May 20, 2016Newsletter

This Week at the Board - May 20, 2016

PTAB Reconsiders Final Written Decision and Changes Finding on Patentability of Dependent Claim

In IPR 2014-01367, the PTAB issued a final written decision, finding a dependent claim to be unpatentable simply because the claim depended from a canceled claim in a different reexamination proceeding. However, shortly after issuing the final written decision, the PTAB reconsidered this finding and issued a new decision, noting that the dependent claim was treated improperly and should have been analyzed for patentability on its own, despite the fact that its parent claim had been canceled. Upon analyzing the dependent claim, the PTAB found that the dependent claim had not been proven to be unpatentable by the petitioner.

Federal Circuit Affirms PTAB’s Finding that Icon’s Exercise Equipment Claims are Invalid

In a recent decision, the Federal Circuit affirmed the PTAB’s finding from an inter partes review that all claims of an Icon Health & Fitness, Inc. patent were invalid as being obvious. During the appeal to the Federal Circuit Icon asserted that the PTAB had improperly changed the claim construction of multiple claim terms in the final written decision, had improperly relied on portions of a prior art reference in the final written decision that were not relied upon during the Inter Partes Review, and had improperly found the claims to be unpatentable based on the prior art reference. However, the Federal Circuit sided with the petitioner, Johnson Health Tech, affirming all of the PTAB’s findings. Johnson Health Tech was represented by Michael Best & Friedrich LLP. 

A link to the Federal Circuit decision is provided here.

PTAB Reconsiders Institution Decision After Replacing Conflicted Patent Judge

In IPR2015-01340, the PTAB reconsidered an institution decision determining the petitioner (Mylan Pharmaceuticals Inc.) had failed to show the claims of AstraZeneca’s patent were likely invalid. In the Motion for Reconsideration, Mylan pointed out that the judge who wrote the decision denying institution had previously served as a partner at a law firm representing AstraZeneca and requested reconsideration by a newly composed panel to avoid the mere appearance of possible impropriety. The PTAB subsequently issued a decision granting the Motion for Reconsideration and instituting inter partes review of the challenged claims. Notably, the petitioner did not appear to have pointed out a clear error by the PTAB in the initial institution decision; rather, the newly composed panel appeared to be persuaded by arguments similar to those set forth in the initial petition for inter partes review.

PTAB Designates Five AIA Review Decisions as Precedential

The PTAB has designed five AIA review decisions as being precedential. The decisions are directed to topics such as motions for additional discovery and the relevant factors to be considered (Garmin and Bloomberg), the one year statutory bar rule and its effect on dismissals without prejudice (Oracle), the duty of disclosure requirements for patent owners when filing motions to amend (MasterImage), and the requirements of a petitioner to name all real parties in interest (Lumentum). These decisions will help to guide and instruct future panels of judges at the PTAB, as well as attorneys and parties involved in post-grant proceedings.

Links to the five PTAB precedential decisions are provided here:

Texas District Court Denies Motion For Stay of Entry of Final Judgment Pending Resolution of Inter Partes Review Proceedings

In a recent decision out of Texas, a defendant asked a District Court to stay entry of a final judgment pending the resolution of an ongoing inter partes review, arguing that the inter partes review proceedings may ultimately invalidate three of five patents in suit. The plaintiff argued that a stay would delay payment on damages, and that the defendant was merely engaging in a delay tactic. The District Court weighed several factors, including (1) the prejudice such a stay (or denial thereof) would have to the plaintiff and defendant; (2) whether the stay would simplify the issues before the Court; and (3) what the status of the current case was. The Court ultimately found that the second and third factors weighed strongly in favor of denying the stay, and that the first factor weighed slightly in favor of denying the stay. The defendant also asked the Court to consider this an extraordinary circumstance under Rule 60(b)(6). However, the Court noted that the PTAB’s final written decisions are no more than final agency determinations, subject to appeal, and that the PTAB’s final written decisions may get reversed. The Court found that this was not an extraordinary circumstance, and therefore denied the stay.

PTAB Sanctions Patent Owner for Breach of Protective Order

In IPR2015-01750, the PTAB found that patent owner had breached the default protective order. The PTAB determined that the disclosure of petitioner’s confidential information to three individuals was in violation of the protective order. The PTAB also found that the petitioner had been harmed by the disclosure. The PTAB imposed sanctions on the patent owner that required patent owner to submit declarations from each of the three individuals stating the extent of confidential information that they had received, and if they could not provide all the information, then counsel for patent owner was ordered to submit a declaration. The PTAB amended the default protective order to exclude corporate officers from the definition of “parties” under the order. The PTAB also authorized petitioner to file a motion for attorneys’ fees incurred in connection with the breach of the protective order.

USPTO Names New PTAB Chief Judge

The USPTO recently named David Ruschke to be the Patent Trial and Appeal Board’s chief judge, effective May 23, 2016. Mr. Ruschke formerly worked at Medtronic as chief patent counsel for the company’s Coronary and Structural Heart business unit, where he participated in numerous post-grant proceedings at the PTAB and in other foreign jurisdictions. USPTO Director Michelle Lee believes the experience in global patent opposition proceedings made Mr. Ruschke an ideal candidate to lead the Board. As a result of Mr. Ruschke’s appointment, Acting Chief Administrative Patent Judge Nathan Kelley will return to his previous position as USPTO solicitor and deputy general counsel for intellectual property law.

A link to the press release is provided here.

PTAB Finds Declaratory Judgment Action Seeking Invalidity That Was Dismissed Without Prejudice Did NOT Invoke IPR Time Bar

In IPR2016-00104, the PTAB granted in part/denied in part institution of inter partes review of Papst Licensing GmbH & Co.’s U.S. Patent No. 6,574,759. Prior to the filing of the IPR, the petitioner sought declaratory judgment of non-infringement and invalidity of the ‘759 Patent in district court proceedings. The district court dismissed the action without prejudice, and the petitioner subsequently appealed the dismissal as to non-infringement but has not appealed the dismissal as to invalidity. In the preliminary response to the petition for inter partes review, the patent owner argued that the petitioner’s filing of the declaratory judgment action and the subsequent appeal resulted in the petition being time barred under 35 U.S.C. § 315(a)(1). The PTAB disagreed, concluding that the petition was not time-barred and noted that the federal courts have consistently interpreted the effect of dismissal without prejudice as leaving the parties as though the action had never been brought. In addition, the PTAB noted that the petitioner’s lack of appeal to the Federal Circuit with regard to the dismissal of the invalidity action resulted in the parties being in the same position as though the action never existed.

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