In Aqua Products, Inc., v. Matal, [2015-1177] (October 4, 2017), a plurality of the Federal Circuit en banc held that §316(e) requires the petitioner to prove all propositions of unpatentability, including for amended claims.

The “decision” consists of five opinions spanning 148 pages: (1) the opinion of the plurality of five judges, joined by two who concur in the result; (2) a separate opinion by three of the five members of the plurality;  (3) a separate opinion by the two judges who concurred in the result, joined in part by four judges; (4) a dissent by four of the judges, in which the two concurring judges join in part; and (5) a separate dissent by two of the four dissenters.

The 66 page plurality opinion of five judges (joined by an additional two who concurred in the result), vacated the rejection of Aqua’s motion to amend its claims, and remanded the Final Written Decision to the Board for reconsideration with the burden of persuasion with respect to the patentability of Aqua’s amended claims on the petitioner, and to consider the motion on the entire record.

The plurality opinion finds the statute unambiguously places the burden on the petitioner, but because six of the eleven judges found the statute ambiguous, the plurality opinion dove into a detailed analysis of whether the USPTO’s actions were entitled to Chevron or Auer deference.  While a delight for Administrative Law aficionados, the bottom line is that the most reasonable reading of the AIA is one that places the burden of persuasion with respect to the patentability of amended claims on the petitioner, and the Board must  consider the entirety of the record before it when assessing the patentability of amended claims, and must justify any conclusions of unpatentability with respect to amended claims based on that record.

In Intelligent Bio-Systems, Inc., v, Illumina Cambridge Ltd., [2015-1693] (May 9, 2016), the Federal Circuit affirmed the PTAB’s Final Written decision that the challenged claims of U.S. Patent No. 7,566,537, directed to a method of labeling nucleotides in DNA strand, was not shown to be obvious.

The presence or absence of a motivation to combine references in an obviousness determination and the presence or absence of a reasonable expectation of success are questions of fact reviewed for substantial evidence.  With respect the the expectation of success, the Federal Circuit found that the Board got it wrong, by failing to consider the appropriate scope of the claim.  The Federal Circuit noted that the Board seemed to believe that the “reasonable expectation of success” inquiry looked to whether one would reasonably expect the prior art references to operate as those references intended once combined. The Court said that is not the correct inquiry—one must have motivation to combine accompanied by a reasonable expectation of achieving what is claimed in the patent-at-issue.

While the Board conflated two different legal concepts—reasonable expectation of success and motivation to combine—it nevertheless made sufficient factual findings to support its judgment that the claims at issue are not invalid.  Petitioner had the burden to show  that a skilled artisan would have been motivated to combine the teachings of the prior art references to achieve the claimed invention.  However petitioner’s argument for obviousness was that it would have been obvious to combine the references to in order to improve the efficiency, reliability, and robustness of the sequencing by synthesis method taught in the primary reference, which required quantitative deblocking.  So even though quantitative deblocking was not a requirement of the claims, it was a requirement of Petitioner’ stated reason for the combination, and the “central” to a motivation to combine.  Not only did the Petition fail to provide a specific or credible explanation why an ordinary artisan would have combined the references, the patent owner provided substantial evidence to support a finding that a person of ordinary skill would not have had reason to combine the references.  These references support a conclusion that the claimed efficiency that allegedly motivated the combination would not be achieved and that a person of ordinary skill in this field would not have been motivated to combine the references.

Of more significance, is the Federal Circuit’s treatment of Petitioner’s improper reply brief.  The Federal Circuit noted that the Board’s determinations whether petitioner exceeded the scope of a proper reply in violation of 37 C.F.R. § 42.23(b) and/or improperly incorporated arguments by reference from another document in violation of 37 C.F.R. § 42.6(a)(3) are reviewed for an abuse of discretion.

The Federal Circuit said that it is of the utmost importance that petitioners in IPR proceedings adhere to the requirement that the initial petition identify “with particularity” the “evidence that supports the grounds for the challenge to each claim.” 35 U.S.C. § 312(a)(3).  The Court said that all arguments for the relief requested in a motion must be made in the motion, and a reply may only respond to arguments raised in the
corresponding opposition or patent owner response.” 37 C.F.R. § 42.23(b). Once the Where this rule is violated, neither the Federal Circuit not the PTAB will parse the reply brief to determine which, if any, parts of that brief are responsive and which are
improper.

The Federal Circuit observed that unlike district court litigation—where parties have greater freedom to revise and develop their arguments over time and in response to newly discovered material—the expedited nature of IPRs bring with it an obligation for petitioners to make their case in their petition to institute. The Federal Circuit agreed that new grounds were presented in Petitioner’s reply, and that the Board did not err in refusing the reply brief as improper under 37 C.F.R. § 42.23(b).  Having concluded the Reply was improper, the Federal Circuit did not reach the issues of whether the reply also impermissably incorporated arguments by reference.

In Pride Mobility Products Corporation v, Permobil, Inc., [2015-1585, -1586] (April 5, 2016), the Federal Circuit reversed the PTAB’s construction and cancellation of claim 7, but affirmed cancellation of all the other claims of U.S. Patent Nos. 8,408,598 and 8,408,343 in IPR2013-00407 and IPR2013-00411.

At issue was the claim language “mounting plate [that] is substantially planar and is
oriented perpendicular to the drive wheel axis.”  The Federal Circuit said it was unreasonable to read that straightforward language as meaning anything other
than that the drive-wheel axis is perpendicular to the surface of the mounting plate that makes the plate substantially planar.  The Federal Circuit explained:

The claim language says two things about the plate: it must be substantially planar, and it must be oriented perpendicular to the drive-wheel axis. The “oriented” term allows the plate and axis not to be touching: it requires that their placement in space must be such that, if translated in space without rotation, they would be perpendicular. With the axis idealized as a line, perpendicularity in the ordinary geometric sense relevant here requires that the axis make a right angle with either an essentially one-dimensional feature (a line or curve) or an essentially two-dimensional feature (a plane or surface) of the plate: lines are not “perpendicular” to a three dimensional object in any other ordinary geometric sense.  And the claim tells us exactly what that feature of the three-dimensional plate is: it is the surface that makes the plate substantially planar. The claim identifies no other feature of the plate. The phrase “oriented perpendicular to the drive wheel axis” must be read to mean that the drive-wheel axis is perpendicular to the mounting plate’s substantially planar surface. We do not see how the claim language can mean anything else without obvious strain.

The Federal Circuit said that the Board’s sole basis for its claim construction does
not reasonably support a departure from what the claim language and specification so clearly mean. There was no evidence of the claim 7 element in the relied-on prior art. Because there is no other Board ruling or properly preserved argument addressed to this element, the Federal Circuit reversed the cancellation of claim 7.

In HP Inc., v. MPHJ Technology Investments, LLC, [2015-1427] (April 5, 2016) the Federal Circuit affirmed the PTAB Final Written Decision in IPR2013-00309, agreeing that all but one challenged claim (claim 13) of U.S. Patent 6,771,381 was anticipated, and holding that it cannot review the Board’s decision not to review that claim as obvious, on redundancy grounds.

The Federal Circuit noted that under 35 U.S.C. § 314(d), the determination
by the Director whether to institute an inter partes review shall be final and nonappealable.  The Board rejected HP’s arguments, including that 314(d) only barred review of findings under 314, namely where there is a reasonable likelihood that petitioner would prevail;  that § 314(d) does not bar review of whether the Board has properly construed the scope of its authority; that the Board lacks authority to grant review on only a subset of properly presented grounds; that the Board did not fulfill its obligations under the APA; and finally that the Board did not adequately explain redundancy.

All is not lost for HP, however, as the Federal Circuit repeated its statement from its recent Shaw decision that estoppel does not apply to grounds that are not instituted, and thus “HP is not estopped from raising the obviousness of claim 13 in a subsequent court or Board proceeding, and a challenger cannot assert that the nonobviousness of claim 13 was resolved by the Board in this proceeding.”

Sanctions!

Rule 37 CFR 42.11 has been amended to provide for sanctions against parties and attorneys:

Pages Limits

The 60 page limit for a IPR Petiton has been replaced with a limit of 14,000 words (37 CFR 42.24(a)(i), and 60 page limit of the Patent Owner Preliminary Response, and Response are likewise replaced with a 14,000 word limit (37 CFR 42.24(b)(1), (2)).  The 80 page limit for a PGR or CBMPR Petition has been replaced with a limit of 18,700 words (37 CFR 42.24(a)(ii), (iii)), and the 80 page limit of the Patent Owner Preliminary Response, and Response are likewise replaced with a 18,700 word limit (37 CFR 42.24(b)(1), (2)).. These word counts do not include the table of contents, table of authorities, grounds for standing under § 42.104, § 42.204, or § 42.304, mandatory notices under § 42.8, a certificate of service or word count, or appendix of exhibits or claim listing.  Where a paper is limited by a word count, the paper must include a certification as to the word count

The page limit for motions to amend is bumped to 25 pages (37 CFR 42.24(a)(vi)), as is the Petitioner’s Opposition (37 CFR 42.24(b)(d), and the reply to an opposition to a motion to amend is bumped to 12 pages (37 CFR 42.24(c)(3)).

Demonstratives

You now have to serve your demonstrative exhibits two days earlier — seven days before oral argument.  37 CFR 42.70(b).

BRI

The USPTO still insists on applying BRI to all claims, in all proceedings, except if the patent will expire within 18 months from the entry of the Notice of Filing Date Accorded to Petition, and the Patent Owner makes a timely motion.  37 CFR 42.100(b); 37 CFR 42.200(b); 37 CFR 42.300(b).

Bar Against Testimony in a Preliminary Response Removed

The bar against the submission of testimony to support a Preliminary Response has been removed.  37 CFR 42.107(c) and 37 CFR 42.207(c) have been removed.  While testimony can be submitted with a Preliminary Response, any genuine issue of material fact created by such testimonial evidence will be viewed in the light most favorable to the petitioner solely for purposes of deciding whether to institute an inter partes review.  37 CFR 42.108(c);  37 CFR 42.208(c)