In a previous post, we discussed the “shifting burdens” framework outlined by the Federal Circuit in Dynamic Drinkware, LLC v. National Graphics, Inc., for demonstrating a prior art reference’s entitlement to a provisional priority date. (See our post hereSee also Dynamic Drinkware, 800 F.3d 1375, 1378 (Fed. Cir. 2015)).

In a pair of recent decisions, the PTAB has adopted the shifting burdens framework to new issues, such as whether a reference is precluded from use in an obviousness rejection under the common ownership exception of 35 U.S.C. § 103(c)(1). See, e.g., Global Tel*Link Corp. v. Securus Techs., Inc., IPR2014-00825, Paper 36 (P.T.A.B. Dec. 2, 2015); Marvell Semiconductor, Inc. v. Intellectual Ventures I LLC, IPR2014-00552, Paper 79 (P.T.A.B. Nov. 30, 2015).

The statute provides: “Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.”

As applied to § 103(c)(1), the shifting burdens framework comprises the following three steps:

  1. The Petitioner must establish that the reference is prior art. The PTAB has not given the Petitioner an initial burden of proving availability of a reference in spite of § 103(c)(1). As a result, this first step is a fairly low burden for the Petitioner. See Global Tel*Link at 11 (“Petitioner has satisfied its burden [] by arguing that [the reference] was prior art under § 102(e) and, in combination with one or more other prior art references, would have rendered claims 1-20 obvious”).
  2. The burden shifts to the Patent Owner to demonstrate that the subject matter of the prior art reference and the claimed invention of the challenged patent were commonly owned at the time the invention was made. The Patent Owner must establish:

(A) The date on which the invention of the challenged patent was made. Absent evidence to the contrary, this date is presumed to be the filing date of the patent’s application.Global Tel*Link at 13.

(B) That the claimed invention and prior art reference were “owned or subject to an obligation of assignment” to the same person/entity as of the date established in (A). Id. To meet its burden with respect to element (B), a patent owner must provide objective evidence such as assignment documents, corporate records, employee agreements/contracts, and even employee paystubs. See Marvel at 9-10; Global Tel*Link at 12. In Marvel, the patent owner successfully used “the common law right of an employer in the inventions of an employee who was employed to invent.” Marvel at 11.

  1. The burden shifts back to the petitioner, who can introduce evidence or arguments in their Reply Brief demonstrating that the prior art was not subject to § 103(c)(1).Global Tel*Link at 15.

In both the Marvel and Global Tel*Link cases, the patent owners were able to supply sufficient evidence of common ownership such that the PTAB upheld validity of any claims challenged using the commonly owned prior art reference. Marvel at 21; Global Tel*Link at 22. Thus, § 103(c)(1) is a narrow but powerful tool for patent owners to defeat inter partesreviews.

A patent owner looking to raise a § 103(c)(1) challenge must decide whether to include it in a Preliminary Response or wait until filing the full Response. To date, we have not identified any successful § 103(c)(1) challenges raised in a Preliminary Response.[Note 1] If testimonial evidence is required – for example, to establish that an employee was under an obligation to assign inventions to their employer – then the issue cannot be raised in a Preliminary Response. However, if documentary evidence is sufficient to demonstrate common ownership, a patent owner may prefer to raise the issue in a Preliminary Response and avoid institution of the inter partes review altogether.