defending patents in ipr...

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Defending Patents in IPR Proceedings Leveraging Motions to Amend and Preliminary Responses,

Weighing Secondary Considerations

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

THURSDAY, AUGUST 13, 2015

Presenting a live 90-minute webinar with interactive Q&A

Michael J. Flibbert, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

John C. Jarosz, Managing Principal, Analysis Group, Washington, D.C.

Maureen D. Queler, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

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FOR LIVE EVENT ONLY

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

Strafford Webinar August 13, 2015

Michael J. Flibbert

[email protected]

Defending Patents in IPR

Proceedings

5 5

Petition Filed

PO Preliminary

Response

Decision on

Petition

PO Response & Motion to Amend

Claims

Petitioner Reply to PO

Response & Opposition

to Amendment

PO Reply to Opposition

to Amendment

Oral Hearing

Final Written Decision

3 months no more than 3 months

3 months 3 months 1 month Hearing Set

No more than 12 months

IPR Overview

PO

Discovery

Period

Petitioner

Discovery

Period

PO

Discovery

Period

Observations

&

Motions to

Exclude

6 6

IPR Statistics- Technology Breakdown FY 2015

928 64%

343 23%

68 5% 113

8%

4 0%

Electrical/Computer Mechanical/Business Method

Chemical Bio/Pharma

Design

7 7

IPR Statistics- Institution Rate

*http://www.uspto.gov/sites/default/files/documents/aia_statistics_04-30-2015.pdf

Joined 7%

Denied 25%

Instituted 68%

8 8

IPR Statistics- Outcome

*http://www.aiablog.com/claim-and-case-disposition/

9 9

IPR Statistics- Substitute Claim Outcome

*http://www.aiablog.com/claim-and-case-disposition/

10 10

Patent Owner Preliminary Response

Petition Filed

PO Preliminary

Response

3 months

• 37 C.F.R. § 42.107

• Respond to proposed grounds of

unpatentability in Petition

• No new testimony beyond that of record except as

authorized by Board

• No deposition of Petitioner’s expert at this stage

• Can file other non-testimonial evidence (e.g., prosecution

declarations, declarations from EP opposition, literature)

• Can request motion for additional discovery relating to

real party-in-interest

11 11


* http://www.uspto.gov/sites/default/files/documents/2015-06-30%20PTAB.pdf

• Response optional: “patent owner may file a preliminary

response”

12 12


• Reasons to file:

– Statutory time bar: 35 U.S.C. §315(b)

• Time bar applies even if complaint was before enactment of AIA (IPR2014-

00008)

• Time applies even if there is a subsequent amendment in reexamination –

statute refers to the patent, not the claims (IPR2013-00315)

• Time bar includes counterclaims for infringement (IPR2013-00258)

• Time bar does not apply if the complaint is dismissed without prejudice

(IPR2013-00312; also IPR2012-00004)

• Time bar does apply if complaint is dismissed WITH prejudice (IPR2013-00168)

– Narrow grounds instituted

• Redundancy

• Improper anticipation grounds

13 13



– Incorrect or omitted claim construction

• Symantec Corp. v. RPost Communications Ltd., IPR2014-00357,

Paper 14 at 10, 14 (PTAB July 15, 2014) (claims not anticipated

because proposed construction was overly broad)

– Missing claim elements in proposed obviousness or

anticipation grounds

• 35 U.S.C. § 312(a)(3)- requires an IPR petition to identify with

particularity the grounds on which the challenge is based, and the

evidence supporting those grounds

14 14



– Failure to address reasonable expectation of success

• BioGatekeeper, Inc. v. Kyoto Univ., IPR2014-01286, Paper 12 at

6-8 (PTAB Feb. 11, 2015) (denying institution because the

petition failed to establish that one of ordinary skill would have

had a reasonable expectation of success in achieving the

claimed combination)

– Failure to name all real parties-in-interest

– Failure to address prosecution history evidence of

unexpected results or other secondary considerations of

nonobviousness

15 15



– Conclusory / unsupported expert declaration

• Kinetic Techs., Inc. v. Skywork Solutions, Inc., IPR 2014-00529,

Paper 8 at 15 (PTAB Sept. 23, 2014) (“Merely repeating an

argument from the Petition in the declaration . . . does not give

that argument enhanced probative value.”).

• TRW Automotive US LLC v. Magna Elecs., Inc., IPR2014-00258,

Paper 18 at 10-11 (PTAB Aug. 27, 2014) (finding Petitioner’s

obvious-to-try rationale unsupported and giving little weight to the

expert declaration because it simply repeated TRW’s conclusory

statements verbatim)

– Reliance on non-prior art

16 16



– Reliance on non-prior art

• The petitioner has the burden to establish that a reference is a

printed publication under 35 U.S.C. § 311(b). Cisco Sys., Inc. v.

Constellation Techs. L.L.C., IPR2014-01085, Paper 11 at 9

(PTAB Jan. 9, 2015)

• LG Elecs., Inc. v. Advanced Micro Devices, Inc., IPR2015-00329,

Paper 13 at 13 (PTAB July 10, 2015) (holding that date printed on

face of reference did not establish that it was published on that

date)

• Because institution decisions must be based on information in the

petition, deficiencies cannot be remedied later. Actavis, Inc. v.

Research Corp. Techs., Inc., IPR2014-01126, Paper 22 at 13

(PTAB Jan. 9, 2015) (citing 35 U.S.C. § 314(a))

17 17



– The Board’s discretion to deny “follow-on” petitions

• Conopco, Inc. dba Unilever v. The Proctor & Gamble Co.,

IPR2014-00628, Paper 23 at 4-6 (March 20, 2013)

• Allowing petitioners to strategically unveil the best prior art and

arguments in serial petitions would tax Board resources and force

patent owners to defend multiple attacks

– No right of appeal of institution decisions

• 35 U.S.C. §319 - A party dissatisfied with a final written decision

may appeal

• St. Jude Medical, Cardiology Division, Inc. v. Volcano

Corporation, 749 F.3d 1373 (Fed. Cir. 2014)

18 18


• Reasons to consider not filing:

– High institution rate (~68%)

– No expert support allowed in Patent Owner preliminary

response

– Claim construction not final in institution decision

– Gives petitioner 5+month lead on your arguments

– Depose Petitioner’s expert without revealing theory of

case

19 19

Experts

• Consider testifying and consulting experts

• Deposition testimony is key

– Good witness is key due to role of depositions

• Retain experts early (even if not filing patent owner

preliminary response)

– Technical experts and commercial success experts

– Identify and engage technical expert early to vet

arguments for preliminary response

– Confer with in-house scientists to identify expert

candidates

20 20

Institution Decision

• Timing of institution is panel-dependent

• Scheduling order will issue with Institution Decision

• 10 days from Institution - file objections to evidence in

Petition (e.g., hearsay, authentication)

PO Preliminary

Response

Decision on

Petition

no more than 3 months

• 37 C.F.R. § 42.108 and 35 U.S.C. § 314

• Institution is discretionary

• Standard: “reasonable likelihood”

21 21

Patent Owner Response

• Respond to grounds of unpatentability in institution

decision with arguments, technical literature, and expert

declarations

• Provide claim construction positions if disagree with

PTAB

• Strengthen evidence of unexpected results with expert

declarations

• Establish commercial success and long-felt need with

expert declarations

• Antedate prior art if possible

22 22

Secondary Considerations

Obviousness is resolved based on factual determinations

including:

(1) the scope and content of the prior art;

(2) any differences between the claimed subject matter and

the prior art;

(3) the level of skill in the art; and

(4) where in evidence, so-called secondary considerations.

See, e.g. IPR 2013-00004, Final Decision at 14 (citing

Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966)).

Applied by PTAB in IPRs and CBMs:

23 23

Commercial Success

“Commercial success involves establishing success in the

marketplace of a product encompassed by the claims and a

nexus between the commercial product and the claimed

invention.”

(IPR2012-00006, Final Decision at 34; IPR2013-00097, Final

Decision at 45)

What is commercial success?

24 24

Commercial Success

“Commercial success is relevant because the law presumes

an idea would successfully have been brought to market

sooner, in response to market forces, had the idea been

obvious to persons skilled in the art.”

Merck & Co., Inc. v. Teva Pharmaceuticals USA, Inc., 395 F.3d

1364, 1376–77 (Fed. Cir. 2005)

Theory:

25 25

Legal Elements of Commercial Success

Commercial Success: patented product or process

has a substantial share of a definable market. See

In re Huang, 100 F.3d 135, 140 (Fed. Cir. 1996).

Nexus: a legally and factually sufficient connection

between the success and the patented invention.

Demaco Corp. v. F. Von Langsdorff Licensing Ltd.,

851 F.2d 1387 (Fed. Cir. 1988).

To date, the Board has rejected commercial success

arguments in almost every case in which the issue

was raised

26 26

Burden of Proof at PTAB

Original Claims:

In an IPR, the Petitioner has the burden to prove a

proposition of unpatentability by a preponderance of the

evidence. 35 U.S.C. § 316(e)

Motion to Amend:

For a motion to amend, the Patent Owner has the burden

to show entitlement to the relief requested. 37 C.F.R. §

42.20(c)

27 27

PTAB Timing

Patent Owners:

Argue commercial success in Preliminary Response?

No expert declarations allowed

Gives petitioner head start on attack

Patent Owner Response: only 3 months or less to

respond after institution

Start early: Consider commercial success soon after

receiving petition (before institution)

What experts needed?

What analysis needed to show market share and nexus?

Discovery needed? (own documents? public documents?

discovery from petitioner?)

28 28

Termination

• Termination of IPR proceedings

– 37 C.F.R. § 42.74(a) – The Board is not a party to settlement

and may independently determine any question of

patentability

– Board considers whether issues have been fully briefed (IPR

2013-00016)

• Appeal

– If party does not make, use, or sell the patented invention

there may be no standing to appeal inter partes

reexamination decision (Consumer Watchdog v. Wisconsin

Alumni Research Found., 753 F.3d 1258 (Fed. Cir. 2014))

29 29

Appeal

• Standard of Review:

– Factual findings are reviewed under the substantial evidence

standard of review

– Legal conclusions are reviewed de novo

– If you are successful at PTAB: focus on the facts and substantial

evidence supporting the Board’s final decision

– If you are unsuccessful at the PTAB: focus on the harmful legal

error in the Board’s final decision

• Affirmance rate

– Historically reverses less than 15% of cases originating from the PTO

– Rule 36 judgment is likely (from Feb 2015 – June 2015, eight out of ten

affirmances of IPRs/CBMs were Rule 36 judgments)

30 30

Speaker Information

Mike Flibbert is a partner is Finnegan’s Washington, DC office and chairs the firm’s chemical practice group. He represents clients in patent disputes before federal district courts and the Federal Circuit and also serves as lead counsel in IPR and other contested proceedings before the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office. He lectures frequently in the United States and abroad on patent law topics, including the America Invents Act (AIA).

31 31

Disclaimer

These materials have been prepared solely for educational and

entertainment purposes to contribute to the understanding of U.S.

intellectual property law. These materials reflect only the personal views of

the authors and are not individualized legal advice. It is understood that

each case is fact specific, and that the appropriate solution in any case will

vary. Therefore, these materials may or may not be relevant to any

particular situation. Thus, the authors, Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han

Foreign Legal Affairs Law Firm) cannot be bound either philosophically or

as representatives of their various present and future clients to the

comments expressed in these materials. The presentation of these

materials does not establish any form of attorney-client relationship with

these authors. While every attempt was made to ensure that these

materials are accurate, errors or omissions may be contained therein, for

which any liability is disclaimed.

Commercial Success at the PTAB Strafford CLE Webinar

August 13, 2015

John C. Jarosz

[email protected]

33 STRAFFORD CLE WEBINAR SERIES – JOHN JAROSZ ■ AUGUST 13, 2015

Commercial Success – Economic Considerations

1) Is the product that embodies the patented invention a marketplace success?

2) Is the success of the product due to the patent (causal nexus)?


1) Product Success

a) Absolute Performance

b) Relative Performance



•Shipments

•Revenues

•Prices

•Costs

•Profits



•Definition of market/competition

a)Product

b)Geographic

•Significance of market share

a)Over time

b)Versus Benchmark



Refill

Pe

rcen

tage

s



Product 1

Product 2

Product 3



Brand Product 1

Generic Product

Brand Product 2



Shipments

Product 1

Product 2

Product 3

Product 4

Product 5

Product 6


2) Causal Nexus

a) Features/Advantages of Patent

b) Importance of Patented Features/Advantages

c) Importance of Non-Patented Features/Advantages


a) Features/Advantages of Patent

•Patent Claims

•Prior Art

•Technical Opinion



•Internal Marketing Materials

•External Promotional Materials

•Industry Praise

•Company Testimony/Declarations

•Customer Testimony/Declarations

•Revealed Preferences

Party Actions

Licenses

Copying

•Consumer Studies/Surveys

Contemporaneous

Made for Litigation



•Product Features

•Non-Product Features

Price

Promotion

Brand Name

Custom


PTAB Final Written Decisions September 2012 – April 2015

•80: Discussion of commercial success

•78: Inadequate proof of commercial success

•2: Adequate proof of commercial success

Intri-PlexTechnologies, Inc. and MMI Holdings, Ltd. v. Saint-Gobain Performance Plastics Rencol Limited,

IPR2014-00309, March 23, 2015

Redline Detection, LLC v. Star Envirotech, Inc., IPR2013-00106, June 30, 2014

Finnegan, Henderson, Farabow, Garrett & Dunner, LLP

Strafford Webinar August 13, 2015

Maureen D. Queler

[email protected]

Defending Patents in IPR

Proceedings

54 54

Evidence

Patent Owner can readily introduce evidence of its

own commercial success (IPR2013-00333, Paper 30)

When would Patent Owner need discovery?

− Petitioner is an alleged infringer whose sales would show

commercial success

• IPR2014-00367: Petitioner sold parts to Whirlpool. Patent Owner

alleged that parts fell within claims and that Petitioner’s sales were

substantial

− Patent Owner’s claimed invention is a component of

Petitioner’s product

55 55

Routine Discovery

Routine Discovery

Exhibits cited in paper or testimony

Inconsistent positions (file with document with

inconsistency) (e.g., claim constructions from litigation)

Cross-examination of declarant

56 56

Additional Discovery

Not Part of Routine Discovery: Petitioner need not produce evidence of commercial success as

relevant information inconsistent with positions advanced in Petition

(IPR2013-00333, Paper 30)

Additional Discovery: Interest of justice standard. See 35 U.S.C.§316(a)(5)(B)

Garmin factors (IPR2012-00001, Paper 20 at 2-3)

– (1) more than possibility that useful information will be discovered;

– (2) not seeking litigation positions;

– (3) information not available through other means;

– (4) easily understandable instructions; and

– (5) not overly burdensome to answer.

57 57

Discovery

(1) more than possibility that useful information will be

discovered

“favorable in substantive value to a contention of the

moving party.”

Commercial Success:

− As practical matter, need well-developed commercial success

position to obtain any discovery

− IPR2014-00367, Paper 20

• To obtain sales data from Petitioner, Patent Owner had to

show some evidence of significant sales in relevant market

• To obtain evidence regarding Petitioner’s product, Patent

Owner had to show some evidence that product met claims

58 58

Discovery

(1) more than possibility that useful information will be

discovered

Real Party-in-Interest

− 77 Fed. Reg. 48,760: funding and control of IPR petition, non-

party’s relationship with the petitioner, relation to petition, degree

of involvement in filing

− Threshold amount of evidence or reasoning needed to show that

discovery is in the interests of justice.

• Evidence of existing indemnity agreement?

• Evidence from district court of relationship between non-

party and Petitioner?

59 59

Evidence

37 C.F.R. § 42.62

The Federal Rules of Evidence applies to IPR proceedings

Authentication (FRE 901): proponent must produce evidence sufficient to

support a finding that the item is what the proponent claims it is.

Hearsay (FRE 801-803): prohibits out-of-court statements from being

offered to prove the truth of the matter asserted

60 60

Evidence-Considerations

What evidence are you submitting?

Who can authenticate that evidence?

− Any self-authenticating evidence? (FRE 902) (periodicals,

newspapers, public records)

Any hearsay statements within that evidence?

− Are they being relied upon for the truth of the matter asserted?

− Can you submit a declaration from the speaker?

− Litigation v. IPR: fewer depositions in IPR proceedings; may

cause more authentication/hearsay disputes

61 61

Evidence-Commercial Success

Market share data:

− Declaration by custodian or person that generated data to

authenticate the data

− Declaration by expert analyzing that data

− Can expert analyzing the data do both?

Statements of physicians on nexus for drug patent

− Could be hearsay unless submitted as part of declaration

− An authentic document (newspaper) may still have hearsay

issues (out-of-court statement by physician praising drug)

62 62

Evidence-Antedating

Authentication v. Corroboration

− Authentication: Witness having personal knowledge of the

document can be sufficient to support document’s authenticity.

FRE 901(a)

− Corroboration: proof of conception must be made by evidence

corroborating inventor’s testimony. Coleman v. Dines, 754 F.2d

353, 359 (Fed. Cir. 1985).

− Inventor cannot authenticate documents intended to corroborate

testimony. Avoids “circular” situations.

− Chen v. Bouchard, 347 F.3d 1299, 1308 (Fed. Cir. 2003);

IPR2013-00578 (Paper 52)

Hearsay v. Corroboration

− Do statements only have corroborating value if they are true?

Then they are hearsay. IPR2013-00578 (Paper 52)

63 63

Evidentiary Objections

37 C.F.R. § 42.64

(b) Other evidence. For evidence other than deposition evidence:

(1) Objection. Any objection to evidence submitted during a

preliminary proceeding must be served within ten business days of

the institution of the trial. Once a trial has been instituted, any

objection must be served within five business days of service of

evidence to which the objection is directed. The objection must

identify the grounds for the objection with sufficient particularity to

allow correction in the form of supplemental evidence.

64 64

Schedule of Proceedings

Objections to Petition Evidence (10 days) Objections to Evidence (5 days)

65 65

Evidentiary Objections / Motion to Exclude

• Timing

– Objections: 10 business days after institution of trial for preliminary

proceeding or 5 business after evidence served

– Supplemental evidence: 10 business days after objection

– Board encourages parties to try to work through issues

– Motion to exclude: Set time in schedule, prior authorization not

necessary

• Not for credibility, weight of expert testimony, or

outside of scope

• Must have basis for objection in Federal Rules of

Evidence

66 66

Printed Publication

• Distinct sufficiency of evidence and authentication issues

• Sufficiency: did the Patent Owner submit sufficient evidence

to show that this prior art was a printed publication before

the patent’s critical date?

– Raise this issue in substantive papers (Preliminary Response)

• Authentication: is there evidence that this document is what

it purports to be?

– Raise this issue in objections / motion to exclude

– Webpage printout relied on for the contents: “[t]o authenticate

printouts from a website, the party proffering the evidence must

produce some statement or affidavit from someone with knowledge

of the website . . . a web master or someone else with personal

knowledge would be sufficient.” IPR2013-00084 (Paper 64)

67 67

Patent Owner’s Motion to Amend

• Include on Motions List

• Conference call with the Board is required before filing

No need to identify full claim set

Outline proposed claim substitutions, acknowledge guidelines, ask

for guidance as necessary

• Exemplary Guidelines:

IPR2012-00005, Paper 27 (Nichia)

IPR2013-00027, Paper 26 (Idle Free)

IPR2015-00040, Paper 42 (MasterImage)

• 37 C.F.R. § 42.121: A patent owner may file one motion to

amend a patent, but only after conferring with the Board.

− Additional motions to amend may only be filed with authorization.

68 68


• High bar: IPRs are not an examination; Patent Owner has

burden to prove patentability

Finnegan achieved grant of only the fourth Motion to Amend to be

granted by the PTAB ever. (REG v. Neste Oil, IPR2014-00192)

69 69


• Distinguish over prior art

Idle Free Systems (IPR2012-00027 Paper 26): patent owner to

show patentable distinction over the prior art of record and also

prior art known to the patent owner

MasterImage 3D, Inc. (IPR2015-00040 Paper 42) further clarified

this decision

Prior art of record:

• any material art in the prosecution history of the patent;

• any material art of record in the current proceeding, including art

asserted in grounds on which the Board did not institute review;

and

• any material art of record in any other proceeding before the

Office involving the patent.

Prior art known: material prior art made of record pursuant to

duty of candor and good faith. 37 C.F.R § 42.11.

70 70


• Identify section 112 written description support

• Provide claim construction support

• Consider intervening rights and patent term extension

implications

71 71


• Only a reasonable number of substitute claims

• Amendments must be responsive to ground of unpatentability

• Claims must include / narrow the challenged claims

• Remodeling of claims- purview of reexamination/reissue

• Contingency

Contingent: if the claims were found patentable the motion would be

denied as the contingency would not have come to pass.

Not Contingent: if the claims were found patentable the Board could

still decide to address the motion and amend or add new claims.

72 72

Confidentiality / Protective Orders

• Standard protective order

– 77 Fed. Reg. 48771 (“Default Protective Order”)

– Changes must be redlined compared to this default

• Broadly written to encompass any employee of either party,

who signs agreement

– Do not try a litigation-based PO

• Acknowledgement

– Party Representatives (aka “us”) need to sign

– Expert Acknowledgement requires more

– execute but not filed or served?

• Protective order expires 45 days after decision

73 73

Confidentiality / Protective Orders

• Address at Initial Conference (Board may ask)

• Address when comes up (e.g., at deposition)

• Motion to Seal

– File a motion to seal with protective order

– Explain why the information is confidential.

– File redacted/public copy of document

– Filing cross-examination testimony, may need other

party to provide you with reason (ask them to prepare

the papers)

74 74

Finnegan Resources

• AIA blog: http://www.aiablog.com/

• Federal Circuit IP Blog: federalcircuitipblog.com

• http://www.finnegan.com/publications/updatenewsl

etters/

– Full Disclosure Patent Newsletter

– IP Marketplace Newsletter

http://www.aiablog.com/

federalcircuitipblog.com

http://www.finnegan.com/publications/updatenewsletters/

http://www.finnegan.com/publications/updatenewsletters/

75 75

Speaker Information

Maureen Queler practices all aspects of patent-related work in the chemical and pharmaceutical areas, including client counseling, patent prosecution, post-grant proceedings, and U.S. district court and appellate litigation. She represents clients in IPR and other contested proceedings before the PTAB. She also has an active patent prosecution and counseling practice, preparing and prosecuting U.S. patent applications on behalf of domestic and foreign clients.

76 76

Disclaimer

These materials have been prepared solely for educational and

entertainment purposes to contribute to the understanding of U.S.

intellectual property law. These materials reflect only the personal views of

the authors and are not individualized legal advice. It is understood that

each case is fact specific, and that the appropriate solution in any case will

vary. Therefore, these materials may or may not be relevant to any

particular situation. Thus, the authors, Finnegan, Henderson, Farabow,

Garrett & Dunner, LLP (including Finnegan Europe LLP, and Fei Han

Foreign Legal Affairs Law Firm) cannot be bound either philosophically or

as representatives of their various present and future clients to the

comments expressed in these materials. The presentation of these

materials does not establish any form of attorney-client relationship with

these authors. While every attempt was made to ensure that these

materials are accurate, errors or omissions may be contained therein, for

which any liability is disclaimed.

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