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S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

Patent Office Litigation:
Lessons L...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

2
PTO Litigation Timeline: Key Issu...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

3
•  Since September
16, 2012, 3,96...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

4
PTAB Institution Outcomes (12/3/1...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

5
PTAB AIA Trial Outcomes
Outcome	
...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

6
Statutory Filing Bar: Civil Actio...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

7
Statutory Filing Bar: 1-Year Bar
...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

8
The 1-Year Bar, cont.
•  An IPR d...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

9
Real Party in Interest (RPI)
•  P...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

10
RPI or RIP
•  It includes determ...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

11
325(d) Discretion: Second bites ...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

12
Joinder: Discretionary
•  PO or ...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

13
Priority Challenges: IPRs and Pr...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

14
Priority Challenges: IPRs and Pr...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

15
Priority Challenges: PGR Eligibi...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

16
Prima Facie Attack: Prior Art Da...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

17
Motions to Exclude: Fatal eviden...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

18
Cannot Appeal Institution Decisi...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

19
Stays: District Court
•  Distric...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

20
Estoppel: Petitioner in Dist. Ct...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

21
Estoppel: at PTAB
•  Petitioner:...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

22
AIA Appeals to the CAFC
Total Nu...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

23
AIA Appeals to the CAFC
Cases Su...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

24
Outcomes Observations
•  Roughly...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

25
Significant Cases
In re Cuozzo S...
S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved.	

26
Questions?
Deborah Sterling, Ph....
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Lessons From Practicing at the PTAB

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Inter partes review (IPR), post-grant review (PGR), and covered business method (CBM) procedures are focused, speedy vehicles for resolving unpatentability and § 101 issues. IPRs, especially, are quickly gaining traction as the go-to mechanism for invalidating patents. But with new procedures come new (or not-yet-established) law, and a steep learning curve. This webinar provides insights and lessons learned from the PTAB’s first three years of IPRs, PGRs, and CBMs.

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Lessons From Practicing at the PTAB

  1. 1. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. Patent Office Litigation: Lessons Learned Deborah Sterling, Ph.D. – Director Sterne, Kessler, Goldstein & Fox PLLC January 14, 2016
  2. 2. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 2 PTO Litigation Timeline: Key Issues Petition Filed PO Preliminary Response Decision on Petition PO Response & Motion to Amend Claims Petitioner Reply & Opposition to MTA PO Reply to Opp to MTA Oral Hearing Final Written Decision 3 months ≤ 3 months 2-3 months 2-3 months 1 month 1-2 months Statutory Filing Bar Real Party in Interest 325(d) Discretion Joinder Priority Challenges Prima Facie Attack (prior art date) Stays Motions to Exclude Estoppel Federal Circuit Appeal
  3. 3. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 3 •  Since September 16, 2012, 3,966 IPR petitions, 406 CBM petitions, and 15 PGR petitions have been filed •  Averaged 150 petitions per month in 2015 – slightly up over 2014. The Rise of PTO Litigation (1/8/15) 0   500   1000   1500   2000   2500   3000   3500   4000   Sep-­‐12   Dec-­‐12   Mar-­‐13   Jun-­‐13   Sep-­‐13   Dec-­‐13   Mar-­‐14   Jun-­‐14   Sep-­‐14   Dec-­‐14   Mar-­‐15   Jun-­‐15   Sep-­‐15   Dec-­‐15    IPR  and  CBM  Filings  by  Month     Total   Month  
  4. 4. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 4 PTAB Institution Outcomes (12/3/15) •  Trial has been instituted in 1,839 IPR proceedings (72.4%) and denied in 700 (27.6%) •  Trial has been instituted in 221 CBM proceedings (69.7%) and has been denied in 96 (30.3%) •  Parties reached a settlement prior to a decision on institution in 449 IPRs and 41 CBMs •  The Board institutes trial for 64.2% of challenged claims in IPRs, and 63.9% of challenged claims in CBMs. Period Institution Rate 1st - 3rd Quarter FY2013 91.2% 4th Quarter FY2013 82.1% 1st Quarter FY2014 78.5% 2nd Quarter FY2014 81.3% 3rd Quarter FY2014 72.2% 4th Quarter FY2014 71.2% 1st Quarter FY2015 77.7% 2nd  Quarter  FY2015   68.8%   3rd  Quarter  FY2015   63.6%   4th  Quarter  FY2015   62.5%   1st  Quarter  FY2016   72.6%   Total   72.2%   70%   75%   80%   85%   90%   95%   Mar-­‐13   May-­‐13   Jul-­‐13   Sep-­‐13   Nov-­‐13   Jan-­‐14   Mar-­‐14   May-­‐14   Jul-­‐14   Sep-­‐14   Nov-­‐14   Jan-­‐15   Mar-­‐15   May-­‐15   Jul-­‐15   Sep-­‐15   Nov-­‐15   Tracking  the  Cumula@ve    Ins@tu@on  Rate  
  5. 5. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 5 PTAB AIA Trial Outcomes Outcome   Count   Percentage   Final Written Decision Received   684   46.6%   Institution Denied   299   20.4%   Settled Post-Institution   264   18.0%   Settled Prior to Institution   146   9.9%   Request for Adverse Judgment   59   4.0%   Institution Vacated; Case Terminated   10   0.7%   Petitioner Abandoned Petition   4   0.3%   Pending   1   0.1%   Patent Owner No Response (Claims Cancelled)   1   0.1%  
  6. 6. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 6 Statutory Filing Bar: Civil Action 35 U.S.C. §315(a): (1) Inter partes review barred by civil action. An inter partes review may not be instituted if, before the date on which the petition for such review is filed, the petitioner or real party in interest filed a civil action challenging the validity of a claim of a patent •  Counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent. 35 U.S.C. §315(a)(1) •  DJ of non-infringement is not a civil action challenging the validity of a claim of a patent [Ariosa, IPR2012-00022] •  Filed does not mean “filed and served” [Anova, IPR2013-00114] •  Dismiss DJ action w/o prejudice “leaves parties as if action had never been brought.” [Butamax, IPR2013-00539]
  7. 7. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 7 Statutory Filing Bar: 1-Year Bar 35 U.S.C. §315(b): An inter partes review may not be instituted if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner … is served with a complaint alleging infringement of the patent. •  Though statute does not refer to a “civil action,” this is how the Board has interpreted this section. An ITC action does not qualify, nor does a complaint in an arbitration. See Amkor, IPR2013-00242, Paper 98.
  8. 8. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 8 The 1-Year Bar, cont. •  An IPR directed to amended claims of a reexamined patent, where the original patent was the subject of an infringement complaint served more than a year earlier, is barred. [BioDelivery Services, IPR2013-00315] •  An IPR triggered by a second infringement complaint filed and served less than a year earlier but after a first infringement complaint for the same patent filed and served more than a year earlier is barred. [Apple, IPR2013-00348] •  Infringement complaint served more than one year earlier but dismissed without prejudice does not trigger the bar. [Macuato, IPR2012-00004]
  9. 9. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 9 Real Party in Interest (RPI) •  Practice Guide states: •  “what constitutes a real party in interest or privy is a highly fact- dependent question” (77 FR 6884) •  “actual control or the opportunity to control the previous proceeding is an important clue that such a relationship existed” (77 FR 6884) •  “[f]actors for determining actual control or the opportunity to control include existence of a financially controlling interest in the petitioner.” (77 FR 6884) •  “For example, a party that funds and directs and controls an IPR or PGR petition or proceeding constitutes a ‘real party-in-interest,’ even if that party is not a ‘privy’ of the petitioner” (77 FR 48760)
  10. 10. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 10 RPI or RIP •  It includes determining the “existence of a financially controlling interest in the petitioner[,] ... the nonparty’s relationship with the petitioner; the nonparty’s relationship to the petition itself, including the nature and/or degree of involvement in the filing; and the nature of the entity filing the petition.” [ZOLL Lifecor, IPR2013-00606]. •  When an error in identifying RPI was minor “because the current entities are legal successors to their original entities” the PTAB allowed petition to keep its original filing date. [Valeo, IPR2014-01203] •  Where the Petitioner failed to identify all RPIs and amending filing date would result in time-barred petition, the PTAB terminated IPR proceedings. [Corning, IPR2014-00440]
  11. 11. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 11 325(d) Discretion: Second bites of the apple •  35 U.S.C. § 325(d): In determining whether to institute or order a proceeding … the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office. •  whether a previous petition was instituted/remains pending; •  whether the second petition was brought by the same petitioner •  whether the second petition uses the same or different prior art as the previous petition; •  whether the second petition challenges the same claims as in the first petition; •  whether the second petitioner faces a statutory one-year bar under 35 U.S.C. § 315(b); •  whether the second petition presents new declaration evidence; and •  whether the second petitioner could have sought joinder with an earlier proceeding.
  12. 12. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 12 Joinder: Discretionary •  PO or petition may request joinder via motion, no later than one month after the institution date of any IPR for which joinder is requested. 37 C.F.R. § 42.122 (b) •  cannot join if base proceeding terminated [Apple, IPR2013-00354 and IPR2014-00061] •  party is not required to file motion for joinder simultaneously with petition [Apple, IPR2013-00348] •  one month time period can be waived for special circumstances [IPR2013-00495 (waived); IPR2013-00584; IPR2014-00061 (not waived)] •  secondary (understudy) party may assume first chair role if parties settle [IPR2013-00495] •  Joinder is for joining parties, not issues [SkyHawke, IPR2014-01485]
  13. 13. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 13 Priority Challenges: IPRs and Prior Art In IPRs: •  The Board addressed Petitioner's priority challenge in 63 Institution Decisions and 7 FWDs •  Out of 63 Institution Decisions: •  priority challenge successful in 30 cases (48%) •  priority challenge unsuccessful in 17 cases (27%) •  Priority challenge moot in 16 cases (25%) •  The Petitioner was successful in maintaining priority challenge in all 7 FWDs
  14. 14. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 14 Priority Challenges: IPRs and Prior Art •  An attack on a priority claim based on 112, 1st paragraph is not prohibited in an IPR [Rackspace, IPR2014-0058] •  Priority challenge failed when it relied upon the same 112, 1st paragraph issue that was raised during prosecution and overcome [Prism Pharma, IPR2014-00315] •  Priority challenge succeeded when it relied upon the same 112, 1st paragraph issue that was raised and overcome during prosecution of a related patent application, but scope of claims in challenged patent were significantly different [Daiichi Sankyo, IPR2015-00291]
  15. 15. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 15 Priority Challenges: PGR Eligibility In PGRs: •  Priority chain challenged in one PGR in order to turn patent from pre-AIA patent to post-AIA patent [see Inguran, PGR2015-00017] •  Priority challenge successful and PGR instituted •  Important because patent otherwise not eligible for PGR •  PGR opens door to 112, 101, etc., in addition to prior art based challenges
  16. 16. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 16 Prima Facie Attack: Prior Art Date To qualify as 102(e) prior art by virtue of an earlier effective filing date, a prior art patent or published application’s claims must have 112, 1¶ support in earlier-filed application •  PTAB held challenged claims not unpatentable in FWD where petitioner failed to demonstrate claims of 102(e)(1) published application or 102(e)(2) patent had 112, 1¶ support in earlier- filed provisional or nonprovisional application •  Vmware, IPR2014-01304 and -01305 (102(e)(2)) •  Ariosa, IPR2014-01093 (102(e)(1)) •  PTAB expanding CAFC decision in Dynamic Drinkware v. National Graphics, 2015-1214
  17. 17. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 17 Motions to Exclude: Fatal evidentiary gap •  Prior art not actually prior art--authenticated publication date not shown •  In TRW Automotive [IPR2014-01347] all grounds relied upon a reference that PO moved to exclude as unauthenticated •  PTAB excluded reference and petitioner’s case fell apart •  FWD confirmed all challenged claims
  18. 18. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 18 Cannot Appeal Institution Decision •  All Federal Circuit appeals from institution decision, even on standing issues, dismissed •  In re Procter and Gamble Co. – mandamus is not a proper vehicle for challenging institution of IPR •  In re The University of Illinois – statutory scheme precludes the court from hearing an appeal from the Director’s decision to institute •  In re Versata – statutory provisions applicable to post-grant review contain an identical bar to appellate review of institution determinations •  All district court appeals from institution decision, even on standing issues, dismissed •  Mentor Graphics Corp. v. Rea, EDVA – Institution decision is not a final agency action, and is not reviewable by the EDVA. Can appeal to CAFC at conclusion of IPR. •  Dominion Dealer Solutions, LLC v. Lee, EDVA – Institution decision is not a final agency action, and is not reviewable by the EDVA
  19. 19. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 19 Stays: District Court •  District courts are generally granting stays •  Over 65% of contested motions to stay have been granted •  BUT…Most district courts are waiting until institution before even considering a motion to stay •  IPR •  310 stays granted by district courts pending the outcome of an IPR (140 stipulated, 4 sua sponte) •  88 stays denied by district courts pending the outcome of an IPR (1 stipulated) •  CBM •  57 stays granted by district courts pending the outcome of a CBM (20 stipulated) •  16 stays denied by district courts pending the outcome of a CBM
  20. 20. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 20 Estoppel: Petitioner in Dist. Ct. •  Estoppel in IPR applies to “prior art consisting of patents or printed publications.” [Redline Detection IRP2013-00106] •  Some courts may apply estoppel before a FWD [Invensys Sys. v Emerson Elec. (E.D. Tex)] •  But others may not [National Oilwell Varco v Omron Oilfield & Marine (W.D. Texas)]
  21. 21. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 21 Estoppel: at PTAB •  Petitioner: •  PTAB denied a second IPR petition under the estoppel provision when the grounds in the second IPR differed from those in the first but the underlying art was the same [Dell, IPR2015-00549] •  Patent Owner: •  estoppel under rule 42.73(d)(3) applies only after all appeals have been exhausted [SDI Technologies, Inc. IPR2014-00343]
  22. 22. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 22 AIA Appeals to the CAFC Total Number of Appeals Docketed   451   Appealed from IPR Final Written Decisions   382   Appealed from CBM Final Written Decisions   69   Appeals from Non-Final Decisions   22   Appeals by Patent Owners   301   Appeals by Petitioners   69   Number of Cross Appeals   40   Total Number of Mandamus Petitions   11   Petitions from decisions in IPR proceedings   10   Petitions from decisions in CBM proceedings   1   Impact  on  the  Federal  Circuit   §  Docketed  104  appeals  in  2014,  309  in  2015,  and  38  in  2016  (TYD)   §  The  vast  majority  of  appeals  are  pursued  by  patent  owners   §  Cross  appeals  represent  two  appeals  based  on  one  decision  
  23. 23. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 23 AIA Appeals to the CAFC Cases Submitted to the Federal Circuit 90 Percentages Decided 60 Affirmed 56 93% Affirmed Affirmed Fed. Cir. R. 36 34 Affirmed Non-Precedential 12 Affirmed Precedential 10 Remanded 3 5% Remanded Reversed 1 2% Reversed Dismissed 8 Pending 22 Impact  on  the  Federal  Circuit   §  Over  90%  of  appeals  decided  on  the  merits  have  been  affirmed   §  Over  50%  of  decisions  issued  are  Rule  36  summary  affirmances   §  Almost  10%  of  appeals  have  been  involuntarily  dismissed  
  24. 24. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 24 Outcomes Observations •  Roughly 50% of final decisions are appealed to the Federal Circuit, and the vast majority of those are by losing patent owners •  In front of the Federal Circuit, appellants are losing over 90% of the time with Rule 36 affirmances deciding over 50% of cases •  high affirmance rate is a natural consequence of the highly deferential standard of review applicable to the majority of issues appealed by parties (e.g., substantial evidence, abuse of discretion, arbitrary and capricious) •  The Court appears to be handling the volume by issuing Rule 36 affirmances and aggressively consolidating related cases •  The Court appears to be staying on track in issuing opinions within 90 days of oral argument, but a calendaring backlog is emerging
  25. 25. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 25 Significant Cases In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268 (Fed. Cir. 2015) §  Upheld BRI as appropriate claim construction standard §  Institution decision is not appealable, even from final decision §  Board not strictly limited to grounds raised in the petition Dynamic Drinkware, LLC v. Nat’l Graphics, 800 F.3d 1375 (Fed. Cir. 2015) §  There is no presumption that a patent is entitled to its priority claim §  Burden of production shifts to establish/rebut prior art status in an IPR, but §  Ultimate burden of persuasion stays with petitioner to prove unpatentability Achates Reference Publ’g, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) §  PTAB’s determination regarding the filing bar of 315(b) is not appealable Ethicon Endo v. Covidien, 2016 WL _______ (Fed. Cir. Jan. 13, 2016) §  It is within the Office’s statutory authority to delegate both the decision to institute and final written decision to the same panel
  26. 26. S K G F. C O M © 2015 Sterne, Kessler, Goldstein & Fox P.L.L.C. All Rights Reserved. 26 Questions? Deborah Sterling, Ph.D., Director dsterlin@skgf.com ▪ 202.772.8501

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