Emerging Trends and Legal Developments in Post-Grant Proceedings

Transcription

1 Emerging Trends and Legal Developments in Post-Grant Proceedings March 28, 2017 Attorney Advertising

2 Overview 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 2

3 IPR Petitions Technology Breakdown As of January 31, Source: 3

4 Sep-12 Oct-Dec-12 Jan-Mar-13 Apr-Jun-13 Jul-Sept-13 Oct-Dec-13 Jan-Mar-14 Apr-Jun-14 Jul-Sept-14 Oct-Dec-14 Jan-Mar-15 Apr-Jun-15 Jul-Sept-15 Oct-Dec-15 Jan-Mar-16 Apr-Jun-16 Jul-Sept-16 Oct-Nov-16 Sep-12 Oct-Dec-12 Jan-Mar-13 Apr-Jun-13 Jul-Sept-13 Oct-Dec-13 Jan-Mar-14 Apr-Jun-14 Jul-Sept-14 Oct-Dec-14 Jan-Mar-15 Apr-Jun-15 Jul-Sept-15 Oct-Dec-15 Jan-Mar-16 Apr-Jun-16 Jul-Sept-16 Oct-Nov-16 IPR Petitions IPRS Filed by Quarter TC1600 IPRS Filed by Quarter As of January 18,

5 IPR Institutions Technology Breakdown As of January 31, Source: 5

6 IPR Institutions 120% Institution Rates 100% 80% 60% 40% 92% 80% 100% 84% 89% 86% 88% 100% 78% 79% 82% 57% 59% 76% 46% 69% 57% 73% 54% 75% 43% 69% 63% 65% 41% 51% 49% 56% 52% 93% 72% 20% 0% Institution Rates All IPRs Institution Rates TC1600 As of January 18, * Of decisions that have reached an institution decision. 6

7 IPR Outcomes Technology Breakdown As of January 31, Source: 7

8 Petitions Orange Book Patents Types of Orange Book Patents Petitioned Compound 63 Formulation/Composition 182 Method of Treatment As of February 23,

9 Institution Decisions Orange Book Patents Types of Orange Book Patents Denied Petitions Compound 19 Formulation/Composition 52 Method of Treatment As of February 23,

10 Outcomes Orange Book Patents 348 Petitions Total Of Decisions Instituted 39 Decisions Awaiting Institution 26 Settled 34 Terminated by Agreement Pre-Institution 96 Not Instituted 179 Instituted 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 As of February 23,

11 Outcomes Orange Book Patents 35 Final Decisions by Type of Patent Formulation Method Compound Not Unpatentable All Unpatentable Some Claims Unpatentable As of March 21,

12 Preliminary Response Rates: Pre and Post Rule to Allow New Testimonial Evidence (NTE) As of January 31,

13 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

14 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

15 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 ) Petitioned: 1. SDB 2. DB 3. QC Instituted: 1. SDB Estopped: 2. DB Not Estopped: 3. QC 15

16 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

17 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. Not Petitioned, Estopped: 5 and 6. Petitioned: 1, 2, 3, 4 Instituted: 1, 2, 3, 4, Estopped: 1,2,3,4 17

18 Joinder and Scope of Estoppel Parallel Networks Licensing, LLC v. Int l Business Machines Corp. 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, IPR at *6. 18

19 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. Estopped: 4. YZ (not in petition but known) Petitioned: 1. SDB 2. DB 3. QC Instituted: 1. SDB Estopped: 2. DB Not Estopped: 3. QC 19

20 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 U.S.C. 315(c) 20

21 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

22 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

23 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 (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

24 Motions to Amend Patent owners are allowed to move to amend claims during an IPR under 37 C.F.R 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

25 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

26 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 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 The Board s rationale is erroneous regardless of the outcome of the In re Aqua Products pending en banc decision. Id. 26

27 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

28 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)* * represents Broadcom 28

29 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

30 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 timebar 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

31 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

32 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

33 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

34 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. * represented Covidien 34

35 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. Kennametal does not permit the Board to fill in missing limitations simply because a skilled artisan would immediately envision them. 35

36 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. IPR Claim Construction In re Magnum Oil Tools Int l, Ltd. (Fed. Cir. 2016). Claim terms in an IPR are to be given their broadest reasonable interpretation. Standard of Review Cuozzo Speed Techs., LLC v. Lee (2016). AIA requires the substantial evidence standard of review. Merck & Cie v. Gnosis SpA (Fed. Cir. 2016). 36

37 Questions? Wilmer Cutler Pickering Hale and Dorr LLP is a Delaware limited liability partnership. principal law offices: 60 State Street, Boston, Massachusetts 02109, ; 1875 Pennsylvania Avenue, NW, Washington, DC 20006, Our United Kingdom offices are operated under a separate Delaware limited liability partnership of solicitors and registered foreign lawyers authorized and regulated by the Solicitors Regulation Authority (SRA No ). Our professional rules can be found at A list of partners and their professional qualifications is available for inspection at our UK offices. In Beijing, we are registered to operate as a Foreign Law Firm Representative Office. This material is for general informational purposes only and does not represent our advice as to any particular set of facts; nor does it represent any undertaking to keep recipients advised of all legal developments. Prior results do not guarantee a similar outcome Wilmer Cutler Pickering Hale and Dorr LLP 37