didn’t they consider this?
    They didn’t want to…

    And that’s how everything transforms to anarchy.

    PTAB is a rogue board. Nothing about them is constitutional or lawful.
    Really, Oil States is asking, “Is the PTAB above the law or not?”

    Not even the President has the power to pardon without reasonable basis as DOJ and FBI at least reviews the applications for pardon.

  • [Avatar for JPM]
    September 1, 2017 08:44 am

    kan·ga·roo court
    ??kaNG???ro?o ?kôrt/
    noun: kangaroo court; plural noun: kangaroo courts

    an unofficial court held by a group of people in order to try someone regarded, especially without good evidence, as guilty of a crime or misdemeanor.