On May 9 2016 the US Patent Trial and Appeal Board (PTAB) designated as precedential five decisions that provide guidance on various issues relating to America Invents Act review proceedings: Garmin Int'l, Inc v Cuozzo Speed Techs LLC, Bloomberg Inc v Markets-Alert Pty Ltd, Oracle Corp v Click-to-Call Techs LP, MasterImage 3D, Inc v RealD Inc, and Lumentum Holdings, Inc v Capella Photonics, Inc.
Garmin Int'l, Inc v Cuozzo Speed Techs LLC(1)
The PTAB discussed the distinct standards for 'routine' discovery and 'additional' discovery in inter partes review proceedings. The impact of these standards is to limit the discovery in such administrative trial proceedings as compared to district court patent litigations, which lowers costs, minimises complexity and shortens the period required for dispute resolution.
'Routine' discovery in inter partes review proceedings does not require PTAB authorisation. Under 37 CFR Section 41/51(b)(1)(i), a party must serve any exhibit cited in a paper or in testimony with the citing paper or testimony, unless previously served or otherwise agreed to by the parties. Under 37 CFR Section 41/51(b)(1)(iii), a party must also serve any relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contain the inconsistency, unless the information has been previously served. The PTAB said that this requirement should be narrowly construed to include only specific inconsistent information that is known to the responding party.
On the other hand, 'additional' discovery under 35 USC Section 316(a)(5) is available only if the requester first obtains PTAB authorisation by demonstrating that such discovery is "necessary in the interest of justice", which the PTAB evaluates in light of five factors:
- The mere possibility of finding something useful, and mere allegations that something useful will be found, do not warrant additional discovery. Rather, the requester should already possess a threshold amount of evidence or reasoning tending to show beyond speculation that something useful will be uncovered through the additional discovery. 'Useful' in this context does not mean merely relevant or admissible, but instead refers to the "substantive value to a contention of the party moving for discovery".
- Requests for the other party's litigation positions, and the underlying basis for each of those positions, do not warrant additional discovery. The PTAB reasoned that it has already established sufficient rules for the presentation of arguments and evidence.
- Information that a requesting party can reasonably ascertain or assemble without a discovery request does not warrant additional discovery. In evaluating a request for additional discovery, the PTAB will consider the ability of the requesting party to generate equivalent information by other means.
- Any discovery instructions should be easily understandable, with the PTAB considering that overly complex instructions are counterproductive and tend to undermine the responder's ability to answer efficiently, accurately and confidently.
- Given the expedited nature of inter partes reviews, the requests must not be overly burdensome to answer, including financial burden, burden on human resources and burden on meeting the time schedule of an inter partes review; they should be sensible and responsibly tailored according to a genuine need.
Bloomberg Inc v Markets-Alert Pty Ltd(2)
In the context of requests for additional discovery in covered business method proceedings, the PTAB concluded that a 'good cause' standard will apply. This 'good cause' standard was indicated to be slightly less strict than the 'necessary in the interest of justice' standard applicable to requests for additional discovery in inter partes reviews. The PTAB's rationale was that the scope of issues which could be raised by a petitioner in an inter partes review is limited to grounds based on patents or printed publications (whereas additional issues can be raised in a covered business method review).
In evaluating motions for additional discovery in covered business method reviews, the same five factors set forth in Garmin Int'l, Inc v Cuozzo Speed Techs LLC(3) for inter partes reviews are used, since both administrative trial proceedings share the same public policy, statutory and regulatory considerations of discovery. In covered business method proceedings, however, each of the five factors is slightly modified to address the more lenient 'good cause' standard.
Oracle Corp v Click-to-Call Techs LP(4)
Section 315(b) of Title 35 prohibits filing an inter partes review more than one year after the date of service on a petitioner, interested party or privy of a complaint alleging infringement of a patent. In this decision, the PTAB held that this requirement of 35 USC Section 315(b) does not trigger the one-year time bar for filing an inter partes review petition where the entire complaint in the prior civil action was voluntarily dismissed without prejudice, pursuant to a joint stipulation under Fed R Civ P 41(a).
The PTAB noted that the Federal Circuit has consistently interpreted the effect of any voluntary dismissal without prejudice as leaving the parties "as if the action had never been brought", and found that such a dismissal in a previous patent infringement suit nullifies the effect of the service of the complaint. As a consequence, voluntary dismissals without prejudice do not bar a petitioner from pursuing an inter partes review.
MasterImage 3D, Inc v RealD Inc(5)
The PTAB provided three points of clarification on the guidance it previously issued in Idle Free Sys, Inc v Bergstrom, Inc,(6) in connection with any proposed claim amendment in inter partes reviews:
- The PTAB had previously stated that, in order for amendments in inter partes reviews to be granted, the patent owner has the burden of showing that the proposed new claims are patentably distinct over the prior art of record. As clarified by the PTAB, the 'prior art of record' refers to:
- any material art in the prosecution history of the patent;
- any material art of record in the current proceeding, including art asserted in grounds on which the board did not institute review; and
- any material art of record in any other proceeding before the patent office involving the patent.
- The PTAB had previously stated that the patent owner also has the burden of showing that the proposed new claims are patentably distinct over the prior art known to the patent owner. As clarified by the PTAB, the 'prior art known to the patent owner' does not mean all prior art in existence, but only "the material prior art that patent owner makes of record in the current proceeding pursuant to its duty of candor and good faith to the Office under 37 C.F.R. § 42.11". When considering this duty of candour and good faith, a patent owner's proposed addition of a claim limitation places the initial focus on the added limitation itself, so any prior art about the added limitation can still be material even if such art does not relate to the rest of the claim limitations.
- The PTAB clarified that once a patent owner has set forth a prima facie case of patentability of narrower substitute claims, the burden of production shifts to the petitioner, although the ultimate burden of persuasion remains with the patent owner to demonstrate the patentability of the amended claims.
Lumentum Holdings, Inc v Capella Photonics, Inc(7)
Section 312(a)(2) of Title 35 requires an inter partes review petition to identify all real parties in interest. Here, the PTAB held that this requirement is merely a threshold issue and not jurisdictional, such that "a lapse in compliance ... does not deprive the board of jurisdiction over the proceeding, or preclude the board from permitting such lapse to be rectified". In this case, because the interested parties changed some time after the filing date, the patent owner argued that the inter partes review proceeding should be terminated since the petitioner failed to identify all real parties in interest, as required under Section 312(a)(2), rendering the petition incomplete and depriving the PTAB of authority to hear the case. However, there was no dispute that the petition, when filed, identified all real parties in interest, and thus the petition was complete and available to be 'considered' under Section 312(a)(2).
Moreover, according to the PTAB, treating 35 USC Section 312(a) as jurisdictional would lead to absurd results; for example, a proceeding would have to be terminated if a petitioner failed to attach to the petition a copy of a patent relied upon in support of the petition, as required by 35 USC Section 312(a)(3)(A). As 37 CFR Section 42/8(a)(3) allows a party 21 days to provide the PTAB with notice of a change in its identification of the real parties in interest, even the PTAB's rules anticipate that the names of the parties in interest may change over the course of a trial without the loss of jurisdiction.
For further information on this topic please contact Jonathan Berschadsky or Anna Haung at Fitzpatrick, Cella, Harper & Scinto by telephone (+1 212 218 2100) or email ([email protected] or [email protected]). The Fitzpatrick, Cella, Harper & Scinto website can be accessed at www.fitzpatrickcella.com.
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