In Great West Casualty Co. v. Intellectual Ventures II LLC, [IPR2016-01534] (February 15, 2017), the PTAB declined to institute an IPR because petitioners were estopped by their prior challenge to U.S. Patent No. 7,516,177.

The Board noted that the instant Petition was the fifth petition filed by Petitioners challenging claims 11–20 of the ’177 patent. Of the four prior petitions IPR2015-01706 and IPR2015-01707 (“prior completed proceedings”) were the only two of the four petitions for which trial was instituted.  In these, the Board issued final written decisions that claims 11–13 and 15–20 of the ’177 patent were unpatentable.

The current petition is substantively identical to a petition filed by Oracle Corporation and HCC Insurance Holdings, Inc., and Petitioner moved to join the proceedings.

The PTAB began with 35 USC 315(e)(1) which provides that a after a final written decision, Petitioner may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.  The PTAB noted that 35 U.S.C. 315(e) applies estoppel on a claim-by-claim basis.

Before the Board, then was the scope of “any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  The current proceeding relied upon the Robinson reference, which was not at issue in the two completed proceedings, which further focused the Board on “reasonably could have raised.”

Petitioner argued that Shaw Industries limited estoppel effect to grounds actually instituted.  The Board disagreed, saying taht it was unpersuaded that the words “reasonably could have raised during that inter partes review” from Section 315(e)(1) should be interpreted as limited to grounds actually raised during the prior completed proceedings.  Instead, the Board interpreted Shaw Industries as meaning that estoppel does not apply to any ground of unpatentability that was presented in a petition.

The Board observed:

a petitioner makes an affirmative choice to avail itself of inter partes review only on certain grounds. That choice, however, comes with consequences, most prominently, that grounds petitioner elects not to raise in its petition for inter partes review may be subject to the consequences of Section 315(e)(1).

The Board next turned to Petitioner’s argument that Robinson is, nevertheless, not a ground that Petitioner “reasonably could have raised” because (1) Petitioner was unaware of Robinson prior to the filing of the petition in IPR2016-01434 despite an exhaustive, litigation-motivated prior art search, and (2) there is not a shred of evidence suggesting that Robinson could be found in the types of places a diligent prior art searcher.  The Patent Owner however identified several searches that would have found Robinson, so the Board concluded that it could have been raised, and thus the Petitioner was estopped.

The Board denied institution at to claims 11-13 and 15-20 because of estoppel, and exercised its discretion not to institute as to claim 14, to which the parties agreed estoppel did not apply.

At least at the Board, estoppel applies to grounds that could have been raised (which does not include grounds presented by for which Board does not institute).

In Phigenix, Inc. v. ImmunoGen, Inc., [2016-1544] (January 9, 2017), the Federal Circuit held that Phigenix, the losing petitioner in an IPR, lacked standing to appeal the PTAB’s decision that claims 1–8 of U.S. Patent No. 8,337,856 were nonobvious.  The Federal Circuit said that although Article III standing is not necessarily a requirement to appear before an administrative agency, an appellant must nevertheless supply the requisite proof of an injury in fact when it seeks review of an agency’s final action in a federal court.  To show this standing, an appellant must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the appellee, (3) that is likely to be redressed by a favorable judicial decision.

The Federal Circuited noted that in some cases, an appellant’s standing to seek review of administrative action is self-evident; no evidence outside the administrative record is necessary for the court to be sure of it.  When the appellant’s standing is not self-evident, however, the appellant must supplement the record to the extent necessary to explain and substantiate its entitlement to judicial review. In so doing, an appellant may submit arguments and any affidavits or other evidence to demonstrate its standing. Taken together, an appellant must either identify record evidence sufficient to support its standing to seek review or, if there is none because standing was not an issue before the agency, submit additional evidence to the court of appeals, such as by affidavit or other evidence.

The Federal Circuit noted that Phigenix does not contend that it faces risk of infringing the patent, that it is an actual or prospective licensee of the patent, or that it otherwise plans to take any action that would implicate the patent.  Instead, Phigenix asserted that it has suffered an actual economic injury because the existence of the patent increases competition between Phigenix and ImmunoGen, which the Federal Circuit found unsubstantiated.  The Federal Circuit also rejected Phigenix contention  that it has suffered an injury in fact because 35 U.S.C. §141(c) “provides a statutory basis for appeal.”  While §141(c) permitted the filing of an appeal, it does nothing to establish Article III standing.  Finally, the Federal Circuit rejected the argument that the estoppel provisions of  35 U.S.C. § 315(e) created standing, but the Federal Circuit found it did not constitute an injury in fact when the appellant is not engaged in any activity that would give rise to a possible infringement suit.

In Medtronic, Inc. v. Robert BoschHealthcare Systems, Inc., [2015-1977, 2015-1986, 2015-1987] (October 20, 2016), the Court of Appeals for the Federal Circuit reaffirmed its earlier order that the PTAB’s vacatur of its institution decisions and termination of the
proceedings constitute decisions whether to institute inter partes review and are therefore “final and nonappealable” under § 314(d).

A decision whether to institute inter partes review is “final and nonappealable” under 35 U.S.C. § 314(d).  The Supreme Court confirmed this in Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct. 2131 (2016), holding that §314(d) operates to bar review in cases where the challenge consists of questions that are “closely tied” or “closely related” to “the application and interpretation of statutes related to the Patent Office’s
decision to initiate inter partes review.”

The Federal Circuit concluded that under Cuozzo a decision whether to institute inter partes review proceedings pursuant to §314(a) (the issue in Cuozzo) and a reconsideration of that decision (the current situation are both barred from review by § 314(d).  The Federal Circuit said that It is difficult to conceive of a case more “closely related” to a decision to institute proceedings than a reconsideration of that very decision. adding that “[i]t would be strange to hold that a decision to institute review would not be reviewable but a reconsideration of that decision would be reviewable.”

While Medtronic correctly pointed out that Cuozzo reserved the question of §314(d)’s effect on “appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond ‘this section.’” The Federal Circuit did not agree that these issues applied here.

Although the result seemed preordained by Cuozzo, one can relate to Medtronic’s incredulity that Congress can give decision making authority to a government agency, and then completely insulate that agency’s exercise of that authority from review by courts,

In Wi-Fi One, LLC v. Broadcom Corporation, [2015-1944] (September 16, 2016), the Federal Circuit affirmed the PTAB’d decision in IPR2013-00601 that the claims of U.S. Patent No. 6,772,215 were anticipated.

Wi-Fi argued that Broadcom was barred from petitioning for inter partes review under 35 U.S.C. § 315(b)  because it was in privity with a time-barred district court litigant.  To determine whether a petitioner is in privity with a time-barred district court litigant, the Board conducts a flexible analysis that “seeks to determine whether the relationship between the purported ‘privy’ and the relevant other party is sufficiently close such that
both should be bound by the trial outcome and related estoppels.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,759 (Aug. 14, 2012).

The Federal Circuit also rejected Wi-Fi’s substantive challenges

In Achates the Federal Circuit held that 35 USC 314(d) “prohibits this court from reviewing the Board’s determination to initiate IPR proceedings based on its assessment of the time-bar of § 315(b), even if such assessment is reconsidered
during the merits phase of proceedings and restated as part of the Board’s final written decision.”  Wi-Fi argued that the Supreme Court’s recent decision in Cuozzo Speed Technologies,LLC v. Lee, implicitly overruled Achates.  Also the Supreme Court held that institution decisions were generally unreviewable, the court emphasized that:

our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review. This means that we need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond “this section.”  Thus, contrary to the dissent’s suggestion, we do not categorically preclude review of a final decision where a petition fails to give “sufficient notice” such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for “indefiniteness under § 112” in inter partes review. Such “shenanigans” may be properly reviewable in the context of § 319 and under the Administrative Procedure Act, which enables reviewing courts to “set aside agency action” that is “contrary to constitutional right,” “in excess of statutory jurisdiction,” or “arbitrary [and] capricious.”

However, the Federal Circuit saw nothing in Cuozzo that overruled Achates.  The Federal Circuit found that §315 was precisely the kind of statute “closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review” that the Supreme Court said was unreviewable.

The Federal Circuit also rejected the patent owner’s substantive arguments, finding no error in the PTAB’s determination that the challenged claims were anticipated.

In Veritax Technologies LLC, v. Veeam Software Corp., [2015-1894] (August 30, 2016).  The Federal Circuit vacated the PTAB’s denial of the patent owner’s motion to amend in IPR2014-00090 as arbitrary and capricious.

The Board also denied the motion to amend without making an evidentiary determination of patentability of the proposed new claims.  The Board concluded only that the patent owner failed to address something the Board said must be addressed, namely, whether each newly added feature in each proposed claim, as distinct from the claimed combination of features, was independently known in the prior art.  The Federal Circuit said:

The Board concluded that the motion and the declaration of Veritas’s expert, Dr. Levy, do not discuss the features separately but discuss only “the newly added feature in combination with other known features.” Id. That conclusion, the sole basis for denying the motion to amend, is unreasonable and hence must be set aside as arbitrary and capricious.

The Federal Circuit said that the the patent owner’s submissions contained statements that the newly added features are not described in the prior art.  The Federal Circuit said that there is no reason to doubt that it is only the combination that was the “new feature,” a scenario recognized in a long line of Supreme Court and Federal Circuit
cases noting that novel and nonobvious inventions often are only a combination of known individual features.  The Federal Circuit said that “In this case, we fail to see how describing the combination is meaningfully different from describing what is new about the proposed claims, even in comparison to the unamended claims.”

Thus according to the Federal Circuit, a strict adherence to the PTAB’s stated requirement for a statement “whether the feature was previously known anywhere, in whatever setting, and whether or not the feature was known in combination with any of the other elements in the claim.” (Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-00419, slip op. at 4–5 (Paper 32) (PTAB March 7, 2014)), can be “arbitrary and capricious.”  One has to wonder what other PTAB requirements are similarly “arbitrary and capricious.”