I consider myself lucky to have served as an administrative patent judge during the creation of the Patent Trial and Appeal Board and its trial jurisdiction. I had the benefit of working alongside some outstanding judges who worked tirelessly to create a “just, speedy, and inexpensive” forum for patentability adjudication.1 During my tenure as administrative patent judge, I witnessed some excellent advocacy on behalf of parties appearing before the PTAB, and I also witnessed some less than stellar representation. Relying on the benefit of five years of adjudicating America Invents Act trials, I offer the following five lessons for those practicing before the PTAB.
1. No AIA Without APA
Each and every aspect of an AIA trial must comport with the Administrative Procedure Act. Your victory at the PTAB may be short-lived if the losing party was denied “notice and opportunity to be heard” on the facts and arguments at issue in the case.2 One of the primary reasons for reversals and remands by the Federal Circuit of PTAB decisions in AIA trials has been for violations of the APA.
The Federal Circuit has characterized AIA trials as “formal administrative adjudications” subject to the requirements of the APA, which requires, under § 554(b)(3), that all parties be informed of the matters of fact and law asserted.3 Additionally, the PTAB is required to permit, under § 556(d), a party to submit rebuttal evidence, and to conduct such cross-examination as may be required for a full and true disclosure of the facts.4 This means that the PTAB may not “change theories in midstream” without giving respondents reasonable notice of the change and the opportunity to argue under the new theory.5 Furthermore, the PTAB must base its decision on facts and arguments to which the opposing party was given a chance to respond.6 The PTAB’s authority “is not so broad that it allows [it] to raise, address, and decide unpatentability theories never presented by the petitioner and not supported by record evidence.“7
There are many examples of circumstances where the Federal Circuit determined that the PTAB denied a party its rights under the APA: (1) adopting a new claim construction in the final decision different from the institution decision, which was not briefed by the parties (SAS),8 (2) failing to permit patent owner to submit testimony from the petitioner’s expert, which was allegedly contradictory to his IPR declarations (Ultratec),9 (3) failing to consider the petitioner’s “additive combination” of obviousness references and focusing instead on a “subtractive analysis” (Shinn Fu),10 (4) relying upon arguments that petitioner did not raise and were unsupported by the record (Magnum Oil),11 and (5) relying upon a prior art reference that was not part of the grounds for unpatentability in the petition or the institution decision (EmeraChem).12
There are also examples where the Federal Circuit determined that there was no APA violation: (1) finding no violation given the vigorous dispute over the construction of a claim term and patent owner’s “opportunity to seek a sur-reply or rehearing” (Intellectual Venture),13 (2) affirming the PTAB’s ability to rely upon in vivo references in a final written decision not relied upon in the institution decision (Genzyme),14 and (3) affirming the PTAB’s ability to institute review on grounds that were not alleged in the petition (SightSound).15
Given the strict requirements of the APA, counsel should be diligent in making sure that any perceived violations are brought to the attention of the panel. Additionally, counsel should emphasize those outcomes permitted by the record upon which the parties have had notice and opportunity to be heard.
2. Hearings Are Critical
One of the most common questions that I am asked is: “Do hearings really matter, or have the judges already made up their mind about the case before the hearing?” The answer is that not only do hearings matter, but they are critical to your case. Prior to the hearing, Judges will have formulated a preliminary conclusion as to some aspects of the case. There are often many undecided issues, however, about which the panel seeks to gather more information during the hearing. How do you figure out which issues are still undecided? It’s easy: Listen.
- The most important words spoken at a hearing are those coming from a judge. If a judge is asking a question about an issue, it is likely that she is still undecided on that issue, and this is your last chance to convince her that you have the better argument. Judges use the hearings to dive further into confusing inconsistencies in the arguments and areas where there are gaps in the record. You want to take advantage of the opportunity to clear up any confusion in the light most favorable to your client.
- Do not just sit there idle—write down the questions asked by the judges during opposing counsel’s oral argument. Typically, judges will not ask about the stronger aspects of a party’s case, but will inquire into the weaker points of its arguments. In essence, the judges’ questions of opposing counsel are your roadmap to the weakest aspects of the opposition, i.e., those aspects where your client has a chance of winning. As patent owner, you want to be prepared to stand up and highlight the holes in the petitioner’s positions identified by the judges’ questions. As the petitioner, you want to be ready to attack on rebuttal regarding the issues with patent owner’s arguments raised in the questions from the judges.
- Do not look at the judge with shock when she asks you questions. This seems obvious, but so often counsel looks appalled when a judge begins to ask a question. Even if you desire avoiding another question, remember to keep your composure and appear welcoming. You should answer in a way that promotes discussion of your good arguments. Remember that the judges are hoping to have a discourse with you about the record. If you are receptive to questions from the judges, you will be in a better position to steer the discussion to those aspects of the record that are more favorable to your client.
- Approach a PTAB oral argument like an interview, not a presentation. Too often, counsel brings a 100-plus page slide deck to the oral argument and attempts to race through from the first slide to the last. Keep in mind that the winner is not the party to show the most slides during oral argument. If you approach the hearing like an interview, you will expect certain questions on your weaknesses and have good answers. The most effective oral advocate is one who engages in a discussion with the panel and identifies how adopting the opposition’s arguments would result in error.
- Take caution with note-passing during the oral argument, as it can be very distracting to the panel and can indicate a lack of knowledge on the part of counsel. Co-counsel should not pass more than a few notes to counsel making the argument during a hearing. Additionally, if you are making the argument and you are receiving notes from multiple members of your team, there is obviously a problem. Do not be afraid to ask the panel for a moment to confer with co-counsel. In certain situations, it may be proper to ask if co-counsel of record can be permitted to make a few remarks with respect to the issue at hand. Judges will not be offended if one attorney does not know every intricacy of the case; thus, it is not a negative to rely on co-counsel to assist in addressing a judge’s inquiry.
3. Merits Matter Most
A judge’s primary goal in an AIA trial is to provide an accurate determination with respect to patentability. When analyzing your case, the panel is not concerned with historical statistics regarding denial rates for petitions or grant rates for certain motions, but is primarily concerned with rendering a proper decision as to the particular circumstances in your case. Grandstanding before the panel about the importance of the invention or the revered status of the inventors and/or experts is not likely to win favor with your panel of judges. Likewise, continually raising extraneous procedural or administrative issues unrelated to patentability is likely to frustrate your panel.
The panel understands that at times, procedural or administrative issues may arise that require the attention of the judges. However, in many instances, it may not be readily apparent how a procedural or administrative issue relates to the merits of the case. When raising a procedural or administrative issue with the judges on your panel, make sure to quickly explain at the outset how the issue relates to, or may otherwise prevent, the evaluation of the merits of the case.
The panel will expect opposing parties to have conferred regarding an issue before scheduling a conference call with the panel. In most circumstances, when a party is making a request, the judges will ask how the opposing counsel responded when approached about the issue. You do not want to be counsel that responds: “Your honor, we did not ask opposing counsel.“
Stipulations can be a powerful tool to streamline a case and remove unnecessary procedural or administrative issues. In many instances, both parties can benefit from entering into a short list of stipulations. For example, parties may enter a stipulation providing a few relevant statements regarding commercial success data to avoid engaging in a protracted disagreement over additional discovery requests, production, objections, depositions and protective orders related to company sales data and other commercial success information. Even if you are unsuccessful in persuading the other side to enter a proposed stipulation, your panel will favorably receive your attempt at a creative solution to avoid bringing the issue to the judges.
4. Ignoring Claim Construction Can Be Costly
Claim construction is often the dispositive issue in a case, such that the construction of one term may render all asserted prior art irrelevant. Parties should consider carefully whether to expressly provide a proposed construction of a claim term or to remain silent and rely upon plain and ordinary meaning. Determining a proper claim construction in a vacuum, without the benefit of arguments from the parties, is a difficult task for the panel, as the panel may not be able to fully appreciate the ramifications of a particular construction. The question for each party is whether you want the panel to render a decision without having received the benefit of your perspective on the proper construction.
Although the Federal Circuit has indicated that it may be acceptable for the board to adopt a claim construction for the first time in its final written decision, panels will typically set forth initial claim constructions on critical terms in the institution decision.16 Therefore, parties must consider that once a claim construction is adopted in the institution decision, it may be more difficult to get it changed. For example, if the patent owner elects not to take an express position on claim construction in the preliminary response, it may be difficult to get the panel to change its mind once trial has been instituted. Furthermore, petitioners must comply with 37 C.F.R. § 42.104(a)(3), which requires the petition to identify ”[h]ow the challenged claim is to be construed.” If a petition is denied based on a claim construction with which the petitioner disagrees, the petitioner’s options to have that construction reviewed are limited.
5. Your Treatment of PTAB Staff and Opposing Counsel Is the Primary Indicator to the Judges of Your Professionalism
A counsel’s direct interaction with the PTAB during the course of a proceeding is usually somewhat limited but, at the same time, incredibly important. Typically it consists of emails with the PTAB paralegals (which get forwarded to the judges), a call or two with the PTAB paralegals, one or more telephone conferences with the judges on your panel, and the trial hearing. Based on those limited interactions, the judges form opinions about your professionalism. Specifically, your treatment of PTAB paralegals, PTAB hearing staff, and opposing counsel is the best indicator to the judges of your level of professionalism. As with most offices, employees within the PTAB talk about the conduct of outsiders that interact with them. If you are courteous to the members of the PTAB and opposing counsel, then the judges will be more inclined to be courteous to you. For example, if you are understanding about opposing counsel’s clerical error, perhaps the panel will be more inclined to allow correction of your next clerical error.
Also, please note that those “sidebar” conversations that you have with opposing counsel, before the teleconference begins with the judges, are not in private. Typically, the two judges on the panel that will not be leading the call will join the conference a few minutes before the call begins to ensure that they are timely. Thus, your comments about “government workers” are not going unnoticed.