The Federal Circuit in In re NuVasive(1) found that, in an inter partes review proceeding, the Patent Trial and Appeal Board (PTAB) violated a patentee's rights under the Administrative Procedure Act by cancelling patent claims based on a portion of a prior art reference that was not specifically identified in the inter partes review petition, and by denying the patentee the opportunity to address that portion of the reference substantively. The Federal Circuit vacated the cancellation of the claims and remanded the matter to the PTAB.

In two separate inter partes review proceedings – 2013-507 and 2013-508 – petitioner Medtronic challenged several claims in patentee NuVasive's US Patent 8,187,334. The patent's claims are directed to a spinal fusion implant having a length greater than 40mm and at least 2.5 times its width. The PTAB cancelled all but one of the claims, finding them obvious based on combinations of prior art references, including "Figure 18" from a prior art Michaelson patent. In both inter partes review petitions, Medtronic set forth combinations of prior art references including Michaelson. In its 507 petition, Medtronic also cited text from Michaelson discussing Figure 18. However, Medtronic did not specifically mention Figure 18 in its 508 petition. Instead, Medtronic first mentioned Figure 18 in its 508 reply – after NuVasive had filed its patent owner response – to argue that Figure 18 disclosed an implant whose length was greater than 40mm and at least 2.5 times its width.

NuVasive tried, unsuccessfully, to move the PTAB either to strike Medtronic's new Figure 18 argument or to allow NuVasive to respond to that argument in a surreply. NuVasive also tried to address Figure 18 substantively at oral argument, but the PTAB refused to allow it to do so. In the 508 inter partes review the PTAB proceeded to find all but one of the challenged claims obvious, crediting Medtronic's argument that Figure 18 disclosed an implant with a length greater than 40mm and at least 2.5 times its width.

On appeal, the Federal Circuit noted that in inter partes review proceedings the PTAB is "not limited to citing only portions of the prior art specifically drawn to its attention" and can make fact findings based on other art that "merely reinforce the meaning of another prior-art disclosure". The Federal Circuit also noted that NuVasive had adequate notice of Figure 18 in the 507 inter partes review, based on the citation in Medtronic's 507 petition of text from Michaelson discussing Figure 18.

Nevertheless, the Federal Circuit held that the PTAB did not provide NuVasive with adequate notice or the opportunity to respond to Figure 18 in the 508 inter partes review, and that notice from the 507 inter partes review did not remedy the inadequacy, given that the PTAB treated the inter partes reviews as "separate, distinct proceeding[s]" based on "different mixes of prior art". The Federal Circuit also held that the PTAB's findings based on Figure 18 were not merely reinforcing of other prior art disclosures. Instead, the Federal Circuit observed that Figure 18 was "essential" to the PTAB's obviousness decision because it was the only prior art disclosure relied upon by the PTAB for the "greater than 40 mm" and "at least 2.5 times its width" claim elements. The Federal Circuit further held that the opportunity for NuVasive – after receiving Medtronic's reply – to cross-examine Medtronic's expert on Figure 18 and to file observations on the cross-examination were not "a substitute for the opportunity to present arguments and evidence" affirmatively in response to Figure 18.

The Federal Circuit concluded that the PTAB had committed a procedural violation by denying NuVasive a full opportunity to respond to Figure 18 in the 508 inter partes review using additional evidence and arguments. The Federal Circuit thus vacated the PTAB's decision in the 508 inter partes review and remanded the matter to the PTAB.

For further information on this topic please contact Christopher E Loh at Fitzpatrick, Cella, Harper & Scinto by telephone (+1 212 218 2100) or email (cloh@fchs.com). The Fitzpatrick, Cella, Harper & Scinto website can be accessed at www.fitzpatrickcella.com.

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Endnotes

(1) Appeals 2015-1672 and 2015-1673.