Posts Tagged: "PTAB"

The Federal Circuit held that the Board correctly placed the burden on Dynamic to prove that Raymond was entitled to the filing date of its provisional application under § 119(e)(1). As the petitioner, Dynamic had the ultimate burden of persuasion to prove unpatentability by a preponderance of the evidence. As for the burden of production, Dynamic satisfied its initial burden by arguing that the claims were anticipated by Raymond under § 102(e)(2). However, this burden then shifted back to Dynamic when the patent owner provided evidence that the claimed invention was reduced to practice before Raymond’s filing date. The burden was then on Dynamic to prove that Raymond was entitled to an earlier effective date.

The PTAB said that the full pilot study had not been made of record, which apparently also meant to the Board that the available description of the pilot study (described in the Kappos reference) was somehow not prior art. This reasoning, if you can call it that given that it was provided in only two short sentences, is extremely troubling. Clearly, the publication of a description of the pilot study would in and of itself be a publication that could be relied upon even if the entirety of the report was not available. Frankly, not considering a published description to be prior art flies in the face of volumes of Federal Circuit decisions on what it means to be a publication. The Kappos reference was a publication and to pretend that something described in that publication is not prior art is unbecoming the dignity of the Board.

In siding with the patent owner the PTAB explained that the petitioner insufficiently made a case that the claimed invention was obvious. A proper obviousness argument must articulate some rational underpinning to support a legal conclusion of obviousness. Unfortunately for Volkswagen, the PTAB saw only conclusions and impermissible hindsight in the IPR Petition. Ultimately, the PTAB was not persuaded that the Petition demonstrated a reasonable likelihood that Petitioner would prevail.

Presently the USPTO has a panel of three APJs decide whether to institute a trial, and then normally has the same three-APJ panel conduct the trial, if instituted. Under the proposed pilot program the single APJ making the IPR institution decision would be on the panel conducting the IPR trial, joined by two other APJs not associated with the IPR institution decision. Regardless of efficiencies, having a single APJ make institution determinations is fraught with due process concerns because decision whether to institute an inter partes review is not appealable.

The USPTO declined to initiate an inter partes review of two patents owned by Acorda Therapeutics, Inc. Acorda patents were challenged by the Coalition for Affordable Drugs, LLC, the entity formed by billionaire hedge fund manager Kyle Bass. I have to wonder whether this decision represents a shift in the worldview of the PTAB or whether they sought out a reason to deny the petition because it was filed by Kyle Bass. Unfortunately, I suspect these two denials have everything to do with who was behind the challenge and little to do with the merits of the challenge.

Even though the Board is generally not bound by the district court’s construction of claim terms, it does not mean that “it has no obligation to acknowledge that interpretation or to assess whether it is consistent with the broadest reasonable construction of the term.” Here, given that PI’s main argument was the proper interpretation of the term “coupled,” which was construed by the district court, the Board had an obligation “to evaluate that construction and to determine whether it was consistent with the broadest reasonable construction of the term.” Because the Board failed to address the district court’s interpretation of the term “coupled” and failed to provide adequate explanation for its decision to reject the claims as anticipated, the Court reversed and remanded.

USPTO proposed rule changes would amend the existing rules relating to trial practice for inter partes review (IPR), post-grant review (PGR), the transitional program for covered business method patents (CBM), and derivation proceedings. By in large, the Office decided to stick with BRI, but not when the challenged patent will soon expire. The USPTO also adopted the comments from those who expressed satisfaction with the Board’s current rules and practices for motions to amend, which means there will be a right to file a motion to amend but no right to amend if these proposed rules go final.

This week in the Federal Circuit Review: (1) Proposed rejections to claims added during Inter Partes Reexamination are not evaluated for substantial new question of patentability (Airbus S.A.S., v. Firepass Corp.); and (2) Likelihood-of-Confusion requires full consideration of strengths and weaknesses of existing mark (Juice Generation, Inc., v. GS Enterprises LLC ).

Ex parte Khvorova is the first PTAB decision on patent eligibility in the life sciences. Until now, the PTAB has been remarkably silent on eligibility in life sciences in the midst of significant judicial activity. The invention relates to synthetically designed and produced small interfering RNA (“siRNA”) molecules, which were discovered in nature for their ability to suppress gene expression. Claim 85 recites a method of rationally designing siRNA molecules with optimal suppression efficacy.

For 61% of the non-defective requests, the panel decided that there was an actual issue for appeal, such that the applicant would either need to file an Appeal Brief, reengage the Examiner or abandon the application. For 33% of the non-defective requests, the panel decided that prosecution was to be reopened. For only 6% of requests were the panel decisions that an application was to be allowed.

Very few thought that the IPR procedure would be used by creative hedge fund managers to reap benefits for the price drop of pharmaceutical companies’ stock that have had their important drugs challenged in an IPR. Most would not have thought that small patent owners would be swamped by serial petitions to invalidate their patents. Others were very surprised at the limited manner in which the USPTO permitted the patent owner to amend her claims during the process. And many did not expect the USPTO to interpret statutory language of the AIA to include so much subject matter in what was intended to be a limited-scope CBM program.

In this issue of the Federal Circuit Review: (1) Personal Jurisdiction Remains Unchanged – Federal Circuit Declines “Stream-of-Commerce” Theory; (2) Court Denies Fee Award Under Octane But Recognizes “Troll”-Like Behavior is Relevant Consideration; (3) 35 U.S.C. § 324(e) Does Not Bar Judicial Review of Initial USPTO Determination That Patent is for a “Covered Business Method” (Versata I); and (4) 35 U.S.C. § 324(e) Bars District Court Review of USPTO Decision to Institute CBM Review (Versata II).

In three related decisions (most recently including a denial of rehearing en banc by a badly divided 6-5 decision issued concurrently with reissuance of the earlier panel decision) titled In re Cuozzo Speed Technologies, the Federal Circuit has held: (1) claim construction in IPR proceedings is governed by the prosecution standard of “broadest reasonable interpretation,” rather than the adjudicatory standard applied in the district courts (i.e., claim terms have their “ordinary and customary meaning” per the 2004 Federal Circuit decision of Phillips v. AHW Corp.); and (2) the Federal Circuit lacks appellate jurisdiction to review the PTAB’s decision to institute an IPR proceeding. Whether the AIA permits appellate review of improperly instituted IPR proceedings, the Administrative Procedures Act clearly permits such appellate review.

Having to defend their patent in post grant reviews such as an IPR can easily cost patent owners between $700,000 to over $1 million when the subject matter of the patent under challenge relates to the biological or pharmaceutical sciences, due in part to the need to cast a wide net for relevant prior art, according to experienced practitioners like Brad Olson, a partner with Barnes and Thornburg, LLP. Such expenses are particularly threatening to new companies finding the patents that drive their business under attack just as they are desperately trying to raise money for their very survival. Given the track record of IPR’s as “patent death squads” potential investors or licensees can’t be blamed for waiting until the reviews are completed to finalize pending deals.

The opinion focused on whether adequate structure corresponding to the “coordinating” function is disclosed in the specification. After determining that a special purpose computer is required to perform the function, the court searched for an algorithm for performing the function, but did not find one. The court rejected Williamson’s argument that the distributed learning control module controls communications among the various computer systems and that the “coordinating” function provides a presenter with streaming media selection functionality. The disclosures relied upon by Williamson were thought of by the court as merely functions of the distributed learning control module and opined that the specification does not set forth an algorithm for performing the claimed functions.