Ultratec, Inc., Appellant v. Captioncall, LLC, Case No. 2016-1706 (Fed. Cir. August 28, 2017)

In Ultratec v. Captioncall, the Federal Circuit vacated and remanded decisions from the Patent Trial and Appeal Board in IPR2013-00540, IPR2013-00541, IPR2013-00544, IPR2013-00545 due to the Board’s failure to consider supplemental information that Patent Owner sought to admit into the proceeding.  The case involved parallel district court litigation and IPR proceedings, where the petitioner-defendant used the same expert in both proceedings on issues of invalidity.  Patent Owner alleged that during the jury trial, the petitioner’s expert’s testimony on cross-examination contradicted his declaration testimony in the IPR.  Within a week of the jury trial, a month before oral hearing in the IPR, the patent owner requested authorization to file a motion for supplemental evidence under 37 C.F.R. 42.123(b).  In connection with making this request for authorization, the Board instructed the patent owner that it was not to submit evidence or any discussion of the supplemental information.  On a conference call with the parties, the Board denied the request, without making any written record of the decision.

On appeal, the Federal Circuit held that the Board erred (1) in denying authorization to file a motion for supplemental information and (2) in its procedure for deciding the request for authorization.  As to the first issue, the Federal Circuit held that the patent owner satisfied the requirements for admitting supplemental information under 37 C.F.R. 42.123(b), that the evidence could not be obtained earlier (one week after the evidence was discovered) and admission of the information would be in the interest of justice (contradictory expert testimony on patentability).  This was the case, even though the patent owner sought to introduce the contradictory testimony three weeks before the oral hearing.

As to the procedure of ruling on the request for authorization, the Federal Circuit further held that the Board erred in (1) failing to consider Patent Owner’s supplemental information when deciding whether to authorize the motion and (2) failing to issue a written opinion on its substantive decision to not admit the evidence.  In important guidance for practioners on IPR on motion practice procedure, the Federal Circuit made clear that “when the Board makes a substantive evidentiary ruling, it is required to explain its decision,” even if the decision is merely whether to grant authorization to file a motion.