New Evidentiary Opportunity Dissolves Patentee Criticism  

Patentees have lamented the inability to submit new, testimonial evidence via preliminary response since the inception of the Patent Trial & Appeal Board (PTAB). It was argued that since AIA trial petitions almost always included testimonial evidence, the inability to respond in kind was procedurally lopsided in favor of challengers.  Because of this perceived imbalance, patentees insisted that trial institution was a foregone conclusion.  Of course, if this patentee criticism were valid, far more trials would conclude favorably to patentees once such evidence is entered (it is permitted later, during trial).   

Nevertheless, responsive to this criticism, the PTAB will begin allowing new testimonial evidence with preliminary responses on May 1st.  But, is this new patentee opportunity truly helpful?

For example, Rule 42.107(a) is amended to allow "supporting evidence":

§ 42.107 Preliminary response to petition.  The patent owner may file a preliminary response to the petition. The response is limited to setting forth the reasons why no inter partes review should be instituted under 35 U.S.C. 314 and can include supporting evidence. The preliminary response is subject to the word count under § 42.24.

(emphasis added)

As mentioned above, if patentee evidence were as game-changing as urged, far more trials would conclude in favor of patentees once all evidence is entered and considered. Yet, the statistics do not show a significantly wide variation between institution rates and final claim cancellation rates.  But, what does a patentee have to lose in taking advantage of every option to stave off a dreaded PTAB institution?

In some cases, a lot.

First, let's not forget the language added to Rule 42.108(c) where declarants on both sides disagree (as will almost always be the case)

§ 42.108(c) Institution of Inter Partes Review .     .      .       .      The Board's decision will take into account a patent owner preliminary response where such a response is filed, including any testimonial evidence, but a genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review. A petitioner may seek leave to file a reply to the preliminary response in accordance with §§ 42.23 and 42.24(c). Any such request must make a showing of good cause.

(emphasis added)

That is, patentees attempting to rebut factual showings of a petitioner, in the vast majority of cases, will go to trial regardless.  Hastily assembling a declaration in the three months time between petition filing and the time the preliminary response is due — as opposed to the 8-9 months time between the petition filing and patentee trial response — might be far more prudent.  Indeed, preemptively addressing all proposed grounds (pre-trial) with declarant testimony could create unnecessary complications given that the Board may ultimately institute on only a subset of such issues.  

Other patentee trade-offs to consider in submitting such evidence:

  • The creation of additional document inventory for deposition of patentee's declarant(s)
  • The creation of up to another 7 hours of deposition (cross-examination) for the patentee expert. (37 CFR §42.51(b)(1)(ii))
  • Previewing the positions of Patentee's declarant for the deposition of petitioner's witness. (Absent the filing of testimonial evidence pre-trial, the petitioner's declarant (deposed after institution but before the Patentee Response and traditional presentation of its direct testimony) has only the preliminary response to guide deposition preparation, assuming one is even filed.

The last point above cannot be emphasized enough — over zealous presentation of declarant testimony prior to trial may enable a well prepared petitioner witness to inject damaging rebuttal testimony at the time of cross-examination. Keep in mind that depositions at the PTAB are very different than district court depositions. This cross-examination testimony goes directly into the record and may be relied upon by petitioner.  On the other hand, a reply declaration by the same petitioner (after the Patentee response) might be considered improper supplementation.

Moving on to the optics of an institution decision in which the PTAB has weighed evidence from both sides, this may also prove quite unfavorable.  Having presented arguments and evidence in a patentee preliminary response, if the trial is instituted anyway, that institution decision (ID) now appears all the more foreboding.  In other words, within 6 months of filing, a panel of three technically trained judges, after hearing arguments and evidence from both sides, still find the claims likely to be unpatentable—quite a sobering development for a patentee.  Sure, the trial is still to come, but the argument that procedure has somehow unfairly colored the ID outcome will be lost to patentees.  At a minimum, the ability to argue the asymmetry in evidence has been of value to patentees facing a stay pending IPR in a co-pending district court case. 

On the petitioner side, knowing that the amendment to Rule 108(c) favors petitioners with respect to factual dispute, going forward, there may be incremental value in defining all such issues in a statement of material facts. 37 C.F.R. § 42.22(c).  As any such statements must be explicitly denied, or may be deemed admitted, this will frame the arguments of the patentee's preliminary response in a petitioner friendly manner.