3 Lessons From Unsuccessful Inter Partes Review Petitions

Law360, New York (April 22, 2015, 10:54 AM ET) --

Tom Irving

In the first two and a half years of inter partes reviews, the proceedings have proved potent, cancelling hundreds of patents and over 3,000 claims.[1] Nevertheless, the Patent Trial and Appeal Board doesn’t automatically institute IPRs, despite some suggesting otherwise.[2] The PTAB must first decide whether to institute an IPR by reviewing the petition, and, if filed, the optional patent owner’s preliminary response (POPR). For the PTAB to institute, the petitioner must show a “reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.”[3]
In reality, the PTAB has instituted only 69 percent (1079/1559) of IPR petitions, denying nearly a third. But include properly filed joinder petitions, and the percentage — often quoted without caveat — jumps to 76 percent (1188/1559).[4]


To be sure, the threshold showing does not seem to be an overwhelming hurdle to vault. The board has found unpatentable a majority of the claims it has considered: 73 percent (2497/3425).[6] Any patent owner’s first goal should be to prevent IPR institution, if possible. So what can patent owners do to increase their chances that the PTAB will deny petitions filed against them?

1. Recommendation: File Only Forward-Looking Specifications and Claims

Once someone files an IPR petition and the board grants it a filing date,[7] patent owners have only three months to prepare an optional POPR.[8] Therefore, earning IPR denials begins early, during claim and specification drafting.

The importance of claim and specification drafting is heightened because the ability to amend claims in IPRs has been virtually nonexistent. In the first 224 IPR final written decisions,[9] it appears that substitute claims were considered in about 26 percent (59/224) of these cases, with only three cases allowing substitute claims (1.3 percent, three out of 224 cases overall; 5 percent in three out of 59 cases in which substitute claims were considered).[10]

Patent owners have particular challenges arguing claim construction in a POPR (and during an IPR). The PTAB uses the “broadest reasonable interpretation” (BRI) claim construction standard,[11] whereas a district court applies the narrower Phillips standard. While it is in patent owner’s interest to have the board adopt a BRI that does not lead to the board holding claims unpatentable, they still must think about infringement. This can be challenging because in a POPR or during IPR, patent owners will have to propose claim constructions without the benefit of discovery regarding the petitioner’s potentially infringing product. When drafting claim language and the specification, patent owners should try to lay the foundation for desired claim construction positions — in either forum.

This will mean following fundamental drafting principles, such as checking to define and use consistently important claim terminology. It may also mean using “patent profanity” — i.e., claim terms normally best avoided[12] — for “critical” embodiments that could put limits on a broad but “reasonable” construction, and could be advantageous to patent owners,[13] while maintaining claims to other embodiments without profanity to preserve a broad, fully supported claim scope for infringement.

Patent owners should draft the specification with multiple embodiments to mirror and support a range of claim scopes, from broad to narrow. Patents with several claims of varying claim scope are more likely to have one or more claims survive IPR — thus preserving patent term. Ideally, the patent should include broad claims for infringement and “picture” claims covering, at a minimum, literal infringement. The narrower claims, assuming that they will be infringed, likely provide strong patentability positions both during prosecution and IPR trial, as it may be more difficult to find prior art that discloses, teaches or suggests their narrow limitations. And the broader claims can offer context for claim interpretation of the narrower claims, and protect the invention from design-around variants.

The first inter partes review decided and appealed, Garmin Int’l Inc. v. Cuozzo Speed Technologies LLC, IPR2012-00001,[14] highlights why patent owners should include a narrow claim with written description support in the specification. There, the board denied a motion to amend seeking substitute claims because none of the original claims covered any embodiment that would be within the scope of the proposed substitute claim.[15] Had Cuozzo included both broad independent claims and other narrow claims covering more specific embodiments (with corresponding written description support), Cuozzo might have had an original claim it could have relied on, eliminating the need to amend the claims entirely, or making it more likely that the board would grant their motion to amend, whether in IPR or reissue practice.

2. Recommendation: Practice Forward-Looking Prosecution

Pursuing and maintaining child applications after issuance of a parent patent has long been good practice to pursue additional claim scope. Now, keeping a family member alive can also help a patent owner facing IPR.[16] This can involve re-examination, reissue and continuation practice. For example, if PTAB does not allow a patent owner to enter a particular proposed substitute claim, as long as the subject of the proposed substitute claim is patentably distinct from any canceled claims, the proposed claim could still be pursued in a pending family member, reissue or other examination proceeding.[17]

And ongoing prosecution can be important to the IPR and ongoing litigation as well — evidence and arguments submitted during the prosecution of other applications in the family chain can be introduced and relied upon in a POPR or patent owner response to a patent undergoing IPR.[18]

To be sure, an IPR can only be instituted under 35 U.S.C. §§ 102 and 103 over patents and printed publications. However, §112 issues may be raised in a petitioner’s challenge to a claim’s entitlement to a priority date to bring in an additional reference, and the board may find the claims too ambiguous to construe, and deny institution — a pyrrhic victory, for obvious reasons.[19] Patent owners can use careful drafting to try to avoid such support problems.

And then there are the ways to show claims would not have been obvious. Exercising caution, patent owners can submit carefully considered declarations, putting more in the record during prosecution — which may benefit the patent in the face of an IPR challenge. Consider submitting solid arguments and/or declarations during prosecution — arguments and declarations supporting §112 and §103 positions. By board rule, in the POPR, a patent owner cannot “present new testimony evidence beyond that already of record.”[20] But they are permitted to point to any evidence of record in the prosecution history and any other relevant publicly available documents.[21]

For example, in Omron Oilfield & Marine Inc. v. Varco LP, IPR2013-00265, the patent owner in its POPR referred to objective evidence of nonobviousness (here, commercial success) submitted during re-examination. The patent owner pointed to the re-examination declarations highlighting objective evidence of nonobviousness and linking that evidence to the claimed invention.[22] Denying institution, the PTAB found first that the petitioner made out a prima facie case of obviousness. They then assessed the objective evidence of record, balanced it against the evidence of obviousness, and found the objective evidence of nonobviousness persuasive.[23] PTAB denied institution on all challenged claims.[24]

As always during prosecution, the applicant must collect and present evidence, conforming to current patent case law — especially as set forth in the Manual of Patent Examining Procedure. And applicants should always endeavor to avoid inequitable conduct.[25] Evidence or a declaration thrown together in haste — or otherwise considered defective — may be harmful rather than helpful.[26] So patent owners should proceed judiciously, making reasoned, well-supported legal arguments. Since inequitable conduct cannot be raised during an IPR or post-grant review, there would likely be no estoppel precluding a losing IPR or PGR petitioner from raising inequitable conduct in any subsequent litigation.

3. File a Carefully Argued and Complete POPR

By statute, a patent owner “may” file a POPR before the institution decision.[27] The commentary to the IPR/PGR rules expressly states that “[n]o adverse inferences will be drawn where a patent owner elects not to file a response or elects to waive the response.”[28] But patent owners must consider that their chances of having an IPR petition denied will almost certainly be increased when an effective POPR is filed, particularly if the strength of the patent was enhanced through artful drafting of the claims and specification and forward-looking prosecution. Remember — a denied IPR petition is a complete win for the patent owner.



In 41 of the sample of 165 decisions, the petition was denied, and in 38 of 41, a POPR was filed (93 percent).[29] In 21 of 26 cases where the board instituted trial on less than all the asserted claims, the patent owner filed a POPR (81 percent).[30] In 73 of 102 cases where the board instituted trial on fewer than all the grounds asserted in the petition, the patent owner filed a POPR (72 percent).[31]

The POPR provides patent owners — particularly forward-looking patent owners with an excellent specification and prosecution history — with the opportunity to, among other things:

• attack the petitioner’s standing;
• attack the status of references as prior art;
• attack the petitioner’s proposed claim constructions;
• attack the petitioner’s unpatentability arguments;
• tell the PTAB why the petition should be denied before a decision on institution, framing the case early, in a way that will remain unrebutted until institution.

In a recent law review article, one of the authors analyzed the first 274 denials of IPR, tracking and counting what the board highlighted as their primary motivation for denial.[32] As shown below, the overwhelming majority of those denied were not due to a standing or procedural error — “did not timely file” or “other” — but rather denied the petition due to either a failure of the evidence presented or a failure to adequately explain or provide reasons to the board. Thus, the patent owner has a chance in the POPR to help PTAB see these weaknesses and conclude that the petitioner did not carry its burden of showing a substantial likelihood of unpatentability.


The POPR also gives patent owners the chance to propose a desired claim construction. Proposing claim constructions at the POPR stage may facilitate outright denial, fewer instituted claims, fewer instituted grounds, or, at least, a trial instituted using the patent owner’s desired claim construction rather than the petitioner’s. A POPR also allows patent owners to show how the intrinsic evidence (the carefully crafted and fully supported claims, specification, and prosecution history) support the patent owners’ desired claim constructions.[34]

To be sure, when the board first introduced IPR, some were concerned that filing a POPR would provide the petitioner an unfair first look into patent owners’ IPR strategies.[35] But this concern has been significantly offset by the risk associated with canceled claims if the PTAB institutes an IPR. The POPR provides an opportunity for the patent owner to enter unrebutted arguments of their own prior to institution — earning the ear of the board in a way unlike any other time during trial. The PTAB’s desire to have petitioners front-load cases — which makes the most efficient use of the PTAB’s resources by allowing PTAB to make the institution decision based on the most information possible — applies to patent owners, too.

If patent owners have dutifully entered relevant and compelling information in the prosecution history, and addressed the closest relevant prior art, that could very well help patent owners convince the PTAB to deny any petitions against the patent.[36] In particular, in the POPR, the patent owner can provide the PTAB a concise, compelling argument why the board should not institute. This may help judges who otherwise would be considering only the petitioner’s arguments and expert declaration. Concise, compelling arguments could help PTAB achieve the statutory objectives that IPR proceedings remain “just, speedy, and inexpensive.”

Conclusion

For any patent hit with a petition, avoiding an IPR remains the best-case scenario, particularly since the Federal Circuit cannot review the denial.[37] Forward-looking claim and specification drafting, prosecution, re-examination and reissue practice may help better the patent owner’s odds. And filing a carefully crafted POPR can lead to denial or an institution on fewer grounds and/or claims than those presented.

—By Deborah Herzfeld, Jonathan Stroud, Samhitha Muralidhar, Stacy Lewis and Tom Irving, Finnegan Henderson Farabow Garrett & Dunner LLP

Deborah Herzfeld is of counsel, Jonathan Stroud and Samhitha Muralidhar are associates, Stacy Lewis is a law clerk and Tom Irving is a partner in Finnegan's Washington, D.C., office.