The Federal Circuit recently issued an opinion endorsing Patent Trial and Appeal Board (“PTAB”) procedures in the inter partes review (“IPR”) process. In their most recent opinion, Redline Detection, LLC v. Star Envirotech, Inc., No. 2015-1047 (Fed. Cir. Dec. 31, 2015), the Federal Circuit affirmed that patent challengers must put all supporting information in their initial petitions, rather than adding it later as supplemental information. This decision, while certainly inuring to the benefit of patent owners, focuses on the specificity required of patent challengers in submitting evidence in their original petitions.
Redline's petition for IPR included 12 grounds on which the PTAB could find the patent-at-issue invalid. Notably, the petition was not supported by an expert declaration. After the PTAB instituted the IPR on 2 of the 12 submitted grounds, Redline sought to submit supplemental information under 37 C.F.R. § 42.123(a), including a new 60 page declaration by its expert and some additional prior art. This submission was timely in that it was made within one month of institution, as required by § 42.123(a). The only justification that Redline gave for the submission of the experts declaration after institution, rather than with the petition, was cost-effectiveness of later submission. Indeed, Redline admitted that it intentionally delayed filing the declaration because it essentially was less complex to have an expert opine on the grounds instituted rather than on all original 12 grounds. The PTAB found that Redline did not allege any arguments or evidence in the newly submitted declaration that reasonably could not have been submitted with the petition. Hence, the PTAB concluded Redline did not establish a sufficient basis for submitting new evidence.
In the Federal Circuit, Redline challenged the PTAB’s denial of its motion to submit supplemental evidence under § 42.123(a). Largely, the arguments were based upon statutory construction of PTAB regulations. Redline argued that § 42.123(a) only requires that a supplemental submission be timely and relevant and that the PTAB should not have considered other issues in making its determination under § 42.123(a). The Federal Circuit disagreed and found that the plain language of § 42.123(a) does not exclude the application of other general governing regulations, including the ability of the PTAB to complete IPR proceedings in a timely manner. Redline also argued that the PTAB was not following its own regulations and relied heavily on prior PTAB decisions allowing the submission of supplemental information. The Federal Circuit distinguished the cases relied upon by Redline, noting “stark difference” between the type of expert reports considered in other cases and the "de novo expert report" submitted for the first time by Redline in its request to submit supplemental information.
Ultimately, the Federal Circuit determined that the PTAB acted properly and well within its discretion to deny Redline’s request to submit supplemental information. The Federal Circuit also affirmed the decision of non-obviousness, noting the substantial evidence used in making the determination by the PTAB, including unrebutted expert testimony.