11th Annual Patent Law Institute - Practising Law...

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11th Annual Patent Law Institute

INTELLECTUAL PROPERTYCourse Handbook Series

Number G-1316

Co-ChairsScott M. Alter

Douglas R. NemecJohn M. White


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Outline: The PTAB Turns Five (January 13, 2017)

Leslie M. Spencer Nicholas Evoy Gabrielle Higgins Henry Huang Andrew Sutton

Ropes & Gray LLP

Reprinted with permission.

If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written.

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1. PTAB CHALLENGES

2. TECHNOLOGIES AT ISSUE

(a) Breakdown of total AIA petitions by technology based on data from PTAB Statistics, Sept. 30, 2016 and Nov. 30, 2016:

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(b) Breakdown of percent of petitions instituted by technology, based on data from PTAB Statistics, Nov. 30, 2016:

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(c) Breakdown of trial outcomes for instituted claims by technology, based on data from PTAB Statistics, Nov. 30, 2016:

3. CHOOSING FORUM FOR CHALLENGES

(a) Options and Considerations: (i) Options: District Court, PTAB, ITC (ii) Considerations:

(1) Claim construction: Phillips or BRI (2) Estoppel in litigation from Final Written Decision (3) Venue and transfer of case

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(4) Admissibility of PTAB decisions in District Court (5) Eligibility for CBM (6) Success rate of § 101 challenges (7) Potential for conflicting statements in multiple co-pending

proceedings (b) CBM Eligibility

(i) The patent must: (1) involve “data processing or other operations used in the

practice, administration, or management of a financial product or service,” and

(2) not claim a technological invention (ii) Unwired Planet v. Google, No. 15-1812 (Fed. Cir. Nov. 21,

2016) (1) Rejected PTAB’s CBM standard of “incidental to” or

“complementary to” a financial activity (2) “The patent for a novel lightbulb that is found to work

particularly well in bank vaults does not become a CBM patent because of its incidental or complementary use in banks.”

(iii) Patent owners have disclaimed “financial” claims to avoid institution

(c) Success rates on Section 101 challenges from August 1, 2012 to January 11, 2017 based on data from Docket Navigator:

0 200 400 600

Courts

PTABGranted

Denied

Other

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(d) 12(b)(6) and 12(c) Motions under § 101, based on data from Docket Navigator from August 2012 to January 11, 2017:

(e) Summary judgment motions under § 101, based on data from

Docket Navigator from August 2012 to January 11, 2017:

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4. TIMING OF PTAB PROCEEDING

(a) Typical IPR/CBM timeline: about 18 months (i) Institution decision: about 6 months after filing petition (ii) Final written decision: about 12 months after institution

(b) One 6-month extension is possible

5. TIMING: PTAB vs. E.D. TEX.

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6. TIMING: PTAB vs. N.D. CAL.

7. TIMING: PTAB vs. ITC

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8. WINDOWS TO FILE IPR PETITIONS

9. STAYS PENDING PTAB: STATISTICS

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10. STAYS PENDING PTAB (IPR): BY COURT

(a) Data from LegalMetric from August 2012 to December 2016:

0 50 100

M.D. Fla.D. Del.

E.D. Tex.C.D. Cal.N.D. Cal.

Stays Pending IPR

Win %Loss %

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11. STAYS PENDING PTAB (CBM): BY COURT

(a) Data from LegalMetric from December 2012 to September 2016:

12. STAYS PENDING PTAB: PRE-/POST-INSTITUTION

(a) Data for June 2014 to June 2015 from “Motions to Stay District Court Cases Pending Post-Grant Proceedings,” DocketReport (Aug. 24, 2015):

0 50 100

M.D. Fla.D. Del.

E.D. Tex.C.D. Cal.N.D. Cal.

Stays Pending CBM

Win %Loss %

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13. STAYS PENDING PTAB: E.D.T.X.

(a) NFC Tech. LLC v. HTC Am., Inc., No. 13-cv-1058, 2015 WL 1069111 (E.D. Tex. Mar. 11, 2015) (Bryson, J.) (i) Granted stay, even though case was “not in its infancy” (>1 yr

after complaint filed) (1) Parties had engaged in “significant discovery.” (2) Claim construction briefing was completed. (3) “[F]ar enough along that a stay would interfere with

ongoing proceedings.” (ii) “[D]enying a stay because of the progress of the case to this

point would impose significant expenses on the parties that might be avoided if the stay results in the simplification (or obviation) of further court proceedings.”

(iii) “[S]ince the circuit court’s decision in VirtualAgility, courts have been nearly uniform in granting motions to stay proceedings in the trial court after the PTAB has instituted [IPR and CBM] proceedings.”

(b) SSL Servs. v. Cisco Sys., No. 2:15-cv-433-JRG-RSP, 2016 U.S. Dist. LEXIS 83370 (E.D. Tex. June 27, 2016) (Payne, M.J.)

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(i) Granted stay, even though case was “at a relatively late stage” with trial set for Sept. 6, 2016 (1) Claim construction had taken place (2) But “not yet on the eve of trial—expert discovery is

ongoing and the deadline to file dispositive motions and motions to strike has not yet passed”

(ii) “[I]t was not improper for Cisco to wait until the PTAB instituted IPR before filing its motion to stay.”

(iii) Cisco filed IPR less than five months after complaint: “A delay of less than five months generally constitutes reasonable diligence.”

(iv) Potential to eliminate claims and prior art creates “high likelihood of issue simplification”

14. RECENT PTAB RULE CHANGES

(a) Effective May 2, 2016 (81 Fed. Reg. 18750) (b) Testimonial evidence before institution:

(i) Patent owners may submit “supporting evidence” in their pre-liminary responses (37 C.F.R. § 42.107(a))

(ii) The Board will consider “any testimonial evidence” in deciding institution (37 C.F.R. § 42.108(c))

(iii) Patent owner testimonial evidence “may warrant granting petitioner a reply to such evidence” (81 Fed. Reg. 18757)

(c) Claim construction: “Phillips-type construction” applies “if a party certifies that the patent will expire within eighteen months from the entry of the Notice of Filing Date Accorded to Petition” (81 Fed. Reg. 18752)

(d) Certifications: All legal contentions, allegations, and denials must be warranted and have evidentiary support (37 C.F.R. § 42.11(b)-(c))

(e) Word counts replaced page limits for certain papers, including petitions

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15. TESTIMONIAL EVIDENCE

(a) Considerations (i) Potentially helps patent owners defeat institution (ii) No negative inference from the patent owner not presenting

such evidence (81 Fed. Reg. 18755) (iii) Any doubts about institution must be resolved in the

petitioner’s favor (37 C.F.R. §§ 42.108(c), 42.208(c)) (b) Statistics

16. PRELIMINARY REPLIES

(a) Considerations: (i) Petitioner must show “good cause” for a reply (37 C.F.R.

§ 42.108(c)) (ii) The PTAB might allow more pre-institution replies by peti-

tioners in response to patent owner testimonial evidence (81 Fed. Reg. 18757)

(b) Statistics:

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17. CONSIDERATIONS FOR APPEALS

(a) Evidentiary defects can result in reversal on appeal (b) Parties must have opportunities to respond

(i) Dell Inc. v. Acceleron, LLC, 818 F.3d 1293 (Fed. Cir. 2016): vacated in part because the patent owner did not have an opportunity to address a factual assertion first introduced at oral argument

(ii) In re NuVasive, Inc., No. 2015-1672 (Fed. Cir. Nov. 9, 2016): vacated in part because the patent owner lacked a chance to respond to an argument first made in the petitioner’s reply

(c) Restrictions on new evidence during trial: (i) “A party . . . may only present arguments relied upon in the

papers previously submitted. No new evidence or arguments may be presented at the oral argument.” (77 Fed. Reg. 48,768)

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