In an Inter Partes Review proceeding, patent owner Escort, Inc., who was permitted to provide live testimony during the oral hearing, lost its bid to antedate the only two references relied on by petitioner K-40 Electronics, LLC. K-40 Electronics, LLC v. Escort, Inc. (IPR2013-00203, Paper No. 45, August 27, 2014). The inventor of challenged U.S. Patent 7,999,721, Steven K. Orr, testified live at the oral hearing in an attempt to support patent owner’s allegations that actual reductions to practice of the claimed invention antedated the applied references. However, the Final Written Decision relied on portions of Orr’s testimony to support the petitioner’s position that the alleged actual reductions to practice did not practice all of the claimed features. (Id. at p. 13). While the live testimony was used to the detriment of the patent owner, this scenario provides some insights on when live testimony will be permitted and also how the testimony will be limited. It also provides a cautionary tale that should lead a patent owner/petitioner to carefully consider pursuing this option.
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As the patent owner, Escort Inc., was relying on testimony of Orr to establish how the actual prototypes worked (1992 prototype and 1996 prototype), they filed a motion requesting live testimony of Orr to the extent that he was a fact witness in the proceeding. (Paper No. 28). The motion sought to have the witness’s credibility evaluated by the PTAB in view of attacks made on Orr’s credibility by the petitioner. Despite having multiple declarations and the deposition testimony on the record, the patent owner still sought live testimony on the basis that “where credibility and veracity are at issue, . . . written submission[s] are a wholly unsatisfactory basis for decision.” (Id. at p. 4 (citing Goldberg v. Kelly, 397 U.S. 254, 269 (1970)). The petitioner opposed patent owner’s motion alleging it would permit a “second bite at the apple”, result in a de facto ruling permitting live testimony in all antedating disputes and permit the patent owner to “start anew”.
In the order, the PTAB justified live testimony in this proceeding on the basis that the demeanor of the witness is critical to assessing credibility, the witness is the sole inventor and the testimony “may well be case dispositive.” (Paper 34 at p. 2). Further, the PTAB’s order laid out some factors to consider when deciding whether to grant live testimony – the importance of the witness’s testimony and whether the witness is a fact witness. (Id. at p. 3). However, the live testimony was not permitted without limitation. Only cross-examination and redirect were permitted – and if the petitioner believed Orr was changing his prior testimony, impeachment was permitted.
While the patent owner appeared to receive a favorable order, the live testimony did not prove to be in their favor. In the Final Written Decision, the PTAB relied on Orr’s statements clarifying certain features of his prototypes and descriptions of evidence on the record to determine that the prototypes did not practice certain features of the claimed invention. (Paper 45 at p. 13). In one example, Orr’s descriptions of the Lanier tape recorder used in the 1992 prototype and alleged to be “a position determining circuit”, did not meet the patent owner’s own construction of this claim term. (Id. at p. 13). In another example, Orr confirmed that the only software file on the record was missing forty-seven lines of code that provided functionality of the “position determining circuit.” (Id. at p. 14).
While Orr’s testimony was detrimental to the patent owner in this proceeding, it is also worth noting that the potential benefit of the testimony was called into question by the Final Written Decision. Noting that the only evidence of a successful reduction to practice was provided by the inventor, the PTAB opined “[i]t has long been the case that an inventor’s allegations of earlier invention alone are insufficient – an alleged date of invention must be corroborated.” (Id. at p. 16 (citing In re NTP, Inc., 654 F.3d 1279, 1291 (Fed. Cir. 2011)). While the PTAB permitted the live testimony of the inventor in this proceeding, it does not appear that this testimony could be capable of curing evidentiary deficiencies apparent on the record. Consequently, when considering the use of live testimony, the parties should carefully weigh the potential benefits against the inherent risks. In this scenario, Orr’s testimony could not have provided the corroboration need to show the actual reduction to practice, and thus, subjected the patent owner to unnecessary risk.