1.0 law & legal cle credit – a/v #1044509 · 1.0 law & legal cle credit – a/v #1044509...

1.0 Law & Legal CLE Credit – A/V #1044509 Recording Date – March 2, 2017 Recording Availability – August 4, 2017

Meeting Location Date Time Topic

King County Bar Association 1200 Fifth Avenue - Suite 700

Seattle, WA

Thursday, March 2, 2017

12:00 PM to 1:15 PM

Challenging Patentability at the PTO

AGENDA 12:00 PM Introductions/Lunch 12:10 PM Presentation: ‘Challenging Patentability at the PTO’, by Candice Claire Decaire,

Kilpatrick Townsend and Stockton • Means by which to challenge patentability at the USPTO, focusing on challenging

issued claims through post grant proceedings (Inter Partes Review, Covered Business Method patent review, and Post Grant Review).

• Pros and cons of challenging patentability through Third Party Submissions during prosecution of a patent application.

• Procedural basics, special strategic issues, and practical considerations, from the point of view of an entity seeking to assure its freedom to operate by challenging potentially problematic patent claims.

1:15 PM Evaluations & Adjourn

SPEAKER BIOGRAPHY: Candice Claire Decaire, Kilpatrick Townsend and Stockton - Candice is a partner in the Seattle office of Kilpatrick Townsend and Stockton, where she practices intellectual property law with a special focus on intellectual property strategy, patent law, and trade secret protection. She works with clients to build and defend strong intellectual property portfolios and licensing programs. Her practice includes counseling and representation in patent litigation, arbitration, ITC investigations, and USPTO post grant proceedings concerning diverse technologies such as computer hardware and software, biologics, pharmaceuticals, mechanical devices, and medical devices.

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© 2017 Kilpatrick TownsendCandice Decaire March 2, 2017

Post Grant Proceedings in the USPTOOverview, Selected Issues, and Traps for the UnwaryPresented to

• Provided by AIA• Any party (some timing constraints)• Challenge validity of patent claims

– Inter Partes Review (IPR)– Covered Business Method (CBM)– Post Grant Review (PGR)

• Expedited (~18 months)• Less expensive than litigation

PTO Post-Grant Proceedings (Patent):

PTO Post-Grant Basics

IPR, CBM, PGR Basics: Timeline

Timing Bases

IPR

• Within 1 year of service of a complaint; and

• More than 9 months after issuance for patents filed on or after 3/16/13

• § 102/103 Only Patents and Printed Publications

CBM

• Once sued or charged with infringement; and

• More than 9 months after issuance for patents filed on or after 3/16/13

• § 101 Subject Matter Eligibility• § 112 Written Description• § 102/103 Patents and Printed

Publications

PGR

• Effective filing date of March 16, 2013 or after

• Within 9 months of issuance

Post Grant Challenges Overview

Standard Estoppel

IPR

• Reasonable likelihood that at least 1 claim is unpatentable (50/50)

• USPTO, District Court, & ITC• Raised or reasonably could

have been raised during the proceeding

• Estoppel attaches with final written decision

• Issue preclusion in PTO attaches with termination of appeal rights

CBM

• More likely than not that at least 1 claim is unpatentable (>50%); or

• Novel or open legal question

• USPTO• Raised or reasonably could

have been raised during the proceeding

• District Court & ITC• Actually raised

• Estoppel attaches with final written decision

• Issue preclusion in PTO attaches with termination of appeal rights

PGR

Post Grant Challenges Overview

Discovery Litigation Stay

IPR

• Depositions of declarants and as necessary in interest of justice

• Not guaranteed for pending cases but often granted

• For later actions for patent invalidity filed by petitioner

CBM

• Evidence directly related to factual assertions by either party

• Not guaranteed for pending cases but often granted

• Immediate interlocutory appeal from denial of stay (will delay litigation)

PGR

Post Grant Challenges Overview

Comparison to Litigation:

• Claim Construction (BRI standard)• Secondary Considerations - Nexus• Estoppel

Selected issues specific topost-grant proceedings:

• Claim Construction (BRI standard)• Secondary Considerations - Nexus• Estoppel

Selected issues specific topost-grant proceedings:

Broadest REASONABLE Interpretation:

• PPC Broadband, Inc. v. Corning Optical Comms. RF, LLC, 815 F.3d 747 (2016) – PTAB used dictionary in applying BRI– construed “reside around” as “in the immediate vicinity of”

or “near”

– Patentee argued this was too broad in light of the claims and specification and should mean “encircle or surround”

• Reversed:– BRI is not simply broadest definition from dictionary– BRI must be “consistent with the specification” and plain

meaning

– BRI ≠ “broadest” interpretation

– BRI = broadest reasonable interpretation consistentwith the specification

Prosecution history is relevant:

• D’Agostino v. MasterCard Int’l Inc., 844 F.3d 945 (2016)– PTAB interpreted “single merchant” so broadly as to

read on a “chain of stores”

– Prosecution history had distinguished single merchant from a chain

• Vacated and remanded:– Interpretation was unreasonable and improper in light

of prosecution history

– Prosecution history of an IPR patent should factor into the BRI analysis (especially when consistent with the plain meaning of the claim term)

• Claim Construction (BRI standard)• Secondary Considerations - Nexus• Estoppel

Selected issues specific topost-grant proceedings:

Secondary considerations:

• Secondary considerations of non-obviousness “can

be the most probative evidence of non-obviousness in the record, and enables the ... court to avert the trap of hindsight.”

– Crocs, Inc. v. Int’l Trade Comm’n., 598 F.3d 1294, 1310 (Fed. Cir. 2010)

– Commercial success – Industry Praise– Long felt but unsolved needs – Failure of others

Nexus requirement:

• “The burden of proof as to . . . nexus resides with the

patent [owner].”

– Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 1392 (Fed. Cir. 1988)

• “In meeting its burden of proof, the patent [owner] in the first instance bears the burden of coming forward with evidence sufficient to constitute a prima facie case of the requisite nexus.”

Presumption of nexus in IPR?

PPC Broadband, Inc. v. Corning Optical Communications RF, LLC, 815 F.3d 734, 747 (Fed. Cir. 2016)

• Claim Construction (BRI standard)• Secondary Considerations - Nexus• Estoppel

Selected issues specific topost-grant proceedings:

• After final written decision• Petitioner is precluded from raising invalidity

arguments (in District Court, in ITC, in proceedings before the PTO) that were raised or reasonably could have been raised in the IPR– 35 U.S.C. §315(e)

• Initially thought to be sweeping preclusion• But seems to be narrowing -

Estoppel (IPR)

Grounds raised during proceeding:

• No estoppel as to grounds in petition for which PTAB declined to institute IPR

• Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293 (Fed. Cir. 2016)

• “The IPR does not begin until it is instituted”

No estoppel as to grounds not instituted?

• Verinata Health Inc. v. Ariosa Diagnostics Inc. (NDCA)• Verinata moved to strike Ariosa’s invalidity

contentions based on Ariosa’s previous IPR petition

grounds (as to which IPR was not instituted)• Motion DENIED:

• “ . . . the Court finds that under Shaw, statutory estoppel only bars the petitioner, or the real party-in-interest or privy of the petitioner, from asserting invalidity grounds raised, or that reasonably could have been raised, during IPRs of the patents-in-suit.”

• Illumina is seeking Federal Circuit review (writ of mandamus)

Estoppel as to references not presented?

• District court extended Shaw to references which could have been presented, but were not (not even in petition), finding no estoppel• Intellectual Ventures v. Toshiba, Civil Action No. 13-

453-SLR (D. Del. Dec. 19, 2016) Summary Judgment Order

• Inconsistent with PTAB view that estoppel applies to grounds that could have been raised but were not (which seems consistent with statutory language)• Apotex Inc. v. Wyeth LLC, No. IPR2015-00873, 2015

WL 5523393 (P.T.A.B., Sept. 16, 2015)

Estoppel applied to patent application:

• “A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent: A claim that is not patentably distinct from a finally refused or canceled claim.”

– 37 C.F.R. 42.73(d)(3)(i)

For Pending Applications

• Issue preclusion does not attach until appeal rights are terminated

• Rationale: no issue preclusion until claim is cancelled, not merely held unpatentable

• And “a claim is not cancelled until all appeal rights have terminated”

– SDI Techs., Inc. v. Bose Corp., IPR2014-00343, Paper 32 (PTAB June 11, 2015)

– Duty to disclose inconsistent information– Additional discovery– Protective Order– Motion to Expunge Record

Potential Traps for the Unwary

– Duty to disclose inconsistent information– Additional discovery– Protective Order– Motion to Expunge Record

Potential Traps for the Unwary

• “Routine discovery” requires affirmative disclosure of

“relevant information that is inconsistent with a position

advanced by the party during the proceeding”

• Duty applies to “parties and individuals involved in the

proceedings”

37 C.F.R. §42.51(b)(1)(iii)

Duty to disclose inconsistent information

• Streamlines proceedings – avoids requests for additional discovery– Patent owner can address in preliminary response

• Consistent with duty of candor and good faith• Similar to Rule 56 duty to disclose information

materials to patentability• But arguably more narrow –

Why require disclosure of inconsistent info?

• Disclosure of inconsistent information, not explanation or characterization

77 Fed. Reg. 48612 at 48639

• Attorney client privilege, work product protection still apply

37 C.F.R. §42.51(b)(1)(iii)

What is required?

• Board will deny broad requests where requester “hopes to discover such inconsistent information”– e.g., Corning Inc. v. DSM IP Assets B.V. , IPR2013-00053, 2013

WL 5970169

• Board will require disclosure of specific information known to be inconsistent– e.g., C&D Zodiac, Inc. v. B/E Aerospace, Inc., IPR2014-00727,

Paper 37

• Board may accept certification of reasonable search– e.g., Ikaria, Inc. v. Geno LLC, IPR2013-00253, 2014 WL 4274078

Duty is narrowly directed

• Petitioner relies on expert testimony that patented method cannot be carried out:– disclose any nonprivileged work inconsistent with

expert’s opinions;

• Patent owner relies on unexpected results to rebut obviousness:– provide petitioner with nonprivileged information

inconsistent with contention of surprising properties

77 Fed. Reg. 48612 at 48639

So what is “inconsistent”?

• Patent Owner learns of new prior art– After Petition is filed, but before Board determines whether

to institute IPR– Does Patent Owner have to disclose art?– Maybe not.– Only if inconsistent with position taken by Patent Owner . . .

And if Patent Owner has opposed specific grounds asserted by Petitioner, this would not include the previously unknown prior art ?

– Rules do not address filing an IDSPCT International, Inc. v. Amphenol Corp.,IPR2013-00229, Paper 27 (May 21, 2014)

How does this play out?

• Patent Owner learns of new prior art– After IPR is instituted, while drafting Motion to Amend to

accompany Patent Owner response– Reference was not identified by Petitioner or in prosecution– Does Patent Owner have to disclose art?– Yes.– When seeking to amend, must state that claim is patentable

over prior art of record and “not of record but known”

Nike, Inc. v. Adidas AG, 2014-1719 (Fed. Cir. 2016)

– Must disclose prior art that is not of record but is materialMasterimage 3D, Inc. v. Reald, Inc., IPR2015-00040 (Paper 42), July 15, 2015

How does this play out?

– Duty to disclose inconsistent information– Additional discovery– Protective Order– Motion to Expunge Record

Potential Traps for the Unwary

• Mandatory initial disclosures and “routine” discovery

to level playing field and to streamline process• Additional discovery only where:

– agreed between parties, OR– “in the interests of justice” (as to IPR)

– “good cause” (as to PGR, CBM)

37 C.F.R. §42.51(b)(2)(i); §42.224

Routine discovery / additional discovery:

• Garmin factors:– More than mere possibility / allegation– Not seeking litigation positions or underlying bases– Whether requesting party can reasonably figure it out or access

the information– Whether request easily understandable– Whether overly burdensome

Garmin Int’l, Inc. v. Cuozzo Speed Technologies, LLC

(IPR2012-0001), 2013 WL 2023626

• Same factors relevant to slightly lower “good cause” /

“limited to evidence directly related to factual

assertions” standardBloomberg Inc. et al v. Markets-Alert Pty Ltd., (CBM2013-0005) (Paper 32)

“Interests of Justice”

– Duty to disclose inconsistent information– Additional discovery– Protective Order– Motion to Expunge Record

Potential Traps for the Unwary

• Protective Order to limit disclosure of confidential information “for good cause”

• Board provides default PO– can seek alternate terms, but must obtain Board

approval– default PO limits use of information to the instant

proceeding,• Board commentary opens the door to use in other

USPTO proceeding where providing party is also a party

37 C.F.R. 42.54; 77 Fed. Reg. at 48760-61, 48771

Protecting confidential information

– Parties can negotiate terms between them to provide for

• Limiting disclosure to specific persons• Specific timing of disclosures• Specific security measures• Treatment of material produced in previous or

co-pending litigation• Post-proceeding treatment of confidential

information- But no guarantee Board will sign on

Agreed Protective Order

– Duty to disclose inconsistent information– Additional discovery– Protective Order– Motion to Expunge Record

Potential Traps for the Unwary

• Within one month after final termination (including appeals), parties are to provide certification of destruction of confidential materials

• Material submitted to Board will become public within 45 days after final judgment or denial of petition

77 Fed. Reg. at 48761

UNLESS

Confidentiality is not guaranteed:

• File motion to expunge the record as to confidential information submitted during proceeding

• No guarantee it will be granted –

• Board likely to deny motion as to information cited in Final Written Decision or Decision Denying Institution

37 C.F.R. §42.56; 77 Fed. Reg. at 48761

Motion to expunge

• Denying motion to expunge all confidential information

• BUT granting as to information not specifically relied upon, and permitting substitution of redacted copies

• RPX Corp v VirnetX, Inc (IPR2014-00171) (Paper 62) – Board found confidentiality outweighed by public interest in

maintaining “complete and understandable file history” of the

IPR– Granted alternative motion to expunge confidential

information not relied on in Decision Denying Institution– See also L-3 Commc’ns Holdings, Inc. v. Power Survey, LLC

(IPR2014-00836), 2015 WL 7695160

Tailoring the Motion to Expunge

ATLANTA AUGUSTACHARLOTTEDALLASDENVERLOS ANGELESNEW YORKRALEIGHSAN DIEGOSAN FRANCISCOSEATTLESHANGHAISILICON VALLEYSTOCKHOLMTOKYOWALNUT CREEKWASHINGTON D.C.WINSTON-SALEM

www.kilpatricktownsend.com

Thank You

Candice Decairecdecaire@kilpatricktownsend.com

With special thanks to:John Alemanni

jalemanni@kilpatricktownsend.comMichael Morlock

mmorlock@kilpatricktownsend.com