The Impact of IPRs on Parallel Litigation Before the District Courts and ITC Presented by: Andrew Sommer April 30, 2015
Today s elunch Presenter Andrew R. Sommer Litigation Washington, D.C. asommer@winston.com
5-Minute Primer on Inter Partes Review
What is an IPR? One of four types of trial proceedings created by the America Invents Act of 2011 ( AIA ); first available on September 16, 2012 Evidentiary proceedings adjudicated primarily on the written record Proceedings replace inter partes reexamination Proceedings require written and oral advocacy skills as well as technical and litigation skills Many procedural pitfalls 4
What is an IPR? Google Inc. v. Jongerius Panoramic Techs, LLC IPR2013-00191, Paper 50 (PTAB Feb. 13, 2014) 5
Types of Validity Challenges in IPR anticipation 102 OR 103 obviousness AND patents OR printed pubs 35 U.S.C. 311(b) Scope. A petitioner in an inter partes review may request to cancel as unpatentable 1 or more claims of a patent only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications. 6
IPR Timeline Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,757 (Aug. 14, 2012). 7
Key Document: Institution Decision 8
Key Document: Institution Decision 9
Key Document: Final Written Decision 10
Estoppel After IPR Who? What? Scope? Petitioner; or real party in interest; or privy of the petitioner may not asset either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid.... on any ground raised; or on any ground that reasonably could have been raised during the inter partes review When? After final written decision See 35 U.S.C. 315(e)(2). 11
Many IPR Filings PTAB Trial Filings by Quarter IPR Petitions Filed CBM Petitions Filed 459 458 415 350 260 204 190 137 17 79 94 8 7 2 19 20 47 43 55 32 44 43 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 12
PTAB Claim Constructions and District Court Proceedings
some deference ContentGuard Holdings, Inc. v. Amazon.com, Inc., Case No. 2:13-cv-1112-JRG, 2015 WL 1289321, at *5-6 (E.D. Tex. Mar. 20, 2015). 14
PTAB Constructions Getting Some Deference ContentGuard Holdings, Inc. v. Amazon.com, Inc., Case No. 2:13-cv-1112-JRG, 2015 WL 1289321, at *4-6, 10 (E.D. Tex. Mar. 20, 2015). 15
PTAB Construction Supports Indefiniteness Grobler v. Apple Inc., Case No. 12-cv-1534-JST, 2014 WL 1867043, at *8 (N.D. Cal. Mar. 6, 2014). 16
But Not Always Getting Deference.... Kroy IP Holdings, LLC v. Autozone, Inc., Case No. 2:13-cv-888-WCB (E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designtion) 17
PTAB Decisions: Intrinsic Evidence? Fairfield Indus., Inc. v. Wireless Seismic, Inc., Civ. A. No. 4:14-CV-2972, 2015 WL 1034275, *5 (S.D. Tex. Mar. 10, 2015) 18
PTAB Decisions: Intrinsic Evidence? DSS Tech. Mgmt., Inc. v. Taiwan Semiconductor Mfg. Co., Ltd. Civ. A. No. 2:14-cv-199-RSP, 2015 WL 1737732 (E.D. Tex. Apr. 9, 2015) 19
Patent Owner s Silence Not Admission Kroy IP Holdings, LLC v. Autozone, Inc., Case No. 2:13-cv-888-WCB (E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designtion) 20
PTAB Decisions and Substantive Motions
IPR Denial Leads to SJ of No Invalidity Jul. 12-15, 2013 IPR Petitions Jul. 3, 2014 SJ of No Invalidity Complaint Jul. 20, 2012 Institution Decisions Jan. 9, 2014 * PTAB denied institution on many challenged claims The Procter & Gamble Corp. v. Team Techs., Inc. Case No. 1:12-cv-552 (S.D. Ohio) 22
IPR Denial Leads to SJ of No Invalidity The Procter & Gamble Corp. v. Team Techs., Inc. Case No. 1:12-cv-552, Dkt. 130, slip op. at 21-24 (S.D. Ohio Jul. 3, 2014) 23
Adverse Judgment in IPR Against Patent Owner Leads to District Court Estoppel? A party may request adverse judgment against itself at any time during a proceeding. Actions construed to be a request for adverse judgment include:... (2) Cancellation or disclaimer of a claim such that a party has no remaining claim in the trial. A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment.... 37 C.F.R. 42.73(d)(3). 37 C.F.R. 42.73(b)(2). 24
Adverse Judgment in IPR Against Patent Owner Leads to District Court Estoppel? Dec. 13, 2014 IPR Petition (by third party) Jul. 3, 2014 4 th Am. Compl. Feb. 9, 2015 Dismissal Denied Institution Decision May 20, 2014 Complaint PTAB Adverse Judgment Jul. 7, 2014 Aug. 19, 2013 Choon s Design, LLC v. Zenacon, LLC Case No. 2:13-cv-13568, 2015 WL 539441 (E.D. Mich. Feb. 9, 2015) 25
Adverse Judgment in IPR Against Patent Owner Leads to District Court Estoppel? Choon s Design, LLC v. Zenacon, LLC Case No. 2:13-cv-13568, 2015 WL 539441 (E.D. Mich. Feb. 9, 2015) 26
Adverse Judgment in IPR Against Patent Owner Leads to District Court Estoppel? Choon s Design, LLC v. Zenacon, LLC Case No. 2:13-cv-13568, 2015 WL 539441 (E.D. Mich. Feb. 9, 2015) 27
Institution of IPR = Objectively Reasonable Invalidity Defense? No IPR instituted unless the petition... and any [preliminary] response... shows that there is a reasonable likelihood that the petitioner would prevail on at least one claim. The objective recklessness determination entails an objective assessment of potential defenses... [and] can be expected in almost every case to entail questions of validity.... 35 U.S.C. 314(a) Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates, Inc., 682 F.3d 1003, 1006 (Fed. Cir. 2012) Does an instituted IPR provide sufficient evidence for summary judgment of no willful infringement since it is decided under the reasonable liklihood of prevailing standard? 28
Institution of IPR Objectively Reasonable Invalidity Defense Ultratec, Inc. v. Sorenson Communications, Inc., 45 F. Supp. 3d 881, 920-23 (W.D. Wisc. 2014). 29
Institution of IPR Objectively Reasonable Invalidity Defense Ultratec, Inc. v. Sorenson Communications, Inc., 45 F. Supp. 3d 881, 920-23 (W.D. Wisc. 2014). 30
Institution of IPR Objectively Reasonable Invalidity Defense Ultratec, Inc. v. Sorenson Communications, Inc., 45 F. Supp. 3d 881, 920-23 (W.D. Wisc. 2014). 31
Admissibility of PTAB Decisions at Trial
Use for Rebutting Willfulness? Ultratec, Inc. v. Sorenson Communications, Inc., Case No. 13-cv-346-bbc, 2014 WL 5023098 (W.D. Wisc. Oct. 8, 2014). 34
Use to Rebut Indirect Infringement? Personalized Media Communications, LLC v. Zynga, Inc. Case No. 2:12-cv-68-JRG, 2013 WL 10253110 (E.D. Tex. Oct. 30, 2013). 35
Use to Rebut Presumption of Validity? Ultratec, Inc. v. Sorenson Communications, Inc., Case No. 13-cv-346-bbc, 2014 WL 4955302 (W.D. Wisc. Oct. 1, 2014). 36
Use to Rebut Presumption of Validity? Ultratec, Inc. v. Sorenson Communications, Inc., Case No. 13-cv-346-bbc, 2014 WL 5023098 (W.D. Wisc. Oct. 8, 2014). 37
Can Patent Owner Use a Denial of Trial? Universal Elecs., Inc. v. Universal Remote Control, Inc., Case No. SACV 12-00329 AG (C.D. Cal. Apr. 21, 2014). 38
IPRs and Litigation Before the ITC
Impact of IPRs in the ITC: Stats Complaints Filed Between September 16, 2012 and December 31, 2014: Number of Complaints: 84 Number of Patent Assertions: 283 patents Number of IPRs filed: 73 Average time between filing of complaint and filing of IPR: 6.7 months Median time between filing of complaint and filing of IPR: 5 months Minimum time between filing of IPR and complaint: -2.0 months Maximum time between filing of IPR and complaint: 23 months 40
IPRs and High-Low Settlements in the ITC In the Matter of Certain Omega-3 Extracts from Marine or Aquatic Biomass and Products Containing the Same, 337-TA-877 (ITC May 13, 2014). 41
IPR Timing Strategies in the ITC File Early If filed early enough, could have a final PTAB decision before exclusion order issues May obtain usable admissions Institution decision may be useful at the hearing if favorable Opportunity for creative resolutions File Late Lower risk of denial of institution impacting ID Increased settlement leverage if petitioner receives favorable ID After favorable ID for petitioner, will have adequate time to complete IPR pending commission review and appeal All cards on the table as to key prior art 42
IPR Timing Strategies in the ITC File IPR Early Pros: 1. If filed early enough, could have a final PTAB decision before exclusion order issues 2. Usable admissions 3. Institution decision may be useful at the hearing if favorable 4. Opportunity for creative resolutions Cons: 1. Highly unlikely to have a final decision before ID 2. Institution decision may harm invalidity defenses 3. Gives Patent Owner additional leverage if institution denied File IPR Late Pros: 1. Lower risk of denial of institution impacting ID 2. Increased settlement leverage if petitioner receives favorable ID 3. May have adequate time to complete IPR pending review and appeal if ID is favorable 4. All cards on the table as to key prior art Cons: 1. Unlikely to be relevant to ID 2. May not be in the record at all 3. No impact if an adverse ID but extra cost 43
Estoppel Effects and District Court Litigation
35 U.S.C. 315(e)(1): Estoppel The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318 (a), or the real party in interest or privy of the petitioner, 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)(2) 45
Cases of Note On Estoppel Issues Synopsys, Inc. v. Mentor Graphics, Case No. 3:12-cv-1500 (D. Oregon) IPR challenged claims 1-15 and 20-33 PTAB instituted trial of claims 1-9, 11, 28, and 29 (43% of challenged claims) Final Written Decision issued on February 19, 2014, finding claims 5, 8, and 9 invalid (25% of instituted claims) In parallel litigation, patent owner dropped claims except for 1, 24, 26, 27, and 28 Validity not sent to the jury Judgment of $36.4M returned for patent owner Nat l Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., No. 1:12-cv-773- SS, Dkt. 62 (Dec. 2, 2013) Defendant filed petition for IPR PTAB denied petition as to all claims Court held that the statutory doctrine of estoppel DOES NOT APPLY to this case and noted that the panel did not think much of the contentions that prior art invalidated the patent by finding that the petitioner... has not demonstrated a reasonable likelihood of prevailing in any of its contentions. 46
Cases of Note On Estoppel Issues ROY-G-BIV Corp. v. ABB, Ltd., 6:11-cv-00622-0624-LED IPRs instituted covering all claims All claims found patentable in final written decision Day final written decision issued, patent owner filed letter brief requesting summary judgment as to all invalidity defenses, and a finding of privity for all defendants Motion allowed, remained pending at time of settlement 47
ROY-G-BIV v. ABB, Ltd. - Estoppel 48
ROY-G-BIV v. ABB, Ltd. - Estoppel 49
IPRs and Procedural Issues in the District Courts
Notifying Court of IPR Proceeding Virginia Innovation Sciences v. Samsung Elecs. Co., 983 F. Supp. 2d 713, 760 (E.D. Va. 2014). 51
Protective Orders: Prosecution Bars Prosecution Bar in N.D. Cal. Model Protective Order Applies to PTAB Trial Proceedings, Even for Expired Patents Software Rights Archive, LLC v. Facebook, Inc., Case No. 5:12-cv-3970- RMW-PSG, 2014 WL 116366 (N.D. Cal. Jan. 13, 2014) 52
Protective Orders: Prosecution Bars Litigation counsel permitted to participate in IPR, but not claim amendments Paice, LLC v. Hyundai Motors Co., WDQ-12-0499, 2014 WL 4955384 (D. Md. Sept. 29, 2014) Endo Pharms., Inc. v. Actavis Inc., No. 12 Civ. 8985 (TPG), 2014 WL 3950900 (S.D.N.Y. Aug. 13, 2014) LifeScan Scotland, Ltd. v. Shasta Techs., LLC, Case No. 11-cv-4494 (N.D. Cal. Nov. 4, 2013) EPL Holdings, LLC v. Apple Inc., No. C-12-4306 JST (JSC), 2013 WL 2181584 (N.D. Cal. May 20, 2013) Prolitec Inc. v. Scentair Techs., 945 F. Supp. 2d 1007 (E.D. Wis. May 17, 2013). 53
Protective Orders: Prosecution Bars Litigation counsel permitted to participate in IPR without restriction: PPC Broadband, Inc. v. Times Fiber Communications, Inc., C.A. No. 5:13- cv-460 (GLS/DEP), 2014 WL 859111 (N.D.N.Y. Mar. 5, 2014). Cases prohibiting counsel having access to source code from participating in IPR: Versata Software Inc. v. Callidus Software, Inc., Case No. 12-931-SLR, 2014 WL 1117804 (D. Del. Mar. 12, 2014) Inventor Holdings, LLC v. Wal-Mart Stores Inc., Case No. 1:13-cv-96 (GMS), 2014 WL 4370320 (D. Del. Aug. 27, 2014). 54
Protective Order Violations Disclosure of confidential information received under district court protective order during conference call with PTAB results in monetary sanctions: Lunareye, Inc. v. Gordon Howard Associates, Inc., Civ. Action No. 9-13-cv- 91 (E.D. Tex. Feb. 2, 2013). The law regarding the interplay between proceedings before the PTAB and district courts is not yet developed. Counsel should therefore have taken care to avail themselves of procedures to avoid inadvertent disclosure of protected confidential information such as a motion to seal under 37 C.F.R. 42.14 or a request that the protective order be modified. The Court then held that a monetary sanction of $2,500 was appropriate because it is the least onerous sanction that is sufficient to remind counsel of this duty, deter future violations in this suit, and serve as an adequate general deterrent for similar conduct. 55
Third Party Discovery Discovery into real-party-in interest or privity through third-party subpoena denied: Personal Audio LLC v. Togi Entertainment, Inc., Case No. 14-cv-80025 RS(NC), 2014 WL 1318921 (N.D. Cal. Mar. 31, 2014) subpoena seeking information about EFF and its relationship with defendants denied because whether EFF will be estopped is irrelevant because it is premature. Callwave Communications, LLC v. Wavemarket, Inc., No. C 14-80112 JSW(LB), 2015 WL 831539 (N.D. Cal. Feb. 25, 2015) subpoena seeking information related to privity between petitioner and defendants in litigation denied. 56
IPR Strategies for Parallel Litigtion
Strategy Considerations for Parallel Proceedings Prior Art Best practices for reasonable prior art search Selection of Grounds Ensure best patents / printed publications are presented in the first petition Availability of Other Defenses Understand risk; either (1) all-in approach; or (2) understand and develop defenses that cannot be presented in IPR 58
What s Next?
Thank You. Andrew R. Sommer Litigation Washington, D.C. asommer@winston.com