Intex, a swimming pool manufacturer, challenged its competitor’s air purge valve patent by petitioning for IPR. The Board instituted trial, despite Bestway, the patent owner, raising questions about whether some of the references asserted in the petition were prior art that could be relied on in IPR.
The petition proposed five grounds of unpatentability. The first three were based on a prior art patent (referred to as Blomquist) alone, or in combination with two Intex manuals. The other two grounds were based on an instructional video Intex shipped with its pumps alone, or in combination with Blomquist.
Bestway’s response challenged whether the Intex manuals and video were shown to be prior art printed publications, particularly in view of the lack of authentication of the copyright notices contained in the manuals, and the lack of authentication of the date of dissemination of the video. In a rarity for the Board, Intex was allowed to file a reply and Bestway a surreply to address the prior art status of the Intex manuals and video.
The Board may institute a trial if the petitioner demonstrates a reasonable likelihood of prevailing. The Board typically decides on a claim-by-claim basis whether the petitioner has made a sufficient showing of unpatentability, such that about 63% of petitions result in instituted trials, but only 45% of challenged claims are reviewed. In this case, however, the Board pointed out that a trial may be instituted if a sufficient showing has been made for at least one challenged claim. The Board found that Intex met the institution threshold for claim 1, at a minimum, based on Blomquist, which it accepted as a prior art patent.
Interestingly, having decided Blomquist was sufficient to satisfy the threshold showing for one claim, in the interest of judicial economy, the Board exercised its discretion to review all of the challenged claims under the asserted grounds, without resolving the parties’ considerable dispute over the prior art status of the Intex manuals and video. Despite granting additional briefing pre-institution, the Board opted not to resolve the dispute over the asserted references pre-institution, implying that it could be resolved in the trial.
In reaching its decision to institute a trial on all grounds (IPR2016-00180), the Board seemed to have been influenced by the district court’s decision to stay related litigation over the patent so long as the Board reviewed all of the claims in the patent. The Board was concerned about the cost of parallel proceedings, with some claims being addressed at the PTAB and other claims in the same patent being addressed in district court. Such inefficiencies, the Board reasoned, were inconsistent with the intent of Congress in creating the AIA trial system.
Having won IPR at the PTAB, Intex seems to have let a little air out of Bestway’s purge valve patent. However, the patent is not yet totally deflated, as Intex still must prove by a preponderance of the evidence at trial that the Intex manuals and video are prior art printed publications. If Intex fails to do that, this case may turn into an example of the adage, “Be careful what you wish for.” Intex surprisingly won the opportunity for a reply pre-institution and used that opportunity to argue that institution does not require the same level of proof that is required to ultimately prevail in a final written decision. The Board granted Intex’s wish and instituted. Now, Intex must meet the higher burden of proof or face a final written decision from which many claims may survive and be available for assertion against it in district court.