In Ultratec, Inc. v. CaptionCall, LLC, No. 2016-1706 (Fed. Cir. Aug. 28, 2017), the Federal Circuit vacated and remanded multiple IPR decisions where the PTAB failed to consider material evidence and failed to explain its decisions to exclude the evidence.

Ultratec and CaptionCall are currently litigating in both district court and before the PTAB.  Ultratec sued CaptionCall for infringement in the Western District of Wisconsin where a jury found the patents infringed and not invalid.  Five months after the verdict, the PTAB issued final written decisions holding all challenged claims of Ultratec’s patents were either anticipated or would have been obvious.  The district court subsequently stayed all post-judgment proceedings pending final resolution of the IPRs.

The final written decisions relied heavily on the PTAB’s belief that CaptionCall’s expert was a credible witness.  CaptionCall retained the same invalidity expert in the concurrent litigation and, in some instances, the expert testified about the same issues and prior art references in both proceedings.  Ultratec alleged that the expert’s trial court testimony addressing a prior art reference conflicted with his written declarations CaptionCall submitted in the IPRs.  Ultratec accordingly moved to supplement the record with the inconsistent expert’s trial court testimony.  Because Ultratec had not first requested authorization to file the motion with the inconsistent testimony, the PTAB refused to accept the motion (and testimony), and expunged the filed motion from the record.  The PTAB articulated its refusal in a conference call, indicating it would issue a written order—an order it never issued.

On appeal, the Federal Circuit determined that Ultratec satisfied the requirements for filing a motion to admit the expert’s trial court testimony:

First, the evidence could not have been obtained earlier. Ultratec emailed the Board requesting authorization to file a motion to supplement the record the week after the jury trial concluded.  This is not evidence that could have been located earlier through a more diligent or exhaustive search; it did not exist during the IPR discovery period.  The fact that Ultratec could have, but did not, depose and obtain inconsistent testimony from [the expert] during the IPR itself is not a basis for concluding otherwise. Ultratec argues that during cross examination at trial in front of the jury [the expert] offered testimony that is inconsistent with his IPR testimony. That inconsistent testimony did not exist sooner and thus could not have been proffered to the Board sooner.  [Opinion, p.10-11]

The Federal Circuit further noted that the PTAB offered no reasoned basis why it would not be in the interest of justice to consider sworn inconsistent testimony on an identical issue:

Ultratec sought to offer recent sworn testimony of the same expert addressing the same patents, references, and limitations at issue in the IPRs. A reasonable adjudicator would have wanted to review this evidence. If [the expert] gave conflicting testimony on cross-examination, this would be highly relevant to both the Board’s analysis of the specific issues on which he gave inconsistent testimony and to the Board’s overall view of his credibility. [The expert’s] testimony was critical to the Board’s fact findings in this case, as the opinions’ repeated reliance on it establishes. Under such circumstances, no reasonable fact finder would refuse to consider evidence of inconsistent sworn testimony. Moreover, any such inconsistencies would likely bear on the overall credibility of the expert. [Opinion, p.11]

Where a judge, jury and/or board places a significant amount of weight on expert testimony when making a decision, the credibility of the expert is of paramount importance.  Here, the Federal Circuit determined that the possibility of conflicting testimony is highly relevant to the expert’s credibility, and admitting that testimony into the IPRs is in the interest of justice and imposes minimal additional administrative burden on the Board.  Accordingly, the court vacated the PTAB’s decisions and remanded the cases for the PTAB to consider the expert’s allegedly inconsistent trial court testimony.  Although the PTAB has not yet weighed in following this remand, this decision highlights the importance of maintaining consistency of expert testimony throughout concurrent litigation and IPR proceedings.