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5 Things We Learned About Inter Partes Review This Year

12/20/2013
Law360, New York (December 19, 2013, 6:36 PM ET) --

By:  John Bird, Chandran Iyer, Azy Kokabi

The Patent Trial and Appeal Board has provided guidance to practitioners throughout 2013, and decided the first inter partes review. In 2014, the board will inevitably decide many more cases within the statutorily mandated one year from the decision initiating trial. Provided below is a list of the top five things learned about IPRs this year.

1. Claim Construction Is Key

In the final decision in Garmin International Inc. v. Cuozzo Speed Technologies LLC, (IPR2012-00001, Paper No. 59) on Nov. 13, 2013, the board construed the key term "integrally attached" in a manner that was inconsistent with both the construction proffered by the Petitioner in the original petition and the construction in the patent owner's response.

The decision included several pages explaining the board's claim construction. Earlier in the decision initiating trial in the same IPR, the board had denied consideration of several grounds included the initial petition based on the same claim construction. The board had denied these grounds even though the patent owner had waived its preliminary response and, as such, had not as yet opposed the petitioner's construction.

At this time, the claims in an IPR proceeding are construed using the broadest reasonable interpretation standard in which claims are given their ordinary meaning in light of the specification, rather than the narrower standard used in litigation, e.g. Philips v. AWH (Fed. Cir. 2005)(en banc.). However, the IPR claim construction standard may soon be changed by Congress. The Innovation Act of 2013 (H.R. 3309), which was passed by the House of Representatives on Dec. 5, would require the Philips standard to be used in IPRs.

2. Confer With the Board

Although only one section of the IPR rules, Section 42.121, requires a party seeking to amend the claims to "confer[] with the Board," parties are asked to confer with the board at other times and in practice the requirement to confer with the board can equate to obtaining authorization from the board. For example, when the parties have reached a settlement, they should confer with the board before filing a motion to terminate in view of the fact that the board has discretion as to whether or not to terminate the proceeding. See Rule 42.72.

Moreover, to ensure that amendments are considered, a patent owner should initiate a separate telephone call with the board and obtain guidance before filing a motion to amend. Section 42.121 allows a patent owner to “file one motion to amend, but only after conferring with the Board.” But it is unclear whether or not this requires a separate teleconference. The requirement to confer with the board was discussed in both Nichia v. Emcore (IPR2012-00005, Paper No. 27) and Idle Free Systems Inc. v. Bergstrom (IPR2012-00027).

In Nichia, the board determined that the patent owner, Emcore, did comply with the requirement to confer even though Emcore had not initiated a separate telephone conference identifying a fully developed claim set. Rather, Emcore listed the motion to amend in its list of proposed motions and discussed the motion during the initial conference call with the board. IPR 2012-00005, Paper No. 27 at pg. 2. In contrast, in Idle Free, the board dismissed the motion to amend because the patent owner, Bergstrom, had failed to confer with the board about special amendments contemplated in the motion.

It remains unclear from the record how Emcore’s acts constituted conferring with the board while Berstroms’ action was a failure to do so. Emcore generally discussed its motion to amend claims with the board in the initial conference call. See Paper No. 17. Likewise, Bergstrom discussed its intend to file a motion to amend during an initial conference call with the board (Paper No. 15). Although a transcript of the calls were not available, it is possible that the more detail provided to the board during the initial conference call may satisfy the conferring requirement of section 42. 121.

However, to ensure that the requirement of conferring is satisfied, a patent owner should initiate a telephone call with the board and obtain guidance for filing its motion to amend, without relying simply on the initial conference call to satisfy the its requirements under Section 42.121(a).

3. Amendments Will Be Limited

The requirements for the patent owner in filing a motion to amend are plentiful and stringent. The patent owner should take care to properly follow the rules clarified in the board’s recent decisions and provide technical and expert declarations to abide by such requirements or risk the motion being dismissed or denied.

Section 42.121 states that a motion to amend may be denied where the “amendment does not respond to a ground of unpatentabilty involved in the trial.” The board has clarified this requirement explaining that the patent owner must identify the added or narrowing feature added to each claim and explain how the feature is patentable distinct over the cited art as well as prior art known by the patent owner, which may not have been cited in the proceeding. See Avaya Inc. v. Network-1 Security Solutions Inc., (IPR2013-00071), Innolux Corporation v. Semiconductor Energy Labs. Co. Ltd (IPR2013-00066 & IPR2013-00068), and Idle Free Systems Inc. v. Bergstrom (IPR2012-00027).

This requirement places a considerable burden on a patent owner to explain how the narrowing feature overcomes all prior art known, including those that may have already been cited during patent prosecution. All of these showings, including an explanation of the construction of the newly added features, must be explained within the page limit imposed by the board, typically 15 pages.

The board’s rationale for the stringent requirement of responding to claims of unpatentablity likely stems from the cost of review of such motions in both time and expense. In Idle Free, the board appreciated that the “just” resolution of IPR proceedings supports allowing a patent owner to propose substitute claims for each challenged claim, but also stated that every substitute claim adds to the cost of review, which the board seeks to streamline through these requirements. Idle Free (Paper No. 26 at pg. 7).

Section (b) of 42.121 sets forth the content of the motion to amend. 42.121(b)(1) states that the motion to amend must include “support in the original disclosure of the patent for each claim that is added or amended.” In Nichia, the board explained that the patent owner must show written description support in the original disclosure of the application, rather than the issued patent. Nichia, IPR2012-00005, Paper No. 27 at p. 4 and Oracle Corp v. Clouding IP LLC (IPR2013-00099), Paper No. 19, p. 2.

Further, merely indicating “where each claim limitation individually is described in the original disclosure may be insufficient to demonstrate support for the claimed subject matter as a whole.” Nichia, Paper No. 27 at pg. 4. The board’s order in Nichia indicates that unless an amended claim is described in haec verba, an explanation is required to explain why one of ordinary skill in the art would have recognized the inventor possessed the claimed subject matter. Id., see also Oracle Corp., Paper No. 19 at p. 2.

The content of a motion to amend must also include a claim listing. See 42.121(b). The claim listing must be part of the 15 pages of the motion to amend, and not filed as a separate paper, an appendix or an attachment to the motion. See Synopsys Inc. v. Mentor Graphics Corp. (IPR2012-00042, Paper No. 30). The strict requirements for claim listing may be problematic for some patent owners with long claims — a listing of which may comprise a majority of the 15-page limit of the motion. The board is unsympathetic to granting more pages to a patent owner, providing an alternative solution to the patent owner such as submitting few amended claims or to pursue the further amended claims via ex parte re-examination or reissue. Id. at p. 5

4. Discovery Will Be Very Limited

The petitioner and patent owner in an IPR are only entitled as a matter of right to the routine discovery described in Rule 42.51(b)(1), including exhibits that the opposing party relies on, information that is inconsistent with the opposing party's positions, and the right to cross-examine the opposing parties experts. Although additional discovery can theoretically be obtained when it is "in the interests of justice" under Rule 42(b)(2), it looks to be only the odd proceeding in which anything more than the enumerated routine discovery will be allowed.

In March, the board in Garmin International Inc. v. Cuozzo Speed Technologies LLC, (IPR2012-00001, Paper No. 26), published a discovery order listing five factors for determining whether additional discovery is "necessary in the interests of justice." In doing so, the board provided clear guidance that this additional discovery will not often be granted, explaining that the limited discovery "lowers the cost, minimizes the complexity, and shortens the period required for dispute resolution." See Garmin v. Cuozzo, (IPR2012-00001, Paper No. 26, page 2).

The board did provide an example of when additional discovery would be in the interests of justice and available on its representative orders, decisions, and notices webpage. In Corning Incorporated v. DSM IP Assets B.V. (IPR2013-00043, Paper No. 27), the board granted a request for laboratory notebooks with the expert's creating and testing samples and the test results, explaining that this additional evidence would be per se useful, while denying a request for the samples themselves.

5. File Promptly

Practitioners understand that an IPR cannot be instituted more one year after service of a complaint. We now have clear decisions from the board that the one-year period cannot be restarted in most instances because the time period is calculated from the service of the first complaint (as opposed to any complaint or the last complaint) for patent infringement. For example, Universal Remote Control Inc. v. Universal Elec. Inc. (IPR2013-00168. However, the Court of Appeals for the Federal Circuit has yet to consider this issue.

What if a patent owner files and serves a complaint, only to dismiss it without prejudice within a year of service? The board has confirmed that an IPR may be filed at any time with respect to a patent that is asserted in an action, which is subsequently dismissed without prejudice, noting the “Federal Circuit has consistently interpreted the effect of such [voluntary] dismissals [without prejudice] as leaving the parties as though the action had never been brought. Graves v. Principi, 294 F.3d 1350, 1356 (Fed. Cir. 2002). See Macauto U.S.A. v. Bos GMBH &KG, (IPR2012-00004).

We learned a great deal about what to do when involved in an IPR proceeding in 2013. And 2014 looks to be an even busier year for the board with final decisions due next year for the hundreds of IPR proceedings filed in 2012 and early 2013. 

As published in December 20, 2013 issue of IPLaw 360