On Tuesday, the Federal Circuit issued a precedential decision affirming the Board’s refusal to consider new arguments that had been made for the first time by IPR Petitioner Dell during the original PTAB oral hearing. This was the second time this IPR appeal came before the Federal Circuit, the first appeal ending in remand to the Board.
In Dell’s first appeal from this inter partes review proceeding, Dell challenged the Board’s validity determination of claims 14-17 and 34-36 of Acceleron’s patent. Acceleron cross-appealed the Board’s cancellation of claims 3 and 20. For claim 3, Acceleron argued that the Board violated the Administrative Procedure Act (“APA”) by relying on an argument (the “slides” argument) that Dell presented for the first time at the oral hearing, and by not giving Acceleron an opportunity to respond. The Federal Circuit affirmed the validity of claims 14-17 and 34-36, vacated the cancellation of claims 3 and 20, and remanded the case for reconsideration of claim 3 and 20. Dell Inc. v. Acceleron, LLC, (“Dell I”) 818 F.3d 1293, 1301-02 (Fed. Cir. 2016).
On remand, the Board decided not to consider the Dell’s new “slides” argument because it was new and non-responsive to Acceleron’s Patent Owner Response. Dell v. Accelleron LLC, IPR2013-00440, 2016 WL 8944607, at *4 (P.T.A.B. Aug. 22, 2016). Based on the arguments and evidence presented in the petition, the Board found on remand that claim 3 was not anticipated. Dell appealed the Board’s decision on remand to the Federal Circuit. In this second appeal, Dell argued that the Board erred on remand because it should have considered Dell’s new “slides” argument, and then provided Acceleron an opportunity to respond. According to Dell, the Board’s refusal was contrary to Federal Circuit precedent and contrary to the Court’s remand order in Dell I. The Federal Circuit disagreed in Dell II.
In Dell II, the Court affirmed the PTAB’s decision on remand refusing to consider petitioner Dell’s new “slides” argument, presented for the first time at the original PTAB oral hearing. The Court affirmed the Board’s ability to control the scope of remanded proceedings. Indeed, pointing to the Board’s own rules prohibiting new arguments in the oral hearing, the Court went even further, stating: “The Board was obligated to dismiss Dell’s untimely argument given that the untimely argument in this case was raised for the first time during oral argument.” Id. Slip op. at 10. The Court then concluded:
Dell contends that ignoring evidence of unpatentability is against public policy because it will not improve patent quality. We find that under these circumstances, due process and preserving the Board’s discretion outweigh any negative effects of not invalidating a patent claim, especially since our decision does not preclude another party from challenging the validity of claim 3 on the same basis.
This case is instructive because it illustrates how the Board is constraining the parties to the properly developed record. It should now be clear that the Board cannot entertain new factual contentions raised for the first time at oral argument, at least not without giving the other party full opportunity to respond. Parties should thus be mindful of how they present arguments and evidence in demonstrative slides and at the oral hearing.
Finally, this case demonstrates how the Board handled the case on remand. Under PTAB SOP 9, which governs the conduct of remands within the PTAB, we know that each remand is getting considerable attention from PTAB leadership. And this case affirms the wide latitude the Federal Circuit is giving the Board to control the scope of remanded cases.