While it is obviously frustrating when an opponent files a paper citing snippets of your own expert’s testimony out of context, a party’s attempt here to right the wrong after the fact was rebuffed by the PTAB and illustrates why mastering the PTAB’s guidelines and prior decisions, and thinking ahead with the same firmly in mind, is paramount. Seagate Technology (US) Holdings, Inc. v. Enova Technology Corp., IPR2014-01178, Paper 45 (Oct. 28, 2015).

The issue in Seagate arose when the patent owner submitted a motion for “observations” on the cross-examination, via deposition, of its own prior art witness, Dr. Thomas Conte. The patent owner did so because it wanted to provide context for the portions of Dr. Conte’s testimony cited in the petitioner’s reply paper, as there is no right to file a sur-reply. Filing of “observations,” including the need to first request authorization by the party defending the deposition, is described in the PTAB’s Trial Practice Guide:

In the event that cross-examination occurs after a party has filed its last substantive paper on an issue, such cross-examination may result in testimony that should be called to the Board’s attention, but the party does not believe a motion to exclude the testimony is warranted. The Board may authorize the filing of observations to identify such testimony and responses to observations, as defined below.

The party taking the cross-examination files the observations. The opposing party may file a response to an observation. The opposing party may not file observations without express prior authorization.

77 Fed. Reg. 48,756, 48,767-68 (Aug. 14, 2012) (emphasis added). Here, without prior authorization and indeed contrary to the case’s scheduling order which contemplated observations for reply witnesses only, the patent owner nonetheless charged ahead and filed its motion for observations (containing the observations themselves). Thus it was no surprise when, shortly thereafter, the petitioner filed a motion to expunge those observations.

It was also no surprise when the PTAB proceeded to grant the petitioner’s motion to expunge, not only because of the patent owner’s procedural transgressions but also because the PTAB had previously determined that it was improper for a party to submit observations on the testimony of its own witness. See Schott Gemtron Corp. v. SSW Holding Co., Inc., IPR2013-00358 (PTAB May 16, 2014) (Paper 77), which the Seagate panel cited as follows:

[A]s the panel explained in Schott, “it is the party taking the cross-examination that typically files observations, and the reason for permitting observations is that the cross-examination takes place after the party has filed its last substantive paper, such that the party has no way to bring relevant testimony to the Board’s attention.” Schott, slip op. at 3. But here, just as in Schott, “[t]he rationale for observations does not apply . . . because it is Patent Owner that seeks to file observations on the cross-examination testimony of its own witnesses.” Id.

It is not clear that the patent owner’s attorneys were aware of the pertinent Trial Practice guidelines and the Schott decision at the time of the deposition of Dr. Conte. If they were, it seems, they would have thought ahead and addressed the unfavorable out-of-context portions of Dr. Conte’s testimony on re-direct (indeed a bit of re-direct was conducted on other points). That would have made it difficult for the petitioner to cite only those out-of-context portions while ignoring the re-direct and in turn, arguably, its duty of candor (though parties do expect the PTAB to consider all of the cross-examination testimony, not just the quotes that appear in the parties’ pleadings).

All that said, and recognizing of course that mastering the PTAB’s rules and decisions is key to doing things correctly in the first place, by filing its motion for observations the patent owner may nonetheless have advanced its cause. While the motion and observations themselves are expunged, the record in the case still contains, e.g., the patent owner’s opposition to the expungement motion where its concerns about Dr. Conte’s testimonial context are plainly expressed. One wonders whether the panel will, as a result, be more likely to read Dr. Conte’s deposition transcript with a careful eye toward such context.