US Supreme Court - High Court Denies Intel Bid to Nix Patent Office’s Fintiv Rule

Michael Shapiro's Bloomberg Law article High Court Denies Intel Bid to Nix Patent Office’s Fintiv Rule is worth reading. It discusses the US Supreme Court's decision to not hear Intel's petition to challenge to the Fintive rule that gives PTAB judges discretion in an inter partes review (IPR) to not institute a patent validity challenge even when the IPR is filed within one year of complaint service if the parallel litigation is at "an advanced stage" in district court. This is a favorable decision for patent owners, since invalidity rates are higher in an IPR than in court.

Copyright © 2024 Robert Moll. All rights reserved.

Federal Circuit - Network-1 Technologies, Inc. v. Hewlett Packard - Joining Party Can Challenge Validity On Different Grounds Than Raised in IPR

In Network-1 Technologies, Inc. v. Hewlett Packard, the Federal Circuit held that a party joining an inter partes review (IPR) before Patent Trial and Appeal Board (PTAB) can later challenge patent validity in court as long the challenge is based on different grounds than those raised earlier in the IPR. 

As a reminder, 35 U.S.C. § 315(e) estops a petitioner from challenging patent claims in court on grounds it "raised or reasonable could have raised" after a final decision in an IPR. The Federal Circuit explained a joining party is not estopped from raising grounds different than those when the IPR was instituted. In short, a party is only estopped from challenging in court on the grounds it "raised or reasonably could have raised" in the IPR.

Copyright © 2020 Robert Moll. All rights reserved.

RPX - The PTAB Sees a Relatively Small Percentage of Patents Litigated in District Court - Comment

On September 16, RPX published a short article: The PTAB Sees a Relatively Small Percentage of Patents Litigated in District Court September 16, 2020. It noted that only 22% of the court cases also see an inter partes review (IPR). Thus, the RPX report might give some patent owners a nice feeling: you probably won't face an IPR where more than half of US patents see claims invalidated. 

But think about it. If RPX is correct that IPRs have only been filed against 4,330 patents since available in 2012, while the USPTO reports 11,148 IPR petitions filed from beginning (Sept. 16, 2012) until recently (Aug. 31, 2020), we have a difference. Let's assume both RPX and the USPTO are correct. Why the difference? I am thinking the difference is attributable to the current practice of filing multiple petitions against certain patents. Many patent may escape an IPR, but for valuable patents, it's "war by attrition."

Copyright © 2020 Robert Moll. All rights reserved.

USPTO - Trial Statistics IPR, PGR, CBM Patent Trial and Appeal Board August 2020

The USPTO monthly publishes trial statistics for IPRs, PRG, and CBM in the PTAB section of USPTO.gov. Note covered business methods (CBM) expired September 15, 2020. 

Here's the latest report: Trial Statistics IPR, PGR, CBM Patent Trial and Appeal Board August 2020

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Uniloc 2017 LLC v. Hulu LLC - PTAB May Review Proposed Substitute Claims for Patent Eligibility in IPR

In Uniloc 2017 LLC v. Hulu, LLC, the Federal Circuit affirmed PTAB's determination that the patent owner's substitute claims proposed in a motion to amend were patent ineligible under 35 U.S.C. § 101 in an inter partes review (IPR).

As a reminder, IPR only permits challenges of US patent claims based on prior literature under 35 U.S.C. § 102 and 35 U.S.C. § 103. However, the Federal Circuit is now making a distinction with issued and substitute claims proposed in an IPR and states that PTAB may review substitute claims proposed by the patent owner for patent eligibility.

The dissent stated: "the majority breathes life into a dead patent and uses the zombie it has created as a means to dramatically expand the scope of inter partes review (“IPR”) proceedings. Because the Patent Trial and Appeal Board (“Board”) is estopped from issuing substitute claims in place of the invalidated claims of U.S. Patent No. 8,566,960 ("'960 patent") and because, even if the Board could issue such claims, it would be improper for it to consider 35 U.S.C. § 101."

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Facebook v. Windy City Innovations LLC - No Same-Party Joinder In Inter Partes Review

In Facebook v. Windy City Innovations LLC, the Federal Circuit held that 35 U.S.C. § 315(c) does not authorize same-party joinder, and does not authorize joinder of new issues (e.g., for cancellation), including issues that would otherwise be time-barred under 35 U.S.C. § 315(b) from inter partes review (IPR).

Unless Federal courts require infringement contentions well within one year of the service of an infringement complaint, this seems to increase legal fees for effective IPR petitions and increase the value of US patents with diverse claims.

See Bloomberg Law Patent Challengers Reassess Strategies After Ruling Bars Tactic.

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Anneal v Almirall - Reverses Attorney Fee Award for Work on Inter Partes Review

In Anneal v Almirall, the Federal Circuit held that a court cannot award attorney fees under 35 U.S.C. § 285 for work incurred on an inter partes review (IPR) and on appeal from IPR decision, because 35 U.S.C. § 285 is limited to "judicial proceedings."

Copyright © 2020 Robert Moll. All rights reserved.

Supreme Court - Thyrv, Inc. v. Click-to-Call Technologies, LP - No Appeal from PTAB's One Year Time Bar Decision on IPR

In Thyrv, Inc. v. Click-to-Call Technologies, LP, the Supreme Court held that a Patent Trial and Appeal Board (PTAB) determination on whether a petition is filed timely for inter partes review (IPR) is not appealable.

As background, an IPR permits a petitioner to request the review the validity of claims in view of written prior art. To institute the review, PTAB must find that the petitioner is likely to succeed with respect to at least one claim and the petition was timely filed (within one year of service of an infringement complaint).

In other words, the Supreme Court states 35 USC § 314(a) permits the patent owner no appeal to the Federal Circuit from an incorrect PTAB decision that a petition was timely filed as required in 35 USC § 315(b). Note in this case the infringement complaint (dismissed without prejudice) was filed 12 years before the IPR petition!

Thus, a patent owner must make every effort to win on the merits of the institution decision and the untimeliness of the petition before PTAB. On the other hand, if the IPR is instituted, the patent owner can still appeal a final decision of invalidity to the Federal Circuit.

Copyright © 2020 Robert Moll. All rights reserved.

Federal Circuit - Hologic v. Minerva Surgical - Assignor Estoppel Does not Bar PTAB Invalidity Decision

In Hologic v. Minerva Surgical, the Federal Circuit held assignor estoppel barred the assignor from asserting invalidity of a patent in district court, but not the assignor relying on the Federal Circuit's affirmance of PTAB invalidating claims of another patent in an inter partes review (IPR).

See further details in the opinion. One detail caught my eye as a patent attorney, Judge Stoll questioning if it is time to revisit assignor estoppel en banc (entire panel) on the construction of the America Invents Act (AIA) due to the illogical regime being perpetuated.

In the opinion on page 30:

"In Arista, we held that the judge-made doctrine of assignor estoppel does not apply in the context of an inter partes review. In other words, an assignor who sold his patent rights may file a petition for IPR challenging the validity of that patent. Arista Networks, Inc. v. Cisco System, Inc. At the same time, we continue to bar assignors from challenging in district court the validity of the patents they assigned. See, e.g., Mentor Graphics Corp.v. EVE-USA, Inc. 

Our precedent thus presents an odd situation where an assignor can circumvent the doctrine of assignor estoppel by attacking the validity of a patent claim in the Patent Office, but cannot do the same in district court. Do the principles underlying assignor estoppel—unfairness in allowing one
who profited from the sale of the patent to attack it—apply in district court but not in Patent Office proceedings?

Should we change the application of the doctrine in district court, or should we revisit our construction of the America Invents Act and reevaluate our interpretation of the statute as prohibiting the doctrine of assignor estoppel? Given the odd circumstance created in this case, I suggest that it is time for this court to consider en banc the doctrine of assignor estoppel as it applies both in district court and in the Patent Office.

We should seek to clarify this odd and seemingly illogical regime in which an assignor cannot present any invalidity defenses in district court but can present a limited set of invalidity grounds in an IPR proceeding. A petitioner in an IPR proceeding may request to cancel as unpatentable one or more claims of a patent, but “only on a ground that could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.” 35 U.S.C. § 311(b)."

Copyright © 2020 Robert Moll. All rights reserved.

PTAB - Consolidated AIA Trial Practice Guide November 2019

On November 20, 2019, the USPTO published the consolidated edition including the 2018-2019 updates and the original America Invents Act (AIA) Trial Practice Guide of 2012:

• Consolidated Trial Practice Guide November 2019
• Trial Practice Guide July 2019 update
• Trial Practice Guide August 2018 update
• Trial Practice Guide August 2012

For additional information see the PTAB home page.

Copyright © 2019 Robert Moll. All rights reserved.

PTAB - Proposed Rules on Burden of Persuasion on Motions to Amend Claims

Today, the USPTO published a Notice of Proposed Rulemaking (NPRM) concerning burdens of persuasion on motions to amend claims in trials (e.g., inter partes review) before the Patent Trial and Appeal Board (PTAB).

It proposes a petitioner challenging a patent bear the burden to show unpatentability of substitute claims proposed in the motion and the patent owner bear the burden to show that a motion complies with rules and the statutory requirements. Further PTAB can determine the patentability of the substitute claims based on the record. Note this proposed rule is favorable to patent owners.

The USPTO invites public comments on the rule by December 23, 2019.

Copyright © 2019 Robert Moll. All rights reserved.

USPTO - Setting and Adjusting Patent Fees During Fiscal Year 2020

The USPTO proposes to increase patent fees in fiscal year 2020:

For example, the USPTO proposes (1) a practitioner fee: $240/year with continuing legal education (CLE) and $340 without CLE to defray the Office of Enrollment and Discipline's costs; (2) an increase of the maintenance and surcharge fees; and (3) an increase in inter partes review (IPR) petition and post institution fees to cover the work of ruling on the validity of each challenged claim as required by the US Supreme Court's holding in SAS Institute Inc. v. Iancu.

See Setting and Adjusting Patent Fees During Fiscal Year 2020 for the USPTO presentation why many patent fees need to increase. Note some of the same IPR fees increased in January 2019.

The public has 56 days to comment on the fee proposal.

Copyright © 2019 Robert Moll. All rights reserved.

USPTO - Webinar on Updated AIA Trial Practice Guide

The USPTO's webinar on the updated AIA Trial Practice Guide is 9-10 am PT on August 8.

Here's the topics: (1) when additional discovery is granted; (2) Phillips claim construction; (3) testimonial evidence for a patent owner's preliminary response; (4) information to provide if multiple petitions are filed about same time; (5) motions to amend; (6) determining whether to grant a motion for joinder; (7) procedures when a case is remanded; and (8) procedures for requests for modifications to a default protective order.

Send questions before and during webinar: PTABBoardsideChat@uspto.gov.

The webinar access information: PTAB webinars.

Copyright © 2019 Robert Moll. All rights reserved.

USPTO - Trial Statistics IPR, PGR, CBM, Patent Trial and Appeal Board June 2019

The USPTO Trial Statistics IPR, PGR, CBM, Patent Trial and Appeal Board June 2019 gives a quick view of what's happening with validity challenges in the USPTO.

From October 1, 2012 to June 30, 2019:

• 93% petitions were filed for inter partes review (IPR), 5% for covered business methods (CBM), and 2% for post grant review (PGR) 
• Overall institution rates have decreased from 87% to 62%
• Institution rates for all technologies are about 60-70% except design at 40% 
• Technologies lacked granularity (e.g., business methods and mechanical clumped together)
• Electrical engineering & software patents are frequent targets for petitioners 
• Pre-Institution settlements rose from 9% to 18%
• Post-institution settlements fell from 90% to 28%
• Status of Petitions for instituted claims: no claims unpatentable 19%, some claims unpatentable 18%, and all claims unpatentable 63%  

The relative low cost of USPTO Trials compared to seeking declaratory relief in court, and the high institution and invalidity rates explain why defendants file petitions with a request to stay any pending court proceedings.

Copyright © 2019 Robert Moll. All rights reserved.

USPTO - AIA Trial Guide Updated in July 2019

The USPTO updated the America Invents Act (AIA) Trial Practice Guide (TPG) for attorneys practicing before the Patent Trial and Appeal Board (PTAB).

The updates include guidance on:

• "Factors that may be considered by the Board in determining when additional discovery will be granted 
• The revised claim construction standard to be used in IPR, PGR, and CBM proceedings 
• The submission of testimonial evidence with a patent owner preliminary response 
• Information to be provided by the parties if there are multiple petitions filed at or about the same time challenging the same patent
• Motion to amend practice
• Factors that may be considered by the Board in determining whether to grant a motion
• Procedures to be followed when a case is remanded
• Procedures for parties to request modifications to the default protective order"

Also see the AIA Trial Practice Web page.

Copyright © 2019 Robert Moll. All rights reserved.

CAFC - Application in Internet Time v. RPX - Real Party In Interest

In Application in Internet Time v. RPX, the Federal Circuit vacated inter partes review (IPR) decisions invalidating two US patents because the Patent Trial and Appeal Board (PTAB) applied an unduly restrictive test for determining whether an entity (i.e., a RPX member) is a real party in interest within the meaning of 35 U.S.C. § 315(b) and failed to consider the entire evidence in assessing whether § 315(b) barred institution of the IPRs filed by RPX.

The Federal Circuit stated the PTAB erred in not further investigating whether the RPX member was the real party in interest even though RPX had communications back and forth with the RPX member and received a large payment from the RPX member just before the IPR petitions were filed.

In short, a defendant in a patent infringement suit that waits more than one year after being served is time barred from filing an IPR. 35 U.S.C. § 315(b). Thus, a defendant that is a member of an organization that files IPR to avoid the one year time bar might expect that PTAB will permit discovery on the relationship between the organization and the defendant to see if the defendant is a real party in interest and the organization is its proxy. The discovery may encompass the communications and the funding of the organization. Once the facts are ascertained it may affect the final IPR decision. Thus, a defendant should expect that it needs to file an IPR petition within one year of being sued rather than rely on a third party organization which may be held to be its proxy.

Copyright © 2018 Robert Moll. All rights reserved.

Supreme Court - Oil States Energy Services, LLC v. Greene's Energy Group, LLC - Inter Partes Review Not Unconstitutional

In Oil States Energy Services, LLC v. Greene's Energy Group, LLC, the Supreme Court considered "whether inter partes review- an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents- violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury."

The Supreme Court held that Inter Partes Review (IPR) proceedings (35 U.S.C. 311-319) before the Patent Trial and Appeal Board (PTAB) do not violate Article III or the Seventh Amendment of the Constitution. In short, Justice Thomas for seven of the justices reasoned that "the decision to grant a patent is matter involving public rights" and "inter partes review is simply a reconsideration of that grant ... Congress has permissibly reserved the PTO's authority to conduct that reconsideration."

Many commentators predicted inter partes review (IPR) would be held constitutional. A more tricky prediction is how much the USPTO's new regulations and policies will level the IPR playing field for patent owners in the future.

Copyright © 2018 Robert Moll. All rights reserved.

CAFC - Arista Networks, Inc. v. Cisco Systems, Inc. - No Assignor Estoppel in Inter Partes Review

In Arista Networks v. Cisco Systems, the Federal Circuit held that assignor estoppel has no place in inter partes review (IPR).

As background, assignor estoppel prevents a party who assigns a patent to another from later challenging the validity of the assigned patent. Further, assignor estoppel prevents parties in privity with the assignor (e.g., a company founded by the assignor) from challenging validity. An IPR is a proceeding before the Patent Trial and Appeal Board for challenging the validity of any issued US patent.

Cisco had sued its competitor Arista for patent infringement of the claims of U.S. Patent No. 7,340,597 ("the '597 patent"), Method and Apparatus for Securing a Communications Device using a Logging Module, owned by Cisco. Arista petition for an IPR, and after instituting the IPR, the PTAB invalidated certain claims. Cisco argued assignor estoppel should prevent Arista challenging the validity in the IPR, because Dr. Cheriton the Arista co-founder had previously assigned the '597 patent to Cisco.

The Federal Circuit questioned did Congress intend for assignor estoppel to apply in IPR in the following manner:

"Cisco's primary argument in favor of applying assignor estoppel is that assignor estoppel is a well-established common-law doctrine that should be presumed to apply absent a statutory indication to the contrary. With this principle in mind, Cisco particularly takes issue with the Board's reasoning that Congress would have expressly provided for application of equitable defenses if it so desired.

There is some merit to Cisco's argument. In Westinghouse, the Court characterized assignor estoppel as "a rule well settled by 45 years of judicial consideration and conclusion" in the district and circuit courts, reaching back as early as 1880. Westinghouse, 266 U.S. at 349; see also Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 260 (1945) (Frankfurter, J., dissenting) ("The principle of fair dealing as between assignor and assignee of a patent whereby the assignor will not be allowed to say that what he sold as a patent was not a patent had been part of the fabric of our law throughout the life of this nation."). But, in Lear, Inc. v. Adkins, the Supreme Court appeared to cast some doubt on the doctrine's continued viability. 395 U.S. 653, 664-66 (1969). And although this court has held that the doctrine survived Lear, we did so recognizing that court decisions post-Lear "reveal[ed] some uncertainty about the continued vitality of the doctrine." Diamond Sci., 848 F.2d at 1223; see also id. ("Although Lear involved the licensing, rather than the assignment, of a patent, the opinion reviewed the history of `patent estoppel' in general, and indicated that the Court's previous decisions had sapped much of the vitality, if not the logic, from the assignment estoppel doctrine as well.").

With this history in mind, we recognize that "Congress is understood to legislate against a background of common-law adjudicatory principles." Astoria Fed. Sav. & Loan Ass'n v. Solimino, 501 U.S. 104, 108 (1991). "Thus, where a common-law principle is well established, . . . the courts may take it as given that Congress has legislated with an expectation that the principle will apply except `when a statutory purpose to the contrary is evident.'" Id. (quoting Isbrandtsen Co. v. Johnson, 343 U.S. 779, 783 (1952)); see also Impression Prods., Inc. v. Lexmark Int'l, Inc., 137 S.Ct. 1523, 1536 (2017). But see United States v. Craft, 535 U.S. 274, 288 (2002) ("The common-law rule was not so well established . . . that we must assume that Congress considered the impact of its enactment on the question now before us."). But even assuming that assignor estoppel could be considered such a well-established common law principle, we nonetheless conclude that, here, "a statutory purpose to the contrary is evident." Astoria, 501 U.S. at 108 (quoting Isbrandtsen, 343 U.S. at 783). In particular, we view § 311(a) as governing the question of whether Congress intended assignor estoppel to apply in the IPR context.13

Section 311(a) states, in relevant part: "(a) In General.—Subject to the provisions of this chapter, a person who is not the owner of a patent may file with the Office a petition to institute an inter partes review of the patent. . . ." § 311(a) (emphasis added).

Arista contends that § 311(a) unambiguously leaves no room for assignor estoppel in the IPR context, given that the statute allows any person "who is not the owner of a patent" to file an IPR.14 We agree. Where "the statutory language is plain, we must enforce it according to its terms." King v. Burwell, 135 S.Ct. 2480, 2489 (2015); see also Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242, 251 (2010). In our view, the plain language of this statutory provision is unambiguous.

Cisco contends that this statute does not directly speak to the question of assignor estoppel in IPRs. Instead, Cisco views § 311(a) as reflecting two principles: first, that an IPR must begin as an adversarial proceeding, rather than as a means for a patent owner to confirm the patentability of certain claims; and second, that there is no Article III-like standing requirement for filing an IPR. In our view, however, the statute, by its terms, does more—it delineates who may file an IPR petition. The plain language of § 311(a) demonstrates that an assignor, who is no longer the owner of a patent, may file an IPR petition as to that patent.

This conclusion is consistent with Congress's express incorporation of equitable doctrines in other related contexts. For example, a statute governing International Trade Commission investigations states that "[a]ll legal and equitable defenses may be presented in all cases." 19 U.S.C. § 1337(c); cf. 15 U.S.C. § 1069 (providing in the Lanham Act context that "[i]n all inter partes proceedings equitable principles of laches, estoppel, and acquiescence, where applicable may be considered and applied"). And although such express inclusion of equitable defenses in other contexts is not dispositive of the issue presented in this case, it is further evidence of congressional intent.

Finally, Cisco contends that allowing assignor estoppel in other forums, such as in the ITC and in district court, while not allowing it in the IPR context creates an inconsistency that invites forum shopping. We, however, do not view this as an inconsistency, but rather as an intentional congressional choice. Such a discrepancy between forums—one that follows from the language of the respective statutes—is consistent with the overarching goals of the IPR process that extend beyond the particular parties in a given patent dispute. See Cuozzo, 136 S. Ct. at 2144 ("[I]nter partes review helps protect the public's `paramount interest in seeing that patent monopolies . . . are kept within their legitimate scope.'" (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816 (1945))). Moreover, any policy choices regarding forum shopping are better left to Congress than to this court. Cf. SAS Inst., 138 S. Ct. at 1358 ("Policy arguments are properly addressed to Congress, not this Court."); Click-to-Call Techs., LP v. Ingenio, Inc., 899 F.3d 1321, 1350 (Fed. Cir. 2018) (Taranto, J., concurring) ("If there turns out to be a problem in the statute's application according to its plain meaning, it is up to Congress to address the problem.").

In sum, we conclude that § 311(a), by allowing "a person who is not the owner of a patent" to file an IPR, unambiguously dictates that assignor estoppel has no place in IPR proceedings."

Copyright © 2018 Robert Moll. All rights reserved.

USPTO - Update AIA Patent Trial Practice Guide (August 2018)

In August 2012, the USPTO published Office Patent Trial Practice Guide (the Guide) for 37 C.F.R. Part 42 (Part 42 is currently on pages 416-447). The Guide was intended to give guidance to parties participating in inter partes review, post-grant review, covered business methods, and derivation under the America Invent Act (AIA) that had just passed.

In August 2018, the USPTO published Trial Practice Guide Update (August 2018) to update the Guide on topics such as expert testimony, motion practice, institution of trial, reply to patent owner response, reply to motion to amend, challenging admissibility, motions to exclude and strike, and oral hearings.

Copyright © 2018 Robert Moll. All rights reserved.

USPTO - Proposes Changes to the Claim Construction in Trial Proceedings Before the Patent Trial and Appeal Board

The USPTO is proposing changes favorable to patent owners with regard to claim construction in the following Patent Office proceedings: (1) inter partes review (IPR), (2) post-grant review (PGR), and (3) the transitional program for covered business method patents (CBM) proceedings before the Patent Trial and Appeal Board (PTAB).

As stated in the regulatory notice: the USPTO "proposes to replace the broadest reasonable interpretation (“BRI”) standard for construing unexpired patent claims and proposed claims in these trial proceedings with a standard that is the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings. The Office also proposes to amend the rules to add that the Office will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding."

If this change is implemented, it should be more difficult for a challenger to invalidate patent claims in certain cases, which may be reasonable given patent owners are rarely afforded the opportunity to amend claims in Patent Office proceedings to date.

See the USPTO Notice of Proposed Rule Making.

Also see U.S. Supreme Court's prior decision in Cuozzo Speed Technologies v. Lee that affirmed PTAB's use of the broadest reasonable interpretation of the claims in inter partes review.

Copyright © 2018 Robert Moll. All rights reserved.