On April 8, 2016, the U.S. District Court for the District of Colorado overturned a jury’s finding that defendant’s infringement was willful, relying in part on the fact that the PTAB had elected to institute inter partes review of one of the asserted patents. We have previously reported on a number of District Court decisions that have addressed whether, and in what circumstances, the denial of an IPR petition may serve as evidence. The Colorado court’s decision appears to be the first to rely upon evidence that the PTAB instituted review to conclude, as a matter of law, that a defendant’s defenses were “objectively reasonable.”

In XY, LLC v. Trans Ova Genetics, LC, Case No. 1:13-cv-00876 (D. Colo.), plaintiff proceeded to trial against defendant on allegations that defendant had infringed claims in ten of its patents relating to systems and methods for selecting the sex of cattle and other livestock. Plaintiff alleged that defendant’s infringement was willful. Defendant countered that the challenged claims were anticipated and/or obvious.

The jury ultimately found defendant liable for infringement of all asserted claims. The jury rejected defendant’s arguments that the asserted claims were invalid. The jury further found that defendant’s infringement was willful.

Following the jury’s verdict, defendant sought to “alter or amend” the judgment of willful infringement via a motion filed pursuant to Rule 59(e) of the Federal Rules of Civil Procedure. The district court construed defendant’s arguments as an assertion that the jury’s willfulness finding was “clearly erroneous as a matter of law.” The court then concluded that the jury, despite having rejected defendant’s invalidity defenses, had erred in concluding that those arguments were “objectively baseless.”

This finding is further supported by the proceedings . . . before the Patent Trial and Appeal Board, which resulted in a finding of invalidity as to the ’920 patent, and a hearing as to the possible invalidity of the ’425 patent. While this evidence was not before the jury, it bolsters the Court’s present finding that Trans Ova’s invalidity defenses met the minimal standard of objective reasonableness, at least as to some of XY’s patents.

The court observed that to establish willful infringement, the evidence must establish that a defendant’s invalidity defenses were “objectively unreasonable,” or alternatively, that they did not present a “substantial question.” The court disagreed with the jury’s conclusion that the defendant had failed to present a sufficient “substantial question” concerning the validity of the asserted claims. The Court first observed that it had denied the plaintiff’s mid-trial motion for judgment on defendant’s obviousness defenses—having concluded that defendant had presented sufficient evidence from which a reasonable trier of fact could find in its favor. The court noted that defendant’s obviousness arguments, while ultimately unpersuasive, were nevertheless supported by testimony of two experts, who addressed each asserted claim in their opinions.

The court then noted that its conclusion was “further supported” by the PTAB’s decisions in two IPR proceedings. In the first, the PTAB had found a sufficient basis to institute review of one of the ten patents tried to the jury. In the second, the PTAB had rendered a final written decision prior to trial finding the claims of a related patent invalid. The court highlighted these PTAB decisions in concluding that the defendant’s invalidity defenses were not objectively unreasonable.

It should be emphasized that the Colorado court pointed to the PTAB’s decisions merely as “further support” for its conclusions—conclusions reached after examining evidence actually before the jury. Other courts have cautioned against giving PTAB decisions “conclusive” effect in such determinations. See Ultratec, Inc. v. Sorenson Communications, Inc., Case No. 3:13-cv-00346 (W.D. Wis. Aug. 28, 2014) (denying defendant summary judgment on willfulness claim, noting that “[n]otwithstanding the elevated threshold for obtaining review, the preliminary and incomplete nature of a decision to institute inter partes review cautions against affording those decisions conclusive weight.”) A PTAB decision denying institution has likewise not been accorded the final word on whether a defense is objectively reasonable, as we have previously reported. See WARF v. Apple, Inc., Case No. 14–cv–062 (W.D. Wis. Oct. 15, 2015) (rejecting plaintiff’s “novel argument” that failure to meet the PTAB’s lower standard for institution of review foreclosed argument that the invalidity defense was objectively reasonable.)

If there needed to be yet another reason for a defendant to make use of AIA post-grant review procedures, the potential that the mere institution of such review could aid in negating a later finding of willfulness is such a reason.