Tall industrial brick chimney venting gasses into the atmosphere

In Redline Detection, LLC v Star Envirotech, Inc., the Federal Circuit affirmed a PTAB final written decision that the petitioner failed to show that the challenged claims were obvious, and upholding the PTAB’s decision denying the petitioner’s motion to submit an expert declaration as supplemental evidence, after the PTAB instituted the IPR.

The petitioner Redline Detection filed an IPR petition challenging two claims of Star Envirotech’s patent, on twelve different grounds. The patent is directed to methods of generating smoke, such as for use in detecting leaks in fluid systems. Redline’s petition did not include any expert declaration in support of the petition. The PTAB instituted the IPR on 2 of the 12 grounds, and nearly one month later, Redline filed a motion to submit a 60-page declaration supporting its arguments for obviousness on the two instituted grounds. Redline sought to submit the declaration as supplemental evidence under 37 C.F.R. § 42.123(a), which permits filing a motion to submit supplemental evidence within one month after the trial is instituted. (Subsections 42.123(b) and (c) permit a party to request authorization to file a motion more than one month after institution.) The PTAB denied the motion, on the basis that Redline did not provide any basis for why the declaration was not submitted with the petition, except that there was a cost savings in submitting a declaration addressing only the instituted grounds, rather than filing a declaration addressing all grounds with the petition. Eventually, the PTAB issued a final written decision adverse to Redline.

On appeal, Redline argued that the PTAB improperly denied the motion, because the motion was filed within one month of institution, and the supplemental information was relevant to the instituted grounds, as required by 37 C.F.R. § 42.123(a). The court evaluated the PTAB’s regulation (§ 42.123), which was promulgated by the USPTO under 35 U.S.C. § 316(a)(3), authorizing regulations concerning submission of supplemental evidence.

the PTAB has discretion to grant or deny motions as it sees fit

The court gave deference to the PTAB in its interpretation of USPTO regulations, accepting the PTAB’s interpretation unless plainly erroneous or inconsistent with the regulation. Applying this deferential standard, the court determined that the PTAB properly interpreted the regulation to permit consideration of other criteria not expressly stated in the regulation, such that petitions that satisfy the timing and relevance requirements of § 42.123(a) did not have to be granted automatically. Additionally, the court noted that the PTAB has discretion to grant or deny motions as it sees fit.

In reviewing the PTAB’s final written decision on the merits, based on the evidence in the record, the court concluded that there was substantial evidence supporting the PTAB’s factual findings concerning the prior art, level of skill in the art, and motivation to combine. The record included the patent owner’s expert declaration, but no declaration in support of the petition, due to Redine’s failure to submit a timely declaration.

This case shows that a petitioner would be advised to include an expert declaration supporting all grounds with the petition. The PTAB might accept a later-filed declaration as supplemental evidence, but a petitioner should not delay filing a declaration and assume that the PTAB will permit it to be filed later.