Emerging Trends and Legal Developments
in Post-Grant Proceedings
March 28, 2017
Attorney Advertising
WilmerHale
Overview
2
Trends for TC1600/Orange Book Patents
Legal Developments
– Scope of Estoppel
– Joinder
– Motions To Amend
– What is reviewable by the Federal Circuit?
– Standing to Appeal
– Sovereign Immunity
– Section 101 Creep
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IPR Petitions – Technology Breakdown
3
As of January 31, 2017.Source: https://www.uspto.gov/sites/default/files/documents/aia_statistics_january2017.pdf
WilmerHale
IPR Petitions
4
37 8
14 17
5
18
41
27
3932
41
5360
35
54 51
32
0
10
20
30
40
50
60
70
Sep
-12
Oct
-De
c-1
2
Jan
-Mar
-13
Ap
r-Ju
n-1
3
Jul-
Sep
t-1
3
Oct
-De
c-1
3
Jan
-Mar
-14
Ap
r-Ju
n-1
4
Jul-
Sep
t-1
4
Oct
-De
c-1
4
Jan
-Mar
-15
Ap
r-Ju
n-1
5
Jul-
Sep
t-1
5
Oct
-De
c-1
5
Jan
-Mar
-16
Ap
r-Ju
n-1
6
Jul-
Sep
t-1
6
Oct
-No
v-1
6
TC1600 IPRS Filed by Quarter
1779 94
137204
267
190
458395
458395
466418
375335
416439448
0
100
200
300
400
500
Sep
-12
Oct
-De
c-1
2
Jan
-Mar
-13
Ap
r-Ju
n-1
3
Jul-
Sep
t-1
3
Oct
-De
c-1
3
Jan
-Mar
-14
Ap
r-Ju
n-1
4
Jul-
Sep
t-1
4
Oct
-De
c-1
4
Jan
-Mar
-15
Ap
r-Ju
n-1
5
Jul-
Sep
t-1
5
Oct
-De
c-1
5
Jan
-Mar
-16
Ap
r-Ju
n-1
6
Jul-
Sep
t-1
6
Oct
-No
v-1
6
IPRS Filed by Quarter
As of January 18, 2017.
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IPR Institutions – Technology Breakdown
5
As of January 31, 2017.
Source: https://www.uspto.gov/sites/default/files/documents/aia_statistics_january2017.pdf
WilmerHale
IPR Institutions
6
92%
84%89%
86%
78% 79%82%
76%
69%73% 75%
69%65%
51%56%
72%
80%
100%
89% 88%
100%
57% 59%
46%
57%54%
43%
63%
41%
49%52%
93%
0%
20%
40%
60%
80%
100%
120%
Institution Rates
Institution Rates All IPRs Institution Rates TC1600
As of January 18, 2017.
* Of decisions that have reached an institution decision.
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IPR Outcomes – Technology Breakdown
7
As of January 31, 2017.
Source: https://www.uspto.gov/sites/default/files/documents/aia_statistics_january2017.pdf
WilmerHale
Petitions – Orange Book Patents
8
As of February 23, 2017.
0 50 100 150 200 250
Method of Treatment
Formulation/Composition
Compound
234
182
63
Types of Orange Book Patents Petitioned
WilmerHale
Institution Decisions – Orange Book Patents
9
As of February 23, 2017.
0 10 20 30 40 50 60 70
Method of Treatment
Formulation/Composition
Compound
68
52
19
Types of Orange Book PatentsDenied Petitions
WilmerHale
Outcomes – Orange Book Patents
10
As of February 23, 2017.
348 Petitions Total
39 Decisions Awaiting
Institution
34 Terminated by Agreement
Pre-Institution
96 Not Instituted
179 Instituted
Of Decisions Instituted
26 Settled
3 Requested Adverse
Judgment
77 Proceeded to Final Written Decision
• 43 All Instituted Claims Unpatentable
• 2 Some Instituted Claims Unpatentable
• 32 All Instituted Claims Not Unpatentable
WilmerHale
Outcomes – Orange Book Patents
11
0
5
10
15
20
25
30
35
Formulation Method Compound
Final Decisions by Type of Patent
Not Unpatentable All Unpatentable Some Claims Unpatentable
As of March 21, 2017.
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As of January 31, 2017.
https://www.uspto.gov/sites/default/files/documents/20170302_PPAC_PTAB_Update.pdf
Preliminary Response Rates: Pre and Post Rule to Allow
New Testimonial Evidence (NTE)
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IPRs – Legal Developments
Scope of Estoppel
Joinder
Motions To Amend
What is reviewable by the Federal Circuit?
Standing to Appeal
Sovereign Immunity
Section 101 Creep
13
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IPRs – Scope of Estoppel
The petitioner in an inter partes review of a claim in a patent
under this chapter that results in a final written decision. . .
may not request or maintain a proceeding before the Office
with respect to that claim on any ground that the petitioner
raised or reasonably could have raised during that inter
partes review. 35 U.S.C. § 315(e)
Shaw Indus. Grp. Inc., v. Automated Creel Sys., Inc.
– Plain language of the statute prohibits the application of
estoppel when a party raises a ground in its petition for IPR
that is then denied and no IPR is instituted on that ground.
14
WilmerHale
Petitioned: 1. SDB
2. DB 3. QC
Instituted:
1. SDB
Estopped: 2. DB
Not
Estopped:
3. QC
Verinata Health v. Ariosa Diagnostics
Ariosa IPR Petitions:
(1) obviousness over the combined
teachings of Dhallan and
Binladen; (“DB”)
(2) obviousness over the combined
teachings of Quake and Craig; (“QC”)
(3) obviousness over the combined
teachings of Shoemaker, Dhallan, and
Binladen. (“SDB”)
The PTAB instituted IPR on only the
third ground. (“SDB”)
Before the district court:
(1) obviousness over the combined
teachings of Dhallan and
Binladen; and (“DB”)
(2) obviousness over the combined
teachings of Quake and Craig. (“QC”)
15
WilmerHale
Verinata Health v. Ariosa Diagnostics
Only arguments raised during IPR are subject
to estoppel.
– However, if the grounds denied as redundant cite a subset of
the references on which the petition was instituted, the
petitioner could have raised them in the IPR and is
therefore estopped. See Verinata, at 7.
– If the final IPR decision is based on a “technicality,” whether a
particular reference can be considered prior art, estoppel
applies even though the PTAB never specifically compared
the reference with the patent in its final decision. See Verinata,
at 9.
16
WilmerHale
Parallel Networks Licensing, LLC v.
Int’l Business Machines Corp.
In August 2015, IBM filed
four IPR petitions.
IPR was instituted on all four
grounds, but IBM ultimately
failed to prove the claims
were unpatentable.
Before the District of
Delaware IBM sought to
invalidate claims based on
prior art combinations of
which it was aware before it
filed the IPR petitions.
17
Petitioned: 1, 2, 3, 4
Instituted:
1, 2, 3, 4,
Estopped:
1,2,3,4
Not
Petitioned,
Estopped:
5 and 6.
WilmerHale
“The PTAB has recognized that estoppel under
§ 315(e) is broad, and that the prior art references (or
combinations) a petitioner ‘could have raised’ includes
any references that were known to the petitioner or
that could reasonably have been discovered by ‘a
skilled searcher conducting a diligent search.’”
Citing Apotex v. Wyeth, IPR2015-00873 at *6.
18
Joinder and Scope of Estoppel
Parallel Networks Licensing, LLC v.
Int’l Business Machines Corp.
WilmerHale
Inconsistent Standards for Estoppel?
Two standards:
Narrow: Raised before
the PTAB, but not
instituted – not barred
by estoppel
Broad: Not raised before
the PTAB, but aware of –
barred by estoppel.
19
Petitioned: 1. SDB
2. DB 3. QC
Instituted:
1. SDB
Estopped: 2. DB
Not
Estopped:
3. QC
Estopped:
4. YZ
(not in
petition but
known)
WilmerHale
Joinder
“If the Director institutes an inter partes review, the
Director, in his or her discretion, may join as a party to
that inter partes review any person who properly files a
petition under section 311 that the Director, after
receiving a preliminary response under section 313 or
the expiration of the time for filing such a response,
determines warrants the institution of an inter parties
review under section 314.” 35 U.S.C. § 315(c)
20
WilmerHale
Verinata Health v. Ariosa Diagnostics
April 24, 2015, Roche filed separate IPR petition
challenging patent.
The same day, Roche also tried to join Ariosa’s IPR
in which Roche had been named a real
party-in-interest.
PTAB denied the motion as untimely and denied
institution of Roche’s own IPR as a “belated, and
essentially, second attempt to raise” duplicative
grounds against the same patent.
21
WilmerHale
Verinata Health v. Ariosa Diagnostics
Court held the Roche was estopped from raising
arguments Ariosa raised or reasonably could have
raised in Ariosa’s IPR.
Estoppel applies equally to a real party-in-interest or
privy of the petitioner.
Nothing more need be shown beyond “literal status
as a real party-in-interest” for estoppel to apply.
– Court need not determine whether the real party-in-interest
had a realistic opportunity to influence the IPR petition.
22
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Parallel Networks Licensing, LLC v.
Int’l Business Machines Corp.
The court rejected IBM’s argument that because it
joined a petition brought by Microsoft on identical
grounds, it would have been unreasonable for it to
have raised any invalidity argument not presented in
the Microsoft IPR. 13-2072 (KAJ), slip. Op. at 25 (D. Del, Feb
22, 2017).
There is no “mirror image” rule for joinder. Id. at 26.
Joinder can involve petitions that assert different
grounds of invalidity.
23
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Motions to Amend
Patent owners are allowed to move to amend claims
during an IPR under 37 C.F.R. § 42.121.
– A motion to amend will only be granted if the patentee also
demonstrates that the proposed amendments would make
the claims patentable over the known prior art.
24
WilmerHale
A History of Motions to Amend
“The burden is on the patent owner to show a patentable
distinction over the prior art of record and also prior art known
to the patent owner.”
– Idle Free Systems, Inc. v. Bergstrom, Inc. (PTAB 2013).
– Microsoft Corporation v. Proxyconn, Inc. (Fed. Cir. 2015).
A patent owner need not identify how amendments are
patentable over all prior art, but only over the
“prior art of record.”
– MasterImage 3d, Inc. v. RealD Inc. (PTAB 2015).
– Nike v. Adidas (Fed. Cir. 2016).
“The purpose of [the] post-grant review [system] is not to stack
the deck against the patentee, but to achieve a correct and
reliable result.”
– Prilotec Inc. v. Scentair Technologies, Inc. (Fed. Cir. 2015)
(J. Newman, dissenting).
25
WilmerHale
Motions to Amend - Veritas v. Veeam
On August 30, 2016, the CAFC vacated the denial of
Veritas’ motion to amend its claims.
PTAB denied Veritas’ motion because Veritas had not discussed whether
each newly added feature was separately known in the prior art, but instead
discussed “the newly added feature in combination with other
known features.” 835 F.3d 1406, 1411 (Fed. Cir. 2016).
CAFC vacated the Board’s denial of motion to amend as arbitrary and
capricious: “We do not see how the Board could reasonably demand more
from Veritas in this case.” Id. at 1414.
“We fail to see how describing the combination is meaningfully different from
describing what is new about the proposed claims, even in comparison to the
unamended claims.” Id. at 1415.
The Board’s rationale is erroneous regardless of the outcome of the In re
Aqua Products pending en banc decision. Id.
26
WilmerHale
Motions to Amend - In re Aqua Products
CAFC granted en banc review to consider two questions
When the patent owner moves to amend its claims under 35
U.S.C. § 316(d), may the PTO require the patent owner to
bear the burden of persuasion, or a burden of production,
regarding patentability of the amended claims as a condition
of allowing them? Which burdens are permitted under 35
U.S.C. § 316(e)? 833 F.3d 1335, 1336 (Fed. Cir. 2016).
When the petitioner does not challenge the patentability of a
proposed amended claim, or the Board thinks the challenge
is inadequate, may the Board sua sponte raise patentability
challenges to such a claim? If so, where would the burden of
persuasion, or a burden of production, lie? Id.
27
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What is judicially reviewable?
AIA bars judicial review of a decision to
institute a review.– Cuozzo Speed Techs., LLC v. Lee, (2016).
But will judicial review be available to challenge a
PTO determination that petitioner satisfied
timeliness requirement?– Overturning Achates?
– Wi-Fi One LLC v. Broadcom Corp. (2017)*
28
* WilmerHale represents Broadcom
WilmerHale
What is judicially reviewable?
Cuozzo Speed Techs., LLC v. Lee
“The determination by the Director whether to institute an inter
partes review under this section shall be final and
nonappealable.” 35 U.S.C. § 314(d).
“[O]ur interpretation applies where the grounds for attacking the
decision to institute inter partes review consist of questions that
are closely tied to the application and interpretation of statutes
related to the Patent Office's decision to initiate inter
partes review.”
– “[W]e need not, and do not, decide the precise effect of §
314(d) on appeals that implicate constitutional questions,
that depend on other less closely related statutes, or that
present other questions of interpretation that reach, in terms
of scope and impact, well beyond ‘this section.’”
29
WilmerHale
What is judicially reviewable?
Wi-Fi One LLC v. Broadcom Corp.
“35 U.S.C. § 314(d) prohibits this court from
reviewing the Board's determination to initiate IPR
proceedings based on its assessment of the time-
bar of § 315(b)”
– Achates Reference Publ’g Inc. v. Apple, (Fed. Cir. 2015).
“Wi–Fi does not dispute that Achates renders its
challenge to the Board's timeliness ruling
nonappealable if Achates is still good law.”
– “What Wi–Fi argues is that the Supreme Court's recent
decision in Cuozzo Speed Technologies, implicitly
overruled Achates.”
– Wi-Fi One LLC v. Broadcom Corp. (Fed. Cir. 2016).
30
WilmerHale
What is judicially reviewable?
Wi-Fi One LLC v. Broadcom Corp.
Petition for rehearing en banc by Wi-Fi One was
granted on a single issue:
Should this court overrule Achates and hold that
judicial review is available for a patent owner to
challenge the PTO's determination that the
petitioner satisfied the timeliness requirement of 35
U.S.C. § 315(b) governing the filing of petitions for
inter partes review?
31
WilmerHale
What is judicially reviewable?
Wi-Fi One LLC v. Broadcom Corp.
Wi-Fi One’s Position:
Absent a clear expression of Congressional intent, courts must read the
statutes to permit judicial review of the process by which the Board made an
institution decision (even if the decision itself is unreviewable), and to permit
challenges asserting the agency exceeded the scope of its statutory
jurisdiction, acted contrary to a statutory command, or otherwise acted
contrary to law.
Broadcom’s Position:
By its plain terms, 35 U.S.C. § 314(d) prohibits appeals of the Board’s
determination whether to institute an inter partes review. The Board’s
conclusion that a petitioner is not time-barred under § 315(b) is a central
aspect of the institution determination and thus falls well within the scope of §
314(d). The Supreme Court’s decision in Cuozzo only bolsters that conclusion.
Cuozzo held that § 314(d), at a minimum, bars challenges that are closely tied
to the application and interpretation of statutes related to the Patent Office’s
decision to initiate inter partes review. § 315(b) is just such a statute.
32
WilmerHale
Standing to Appeal
To appeal a decision of the PTAB, a party must establish a
concrete and particularized injury in fact from the
adverse decision.
– Phigenix, Inc. v. Immunogen, Inc., (Fed. Cir. 2017).
Injury in fact:
Must be concrete. . .
– The harm must actually exist or appear imminent.
– A conjectural or hypothetical injury will not suffice.
. . . and particularized.
– Will affect an appellant in a personal and individual way.
Phigenix failed to substantiate its alleged injury in fact.
Submitted two declarations that asserted only that it suffered actual
economic injury because Immunogen’s patent increased competition.
33
WilmerHale
Sovereign Immunity
Covidien v. Univ. Fla. Research Found. Inc.
“On the whole, considering the nature of inter partes review and civil
litigation, we conclude that the considerable resemblance between
the two is sufficient to implicate the immunity afforded to the States
by the Eleventh Amendment.”
Further, we note that there are several similarities between civil
litigation and inter partes review that are not unlike those compared
in Vas-Cath for interferences.
– “The manner of discovery, adversarial nature of the proceeding, role
of the APJ, and the applicability of the Federal Rules of Evidence in
an inter partes review largely mirrors that involved in an
interference proceeding.”
34
* WilmerHale represented Covidien
WilmerHale
Section 101 “Creep”
Nidec Motor Corp. v. Zhongshan Broad
Ocean Motor Co. Ltd.
The Board held that anticipation can be
found even when a prior art reference
fails to disclose a claim element so long
as a skilled artisan reading the reference
would “at once envisage” the claimed
arrangement. Citing Kennametal Inc. v.
Ingersoll Cutting Tool Co.,
(Fed. Cir. 2015).
“Kennametal does not stand for the
proposition that a reference missing a
limitation can anticipate a claim if a
skilled artisan viewing the reference
would ‘at once envisage’ the
missing limitation.”
35
“Kennametal does not permit the
Board to fill in missing limitations
simply because a skilled artisan
would immediately envision them.”
WilmerHale
Other 2016 IPR Decisions of Note:
Burden of Proof in IPR Proceedings– The burden of proof in an IPR proceeding after institution
remains with the petitioner.
In re Magnum Oil Tools Int’l, Ltd. (Fed. Cir. 2016).
IPR Claim Construction– Claim terms in an IPR are to be given their broadest
reasonable interpretation.
Cuozzo Speed Techs., LLC v. Lee (2016).
Standard of Review– AIA requires the “substantial evidence” standard of review.
Merck & Cie v. Gnosis SpA (Fed. Cir. 2016).
36
WilmerHale
Questions?
37
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