Addressing whether disclaimer of all challenged claims prior to institution of post-grant review constitutes a request for adverse judgment, the Patent Trial and Appeal Board (PTAB) found that it did not and denied the petition. Corvus v. United States, Case No. PGR2016-00042 (PTAB, Mar. 31, 2017) (Green, APJ).

Corvus sought post-grant review of certain claims of a patent owned by the US government. The government responded by disclaiming all challenged claims. Corvus then argued that the government’s statutory disclaimer constituted a request for adverse judgment under 37 CFR § 47.73(b)(2), which provides that “[a] party may request judgment against itself at any time during a proceeding” and lists disclaimer among the actions “construed to be a request for adverse judgment.” The government responded that because no trial had been instituted, 37 CFR § 42.73(b)(2) did not apply. Rather, the government argued that the PTAB was compelled to deny the petition under 37 CFR § 42.207(e), which provides that “[n]o post-grant review will be instituted based on disclaimed claims.”

Corvus argued that the PTAB should enter an adverse judgment because otherwise, the government “will arguably be free to prosecute claims that are patentably indistinct from the claims it has disclaimed” in a pending continuation application. Corvus noted that “it expended considerable resources in preparing the Petition” and that adverse judgment was warranted in view of Corvus’s and “the public’s interest ‘in finality and repose on the challenged claims.’” Corvus relied on the PTAB’s 2016 Smith & Nephew decision, in which the PTAB concluded that “the entry of adverse judgment was the more equitable result as the patent owner had two continuation applications pending, and, thus, absent entry of adverse judgment, nothing would prevent that patent owner from seeking allowance of patentably indistinct claims.”

The government also relied on prior a PTAB decision (FCA) to argue that disclaimer necessitated denial of the petition and that § 42.73(b)(2) does not apply because no trial has been instituted (RPX). The government also argued that Smith & Nephew distinguished the PTAB’s 2015 RPX and FCA decisions by noting that those panels had not considered the ability of the patent owner to obtain the disclaimed claim coverage in future prosecution.

The PTAB concluded that “our rules necessitate denying institution under the circumstances of the instant proceeding, that is, where patent owner disclaims all of the challenged claims prior to institution.” The PTAB declined to follow Smith & Nephew and emphasized that it, as well as the cases relied on by the government, were non-precedential and thus non-binding.

The PTAB instead focused on the text of the pertinent regulations and concluded that the rules, when “read in full and in concert,” do not permit entry of adverse judgment, but rather “oblige us to deny institution.” The PTAB explained that under the plain language of § 42.73(b)(2), disclaimer of challenged claims only constitutes a request for adverse judgment when the party has “no remaining claim in the trial.” However, because no trial had been instituted, “there are no claims in a trial.” The PTAB thus concluded that the rule does not permit it to “construe the relevant action by Patent Owner, i.e., disclaimer of challenged claims, as a request for adverse judgment before institution of trial.” Accordingly, the PTAB denied the petition for post-grant review.

Practice Note: This case provides a patent owner an avenue by which it may avoid post-grant review and still address the petitioner’s invalidity arguments through ex parte prosecution—disclaim challenged claims in the preliminary response, then prosecute the disclaimed subject matter in a pending application. It remains to be seen whether Corvus will be designated precedential and thus set a binding rule for future cases.