Ariosa Diagnostics v. Isis Innovation Ltd.

Addressing a variety of issues in a recent inter partes review (IPR), the U.S. Patent and Trademark Office’s Patent Trial and Appeal Board (PTAB or Board) determined that some claims were patentable and some were unpatentable, finding, inter alia, that neither filing an action for declaratory judgment of non-infringement nor raising invalidity as an affirmative defense to a counterclaim of infringement triggers the civil action bar of 35 U.S.C. § 315(a); that under an expansive view of the doctrine of inherency, certain claims of the patent were anticipated; and that the patent owner did not meet its burden to show that proposed amendments were patentable because it did not address a district court’s ruling of patent ineligibility in a parallel action.  Ariosa Diagnostics v. Isis Innovation Ltd., Case No. IPR2012-00022 (PTAB, Sep. 2, 2014) (Green, APJ).

First, the Board ruled that one-year time bar of 35 U.S.C. § 315(a) does not bar a declaratory judgment plaintiff seeking only a declaration of non-infringement who later raises invalidity as an affirmative defense from instituting an IPR. Before filing its IPR, petitioner Ariosa had filed a district court action seeking declaratory judgment of non-infringement of the challenged patent. Patentee Isis counter-claimed for infringement, and Ariosa raised invalidity as an affirmative defense. The Board reasoned that because “a civil action for a declaratory judgment of non-infringement is not a civil action challenging the validity of a patent” and because “it is clear from [the Supreme Court’s opinion in] Cardinal Chem Co. that there is a fundamental difference between an affirmative defense of invalidity and a counterclaim of invalidity,” Ariosa had never “filed a civil action challenging the validity of the claim of the patent” as required by § 315(a). Thus, no bar existed to Ariosa’s filing of the IPR.

Second, the Board presented a relatively expansive view of the doctrine of inherency, holding that a limitation is inherent in the prior art if the claimed limitation is the “natural result flowing from the operation as taught” and that “to anticipate, the prior art need only meet the inherently disclosed limitation to the extent the patented method does.”  The combination of the Board’s broad interpretation of claim language and expansive interpretation of the inherency doctrine proved fatal to some of the challenged claims.

Finally, the Board denied the patent owner’s motion to amend the claims based on its failure to address district court findings of patent ineligibility under § 101. In the parallel district court proceeding, the patent’s claims were held patent-ineligible. Although the Board cannot hear challenges to patent eligibility of existing claims in IPRs, it nonetheless requires patent owners to prove that proposed amendments—not subject to further examination—are patentable. Where a court has found ineligibility, the Board ruled, the patent owner must prove that the proposed amendments are drawn to eligible subject matter.