m -year review of ptab final written decisions · 9/25/2015 · claims 1, 3 and 5–9 based upon...

MID-YEAR REVIEW OF PTAB FINAL

WRITTEN DECISIONS

Wednesday, August 31, 2016

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Presented by…

9 © AIPLA 2016

Ehab Samuel Manatt Phelps & Phillips

Joe Cianfrani Knobbe Martens

Mid-Year Review of PTAB Final Written Decisions

Ehab Samuel

Manatt, Phelps & Phillips, LLP

310.312.4243

[email protected]

August 31, 2016

11 Agenda

Kingston Tech. Co. v. Imation Corp.,

IPR2015-00066, Paper No. 19 (March 24, 2016)

HTC Corp. et al. v. Cellular Comm. Equipment LLC,

IPR2014-01135, Paper No. 43 (January 4, 2016)

VMware Inc. v. Clouding Corp.,

IPR2014-01304, Paper No. 35 (January 7, 2016)

Smart Modular Technologies Inc. v. Netlist, Inc.,

IPR2014-01372, Paper No. 45 and


Toshiba Corp. v. Optical Devices, LLC,


Mid-Year Review of PTAB Final Written Decisions | Manatt, Phelps & Phillips, LLP

12 Kingston Tech. Co. v. Imation Corp. – Background

Kingston petitioned the PTAB to institute an inter partes review of claims

10–14 and 20 of U.S. Patent No. 6,890,188, alleging 6 invalidity grounds

based on 4 prior art references

The claims at issue are directed to a memory card that included both a device

connector conforming to a device connection standard and a host connector

Although Imation had the right to file a

Preliminary Response to the Petition,

it was not required and chose not to file

a Preliminary Response

The Board instituted a review based on

2 invalidity grounds with 2 prior art

references, and exercised discretion to

not institute on the other grounds to

“ensure timely competition of the

instituted proceeding”


13 Kingston Tech. Co. v. Imation Corp. – Final Written Decision

The Board held that Kingston failed to demonstrate that the challenged claims were either anticipated and/or obvious in view of the 2 prior art references.

Kingston attempted to advance new evidence and arguments at the oral hearing, but the Board refused. Practice Guide, 77 Fed. Reg. at 48,768 (“No new evidence or arguments may be presented at the oral argument.”).

Kingston requested the Board revisit or alter the instituted grounds, but the Board declined.

Kingston speculated that Imation strategically may not have filed a Preliminary Response to preclude the Board from instituting, sua sponte, on obviousness grounds in view of one of the submitted prior art references.

The Board noted that Imation’s arguments in the Response are not untimely and that Imation was permitted—but not required—to file a Preliminary Response.


14 HTC Corp. et al. v. Cellular Comm. Equip. LLC – Background

HTC, ZTE, Amazon, Pantech, Pantech Wireless, Dell, LG Electronics, and LG

Electronics USA (“Petitioners”) collectively petitioned the PTAB to institute an

inter partes review of claims 1–12 of U.S. Patent No. U.S. 6,377,804.

The claims at issue are directed to mobile communications systems.

Independent claim 1 is directed to a method of operating a mobile device in an

area with overlapping coverage from a “home network” and a second mobile

telephone network.

The Board instituted a review of

claims 1, 3 and 5–9 based upon Petitioners’

anticipation grounds.

Here, at the institution stage, the Board

relied on Petitioners’ assertion that the

limitation “home network” was

disclosed explicitly in the reference.


15 HTC Corp. et al. v. Cellular Comm. Equip. – Final Written Decision

At the hearing and in the Reply Brief, Petitioners acknowledged that the prior art reference does not explicitly disclose the limitation, but instead is inherently disclosed.

The Board emphasized that “[t]o serve as anticipation when the reference is silent about the asserted inherent characteristic, such gap in the reference may be filled with recourse to extrinsic evidence. Such evidence must make clear that the missing descriptive matter is necessarily present in the thing described in the reference, and that it would be so recognized by persons of ordinary skill.” Id. at 7.

Petitioners failed to proffer evidence on this issue. Instead, Petitioners contend that the limitation is trivial or well-known and asked the Board to take judicial notice of this missing evidence.

The Board declined to take judicial notice noting that (i) Petitioners did not meet their burden and (ii) the claim limitation they are being asked to take judicial notice of was not trivial.

Notice of Appeal filed March 7, 2016.


16 VMware Inc. v. Clouding Corp. – Background

VMware petitioned the PTAB to institute an inter partes review of claims 1–4

and 6–9 of U.S. Patent No. 7,065,637, alleging 3 invalidity grounds based on

3 prior art references. One of the references (Patterson) claimed priority to a

Patterson provisional application and to a non-provisional application (Aziz).

The claims at issue are directed to an interactive system for computer system

architects to design and create a computing environment dynamically.

Preliminary Response challenged the priority date of the Patterson reference,

among others. The Board rejected PO’s argument and stated that provisional

application and Aziz application provide written description support for the

“disclosure” of a certain feature in the Patterson patent.

The Board instituted a review based on 2 invalidity

grounds with 2 prior art references, and exercised

discretion to not institute on the other grounds to

“ensure timely competition of the instituted proceeding.”


17 VMware Inc. v. Clouding Corp. – Final Written Decision

After institution, Dynamic Drinkware LLC v. Nat’l Graphics, Inc., 800 F.3d 1375

(Fed. Cir. 2015) clarified Petitioner’s burden of proof with respect to a

reference patent’s entitlement to the benefit of the filing date of a provisional

application

Emphasized that entitlement under §119(e)(1) to claim benefit of the filing date

of provisional application or under §120 to claim benefit of earlier-filed non-

provisional, Petitioner must provide support for the “claims in the reference

patent” in compliance with §112, ¶1

Petitioner failed to explain how the Patterson

provisional or the Aziz non-provisional provide

adequate written description support for the

“claims of the Patterson patent” per §112, ¶1

Unrelated to the Dynamic Drinkware argument

or reference, the PTAB found the claims to be

obvious in light of the combination of the other

references accepted at institution


18 Smart Modular Techs. Inc. v. Netlist, Inc. – Background

Petitioner filed two requests to institute inter partes review for each of U.S.

Patent No. 8,359,501 (“ ’501”) and 8,001,434 (“ ’434”). Two were denied and

two instituted (IPR2014-01372 for ’434 and IPR2014-01374 for ’501, both

based on anticipation in light of Averbuj patent).

Patents ’434 and ’501 were also subject to a separate inter partes review from

Sandisk Corporation (IPR2014-00970 for ’434 and IPR2014-00971 for ’501), in

which claims were held unpatentable under 102(b) as anticipated by Averbuj

publication (published application of the Averbuj patent).

Petitioner Smart Modular relied on effectively

the same document (the Averbuj patent instead

of the publication relied upon by Sandisk).

Oral argument of the present IPRs was consolidated

and final decisions were concurrently issued.


19 Smart Modular Techs. Inc. v. Netlist, Inc. – Final Written Decision

PTAB rejected Petitioner’s proposed constructions, noting that even

Petitioner’s testimony is devoid of any facts and analysis as to what led him to

conclude that POSITA would interpret claim term as Petitioner proposes.

Instead, the PTAB adopted and incorporated by reference its claim

construction analysis in Sandisk’s IPR-970/971 relating to the same 2 patents.

Despite relying on same claim construction, the PTAB (with same judges for

’434 and 2 of 3 judges for ’501 as in Sandisk case) held that Petitioner failed to

show by preponderance of evidence that

the claims are unpatentable under 102(b)

as anticipated by Averbuj patent.

The 970/971 IPRs are currently on appeal.

The decision denying Petitioner’s Request

for Rehearing in 1372/1374 was just issued

July 11, so an appeal can be expected.


20 Toshiba Corp. v. Optical Devices, LLC – Background

Toshiba petitioned the PTAB to institute an inter partes review of claims 1–10 of Patent No. U.S. 7,839,729 B2 (“the ’729 patent”).

The claims are directed to an optical disk drive having a digital servo system.

After institution, the Patent Owner objected to two exhibits in Petitioner’s Reply. In response to Patent Owner’s objections, Petitioner submitted two new exhibits more than 10 business days after being served with Patent Owner’s objections.

Petitioner stated that the two new exhibits “were introduced for purposes of responding to Patent Owner’s arguments in its Response pursuant to 37 C.F.R. § 42.23.”

Patent Owner brought a Motion to Exclude the two new exhibits as (a) untimely and (b) Petitioner’s failure to seek authorization to file a motion to submit supplemental information per 37 C.F.R. §42.123(b).


21 Toshiba Corp. v. Optical Devices, LLC – Final Written Decision

The PTAB granted Patent Owner’s Motion to Exclude with respect to the two

new exhibits and did not consider those exhibits, or the arguments in the Reply

Brief addressing those exhibits, when considering the merits of the case.

The PTAB noted that Petitioner’s reliance on 37 C.F.R. § 42.23 as justification

for submitting evidence not initially part of the record was misplaced. Section

42.23(b) states that “A reply may only respond to arguments raised in the

corresponding opposition or patent owner response.” That section does not

authorize or otherwise provide a means for supplementing the evidence

of record.

Rules expressly provide procedures for introducing

supplemental information or evidence

into the proceeding:

– 37 C.F.R. § 42.64(b)(2)—supplemental evidence

– 37 C.F.R. § 42.123(a)–(c)—supplemental information


22 Practice Tips for Petitioners

Lead with your best invalidity grounds in your Petition

Do not advance new evidence and arguments at the oral hearing

Support your inherency arguments with extrinsic evidence regardless of how trivial the limitation is

If relying on a prior art reference with a priority claim under §119(e)(1) or §120, must provide support for the “claims in the reference patent” in compliance with §112, ¶1

Support proposed constructions with facts, extrinsic evidence and analysis showing why POSITA would interpret the claim as proposed

Request authorization and file motion to submit supplemental information per 37 C.F.R. §42.123, if necessary

File Motion to exclude to preserve any objections in the record per 37 C.F.R. §42.64(c)


23 Practice Tips for Patent Owners

Consider the Imation strategy of preserving your

attack on the Petition until after institution

Challenge Petitioner’s explicit and/or inherency arguments

Hold Petitioner to its burden of production on a priority claim

under §119(e)(1) or §120 for a prior art reference,

i.e., argue no support for the “claims in the reference patent”

in compliance with §112, ¶1

Challenge Petitioner’s expert testimony and proposed constructions on the

basis that they are devoid of specific facts and other evidence that supports

proposed construction

Request authorization and file motion to submit supplemental information per

37 C.F.R. §42.123, if necessary

File Motion to exclude to preserve any objections in the record per

37 C.F.R. §42.64(c)


Thank You!

Ehab Samuel

Manatt, Phelps & Phillips, LLP

310.312.4243

[email protected]

knobbe.com

Significant Recent IPR Decisions

August 31, 2016

Joe Cianfrani

26 © 2016 Knobbe, Martens, Olson & Bear, LLP all rights reserved.

American Simmental Ass’n

v. Leachman Cattle of Colorado

• One of the first two final PGR decisions (June 13, 2016).

• Involved §103 and 101 challenge to two patents directed to livestock valuation based on specific genetic traits

https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&ved=0ahUKEwiNxbbvt-XOAhUFOCYKHVlmD84QjRwIBw&url=http://www.crosslivestock.com/&psig=AFQjCNHpY3ku8iENV542-3YQdNpzsQ7w4g&ust=1472519148573284




Claim 16:

• A computer-implemented method to determine relative market value of a sale group, the sale group including cattle that are fed and harvested for beef production, the method comprising:

• determining, by one or more processors, a plurality of economic weighting factors responsive to a plurality of genetic merit estimates associated with the sale group and one or more economic outcomes;

• determining, by one or more processors, relative market value and ranking of the genetic merits of the sale group responsive to the plurality of genetic merit estimates and the plurality of economic weighting factors; and

• outputting to one or more electronic interfaces, positioned to display an online genetic merit scorecard to thereby define one or more genetic merit interfaces, the online genetic merit scorecard for the sale group responsive to determining the relative market value and the ranking of the genetic merits of the sale group, the online genetic merit scorecard including the relative market value and one or more rankings of genetic merits of the sale group being displayed on the one or more genetic merit interfaces.




• Not obvious, but…

• Applied Alice two-step subject-matter eligibility framework

– Abstract idea of fundamental economic practice

– Merely recite generic computer hardware that is used in a conventional manner

Relatively easy case under Alice


Google v. ContentGuard Holdings

• CBM proceeding

• PTAB found claims invalid under §102, 103

• Granted contingent motion to amend the claims

• Found new claim was not broader and had written description support in the specification

• Patent owner must then demonstrate patentability over the prior art of record and the prior art known to the patent owner

• “prior art of record” includes all art in the prosecution history or asserted in the petition.


Google v. ContentGuard Holdings

• “prior art known to the patent owner” is the prior art the patent owner makes of record pursuant to its duty of candor.

• Patent owner demonstrated patentability over prior art of record.

• PTAB also declared that the scope of the substitute claim was substantially identical to the original claim as would be interpreted by a district court


Redline Detection v. Star Envirotech (Fed. Cir. 2015)

• PTAB rules (§42.123(a)) allow for submission of supplemental information within one month of institution of trial in an IPR petition.

• The PTAB rejected the supplemental evidence because the only reason given for failing to submit the evidence with the petition was complexity and cost.

• Petitioner argued that acceptance of supplemental evidence was mandatory.


Redline Detection v. Star Envirotech (Fed. Cir. 2015)

PTAB interpreted statute as subject to its discretion to “ensure efficient administration of the Office and the ability of the Office to complete IPR proceedings in a timely manner.”

Federal Circuit affirmed noting that the PTAB’s interpretation of the statute that there is no obligation to accept supplemental information was not clearly erroneous.


Westlake Services v. Credit Acceptance

• Addresses estoppel resulting from a prior terminated petition.

• §325(e)(1) estops a petitioner from filing or maintaining a proceeding “on any ground that the petitioner raised or reasonably could have raised”

• PTAB: estoppel applies on a claim-by-claim basis and thus does not apply to non-instituted claims from a previous petition

• Non-instituted claims can be challenged in a subsequent proceeding


Westlake Services v. Credit Acceptance

• PTAB recognized it could have declined institution under §325(d), which authorizes it to reject a petition because “the same or substantially the same arguments previously were presented”

• Same result in recent Federal Circuit case:

– Estoppel does not apply in PTO or district court for invalidity grounds denied at institution stage

– Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016)


Coalition for Affordable Drugs, IV

v. Celgene

• Petitioner and hedge fund manager filed a number of IPR petitions as part of an investment strategy to drive down value of targeted companies and profit by shorting the stock.

• Patentee moved for sanctions requesting dismissal

because the IPR strategy was driven entirely by an

admitted profit motive unrelated to the purposes

for which the IPR system was intended.

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwiCr6LH8ebOAhUG-2MKHb3RDOUQjRwIBw&url=http://www.dividendninja.com/investing-during-market-declines/&bvm=bv.131286987,d.cGc&psig=AFQjCNHB-vkj3MSe9fpUkA0Ss7mWeZ3aOA&ust=1472569053303863


Coalition for Affordable Drugs, IV v. Celgene

• Motion denied. Unlike a CBM proceeding, having a competitive interest in the challenged patents is not a requirement to file an IPR.

“Profit is at the heart of nearly every patent and nearly every inter partes review.

As such, an economic motive for challenging a patent claim does not itself raise abuse of process issues.”

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved. © 2016 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 37

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1

SIGNIFICANT RECENT INTER PARTES REVIEW DECISIONS

Ehab Samuel

Counsel, Manatt, Phelps & Phillips, LLP

Joe Cianfrani

Partner, Knobbe Martens Olson & Bear

Owens Corning v. Certainteed Corp., IPR2014-01397 (March 8, 2016).

Petitioner sought inter partes review of a patent for a roofing shingle based on grounds of obviousness under 35 U.S.C. § 103(a). In attempting to overcome Petitioner’s evidence of obviousness, Patent Owner presented evidence to demonstrate objective indicia of non-obviousness. Id. at *12. Citing Federal Circuit precedent, the Board explained that:

It is not sufficient that a product or its use merely be within the scope of a claim in order for secondary evidence of non-obviousness tied to that product to be given substantial weight. There must also be a causal relationship, termed a “nexus,” between the evidence and the claimed invention. A nexus is required in order to establish that the evidence relied upon traces its basis to a novel element in the claim, not to something in the prior art. Objective evidence that results from something that is not “both claimed and novel in the claim,” lacks a nexus to the merits of the invention. All types of objective evidence of non-obviousness must be shown to have such a nexus. The stronger the showing of nexus, the greater the weight accorded the objective evidence of non-obviousness.

Id. (internal citations omitted). The Board examined the evidence presented by Patent Owner and concluded that Patent Owner failed to demonstrate commercial success and industry praise attributable to the claimed invention. Id. at 14. Patent Owner failed to establish the nexus between the evidence presented and the claimed invention.

2

Toshiba Corp. v. Optical Devices, LLC, IPR2014-01445 (March 9, 2016).

While proceedings specific to the patent at issue were pending at the district court, Toshiba Corporation petitioned the Patent Trial and Appeal Board (PTAB) to institute an inter partes review of claims 1–10 of Patent No. U.S. 7,839,729 B2 (“’729 patent”). The claims at issue are directed to an optical disk drive having a digital servo system. Optical Devices, LLC (“Patent Owner”) filed a Preliminary Response to Toshiba’s Petition. Considering the Petition and Response, the PTAB instituted an inter partes review of claims 1–10 of the ′729 patent.

During the proceedings at the PTAB, Patent Owner filed a Patent Owner Response to the Petition, and Petitioner filed a Reply to the Patent Owner’s Response. Patent Owner objected to two exhibits in Petitioner’s Reply. In response to Patent Owner’s objections, Petitioner submitted two new exhibits more than 10 business days after being served with Patent Owner’s objections. Petitioner stated that the two new exhibits “were introduced for purposes of responding to Patent Owner's arguments in its Response (Paper 16) pursuant to 37 C.F.R. § 42.23.” Patent Owner brought a Motion to Exclude the two new exhibits as “untimely.”

The PTAB, considering the parties’ arguments, granted Patent Owner's Motion to Exclude with respect to the two new exhibits and did not consider those exhibits, or the arguments in the Reply Brief addressing those exhibits, when considering the merits of the case. The PTAB noted that Petitioner's reliance on 37 C.F.R. § 42.23 as justification for submitting evidence not initially part of the record was misplaced. Section 42.23(b) states that “A reply may only respond to arguments raised in the corresponding opposition or patent owner response.” That section does not authorize or otherwise provide a means for supplementing the evidence of record. The PTAB noted that although Petitioner was aware early on of the possible need for such supplemental evidence or information in this proceeding, Petitioner made no apparent effort to take advantage of the available procedures. See Avocent Huntsville Corp. v. Cyber Switching Patents, LLC, Case IPR2015–00690, slip op. at 5–7 (PTAB Oct. 2, 2015) (Paper 28) (“Supplemental evidence, served in response to an evidentiary objection, is offered solely to support admissibility of the originally filed evidence and to defeat a motion to exclude that evidence, and not to support any argument on the merits (i.e., regarding the patentability or unpatentability of a claim).”); Palo Alto Networks, Inc. v. Juniper Networks, Inc., Case IPR2013–00369, slip op. at 2–3 (PTAB Feb. 5, 2014) (Paper 37) (granting a motion to submit supplemental information regarding public accessibility of references serving as a basis for instituted grounds).

3

Smart Modular Technologies Inc. v. Netlist, Inc., IPR2014-01372 and IPR2014-01374 (March 9, 2016).

Petitioner’s previously filed two requests to institute inter partes review of U.S. Patents 8,359,501 (“’501”) and 8,001,434 (“’434”). Both requests were denied. Patents ‘434 and ‘501 were also subject to a previous, separate inter partes review from Sandisk Corporation (IPR2014-00970 and IPR2014-00971), in which a number of claims in ‘434 and ‘501 were held unpatentable based on the Averbuj application publication. The present IPRs were instituted to review ‘434 claims 1-4, 14-20, 27, and 29 and ‘501 claims 1, 2, 4-6, 9-11, 14-17, and 20. Oral argument of the present IPRs was consolidated and final decisions were concurrently issued.

During the proceedings at the PTAB, Petitioner and Patent Owner disputed the proper claim construction for the terms “generate” and “configured to generate.”

Claim Term/Phrase Patent Owner’s Proposed Construction

Petitioner’s Proposed Construction

Adopted Construction

Generate Produce Cause or initiate transmission

Produce (consistent with IPR2014-00970)

Configured to generate

Programmed to generate/produce

Arranged or prepared to produce or cause

Designed, adapted, or arranged to produce (from IPR2014-00970)

The PTAB interpreted the claims according to the broadest reasonable construction, constructing “generate” to exclude propagated or retransmitted data received from another component. Presuming that each appearance of the term “configured to” in the specification should carry the same meaning, the PTAB therefore pulled its prior “designed to, adapted to, or arranged to” construction from the previous IPR2014-00970/971, in which the PTAB found the claims to be unpatentable.

The PTAB chose to adopt the claim construction from the 2 previous IPRs of the same 2 patents relying on effectively the same document (the Averbuj patent publication vs the eventual issued Averbuj patent) and decided by nearly the same ALJ panel (the second IPR included an additional 4th ALJ), and managed to come to the opposite result.

4

In IPR2014-00970, The Board noted that “Petitioner has met its burden to show, by a preponderance of the evidence, unpatentability of: claims 1, 14, 15, 20-25, 27, and 29-34 under 35 U.S.C. §102(b) based on Averbuj…” and concluded that “[f]or the reasons given, it is ORDERED that claims 1, 14, 15, 19-25, and 27-34 are unpatentable…” Id. (emphasis added). Meanwhile, in IPR2014-01372, the Board noted that “Petitioner has not shown by a preponderance of the evidence that claims 1-4, 14-20, 27, and 29 of the ‘434 patent are unpatentable under 35 U.S.C. §102(b) as anticipated by Averbuj…” and concluded that “[i]n consideration of the foregoing, it is hereby: ORDERED that claims 1-4, 14-20, 27, and 29 of the U.S. Patent No. 8,001,434 B1 are not held unpatentable under 35 U.S.C. §102(b)as anticipated by Averbuj…” Id. (emphasis added).

The 970/971 IPRs are currently on appeal. The decision denying Petitioner’s Request for Rehearing in 1372/1374 was just issued July 11, so an appeal can be expected.

Oracle Corp. v. Crossroads Systems, Inc., IPR2014-01197 (January 28, 2016).

The patent at issue, U.S. Patent 6,425,035 (“’035”) is the subject of 4 current district court proceedings and the ‘035 patent family is subject to at least 8 other current IPR proceedings. In its Decision to Institute, the PTAB determined that no claim terms required construction, and that decision was maintained through the PTAB’s final written decision.

Without performing claim construction, the PTAB differentiated the present patent from the prior art by analyzing the differences between “using native low level, block protocols” in the present claims and “high-level access controls” in the prior art and found the patent not obvious. The PTAB further chastised Petitioner’s argument for disregarding parts of the prior art reference without providing explanation why a person having ordinary skill in the art at the time the invention was made would choose to do so, stating “[t]his type of reasoning – where relevant parts of the references are disregarded for the proposed combination without sufficient explanation of why a person of ordinary skill would do so – is precisely the type of hindsight reasoning that must be rejected.” In its analysis, the PTAB focused significantly on Petitioner’s failure to present credible POSITA motivation to combine.

The PTAB determined that Petitioners had not shown that any claims were obvious.

5

Microsoft Corp. v. Biscotti Inc., IPR2014-01457, IPR2014-01458, IPR2014-01459 (March 17, 2016).

All three IPRs were directed to US8,144,182. Patent owner asserted the present patent against Petitioner in the Eastern District of Texas, and Petitioner filed the 3 inter partes review petitions that became the 3 current final written decisions, which were consolidated for oral argument and received simultaneous Final Written Decisions. Petitioner relied on a combination of multiple embodiments within a single reference to establish anticipation of the present claims.

Petitioner identified where the functionality of each instruction sub-element could be located in the reference and relied on the sentence “[e]mbodiments of a subset of all (and portions or all) of the above may be implemented by program instructions stored in a memory medium or carrier medium and executed by a processor” (the “program-instructions sentence”) to explain that any of the embodiments in the disclosure could be stored in a storage medium as instructions. In response, Patent Owner argued that the catch-all phrase associated with the program-instructions sentence could not apply to all preceding pages and embodiments because many of the disclosures or embodiments could not be implemented with program instructions (such as handles or fans), and therefore the sentence did not support those embodiments as instructions stored in a storage medium.

The majority found in favor of the Patent Owner, quoting In re Bond (910 F.2d 831, 832 (Fed. Cir. 1990)) for the proposition that “[t]o demonstrate anticipation, Petitioner must demonstrate that a prior art reference shows every element of the claimed invention identically, in the same relationship as in the claim.” The majority was not convinced by Petitioner’s argument that the program-instructions sentence tied together multiple separate embodiments. The majority further explained that although “a reference can anticipate a claim even if it ‘does not expressly spell out’ all the limitations arranged or combine as in the claim, if a person of skill in the art, reading the reference, would ‘at once envisage’ the claimed arrangement of combination.” The majority effectively conceded that while an obviousness argument may have succeeded, the anticipation argument was unsupportable, noting that “[t]he thrust of Petitioner’s arguments is that Kenoyer expressly discloses the disputed claim limitations, not what a person of ordinary skill in the art would envisage or understand based on what Kenoyer does disclose.”

In dissent, APJ Kevin Cherry noted that he would have found the claims anticipated even without the “program instructions” sentence because in APJ Cherry’s view, a person having ordinary skill in the art could have “at once envisaged” the

6

claimed invention upon seeing the reference. The dissent further agreed with Petitioner’s argument that the program-instructions sentence modified the entire specification, further bolstering anticipation of the claims.

MasterImage 3D, Inc. v. Reald Inc., IPR2015-00035 (April 20, 2016).

Fairly standard disqualification, based on Dynamic Drinkware LLC v. Nat’l Graphics, Inc., 800 F.3d 1375 (Fed. Cir. 2015), because Petitioner failed to properly establish the reference’s 35 USC 102(e) prior art date when Petitioner failed to show that the reference is entitled to claim priority to the filing date of its provisional application. Thus, it was not obvious because the reference thrown out when Petitioner failed to carry Dynamic Drinkware burden. Primary reference was also owned by IPR patent owner, and ALJs ruled that Patent Owner did not waive ability to challenge 102(e) support when it asserted the reference patent in ITC and indicated the provisional date as the earliest priority date.

VMware Inc. v. Clouding Corp., IPR2014-01304 (January 7, 2016).

Petitioner failed to properly present the Dynamic Drinkware support for the anticipation reference, which requires that not only the relevant portion of the patent application, but specifically the claims of the published or issued reference must find support in the provisional application to apply as a 35 USC 102(e) reference. The PTAB therefore determined that Petitioner had failed to prove that the reference anticipated those claims. Unrelated to the Dynamic Drinkware argument or reference, the PTAB found the claims to be obvious in light of the combination of the other references accepted at institution. Aside from reminding practitioners of the specific claim chart relationship necessary for a 35 USC 102(e) reference depending on a provisional application filing date, this IPR reminds practitioners of the need to include multiple alternative grounds for institution in a petition, sometimes including different references as well as sometimes asserting both anticipation and obviousness arguments regarding the same reference.

HTC Corp. v. Cellular Comm. Equipment LLC, IPR2014-01135 (January 4, 2016).

HTC, ZTE, Amazon, Pantech, Pantech Wireless, Dell, LG Electronics, and LG Electronics USA (collectively “Petitioners”) petitioned the Patent Trial and Appeal Board (Board) to institute an inter partes review of claims 1–12 of U.S. Patent No. U.S. 6,377,804. The claims at issue are directed to mobile communications systems. The

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Board instituted a review based upon Petitioners’ assertion that the claims are anticipated.

After considering the parties’ evidence and arguments, the Board held that the patent claims were not anticipated by prior art references disclosing creating a catalog of service providers and a wireless communicator that does not support roaming for service. At the hearing, Petitioners acknowledged that their inherency arguments were not made until the Reply brief and that they did not proffer evidence on the issue. The Board emphasized that “[t]o serve as anticipation when the reference is silent about the asserted inherent characteristic, such gap in the reference may be filled with recourse to extrinsic evidence. Such evidence must make clear that the missing descriptive matter is necessarily present in the thing described in the reference, and that it would be so recognized by persons of ordinary skill.” Id. at 7. Petitioners instead asked the Board to take judicial notice of the lack of evidence and arguments provided by Petitioners. The Board declined to take judicial notice noting that Petitioners did not meet their burden and the claim limitation being asked to take judicial notice of was not trivial.

Kingston Tech. Co. v. Imation Corp., IPR2015-00066 (March 24, 2016).

Kingston Technology Company, Inc. (“Petitioner”) petitioned the Patent Trial and Appeal Board (Board) to institute an inter partes review of claims 10–14 and 20 of U.S. Patent No. U.S. 6,890,188. The claims at issue are directed to a memory card that included both a device connector conforming to a device connection standard and a host connector. Although it had the right to file a Preliminary Response to the Petition, Imation Corp. (“Patent Owner”) was not required and chose not to file a Preliminary Response. The Board instituted a review based upon Petitioner’s showing of a reasonable likelihood that Petitioner would prevail in establishing the unpatentability of the challenged claims.

After considering the parties’ evidence and arguments, the Board held that Petitioner failed to demonstrate that the challenged claims were either anticipated and/or obvious in view of the submitted prior art references. Petitioner attempted to advance new arguments at the oral hearing. Rebuking Petitioner’s new theories, the Board emphasized that:

The oral hearing is not an opportunity to make new arguments or submit new evidence. See Dell, slip op. at 13–15 (holding that the “oral argument presented no opportunity for [petitioner] to supply evidence,” as the Board’s prohibition on new evidence and arguments in an oral hearing reflects the “fundamental requirements” of the APA, and a final decision based on a factual assertion raised for first time at oral argument deprived

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patent owner of required meaningful opportunity to respond); Practice Guide, 77 Fed.Reg. at 48,768 (“No new evidence or arguments may be presented at the oral argument.”). Id. at 14.

Next, Petitioner requested that the Board ignore as untimely Patent Owner’s arguments in the Response. Petitioner speculated that Patent Owner strategically may not have filed a Preliminary Response to preclude the Board from instituting, sua sponte, on obviousness grounds in view of one of the submitted prior art references. The Board noted that Patent Owner’s arguments in the Response are not untimely and that the Patent Owner was permitted—but not required—to file a Preliminary Response. See 35 U.S.C. § 313 (“[T]he patent owner shall have the right to file a preliminary response to the petition.”) (emphasis added); 37 C.F.R. § 42.207(a) (“The patent owner may file a preliminary response to the petition.”) (emphasis added). Accordingly, the Board did not disregard any arguments that Patent Owner properly and timely made in its Response.

Nintendo of Am. Inc. v. iLife Techs., IPR2015-00105 (April 28, 2016),

Nintendo of America Inc. and Nintendo Co., Ltd. (“Petitioners”) petitioned the Patent Trial and Appeal Board (Board ) to institute an inter partes review of claims 1–24 of U.S. Patent No. U.S. 6,307,481. The claims at issue are directed to systems, and methods of operation thereof, for evaluating movement of a body relative to an environment. The Board instituted a review based upon Petitioners’ assertion that the claims are obvious.

After considering the parties’ evidence and arguments, the Board held that the challenged claims were unpatentable as obvious. In a Motion to Exclude, Patent Owner moved to exclude certain paragraphs that included declaration testimony of Petitioners’ expert as comprising new claim construction arguments. Patent Owner argued that Petitioner should have presented such arguments in the Petition. The Board noted that normally a motion to exclude is available to parties to explain why certain evidence is inadmissible and is not the proper place to raise arguments regarding the scope of a reply. Rather than deny Patent Owner’s motion on that basis, the Board addressed the points raised in the motion to clarify the issues raised. In denying the Patent Owner’s Motion to Exclude, the Board noted that Petitioners’ paragraphs were submitted properly to rebut Patent Owner’s arguments made in its Patent Owner Response.

The Board also determined that Petitioner's reliance on identified arguments and evidence in Petitioners’ Reply was responsive to arguments raised in the Patent Owner Response as to the entirety of the teachings of a prior art reference, and accordingly, had given appropriate consideration to the identified arguments and evidence relating to

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the contentions regarding the entirety of a submitted prior art reference. The Board noted that “the mere fact that a petitioner submits rebuttal testimony that relies on new evidence not previously identified in the petition does not suffice to establish its impropriety. The very nature of a reply is to rebut the patent owner’s response.” Id. at 20 (citing 37 C.F.R. § 42.23(b)).

MasterImage 3D, Inc. v. RealD Inc., IPR2015-00040, Paper 42 (PTAB July 15, 2015). On the issue of motions to amend in IPR proceedings, the PTAB clarified its

statement from a previous decision that “[t]he burden is not on the petitioner to show

unpatentability, but on the patent owner to show patentable distinction over the prior art

of record and also prior art known to the patent owner." MasterImage 3D, Inc. v. RealD

Inc., IPR2015-00040, Paper 42 at 2 (PTAB July 15, 2015) (citing Idle Free Systems, Inc.

v. Bergstrom, Inc., IPR2012-00027, Paper 26 (PTAB June 11, 2013)).

More specifically, the PTAB clarified that “prior art of record” refers to: “a) any

material art in the prosecution history of the patent; b) any material art of record in the

current proceeding, including art asserted in grounds on which the Board did not

institute review; and c) any material art of record in any other proceeding before the

Office involving the patent.” Id. As for “prior art known to the patent owner,” the Board

noted that this term refers to “no more than the material prior art that Patent Owner

makes of record in the current proceeding pursuant to its duty of candor and good faith

to the Office under 37 C.F.R. § 42.11.” Id. at 3. The PTAB further noted that “once

Patent Owner has set forth a prima facie case of patentability of narrower substitute

claims over the prior art of record, the burden of production shifts to Petitioner.” Id. at 4.

Garmin Int’l, Inc. et al. v. Cuozzo Speed Tech. LLC, IPR2012-00001, Paper 26 (PTAB Mar. 5, 2013). During the previous IPR proceeding of this recent Supreme Court case, the

patent owner, Cuozzo, filed a motion for additional discovery. The PTAB denied the

motion for failing to meet the statutory standard of being “necessary in the interest of

justice.” 35 U.S.C. § 316(a)(5).

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The Board noted the following factors as important in considering a motion for

additional discovery in IPR proceedings: 1) more than a possibility and mere allegation;

2) litigation positions and underlying basis; 3) ability to generate equivalent information

by other means; 4) easily understandable instructions; and 5) requests not overly

burdensome to answer.

Bloomberg Inc. et al., v. Markets-Alert Pty Ltd., CBM2013-00005, Paper 32 (PTAB May 29, 2013). This case also addresses the issue of additional discovery but in the context of

covered business method (CBM) review proceedings. The same factors discussed

above in relation to Cuozzo were applied.

Oracle Corp.et al. v. Click-to-Call Tech. LP, IPR2013-00312, Paper 26 (PTAB Oct. 30, 2013). Only Section III.A. of this IPR decision relating to the statutory bar under 35

U.S.C. § 315(b) was designated by the PTAB as precedential. Under 35 U.S.C. §

315(b), “[a]n inter partes review may not be instituted if the petition requesting the

proceeding is filed more than one year after the date on which the petitioner, real party

in interest, or privy of the petitioner is served with a complaint alleging infringement of

the patent.”

In this case, a complaint was served more than one year before filing of the IPR

petition. However, the infringement suit was dismissed voluntarily without prejudice,

which the Federal Circuit has consistently interpreted as “leaving the parties as though

the action had never been brought.” Oracle Corp.et al. v. Click-to-Call Tech. LP,

IPR2013-00312, Paper 26 at 17 (PTAB Oct. 30, 2013) (citing Graves v. Principi, 294

F.3d 1350, 1356 (Fed. Cir. 2002)). As such, the effect of the complaint was nullified and

did not bar the petitioner from filing a petition for IPR.

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Lumentum Holdings, Inc. et al. v. Capella Photonics, Inc., IPR2015-00739, Paper 38 (PTAB Mar. 4, 2016). By statute, an IPR petition must name all real parties-in-interest. 35 U.S.C. §

312(a). In this case, after filing the petition, a series of corporate restructuring events

resulted in changes to the real parties-in-interest from the date of filing. After a decision

to institute the IPR was entered, petitioner filed an updated notice listing the new

parties-in-interest, by which point more than 21 days had passed since the change in

name of the real parties-in-interest as required by 37 C.F.R. § 42.8(a)(3).

Subsequently, the patent owner filed a motion to terminate the IPR proceeding on the

basis that the PTAB lacked jurisdiction to institute the IPR due to the petition being

incomplete.

The Board denied the motion. The PTAB noted that while 35 U.S.C. § 312(a)

“sets forth requirements that must be satisfied for the Board to give consideration to a

petition, … a lapse in compliance with those requirements does not deprive the Board of

jurisdiction over the proceeding, or preclude the Board from permitting such lapse to be

rectified.”

LG Electronics Inc. v. Mondis Tech. Ltd., IPR2015-00937, Paper 8 (PTAB Sept. 17, 2015). LG Electronics (“LG”) was served with a first complaint alleging infringement in

2008 and a second complaint again in 2014. Within a year after being served the

second complaint in 2014, LG filed a petition requesting an IPR. In view of the fact that

the first complaint was not wholly dismissed without prejudice, the PTAB denied

institution of the IPR because the petition was filed more than 1 year after the date on

which LG was served the first complaint. See 35 U.S.C. § 315(b).

Westlake Services LLC v. Credit Acceptance Corp., CBM2014-00176, Paper 28 (PTAB May 14, 2015). Estoppel applies on a claim-by-claim basis per 35 U.S.C. § 325(e)(1) and 37

C.F.R. § 42.73(d)(1). More specifically, “[b]y its terms, estoppel is invoked under

Section 325(e)(1) as to ‘a claim in a patent’ that ‘results in a final written decision under’

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35 U.S.C. § 328(a).” Westlake Services LLC v. Credit Acceptance Corp., CBM2014-

00176, Paper 28 at 5 (PTAB May 14, 2015). As such, the PTAB found that estoppel

does not apply to non-instituted claims from a previous petition, and such claims can be

challenged in a subsequently-filed IPR petition.

Space Exploration Technologies Corp. v. Blue Origin LLC, IPR2014-01378, Paper 6 (PTAB Mar. 3, 2015). By statute, an IPR can only involve a request to cancel claims based on novelty

and/or obviousness. 35 U.S.C. § 311(b) (2012). As such, IPR proceedings are not

supposed to address indefiniteness. However, in determining whether a reasonable

likelihood of success exists based on novelty and/or obviousness and whether to

institute a particular IPR, it is necessary for the PTAB to first construe the challenged

claims. In fact, by rule, a petitioner requesting an IPR must set forth how the challenged

claim(s) should be construed, and the Board routinely addresses claim construction

before considering any alleged basis for invalidity. 37 C.F.R. § 42.104(b)(3).

Accordingly, the PTAB first addressed the issue of claim construction and found

that almost all of the limitations of the challenged claims were indefinite under 35 U.S.C.

§ 112, ¶ 6 and not amenable to construction. Unable to ascertain the breadth of the

challenged claims, the PTAB was “unable to determine whether there is a reasonable

likelihood that SpaceX would prevail on the prior art ground asserted in the Petition.”

Space Exploration Technologies Corp. v. Blue Origin LLC, IPR2014-01378, Paper 6 at

9 (PTAB Mar. 3, 2015). Thus, the PTAB essentially denied institution of the IPR based

on indefiniteness of the claims.

Coalition for Affordable Drugs VI, LLC v. Celgene Corp., IPR2015-01092, Paper 19 (PTAB Sept. 25, 2015). The Coalition for Affordable Drugs and hedge fund manager Kyle Bass filed a

number of IPR petitions as part of an investment strategy to drive down the value of

targeted companies and profit by short selling their stock. Celgene filed motions for

sanctions requesting the dismissal of the petitions because the petitions were driven

entirely by “an admitted profit motive unrelated to the purpose of the America Invents

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Act and unrelated to a competitive interest in the validity of the challenged patents.”

Coalition for Affordable Drugs VI, LLC v. Celgene Corp., IPR2015-01092, Paper 19 at 2

(PTAB Sept. 25, 2015).

The Board denied the motion. In response to Celgene’s arguments, the PTAB,

while taking no position on the merits of Bass’s investment strategy, noted that “[p]rofit

is at the heart of nearly every patent and nearly every inter partes review.” Id. at 3. The

Board also distinguished IPRs from CBM reviews, which require a party or privy to have

been sued or charged with infringement of the patent, and held that “Congress did not

limit inter partes reviews to parties having a specific competitive interest in the

technology covered by the patents.” Id. at 4.

Redline Detection v. Star Envirotech, Appeal No. 2015-1047 (Fed. Cir. Dec. 31, 2015).

While the PTAB rules allow for submission of supplemental information within

one month of an IPR petition being granted under 37 C.F.R. § 42.123(a), acceptance of

such supplemental information by the PTAB is not mandatory. In this case, the

petitioner filed a motion to submit supplemental information, including a 60-page expert

declaration, within the one-month period. The Board denied the motion based on the

fact that Redline provided no reason for the delayed submission other than cost

savings. The Federal Circuit affirmed the PTAB’s decision, noting that the Board was

neither erroneous nor inconsistent because the rule does not preclude consideration of

additional criteria.

David O.B.A. Adebimpe v. The Johns Hopkins Univ., PGR2016-00020, Paper 14 (PTAB, July 25, 2016). Post-grant reviews are available only for patents that issue from applications with

an effective filing date of on or after March 16, 2013, which corresponds to the end of

the 18-month period from the date of the enactment of the AIA. AIA § 6(f)(2)(A). In this

case, the petitioner argued that the patent at issue was eligible for PGR because claim

amendments were filed in the patent application after March 16, 2013. However, the

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PTAB denied the petition on the ground that filing claim amendments in an application

does not change the effective filing date of a patent.

Google Inc. et al. v. ContentGuard Holdings, Inc., CBM2015-00040, Paper 34 (PTAB, June 21, 2016). In a CBM proceeding, the patent owner, ContentGuard Holdings (“CGH”), filed a

motion to amend and also requested the PTAB to determine that the scope of the

substitute claim is substantially identical to the original claim as it would be interpreted

by a district court. The new claim proposed by CGH added a “wherein” clause to the

original claim to further specify a term. The PTAB found that the proposed amendment

responded to a ground involved in the trial, did not broaden the scope of the claim, and

was supported by the written description of the patent. The Board further found that

CGH met its burden of proof to demonstrate patentability of its proposed claim over the

prior art. Accordingly, the PTAB granted CGH’s motion to amend and declared that the

scope of the substitute claim is substantially identical to the original claim.

American Simmental Ass’n v. Leachman Cattle of Colorado, LLC, Inc., PGR2015-00003, Paper 56 (PTAB, June 13, 2016); American Simmental Ass’n v. Leachman Cattle of Colorado, LLC, Inc., PGR2015-00005, Paper 52 (PTAB, June 13, 2016). In the first two final PGR decisions, the PTAB invalidated two patents directed to

livestock valuation on 35 U.S.C. § 101 grounds. Applying the two-step subject-matter

eligibility framework set forth in Alice, the Board found that the claims were directed to

an abstract idea of fundamental economic practice and that the claims merely recite

generic computer hardware that is used in a conventional manner.

23943674

Ehab Samuel is counsel at the LA office of Manatt Phelps & Phillips, where he maintains an active practice in patent, trademark, trade secret, antitrust, false advertising and unfair competition litigation. He has represented clients before the PTAB, district courts and the Federal Circuit. Complementing his IP practice is his diverse educational background. He earned his Masters of Law (LL.M.) in intellectual property (2005) and his Masters in Electrical Engineering (2005) from The George Washington University (2005), his Law degree (J.D.) from the Chicago-Kent College of Law (2002), his Masters in Chemical Engineering from the University of Illinois at Chicago (2002), and his Bachelors in Civil Engineering from the University of Windsor (1999). Ehab has lectured frequently on all aspects of inter partes review proceedings at legal education seminars, including OCPLA, AIPLA, the Association of Corporate Counsel (ACC), and the California Bar IP Section.

Joseph S. Cianfrani graduated from the University of Virginia in 1991 with a degree in electrical engineering. He obtained his J.D. from the University of Virginia School of Law in 1997 where he was awarded the John M. Olin scholarship and served as an editor of the law review. He also earned a masters degree in electrical and computer engineering from George Mason University in 1997. Upon graduation, Mr. Cianfrani served as a law clerk to the Honorable Arthur J. Gajarsa, Circuit Judge of the United States Court of Appeals for the Federal Circuit, and joined Knobbe Martens upon the completion of his clerkship in 1998. He became a partner in 2003. Since joining Knobbe Martens, Mr. Cianfrani has primarily represented clients before the PTAB, as well as in patent litigation at the trial and appellate levels. Mr. Cianfrani has spoken on various patent law issues, including the effect and implementation of the America Invents Act and the Inter Partes Review process.

m -year review of ptab final written decisions · 9/25/2015 · claims 1, 3 and 5–9 based upon...

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