Since IPR and CBM proceedings began following the passage of the America Invents Act in September 2011, the rate of institution of proceedings has remained high. The relative success of the post-grant proceedings has resulted in an increasing number of petitions being filed before the PTAB, from 58 IPR and 7 CBM petitions per month in 2013, to 125 IPR and 14 CBM petitions per month in 2014.1 Such petitions are usually accompanied by an expert declaration providing support for issues and positions raised in the petition. Faced with the onslaught of petitions being filed, the PTAB appears more likely to rely on mechanisms and rationale that do not address the substance of the petition to reduce the number of petitions being filed and to make it more difficult for petitions to be granted and proceedings instituted. These approaches include the broad reading of § 325(d) and § 314(a) to provide the PTAB support in denying “serial” or “follow-on” IPR petitions.2
Beyond the PTAB's apparent efforts to reduce the number of instituted petitions, Patent Owners are becoming increasingly adept at raising arguments in preliminary responses to filed petitions. While initially Patent Owners appeared concerned with filing preliminary responses and providing a window into their arguments, this concern has been outweighed by the disadvantages in attacking a petition after, rather than before it is granted. As Petitioners are not provided an opportunity to address preliminary responses prior to the PTAB making an institution decision, Patent Owners are leveraging preliminary responses to thwart otherwise solid prior art arguments by finding deficiencies in the petitions as prepared. Given that less than 15% of all requests for rehearing were granted in 2015, Patent Owners are gaining a tactical advantage by obtaining an unappealable denial of a petition, frequently too late for a Petitioner to remedy deficiencies and based upon arguments to which Petitioners have no opportunity to respond. This reality necessitates extreme care in preparing the petition and accompanying expert declaration to avoid potential pitfalls.
Expert declarations have been increasingly subject to attacks due to their importance in the petition process. For example, in IPR2014-00547 (Decision published December 3, 2014), the Petitioner had filed an IPR petition raising six prior art grounds for invalidity.3 The petition was accompanied by an expert declaration that provided support for the anticipation and obviousness grounds in the petition.4In its preliminary response, the Patent Owner argued that the expert declaration should be ignored and the petition denied institution since the expert declaration was improper for failing to address the perspective of one of ordinary skill in the art (“POSITA”).5 Specifically, the Patent Owner argued that the declaration addressed the expert's personal views rather than a POSITA at the time of the alleged invention.6
In denying the petition, the three judge panel agreed with the Patent Owner and denied institution on all grounds.7 As one example, the PTAB stated that the declaration was flawed because the expert addressed his own skill and knowledge, rather than explain why a POSITA would have been motivated to combine the references as advocated.8
IPR2014-00912 (Decision published December 16, 2014) is another example of a Patent Owner avoiding institution of a petition based upon alleged flaws in a declaration that were raised in a Preliminary Response.9 Here, the Petitioner had included an expert declaration with its petition providing support for claims of obviousness against the Patent Owner’s ‘672 patent.10 In its preliminary response, the Patent Owner argued that institution should be denied because among other things, the prior art failed to claim or teach the intended application of the ‘672 patent and in fact could not be used for the same functions as the ‘672 patent.11
The PTAB denied the petition, noting that the Petitioner’s expert declaration had explained why the prior art could have been used in the same way as the ‘672 patent, but it did not explain why it would have been obvious to a POSITA to do so.12
In another pair of decisions in IPR2015-00099 and IPR2015-00153 the Patent Owner was again able to utilize a technical requirement to defeat institution of an IPR proceeding. In IPR2015-00099 the Petitioner relied on a provisional application date for a prior art reference in its efforts to invalidate the Patent Owner’s allegedly infringed patent.13 The Petitioner failed, however, to analyze whether the provisional application disclosed the same subject matter as the later, prior art reference.14 In a brief denial decision, the PTAB agreed with the Patent Owner’s argument that the absence of subject matter analysis was fatal to the petition.15 In a similar factual situation in IPR2015-00153, the PTAB took its decision one step further when it decided that an expert declaration that argued, “[all] subject matter of [the prior art reference] is supported by [the provisional application]” was not sufficient to satisfy the requirement that provisional applications address the referenced subject matter of prior art used in efforts to invalidate Patent Owners’ patents.16
A Patent Owner’s ability to challenge the identity of the real party in interest (“RPI”) is another example of a requirement that is being broadly interpreted to deny petitions. A primary purpose of this requirement was to prevent hidden parties from funding IPR petitions without revealing themselves to the PTAB, thereby potentially avoiding any estoppel effects.17 However, in IPR2014-00962 (Decision published December 29, 2014), the PTAB denied institution based on a failure to identify Paramount Pictures Corporation as an RPI in a petition brought by Paramount Home Entertainment Distribution Inc., finding that the parent company was a RPI.18
The decisions discussed above confirm the increasingly critical importance of careful preparation of a petition and oversight of the accompanying expert declaration by experienced counsel, particularly because of the PTAB's increased scrutiny of petitions. The preparation of an original petition is also gaining increasing importance based upon some recent PTAB decision disapproving of the use of "serial" petition filings in which a Petitioner attempt to address and correct issues that resulted in the denial of an earlier petition. Thus, the preparation of petitions requires not only strong technical arguments and proper legal analysis but also a detailed understanding of the requirements for petitions and declarations to prevent Patent Owners from obtaining petition dismissal by poking a single hole in an otherwise strong petition. Similarly, adept and experienced counsel representing Patent Owners can increasingly utilize these and other techniques within preliminary responses to prevent institution of proceedings.