The Leahy-Smith American Invents Act provides post-grant procedures for challenging the validity of a granted patent before a panel of administrative law judges from the Patent Trial and Appeal Board (the “Board”).1 The United States Patent and Trademark Office promulgated rules in 37 C.F.R. § 42 and issued an Office Patent Trial Practice Guide setting forth the requirements that participants in a post-grant proceeding must follow. This article addresses two requirements that have played a significant role in several Board decisions ininter partes review (“IPR”) proceedings in light of the statutory requirement that the Board must decide whether to institute a IPR within six months of a petition being filed:2 1) the prohibition on incorporating argument by reference from one document into another;3 and 2) the requirement that a motion must provide “[a] full statement of the reasons for the relief requested, including a detailed explanation of the significance of the evidence [relied upon].4 A review of the Board’s decisions reveals a propensity to strictly enforce those requirements and to refuse to consider all or parts of motions that fail to meet them. As a result, many parties in IPR proceedings have seen their substantive arguments denied not on the merits, but due to the parties’ inability to present arguments that comply with those requirements and the Board’s interpretation of them.

The two requirements apply to all parties but are especially meaningful to petitioners. Underlying the Board’s interpretation of those requirements is its view that:

[P]resentation of an overwhelming number of issues tends to detract from the argument being presented, and can cause otherwise meritorious issues to be overlooked or misapprehended. The parties should avoid submitting a repository of all the information that a judge could possible consider, and instead focus on concise, well-organized, easy-to-follow arguments supported by readily identifiable evidence of record.5

Thus, in order to take advantage of the significant benefits an IPR can provide patent challengers,6 a successful petitioner must determine, clearly identify, and concisely explain the petitioner’s best prior art and corresponding arguments at the earliest stages of an IPR. That approach will be foreign to parties—and their attorneys—accustomed to asserting patent invalidity during litigation, where the goal at the early stages is often to preserve flexibility in later stages by disclosing as many different invalidity theories as possible, while attempting to avoid highlighting for the opposing party the theories on which the patent challenger believes it will ultimately rely. However, approaching an IPR with a strategy best suited for litigation merely invites the Board to summarily deny petitions without considering the merits of the petitioner’s arguments.7

A. Impermissible Incorporation by Reference

37 C.F.R. § 42.6(a)(2) prohibits incorporating arguments into a motion by referring to another document. Some parties in IPRs have had arguments rejected simply by being unaware of this rule and the extent to which the Board polices it.8 However, even motions that arguably comply with the rule have been considered defective by the Board. In particular, several Board decisions have refused to consider material deemed incorporated by reference from a claim chart or expert report attached to a motion, even though the Board expects such evidence will be presented.9 Thus, a party must ensure that a motion thoroughly explains the substance and relevance of any evidence supporting the motion, or else will risk having that evidence excluded by the Board.

For example, the Board recently denied instituting three IPRs by petitioner Fidelity National Information Services, Inc. (“Fidelity”).10 The petitions at issue provided a brief description of how the cited references relied on disclosed each limitation of the challenged claims, and discussed specific components and features disclosed by the cited art.11 However, the petitions supported those descriptions by citing almost entirely to the declaration of Fidelity’s expert. That expert declaration cited to a claim chart attached as an exhibit to the petition, and the claim chart identified the actual portions of the prior art references on which Fidelity relied. Even though each petition included a high-level description of the how the components in the cited art disclosed each claim element, the Board held that Fidelity’s “three levels of incorporation” approach amounted to impermissible incorporation by reference, stating that “[f]or claim 1...four pages of Petition expand to ten pages of citations to references.”12 Thus, “the Petition’s extensive reliance on citations to the [expert] declaration in lieu of citations to the references themselves amounts to an incorporation by reference of arguments made in the [expert] Declaration into the Petition, thereby circumventing the page limits that apply to the petition.”13 The Board also highlighted the overall length of the expert report, claim charts, and prior art attached as exhibits to the petition,14 a common theme in the Board’s decisions deeming material incorporated by reference.15 Noting that “[a]lthough the Petition includes some citations to the references themselves, those citations do not identify sufficiently the portions of the references alleged to teach or suggest the limitations of the challenged claims,” the Board declined to consider any of the material found only in the expert declaration or claim charts, including the specific portions of the references cited to only by those exhibits. Having excluded that evidence, the Board denied the petitions as failing to set forth any ground that had a reasonable chance of success.

As another example, the Board recently denied instituting an IPR based on a petition that included claim charts but cited, without explanation, to significant portions of a lengthy expert declaration.16 As in Fidelity, the Board emphasized the overall length of the declaration in concluding that the Petition sought to “circumvent page limits...while imposing on our time by asking us to sift through over 250 pages of [expert] declaration (including numerous pages of claim charts) to locate the specific arguments corresponding to the numerous paragraphs cited to support petitioner’s assertions.”17 The Board also compared the number of pages devoted to the arguments set forth in the petition to the number of pages devoted to the supporting evidence, noting that the Petition devoted seven pages to the grounds of unpatentability (including a three-page claim chart), yet cited to seventeen pages of expert declaration that included 11 pages of claim charts. The Board thus deemed much of the material in the expert declaration incorporated by reference and refused to consider it, resulting in denial of the petition.18

The IPR requirement to explain the significance of the prior art references cannot be met with a petition that merely reproduces evidence, however. InGoogle, Inc. v. EveryMD.com LLC, Google’s petition included in its body a claim chart that reproduced blocks quotes and figures from the relevant prior art references.19 The claim chart also contained direct citations to the relevant portions of the references. However, the Board stated that “[t]o the extent that Petitioners assert that the brief summary, and quotations, citations, and reproduced figures from [the prior art] qualify as argument, they do not,” and found the petition inadequate for failing to explain how the prior art met the charted claim elements.20 The Board thus denied the petition, citing to 37 C.F.R. § 42.22(a)(2)’s requirement that the petition include a “full statement of the reasons for the relief requested, including a detailed explanation of the significance of the evidence.” (emphasis added).21

B. Too Many Arguments

Litigants often believe “the more the better.” This is simply not so before the Board. As explained in Part A, a petitioner who has several grounds of unpatentability cannot use exhibits or other documents as a vehicle to present its arguments. Each of those arguments must be made in the petition. But a petition that presents several grounds must present those ground using “concise, well-organized, easy-to-follow arguments.” Failing to do so may lead the Board to reject the entire petition as: 1) placing an unfair burden on opposing parties to respond to undeveloped arguments; 2) requiring undue effort by the Board to determine which, if any, arguments have merit; and 3) requiring undue effort by the Board to determine whether to institute an IPR within the statutory time limit.

While there is no hard-line limit on the number of unpatentability grounds one may present in a single petition, a number of petition denials demonstrate what can be too many. In Zetec, Inc. v. Westinghouse Electric Co., LLC, the Board addressed a petition that purported to allege 68 grounds of unpatentability.22However, because several grounds included open-ended combinations of prior art (e.g., reference A combined with reference B, C, or D), the Board determined that the petition actually presented at least 127 grounds of unpatentability. As a result, the Board found that many of the grounds lacked the specificity required by 42.22(a)(2). Moreover, the Board declined to even determine whether any ground was sufficiently developed to demonstrate a reasonable likelihood of success, stating that “under the circumstances, attempting to evaluate fully the numerous grounds and underdeveloped assertions in the Petition to determine whether Petitioner has shown that it would be likely to prevail in any unpatentability challenge would place a significant burden on the Board and contravene the efficient administration of the Office.”23 The Board thus declined “to expend our resources scouring the numerous grounds for one that demonstrates a reasonable likelihood that Petitioner would prevail,”24 expressing doubt that it could determine whether any ground existed within the time limits set by Congress. Finally, the Board found that the petition placed an unfair burden on the patent owner to respond to numerous, underdeveloped arguments.25

Similarly, in Edmund Optics, Inc., v. Semrock, Inc., petitioner Edmund presented what it asserted to be six grounds alleging obviousness of the challenged claims.26 However, due to “multiple conjunctive and disjunctive ‘and/or’ connectors that greatly multiply the total number of asserted grounds,” the Board determined that the petition actually presented 64 grounds of obviousness. The Board criticized Edmunds for failing to “make [any] meaningful distinction among these various grounds,” finding that Edmund failed “to supply articulated reasoning with rational underpinning as to why a person of ordinary skill in the art would have made any one, much less all, of these numerous combinations of references to achieve the claimed invention.” The Board thus denied to institute an IPR based on any of the obviousness grounds.

In Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., the Board concluded that the petitioner asserted four hundred and twenty grounds of unpatentability challenging 20 total claims.27 In an order devoted entirely to the number of grounds presented, the Board noted “that numerous redundant grounds would place a significant burden on the Patent Owner and the [Board],” stating: “we take this opportunity to note that multiple grounds, which are presented in a redundant manner by a petitioner who makes no meaningful distinction between them, are contrary to the regulatory and statutory mandates, and therefore are not all entitled to consideration.” The Board held that “[b]ecause the references are not identical, each reference has to be better in some respect or else the references are collectively horizontally redundant” and required the petitioner to select one group of references for each claim or claim element separately argued.

C. Impacts for Petitioners

Although the Board’s decisions regarding incorporation by reference and numerous grounds have not been entirely consistent, the decisions do emphasize a few key practice points for petitioners to follow.

First, a petitioner should view its petition as similar to a summary judgment motion and focus on developing and presenting only its best grounds to the Board. Those grounds should be presented as “concise, well-organized, easy-to-follow arguments.” As seen in ZetecEdmunds, and Liberty Mutual, alleging invalidity under every possible ground—an approach often adopted in the early stages of litigation—can backfire in the early stages of an IPR, resulting in meritorious arguments being effectively buried and summarily dismissed by the Board. To ensure that grounds are properly developed, a petitioner should begin its prior art investigation well in advance of the deadline for filing a petition. Often, that will mean addressing invalidity issues under a much different timeline than that required by concurrent patent litigation.

Second, a petition—and not its exhibits or appendices—must address the legal and factual reasons supporting each ground of unpatentability. The petition should include a detailed explanation of how the cited art discloses each claim element and how and why different references would have been combined by one of ordinary skill in the art. To avoid the outcome of Fidelity, a petition should identify with specificity each relevant portion of the prior art relied on. If the petition relies on supporting materials, the relevance of each portion relied on must be adequately explained in the petition itself. Conclusory statements followed by citations to supporting evidence invite the Board to ignore the evidence as impermissibly incorporated by reference. And as the Board states, “if a [party] wishes to rely upon factual evidence submitted in a declaration, it must identify [in the motion] the factual portions of a declaration with sufficient specificity and provide an adequate explanation as to how the factual evidence supports its arguments.”28

Third, a petitioner who relies on supporting evidence should be wary of evidentiary exhibits that dwarf the petition, which is limited to sixty pages.29Again, while there are no explicit page limits on exhibits or a supporting declaration, the Board appears to give petitions that attach lengthy exhibits extra scrutiny under the prohibition on incorporation by reference, and, as evidenced by Fidelity and Juniper Networks, appears poised to use the overall and relative lengths of exhibits as justification for refusing to consider evidence. The Board may be using the rule prohibiting incorporation by reference as its hook to avoid instituting IPRs that would require analysis of large factual records, and petitioners should avoid the appearance of such records by ensuring that exhibits and declarations do not grow too large.

D. Impacts for Patent Owners

While most of the Board’s decisions enforcing the requirements discussed in this article address petitioners’ motions, those requirements also apply to motions made by patent owners.30 Thus, a patent owner should ensure that its motions do not incorporate by reference evidence that the patent owner wishes to rely on.

If done carefully, a patent owner can and should attack a petition that incorporates by reference or presents numerous grounds of unpatentability. However, because enforcement of those procedures is entirely at the Board’s discretion,31 such arguments—even if correct—are not dispositive and may in fact irk the Board. For example, in Research in Motion v. Multimedia Ideas LLC, the Board dismissed a patent owner’s argument that a petition’s citations to an expert declaration amounted to incorporation by reference, stating that:

[I]f a party has an objection about the other party exceeding a certain page limit, the matter should be raised as soon as possible with the Board to preserve remedial measure which can still be taken by the Board without prejudice to all parties. We disapprove of the patent owner’s taking three months to make the procedural objection and to ask that the petition be denied on that.32

A better approach for patent owners faced with a petition that incorporates by reference is to emphasize that the petition itself fails its statutory requirement under 35 U.S.C. § 312(a)(3) to “identif[y], in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim....”33Moreover, when a petition presents a large number of grounds, a patent owner should flag that issue for the Board by noting that the presence of numerous undeveloped arguments frustrates the patent owner’s ability to determine which grounds actually merit a response.

E. Conclusion

What is the real effect of these decisions? While not explicit, the various PTAB panels appear to be wary of a number of past issues with re-examinations and seek to avoid them here. Past practice in re-examination allowed unlimited technical support and declaration length. The petitions themselves were also unlimited, which lead to massive filings that contributed to a significantly delayed process and resulted in an abysmal record in start-to-finish times for re-examinations. The Board now appears to be quite deliberate in protecting its docket and efficiency. Few invalidity arguments are aided by voluminous filings. As always, pick your best arguments and present them well.