In Dell, Inc. v. Acceleron, LLC, 884 F.3d 1364 (Fed. Cir. 2018), the Federal Circuit determined that the Patent Trial and Appeal Board was not required to consider arguments first presented by the petitioner at oral argument, despite having remanded an earlier appeal of the Board’s decision for that very purpose. In that earlier appeal, the court had concluded that the Board deprived patent owner, Acceleron, a fair opportunity to rebut new arguments petitioner Dell presented during oral argument—arguments that convinced the Board to cancel Acceleron’s patent claims. The court had vacated the Board’s decision and remanded for reconsideration. On remand, the Board elected not to consider Dell’s new argument and, reversing itself, the Board found as a consequence that Dell had failed to establish that the challenged claims were anticipated.On appeal of the Board’s remand decision, Dell argued that the Board’s failure to consider its arguments was contrary to precedent and to the court’s earlier remand. The court disagreed. The court interpreted its earlier order as a direction that the Board merely follow appropriate procedures in addressing Dell’s newly raised arguments. The court concluded that in keeping with such procedures, the Board was free to exclude Dell’s new arguments. The court determined that the Board’s failure to do so was not an abuse of its discretion.
Dell further argued that the court’s decisions in SAS Institute, Inc. v. ComplementSoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016) (discussed here), and In re NuVasive, Inc., 841 F.3d 966 (Fed. Cir. 2016) (discussed here), compelled the Board to consider Dell’s arguments on remand. The court rejected Dell’s arguments, observing that “Dell draws too broad a lesson for those decisions.” The court observed that SAS involved the Board’s adoption, in its final written decision, of a claim construction that the parties had not earlier been given an opportunity to address. The court noted that Dell’s arguments at oral argument were unlike any such new claim construction.
NuVasive, said the court, involved the Board’s reliance upon a portion of a prior art reference that had not been identified as a basis for unpatentability in advance of the patent owner’s response. The court noted that in NuVasive it had remanded the matter to the Board, but had not directed the Board to admit new evidence. The court characterized that earlier decision as merely precluding the Board from considering the previously unmentioned portions of the prior art reference, in the event that it did not afford the patent owner an adequate opportunity to submit additional evidence and arguments.
The court concluded that neither SAS nor NuVasive compelled the Board to consider Dell’s new evidence. The court further noted that the PTO guidelines provide that “[n]o new evidence or arguments may be presented at the oral argument.” Office Patent Trial Practice Guide, 77 Fed. Reg. 48,756, 48,768 (Aug. 14, 2012). The court observed that under those guidelines, unless the Board chose to exercise its discretionary authority under 37 C.F.R. § 42.5(b) to consider Dell’s untimely arguments, it was obligated to dismiss them.
The court further rejected Dell’s appeal to public policy, observing that the need for due process and the interest in preserving the Board’s discretion outweighed any negative effects stemming from Dell’s failure to invalidate the claim—particularly given that parties other than Dell remained able to challenge the patent.
The Federal Circuit’s decision in Dell reemphasizes the potentially fatal consequences of failing to sufficiently and timely identify all arguments in favor of invalidity in papers to which the patent owner is afforded an opportunity to respond.