Writing on the calendar.

A split panel of the Federal Circuit held that the PTAB applied a standard that was too exacting when it required an inventor to prove the “continuous exercise of reasonable diligence” to antedate a prior art reference. Rather, the PTAB should have applied the rule of reason to determine if the inventor proved that there was “reasonably continuous diligence.” Perfect Surgical Techniques v. Olympus America, Inc., Case No. 2015-2043, __ F.3d __ (Fed. Cir. Nov. 15, 2016). This clarified standard appears to ease the burden on a party seeking to prove diligence.

In this case, Olympus America filed an IPR petition seeking to cancel claims of U.S. Patent 6,030,384 directed to a bipolar surgical device. Olympus America identified a Japanese Patent Application published on February 10, 1998, as prior art that both anticipated and rendered obvious the ’384 patent. As of that publication date, the inventor, a surgeon named Dr. Camran Nezhat, was already in possession of a draft application he received from his patent attorney on January 28, 1998. The application that issued as the ‘384 patent was filed on May 1, 1998. Dr. Nezhat testified that he was working approximately 80 hours per week at his medical practice and performing four to six surgeries each week. He also presented evidence that he submitted comments to his attorney about the initial draft on March 2, received questions from his attorney on March 4 and 12, participated in a conference with the attorney on March 16, and received a revised application on April 13. He then testified that he again reviewed the draft prior to its filing on May 1. He relied upon his own activities and those of his patent attorney to prove diligence.

Under pre-AIA 102(g), an inventor may antedate a reference by proving, with corroborated evidence, an earlier conception and reasonable diligence in reducing the invention to practice. Reasonable diligence must be shown for the period of time just prior to the competing reference’s effective date and ending on the date of the invention’s reduction to practice. The purpose of this requirement “is to assure that, in light of the evidence as a whole, ‘the invention was not abandoned or unreasonably delayed.’” Slip Op. at 8 (citing Brown v. Barbacid, 436 F.3d 1376, 1379 (Fed. Cir. 2006)). In this case, the inventor relied on his filed patent application as a constructive reduction to practice, so he was required to show diligence from just prior to February 10 to May 1, 1998 (the critical period).

An inventor is not required to work on reducing his invention to practice every day during the critical period and periods of inactivity do not automatically require a finding of no diligence.

The PTAB found that Dr. Nezhat had not provided sufficient evidence to demonstrate that he had continuously exercised reasonable diligence throughout the entire critical period. The Federal Circuit disagreed that he was required to show continuous exercise of reasonable diligence, but instead held that he must show reasonably continuous diligence. Under that standard, the court stated that an inventor is not required to work on reducing his invention to practice every day during the critical period and periods of inactivity do not automatically require a finding of no diligence. Also, the court held that the PTAB erred by not properly weighing the evidence of diligence under a rule of reason analysis because the PTAB fixated on portions of the critical period where no evidence or specific activities had been provided to conclude that diligence was not continuous. The court stated that the inventor was not required to corroborate every day the application was worked on, every surgery that he performed, or specify precisely what work was done. Accordingly, the court vacated the PTAB’s finding that Perfect Surgical failed to antedate the prior art reference and remanded the case for consideration of whether, under a rule of reason analysis, the evidence shows that the inventor and his patent attorney worked reasonably diligently to reduce the invention to practice during the critical period.

Judge Schall dissented from this portion of the opinion because he concludes that the dates of inactivity during the critical period were sufficient to support a finding that the inventor was not diligent. Judge Schall particularly noted that Perfect Surgical offered no specific evidence (such as medical records or surgery dates) to excuse the lack of activity. In his view, the PTAB properly applied the court’s precedent to find the evidence insufficient to allow Perfect Surgical to meet its burden.