On May 9, 2016, the Patent Trial and Appeal Board (Board) designated as precedential five decisions that provide guidance on various issues relating to America Invents Act (AIA) review proceedings.
The Board discussed the distinct standards for “routine” discovery and “additional” discovery in inter partes review (IPR) proceedings. The impact of these standards is to limit the discovery in such AIA administrative trial proceedings as compared to district court patent litigations, which lowers costs, minimizes complexity, and shortens the period required for dispute resolution.
“Routine” discovery in IPR proceedings does not require Board authorization. Under 37 C.F.R. § 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 C.F.R. § 41.51(b)(1)(iii), a party also is required to 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 Board 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 U.S.C. § 316(a)(5) is available only if the requester first obtains Board authorization by demonstrating that such discovery is “necessary in the interest of justice,” which the Board evaluates in light of these five factors:
First, the mere possibility of finding something “useful,” and merely alleging that something “useful” will be found, do not warrant additional discovery. Rather, the requester should already be in possession of 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 and/or admissible, but instead refers to the “substantive value to a contention of the party moving for discovery.”
Second, requests for the other party’s litigation positions, and the underlying basis for each of those positions, do not warrant additional discovery. The Board reasoned that it already has established sufficient rules for the presentation of arguments and evidence.
Third, information a requesting party can reasonably ascertain or assemble without a discovery request does not warrant additional discovery. Thus, in evaluating a request for additional discovery, the Board will consider the ability of the requesting party to generate equivalent information by other means.
Fourth, any discovery instructions should be easily understandable, with the Board considering that overly complex instructions are counterproductive and tend to undermine the responder’s ability to answer efficiently, accurately, and confidently.
Fifth, given the expedited nature of IPRs, 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 IPR, and should be sensible and responsibly tailored according to a genuine need.
In the context of requests for additional discovery in CBM proceedings, the Board 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 IPRs. The Board’s rationale was that the scope of issues which could be raised by a petitioner in an IPR is limited to grounds based on patents or printed publications (whereas additional issues can be raised in a CBM review).
In evaluating motions for additional discovery in CBM reviews, the same five factors set forth in Garmin Int’l, Inc. v. Cuozzo Speed Techs. LLC, Case IPR2012-00001, Paper No. 26 (Mar. 5, 2013), for IPRs are used since both administrative trial proceedings share the same public policy, statutory, and regulatory considerations of discovery. In CBM 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, Case IPR2013-00312, Paper No. 26 (Oct. 30, 2013) (precedential only as to Section III.A)
Section 315(b) of Title 35 prohibits filing an IPR 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 Board held that this requirement of 35 U.S.C. § 315(b) does not trigger the one-year time bar for filing an IPR 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 Board noted that the Federal Circuit consistently has 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 IPR.
The Board provided three points of clarification on the guidance it previously issued in Idle Free Sys., Inc. v. Bergstrom, Inc., Case IPR2012-00027, Paper No. 26 (June 11, 2013) (informative), in connection with any proposed claim amendment in IPRs:
First, the Board had previously stated that, in order for amendments in IPRs to be granted, the patent owner has the burden to show that the proposed new claims are patentably distinct over the “prior art of record.” As clarified by the Board, the “prior art of record” refers to (a) any material art in the prosecution history of the patent; (b) any material art of record in the current proceeding, including art asserted in grounds on which the Board did not institute review; and (c) any material art of record in any other proceeding before the Patent Office involving the patent.
Second, the Board had previously stated that the patent owner also has the burden to show that the proposed new claims are patentably distinct over the “prior art known to the patent owner.” As clarified by the Board, 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 candor 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.
Third, the Board 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.
Section 312(a)(2) of Title 35 requires an IPR petition to identify all real parties in interest. Here, the Board 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 sometime after the filing date, the patent owner argued that the IPR proceeding should be terminated since the petitioner failed to identify all real parties in interest, as required under § 312(a)(2), rendering the petition incomplete and depriving the Board 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 § 312(a)(2). Moreover, according to the Board, treating 35 U.S.C. § 312(a) as jurisdictional would lead to absurd results, since 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 U.S.C. § 312(a)(3)(A). As 37 C.F.R. § 42.8(a)(3) allows a party 21 days to provide the Board notice of a change in its identification of the real parties in interest, even the Board’s rules anticipate that the names of the parties in interest may change over the course of a trial without the loss of jurisdiction.