Tug of WarIf you’re a patent owner faced with an expert declaration submitted by an IPR petitioner on reply, try to respond, and in multiple ways. Don’t just complain that the declaration should be excluded. This was the Federal Circuit’s recent message in Belden Inc. v. Berk-Tek LLC

The court’s decision is noteworthy for a few reasons. On the merits, the Federal Circuit not only affirmed the PTAB’s decision that certain claims were obvious; it also reversed the decision that the remaining claims were not obvious. The PTAB had earlier found there was insufficient evidence of a motivation to combine two prior-art references to practice methods of making a communications cable. In the court’s analysis, at least one of those references (JP ’910) provided the required motivation to combine by disclosing both the problem of aligning cable conductors with a separator and the solution to that problem (the use of a die to prevent separator twisting before “bunching” with conductors for twisting in a “stranding” device). The court held that the PTAB erred by dwelling on specific features disclosed in the JP ’910 reference (the absence of insulated conductors, as recited in the claims, and a stranding step arguably inconsistent with the desired cable), and disregarding that the disclosed alignment problem and solution were independent of those features. The court viewed that as violating the principle that “a reference must be considered for everything it teaches” and is “not limited to the particular invention it is describing and attempting to protect.”

The court’s decision is also noteworthy for how it says patent owners can respond to expert declarations submitted with a petitioner’s reply, and for its comments that depending on the technology, petitions may not require a supporting declaration. The court held that the PTAB did not abuse its discretion in denying the patent owner’s motion to exclude a declaration submitted on reply, even after the petitioner submitted no such declaration with its petition. The court found no error in the PTAB’s findings that each of the points in the declaration responded to a statement made in an expert declaration submitted by the patent owner with its response, and that the reply declaration was unnecessary to make out a prima facie case of obviousness. Without evidence to the contrary, the court was unwilling to hold that the declaration should have been excluded.

This result alone is not surprising, particularly given the deferential abuse-of-discretion standard. The court, however, also considered arguments that the patent owner had no opportunity to respond to the reply declaration. The court said it considers the PTAB’s rules and practices to generally protect against loss of patent rights without notice and an opportunity to respond. Consistent with that, the court said there are multiple ways in which a patent owner can respond to an expert declaration submitted on reply:

  • Cross-examine the expert and move to file observations on the cross-examination;
  • Move to exclude the declaration;
  • Dispute the substance of the declaration at oral hearing before the PTAB;
  • Move for permission to submit a surreply responding to the declaration’s contents; and
  • Request that the PTAB waive or suspend a regulation that the patent owner believes impairs its opportunity to respond to the declaration.

The court stressed that while Belden (the patent owner) cross-examined the declarant and submitted non-argumentative observations, it failed to move to (i) file a surreply, (ii) file additional observations on its cross-examination, (iii) make arguments in those observations, or (iv) ask the PTAB waive any other regulations that Belden believed prevented it from adequately responding to the petitioner’s declaration. Holding these against Belden, the court was unwilling to disturb the PTAB’s denial of the motion to exclude.

If faced with a declaration that the petitioner submitted on reply, and a response is desirable, patent owners should try to respond in the ways the court described in Belden.

Patent owners should heed these instructions. If faced with a declaration that the petitioner submitted on reply, and a response is desirable, patent owners should try to respond in the ways the court described in Belden. The Belden court indicated that barring a reply declaration doing something like raising a new issue or being necessary to make out a prima facie case, it considers exclusion to be unwarranted, and that there are multiple ways in which a patent owner can respond to such a declaration.

This decision also shows how, depending on the technology and circumstances, petitioners may be able to wait until reply to submit any expert testimony. As the Belden court viewed it, “no rule requires a Petition to be accompanied by any declaration, let alone one from an expert guiding the Board as to how it should read prior art,” and “Board members, because of expertise, may more often find it easier to understand and soundly explain the teachings and suggestions of prior art without expert assistance.” That’s a considerable amount of deference. Patent owners should consider this in preparing their responses, including for the reason that their experts may not have the last word, even when the petitioner submitted no expert declaration in support of its petition.

Update: More recently, the PTAB acknowledged and followed the Federal Circuit’s Belden opinion in granting a request to file a sur-reply to arguments in a petitioner’s reply regarding actual reduction to practice. HTC Corp. v. NFC Technology, LLC, Case IPR2014-01198, Paper 45, slip op. at 3-5 (PTAB Nov. 19, 2015) (“Because we are persuaded that Patent Owner bears the burden of production regarding actual reduction to practice for purposes of antedating [the prior art] and because the Board has granted patent owners the opportunity to respond to petitioners’ arguments regarding the antedating of references, we are persuaded that it is appropriate here to allow Patent Owner to file a sur-reply to Petitioner’s Reply.”).