Posts Tagged: "PTAB"

On Wednesday, August 24th, the Patent Appeal and Trial Board (PTAB) issued decisions in two inter partes review (IPR) filings made against patents owned by private Israeli firm Yeda Research & Development Co. The company is the tech transfer arm of the Weizmann Institute of Science, a public research university located in Rehovot, Israel. The IPRs, which were filed by American pharmaceutical developer Mylan Inc. (NYSE:MYL), resulted in the invalidation of all claims in both Yeda patents. About a week later, on September 1st, PTAB invalidated a third patent owned by Yeda after another IPR challenge was filed by Mylan.

While the PTAB statistics demonstrate the profound effect that the AIA trials have had on issued patents, it seems to have the greatest impact on non-manufacturing patent assertion entities (PAE). With the increased tendency of district courts showing a willingness to grant stays of the concurrent litigation, the AIA trials have become an effective weapon against PAE. However, nevertheless, it is not surprising that with any dynamic system we have seen a settling process where institution rates have been dropping and the information provided by the PTAB in its publication of informational and precedential decisions has served to provide clarity to those practicing before the PTAB in administrative trials.

The enumerated problems with the post grant procedures could be bettered by both the courts and the USPTO. The courts have had an opportunity to change the standard for claim construction in the post grant procedures but have declined. However, the USPTO can ameliorate the problem itself by providing for more liberal leave to amend. The rationale for BRI at the USPTO is that patentee can amend at the Office but not in court. The Office can more easily allow for claims that are further limiting and this would greatly reduce the problem.

IPRs offer many improvements compared to inter partes reexamination[12]. However, the statistics reveal that IPRs are no more of a true alternative for litigation than the challenge proceeding which they replaced and supposedly improved upon – at least not yet, but with all of the publicity about the high rate of invalidation it is hard to imagine that patent challengers just need more time to gain confidence in IPRs. These statistics combined with the relationship between IPR behavior and the increasing phenomenon of efficient infringement suggest that the post grant challenge proceedings as currently implemented are not a substitute for litigation and may, unfortunately, instead actually promote litigation.

While the Patent Office likes to tout statistics that assert most patent claims challenged in IPR are not invalidated, those statistics are simply not credible. When reporting its statistics the Patent Office ignores the reality that once an IPR is actually instituted few claims are actually adjudicated to be patentable. The Office is also grossly misleads when they characterize claims not subject to a final written decision as “remaining patentable.”… Recently I’ve heard a story from a former PTAB judge who explained that institution of IPR challenges is far more likely when there are multiple petitions filed against the same patent because it makes it easier for PTAB judges to meet their production quota. If that is not proof that the PTAB is hopelessly broken I don’t know what is.

At exactly 11:42am on September 16, 2011, President Barak Obama signed the America Invents Act into law. As President Obama put his pen down he said: “All right guys, congratulations, the bill is signed.” It was at this precise moment that U.S. patent laws dramatically changed forever. With this in mind, over the next two weeks we will be examining the AIA in great detail in a special AIA 5th Anniversary series. I’ve invited a number of guests to comment, discuss and/or editorialize about the AIA. Below is a sneak peak of some of the contributions already received. As articles are published this preview article will be updated with links to the entire series.

In the final decision by the Board in the IPR, the Board denied the patent owner’s motion solely because the patent owner did not discuss whether each newly added feature was separately known in the prior art. The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, was insufficient because it did not discuss the features separately but discuss only the newly added feature in combination with other known features. The Federal Circuit found that denying the motion to amend for this reason alone was unreasonable and, therefore, the decision of the Board had to be set aside as being arbitrary and capricious.

The Lifefactory patent covering a protective sleeve technology survived a challenge at the Patent Trial and Appeal Board (PTAB) with most of its claims intact. The company announced that 13 of 21 claims in U.S. Patent No. 8579133, titled Protective Sleeves for Containers, were deemed valid as a result of an inter partes review (IPR) filed by Leapfrog Product Development of Chicago, IL. The ‘133 patent is not currently involved in any current litigation as of our August 26th interview with Mabrey. According to Mabrey, the company wanted to wait to see the outcome of the IPR process before deciding on a strategy.

Robert Bahr, the Deputy Commissioner for Patent Examination Policy, responded that “hindsight is great,” and went on to explain that they thought that the rejections that were being appealed to the Board would stand and there would not be a need to bring the cases back and issue Alice rejections. “These are sort of judgments calls you have to make,” Bahr explained. “Sometimes it works out for you and sometimes it doesn’t.”

The Court recognized that “‘[c]ommon sense has long been recognized to inform the analysis of obviousness if explained with sufficient reasoning.’” However, “there are at least three caveats to note in applying ‘common sense’ in an obviousness analysis.” First, common sense is typically invoked to provide a known motivation to combine, and not to supply a missing claim limitation. Second, while some cases have allowed use of common sense to supply a missing claim limitation, “the limitation in question was unusually simple and the technology particularly straightforward.” Third, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

The Court held that the Board improperly continued to apply the BRI standard following the expiration. While the examiner properly applied the BRI prior to expiration, the BRI standard no longer applies the moment the patent expires – even if it means the Board applies a different standard than the examiner.

The Court noted that all of Warsaw’s arguments related to the Board’s findings of fact, and were therefore reviewed for “substantial evidence.” The Board’s reconciliation of the potentially conflicting descriptions in the reference amounted to a re-weighing of evidence, which is not permitted under the standard of review. The Court also affirmed the Board’s motivation to combine analysis. Finally the Court summarily rejected Warsaw’s arguments presented for the first time on appeal.

O’Malley recognized that in Perfect Web the Federal Circuit did authorize the use of common sense to supply a missing claim limitation, but she pointed out that this was the only case where that has been done. O’Malley further explained that in Perfect Web that which was missing was “unusually simple and the technology particularly straightforward.” In fact, in Perfect Web, which dealt with sending e-mail to an e-mail list, the missing claim limitation was nothing more than merely repeating the step of resending e-mails in accordance with the claim. Thus, O’Malley explained that Perfect Web is properly considered an exception to allowing common sense to supply a missing claim limitation, rather than the rule.

Amongst the appeals involving patent-eligibility rejections, the most recently filed appeal brief was filed in November 2015. Thus, all of the appeal briefs and most of the PTAB decisions were filed prior to the development of more recent case law that has further illustrated why and how various software technologies can be patent eligible. Further, most of the eligibility-involved PTAB decisions were issued prior to these recent cases, which may further have disadvantaged the appellants. Continued assessment of PTAB decisions on post-Alice appeals will provide further insight as to the Board’s interpretation of this area of law fraught with uncertainty and applicant frustration.

One reason the PTAB is convenient for reaching reverse payment deals is that there is no direct antitrust oversight, since its judges are administrators with very narrow legal authority. Further, while there is a statute requiring agreements between Hatch-Waxman firms to be submitted to the Federal Trade Commission (FTC) for antitrust review, the parties may attempt to evade it. The statute requires submission of agreements that relate to the manufacture or sale of either firm’s drug. The parties might therefore feel justified (rightly or wrongly) in not submitting a consent decree stating that the patent is valid and would be infringed by the proposed generic, since this does not expressly address manufacture or sales. Alternatively, it could be that the parties submit a district court consent decree (which includes no reverse payment), but not the PTAB settlement (which could include a reverse payment). After all, a PTAB settlement simply says that the parties agree to terminate the IPR – it need not declare the patent valid – and this arguably does not relate to manufacture or sales.