PTAB Sanctions Patent Owner for Abusing IPR Process, Cancels All Claims Challenged by COVID Testing Device Maker

The U.S. Patent and Trademark Office’s (USPTO’s) Patent Trial and Appeal Board (PTAB) yesterday made public a Sanctions Order against a patent owner that resulted in the cancellation of all 183 claims of five patents challenged in separate inter partes review (IPR) proceedings. The PTAB order said that Longhorn Vaccines & Diagnostics “committed an egregious abuse of the PTAB process” by “selectively and improperly” withholding “material results that were inconsistent with its arguments and the patentability of both original and proposed substitute claims.”

The PTAB issued the Final Written Decisions in IPR2021-00847 (Patent 8,084,443 B2); IPR2021-00850 (Patent 8,293,467 B2); IPR2021-00854 (Patent 8,669,240 B2); IPR2021-00857 (Patent 9,212,399 B2); and IPR2021-00860 (Patent 9,683,256 B2), as well as contemporaneous Sanctions Orders, on May 3 to the Board and Parties, but gave Longhorn the opportunity to redact portions of the Order relevant to its potential appeal to the U.S. Court of Appeals for the Federal Circuit. The redacted Order became available to the public on May 22.

In the Order, the PTAB said Longhorn’s behavior was inconsistent with the duty of candor and fair dealing and thus issued an adverse judgment as to all of the challenged claims as sanctions, and also denied Longhorn’s revised motions to amend.

The IPRs were brought by Spectrum Solutions, LLC, who challenged certain claims of five of Longhorn’s patents on a type of biological testing method that Longhorn said Spectrum’s whole saliva collection device for COVID-19 testing infringed. According to a press release from Spectrum’s counsel, Knobbe Martens, Spectrum’s test was “the first product granted Emergency Use Authorization by the Food and Drug Administration for the collection of samples for RT-PCR Covid testing.”

The PTAB’s Sanctions Order explained that Longhorn improperly ignored the Board’s alternative claim constructions discussed in the institution decisions, thereby limiting the scope of its “obligatory disclosures to the Office and Petitioner, omitting data and information it should have disclosed under the duty of candor and fair dealing.”

Administrative Patent Judge (APJ) Georgianna Braden issued a concurrence in the Sanctions Order explaining that she would have awarded Spectrum compensatory expenses, including attorney fees. The majority concluded that an award of attorney fees on its own “is neither sufficient, nor necessary to protect the interests of the PTO and the public,” and, having already imposed sanctions in the form of cancellation of all claims, thus determined it was an unnecessary additional sanction.

But APJ Braden said whether attorney fees would serve to protect the interests of the USPTO and the public or not, or whether such fees would be a sufficient deterrent to future parties, was irrelevant. “The imposition of adverse judgment and a denial of Patent Owner’s motions to amend in each proceeding may well act to protect the agency and public’s interest as well
as to stand as a deterrent to other similarly situated parties,” Braden said. She continued:

“Under the circumstances of the present case, however, ordering Patent Owner to pay Petitioner’s attorney fees and laboratory costs associated with countering Patent Owner’s egregious and willful actions would serve, first, as a compounding sanction hand-in-hand with adverse judgment against Patent Owner in order to prevent a gross injustice to Petitioner. And, second, would compensate and make Petitioner whole for the time and money it spent addressing incomplete laboratory data and test results, incorrect deposition testimony, and knowingly false attorney arguments.”

On the merits, the PTAB found all of the challenged claims unpatentable in IPR2021-00847, IPR2021-00854 and IPR2021-00857; and some of the challenged claims unpatentable in IPR2021-00850 and IPR2021-00860. But due to the adverse judgment and sanctions, all of the challenged claims were cancelled.

According to Knobbe Martens, this is an “unprecedented move” by the PTAB, marking “the first time since Congress enacted the IPR process that the PTAB has cancelled all claims of a patent based on the patent owner’s ‘unwarranted disregard relating to its duty of disclosure and fair dealing before [the PTAB].’”

IPWatchdog reached out to Longhorn’s counsel for comment but had not received a response as of the time of publication.

Image Source: Deposit Photos
Image ID:55946639
Copyright:exopixel