Presenting a live 90-minute webinar with interactive Q&A Preparing for and Navigating PTAB Appeals Before the Federal Circuit Conducting PTAB Trials With Eye to Appeal, Determining Errors for Appeal, Understanding PTO Practice and Federal Circuit Law WEDNESDAY, JANUARY 6, 2016 1pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Erika H. Arner, Partner, Finnegan Henderson Farabow Garrett & Dunner, Reston, Va. Michael J. Flibbert, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.
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Preparing for and Navigating PTAB Appeals Before the Federal Circuit January 6, 2016 Presented by Erika H. Arner and Michael J. Flibbert
Sources of PTAB Appeals IPR, CBM and PGR appeals under 35 U.S.C. 141: A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318 (a) or 328 (a) (as the case may be) may appeal the Board s decision only to the United States Court of Appeals for the Federal Circuit. Interlocutory appeals of CBM stay denials under AIA 18 Mandamus? 5
Tsunami of PTAB Appeals? As of October 31, 2015: 3,684 inter partes review (IPR) petitions 393 covered business method review (CBM) petitions 13 post-grant review (PGR) petitions PTAB instituting at high rate and holding claims unpatentable at high rate Very few motions to amend granted Related district court litigation is common Compared to... 6
Tsunami of PTAB Appeals? 7
Commencing a PTAB Appeal Must file a timely Notice of Appeal: [n]o later than sixty-three (63) days after the date of the final Board decision. 37 CFR 90.3(a). [m]ust be filed with the Director, 37 CFR 90.2(a), with copy of notice to PTAB, 37 CFR 90.2(a), and three copies to Federal Circuit clerk, Fed. Cir. R. 15(a)(1) Must provide sufficient information to allow the Director to determine whether to intervene. 37 CFR 90.2(a)(3)(ii). Cross-appeals: Within 14 days of the Notice of Appeal. FRAP 4(a)(3). 8
First Rulings: Appeal of Institution Denials Appeal of institution denials: After PTAB refused institution and party appealed directly to CAFC, Federal Circuit held that institution decision could not be appealed because of Section 314(d) s broadly worded bar on appeal. St. Jude v. Volcano, 749 F.3d 1373, 1376 (Fed. Cir. 2014). Court noted that Section 314(d) may well preclude all review [of a noninstitution decision] by any route, but it need not decide that issue here. Id. See also Zoll v. Phillips, 2014 WL 4179887 (Fed. Cir. Aug 25, 2014). 9
Review of FWDs In re Cuozzo Speed Technologies LLC, 793 F.3d 1268 (Fed. Cir. 2015) PTAB instituted IPR of claims based on grounds not in the Petition; patent owner appealed. 35 U.S.C. 314(d) states: The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable. Majority held 314(d) prohibits all review of the institution decision, even if it was wrong. Left open option of mandamus if the Board clearly and indisputably exceeded its authority. 10
Review of FWDs Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015) PTAB instituted CBM review; following a FWD, patent owner appealed determination that patent is a CBM patent 35 U.S.C. 324(e) states: The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable. Court can review the PTAB s threshold determination that a patent is a CBM patent in an appeal from a FWD 11
Review of FWDs Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015) (continued) Majority reasoned that 324(e) does not apply to limits on the authority to enter a final written decision invalidating a patent because institution and invalidation are two distinct actions by the PTAB. 12
Review of FWDs Achates Reference Publishing, Inc. v. Apple Inc, 803 F.3d 652 (Fed Cir. 2015) Achates filed suit against several companies and joined Apple as a codefendant a year later Apple filed petitions for IPR of the asserted patents Achates argued that the PTAB lacked authority to institute the IPRs because Apple was time-barred Court held that the PTAB s determination on whether a petition is timely is part of the decision to institute and is therefore nonappealable, even after a FWD Distinguished Versata: time bar does not itself give the Board the power to invalidate a patent 13
Mandamus Mandamus remains an option if, after the Board s FWD, the Board clearly and indisputably exceeded its authority. In re Cuozzo Speed Technologies LLC, 793 F.3d 1268, 1274 (Fed. Cir. 2015). But mandamus is this context has still not been directly addressed: However, we did not decide the question of whether the decision to institute review is reviewable by mandamus after the Board issues a final decision or whether such review is precluded by 314(d).... Nor do we do so now. Id. 14
First Rulings: Mandamus Mandamus petitions relating to institution: PTAB refused to institute IPR proceedings on five patents, and Federal Circuit found that Petitioner had no clear and indisputable right to challenge a noninstitution decision directly in this court, including by way of mandamus. In re Dominion Dealer Solutions, 749 F.3d 1379, 1381 (Fed. Cir. 2014). See also In re Procter & Gamble, 749 F.3d 1376 (Fed. Cir. 2014). 15
First Rulings: Mandamus Mandamus petitions relating to institution (continued): Party argued that IPR should have been barred under Section 315(b) s one-year deadline because IPR petitioner was in privity with a third party from a previous lawsuit. In re MCM Portfolio, LLC, 2014 WL 595366 (Fed. Cir. Feb. 18, 2014). Federal Circuit denied mandamus without prejudice to MCM attempting to raise its section 315(b) arguments on appeal after final decision by the Board. Id. 16
First Rulings: Interlocutory Appeal of Stay Denials CBM-related stay requests (AIA 18(b)) Four factors district courts shall consider when a stay related to a CBM is requested Immediate interlocutory appeal De novo standard of review Federal Circuit has reversed district court denials of stays VirtualAgility, Inc. v. Salesforce.com, Inc. Versata Software, Inc. v. Callidus Software, Inc. 17
Standing The PTO is an administrative agency Party need only meet the requirements laid out by the agency and congress to commence PTO proceeding Article III courts require standing Article III of the U.S. Constitution limits the jurisdiction of federal courts to actual Cases and Controversies. Art. III, 2. Standing is immutable and non-waivable No requirement to show Article III standing before an agency, but standing must be demonstrated on direct appeal from agency action to a federal court of appeals 18
Standing Standing Consumer Watchdog v. Wisconsin Alumni Research Foundation: Petitioner-Appellant, Consumer Watchdog, was a nonprofit taxpayer and consumer-rights organization Filed inter partes reexamination, was unsuccessful, and appealed CAFC asked for supplemental briefing on Appellant s standing 19
Standing Standing Consumer Watchdog v. Wisconsin Alumni Research Foundation (continued): To establish standing must show injury that is: Concrete and particularized Imminent or actual Caused by the defendant and Is likely redressable by a favorable decision 20
Standing Standing Consumer Watchdog v. Wisconsin Alumni Research Foundation (continued): For standing, Consumer Watchdog relied on the Board s denial of its requested administrative action namely, the Board s refusal to cancel claims in the patent Consumer Watchdog did not claim to make, use, or sell the patented invention; was not threatened with suit; and did not name another real party in interest 21
Standing Standing Consumer Watchdog v. Wisconsin Alumni Research Foundation (continued): Court held that the Board s denial of Consumer Watchdog s requested action did not confer standing Not enough that 35 U.S.C. 315(b) allows a third-party requester to appeal decisions favorable to patentability. A statutory grant of a right to appeal does not eliminate requirements of Article III. Consumer Watchdog had not identified a particularized, concrete interest in the patentability of the 913 patent, or any injury in fact flowing from the Board s decision. Slip Op. at 8. 22
Claim Amendments Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015) Proxyconn appealed denial of motion to amend. 37 C.F.R. 42.20(c): The moving party has the burden of proof to establish that it is entitled to the requested relief. 37 C.F.R. 42.121(a)(2): A motion to amend may be denied where: (i) The amendment does not respond to a ground of unpatentability involved in the trial; or (ii) The amendment seeks to enlarge the scope of the claims of the patent or introduce new subject matter. 23
Claim Amendments Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292 (Fed. Cir. 2015) (continued) PTAB previously addressed several important requirements for a patent owner s motion to amend claims in Idle Free Systems, Inc. v. Bergstrom, Inc., IPR2012-00027, 2013 WL 5947697 (PTAB June 11, 2013). Court affirmed the Board s decision to require a showing that the amended claims are patentable over all prior art of record not just the prior art that the Board relied upon when instituting review. 24
Claim Construction In re Cuozzo Speed Technologies LLC, 793 F.3d 1268 (Fed. Cir. 2015) The claim construction in IPR should be the broadest reasonable interpretation for unexpired patents. Although the opportunity to amend is cabined in the IPR setting, it is nonetheless available. Review underlying factual determinations concerning extrinsic evidence for substantial evidence and the ultimate construction of the claim de novo, following the Supreme Court s Teva Pharms. USA, Inc. v. Sandoz, Inc. 25
CBM and 101 Versata Development Group, Inc. v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir. 2015) Versata appealed whether the PTAB is authorized to invoke 101 as a test of validity in CBM proceedings. 35 U.S.C. 328(a) states: The PTAB "shall issue a final written decision with respect to the patentability of any patent claim challenged.... [W]e so hold that, looking at the entirety of the statutory framework and considering the basic purpose of CBM reviews, the PTAB acted within the scope of its authority delineated by Congress in permitting a 101 challenge under AIA 18. 26
Constitutionality MCM Portfolio LLC v. Hewlett-Packard Co., No. 2015-1091, 2015 WL 7755665 (Fed. Cir. Dec. 2, 2015) Patent holder argued that IPR is unconstitutional because any action revoking a patent must be tried in an Article III court with the protections of the Seventh Amendment. Court held that IPR provisions do not violate Article III. Because patent rights are public rights, and their validity susceptible to review by an administrative agency, the Seventh Amendment poses no barrier to agency adjudication without a jury. 27
Rule 36 Judgments Federal Circuit Rule 36 specifies that [t]he court may enter a judgment of affirmance without opinion when certain conditions exist and an opinion would have no precedential value. From December 2013 to November 2015, 50% of decisions in IPR appeals were Rule 36 judgments. Possible explanations: Rule 36 decisions are made public faster, so the numbers may appear inflated. Substantial evidence standard of review for factual determinations is highly deferential. 28
Make a record Strategic Tips: Make a Record Introduce facts into the record to support theme: Expert declarations Factual declarations and Discussion of prior art references Balance theme development with discovery repercussions Witnesses submitting affidavits or declarations can be deposed; other discovery allowed based on the interest of justice 29
Strategic Tips: Preserve Issues for Appeal Preserve Arguments: When seeking to challenge a specific rule, cite the rule to the PTAB. Lingamfelter v. Kappos, No. 2011-1449, 2012 WL 3218529, at *2 (Fed. Cir. Aug. 9, 2012). Specifically articulate arguments at every step before rehearing. In re Avid Identification Sys., Inc., No. 2012-1092, 2013 WL 69102, at *6 (Fed. Cir. Jan. 23, 2013). Requests for Rehearing: opportunity to bolster your record, but also gives PTAB a chance to bolster its reasoning 30
Strategic Tips: Third-Party Involvement Government participation in appeals from PTAB is discretionary The USPTO and the United States may only participate in significant cases The Federal Circuit may request government briefing May third parties intervene in the appeal? What about estoppel? Will Court permit third parties to file an amicus brief? 31
Strategic Tips: Positioning the Appeal Narrow the issues only present strongest grounds for reversal One issue is better than two, etc. Consider the applicable standard(s) of review Issues of law reviewed de novo greatest chance E.g., obviousness, enablement, statutory interpretation Issues of fact reviewed for substantial evidence difficult to reverse E.g., written description, anticipation, facts underlying obviousness Procedural issues (e.g., denial of discovery) are unlikely to be reversible even if appealable 32
Strategic Tips: Appeal Brief Most appeals turn on briefs, not oral argument Clarity is key Preliminary statement is helpful Explain technology but avoid unnecessary detail Headings provide a useful roadmap Statement of facts Must tell a compelling story Avoid arguments or case citations Include accurate record cites; don t overstate Court should want to rule for you after reading facts 33
Argument section Strategic Tips: Appeal Brief Prioritize strongest argument usually goes first Don t leave the Court guessing at your best precedent identify key cases and fully develop them Address any adverse precedent Avoid string cites or block quotes Avoid making substantive arguments in footnotes 34
Strategic Tips: Oral Argument Start by concisely identifying the reversible error (or the key reasons for affirmance) Purpose is to allow Court to ask questions Listen carefully, be flexible, answer questions directly Thorough familiarity with record and relevant case law is essential Advance preparation should include brainstorming to identify possible questions Don t interrupt judges; adhere to time limits 35
A Look Ahead: Redundancy Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., Nos. 15-1116, -1119 (Fed. Cir.) PTAB often eliminates alternative grounds challenging the same patent claims as redundant. Petitioner raised a three-reference obviousness ground and a single-reference anticipation ground. The PTAB instituted the obviousness ground and denied the anticipation ground as redundant. Petitioner argues that the PTAB s denial of the anticipation ground was unlawful. PTO argues that the Federal Circuit lacks jurisdiction to review institution decisions. 36
Questions? 37
Thank You Erika Harmon Arner Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Two Freedom Square 11955 Freedom Drive Reston, VA 20190-5675 Tel +1 571 203 2754 Fax +1 202 408 4400 erika.arner@finnegan.com Michael J. Flibbert Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 901 New York Avenue, NW Washington, DC 20001-4413 Tel +1 202 408 4493 Fax +1 202 408 4400 michael.flibbert@finnegan.com 38
Speaker Information Erika Arner chairs Finnegan s patent office practice. She focuses on patent office trials, patent prosecution management, client counseling, and litigation, with an emphasis on electronic technology, computer software, and the Internet. She has also served as lead counsel before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office (PTAB) in more than 20 post-grant review and inter partes review proceedings. Mike Flibbert is a partner in Finnegan's chemical practice group, which he has chaired. With more than 20 years of experience, he serves as lead counsel in district court litigations, IPRs before the PTAB, and Federal Circuit appeals. Mike handles cases involving pharmaceuticals, biotechnology, chemistry, and chemical engineering. He has particular experience representing pharmaceutical patent holders in Hatch- Waxman Act litigations. 39
Disclaimer These materials have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. and European intellectual property law. These materials reflect only the personal views of the authors and are not individualized legal advice. It is understood that each case is fact specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the authors, Finnegan, Henderson, Farabow, Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han Foreign Legal Affairs Law Firm) cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with these authors. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. 40