AIA Trial Practice & Procedure Mature & New Trends Emerge
The Patent Trial & Appeal Board (PTAB) has reached steady state in terms of work flow. The number of final decisions (delayed by the 18 month pre-trial and trial phase) are now tracking the significant petition filing rate that began in 2013. The decisions coming due today pertain to late 2013 petition filings. As the work has increased, several trends have emerged.
The most noteworthy trends are detailed below.
Over Two Dozen Victories on the Merits for Patent Owners
Whether by dint of less low hanging fruit (i.e., stronger target patents), poor petition drafting practice, a tightening of PTAB standards, or a combination of all of these factors, patentees are seeing more success of late.
Over the past several weeks the PTAB sided with Patent Owners on the merits in well over two dozen denials of institution and final written decisions. The Board is reading both the prior art disclosures and the petitioners' arguments narrowly. The Board has been quite comfortable finding that petitioners did not carry their burden, even for simple technologies. See, e.g., IPR2014-01173, IPR2014-01552, IPR2014-01174, IPR2014-01280, IPR2014-01029, IPR2014-01414, IPR2014-01452, IPR2015-00096, IPR2014-01456, IPR2014-01564, IPR2014-1096, IPR2014-01440, IPR2015-00022, IPR2014-01084, IPR2014-01369, IPR2014-01423, IPR2014-01370, IPR2014-01371, IPR2014-01373, IPR2014-01490, IPR2014-00379, IPR2014-01476, IPR2014-01090
If It's Not Spelled Out Within the Four Corners of the Petition . . .
The Board continues to reject arguments on the basis that the petitioner omitted material information or explanation from the petition. Many grounds were rejected on the basis that petitioners did not affirmatively establish that the prior art documents were sufficiently accessible to the public. See, e.g., IPR2014-01457, IPR2015-00146, IPR2014-01053. In one case, the prior art reference was discarded essentially because the petition didn't specify the date of publication in the copyright notice. CBM2014-00156. In other cases, the Board refused to consider references because they were discussed in a declaration rather than in the body of the petition. E.g., IPR2014-01260. Alternative grounds were considered redundant on several occasions where the petition did not affirmatively explain the "strengths and weaknesses" of each ground. See, e.g., IPR2014-01448.
Several Petitions Fail to List All Real Parties-in-Interest
RPI continues to be a hot-button topic. It caused the demise of many petitions over the last month. See, e.g., IPR2014-00041, IPR2014-01324, IPR2014-01288, IPR2013-00453. While a plain vanilla parent-subsidiary relationship will not cross the line, historical evidence of pattern of control by a parent company justifies finding that the parent should have been listed as a RPI. IPR2014-01422. The latest decisions have focused on whether the third party could have "called the shots" or exercised control over the petition, irrespective of whether any control was actually exercised. See, e.g., IPR2014-01288.
Beware Preparing your Witness for Re-Direct
The panel in Flir v. Leak Surveys (IPR2014-00411, Paper 12) parted with earlier decisions and stated essentially that it was improper to prepare your witness for redirect, as through mock questioning.
Prior Art May Not Be Used to Challenge Indefinite Claims
If claims are deemed indefinite, no prior art grounds will be instituted. In CBM2014-00202, the Board declined to institute trial on the basis that the claims were likely indefinite. In IPR2014-01378 the Board declined to institute because the patent did not disclose sufficient corresponding structure for a means-plus-function element. Same result in IPR2013-00559.
Covered Business Method Definition Construed More Narrowly?
A system for software registration did not qualify as a business method because it did not claim a method or apparatus 'for performing data processing or other operations used in the practice, administration, or management of a financial product or service.' CBM2014-00183. Of course, the definition of a "business method" will be examined by the CAFC shortly as the decision in SAP v. Versata is expected any day. The Patentee, Versata, has been urging the CAFC since oral argument in 2014 (via supplemental filings) that the PTAB is now applying a standard that requires a "financial product" component to claims, a component they argue is not recited in their claims.
As to trends going forward, due to the "quick-fix" rule changes announced last week, it is expected that successful amendments will become more commonplace (although such cases will always be a minority of cases due to intervening rights). Once further proposed changes are implemented lessening the burdens in motions to amend, they should be relatively straight forward filings, likely in 2016 (after necessary notice and comment rule making).
Issue joinder, unfortunately, will continue to be panel dependent as Target v. Destination Maternity will not be designated precedential; this is unfortunate. While reasonable minds may differ on this dispute, the Board should be consistent until guidance is provided by the CAFC.