For the second time the United States Court of Appeals for the Federal Circuit vacated a Patent Trial and Appeal Board (PTAB) ruling that a patent was valid, providing the first developments of PTAB appellate law.  The decision stems from an inter partes review (IPR) last year where the PTAB upheld all 30 claims of Verinata’s patent.  This decision to uphold all claims came after the PTAB’s decision to institute review on all claims because it believed, at the time, that there was a reasonable likelihood that the claims were invalid.  Ariosa Diagnostics appealed the PTAB’s final written decision to the Federal Circuit.

Ariosa’s arguments, and the Court’s decision, focused on the PTAB’s failure to explicitly state that it considered an exhibit that was not present in the petition.i  At issue was whether the PTAB would consider an exhibit to an expert declaration (Exhibit 1010) that was presented post-petition.ii  The PTAB gave part of the expert’s testimony no weight because petitioner gave no reason why Exhibit 1010 was not presented in the petition for IPR.  Id.  The Court held that this was in error because it was unclear whether the Board was declining to consider the Exhibit, “even as evidence of the background understanding of skilled artisans.”  Id. at 11.  The Court held this way because “[a]rt can legitimately serve to document the knowledge that skilled artisans would bring to bear in reading the prior art identified as producing obviousness.”iii

Based on the Court’s analysis, Petitioners and Patent Owners should take notice.  Specifically, Petitioners should be aware that even if a piece of their case was not present in the petition, it may still be relevant and may need to be considered by the PTAB.  While the evidentiary considerations in the case were reviewed under the substantial evidence doctrine, the PTAB’s ruling of nonobviousness was reviewed de novo.  Id. at 12.  To date, the Federal Circuit frequently upholds PTAB decisions rather than overturns them.  However, the implications ofAriosa are significant, if narrow.  Petitioners should focus on how evidence may be considered by the PTAB.  Patent Owners must also review how evidence is considered both at the PTAB and by the Federal Circuit due to the de novo review standard.  While rare, it is possible to have a decision of nonobviousness overturned by the PTAB.  To avoid the same fate as Verinata’s patent, Patent Owners should make sure that they argue the merits of each piece of evidence in Petitioner’s case, even if it is not part of the original petition.  Patent Owner argued that the PTAB should not consider Exhibit 1010 on largely procedural grounds.iv  This proved fatal to Patent Owner’s case. 

The Federal Circuit’s decision also provides insight into interesting strategies when appealing from the PTAB.  The Federal Circuit indicated that it is open to considering the PTAB’s failure to adequately articulate its reasoning in PTAB decisions.  Id. at 14.  Appellants should be ready to point out inadequately articulated PTAB decisions to the Federal Circuit.  Conversely, Appellees should be prepared to not only defend their case, but the PTAB’s reasoning and why the PTAB’s decision was sufficiently articulated.