The Federal Circuit’s precedential decision in In re: Warsaw Orthopedic, Inc., No. 2015-1050, 2015-1058 (Fed. Cir. Aug. 9, 2016), highlights recurring themes in appeals of PTAB IPR decisions. On one hand, the Federal Circuit is reluctant to overturn a PTAB decision canceling claims for obviousness based on Patent Owner’s assertions that the PTAB failed to properly weigh certain facts found in reaching its decision. On the other hand, the Federal Circuit will not hesitate to vacate and remand PTAB decisions where the PTAB does not adequately describe its reasons for concluding a claimed invention is obvious.
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Who Must Bear the Burden of Proof Regarding Patentability of Amended Claims?
On August 12, 2016, the Federal Circuit issued an order vacating its decision in In re Aqua Products, Inc., 823 F.3d 1369 (Fed. Cir. 2016), and reinstating the appeal after granting the aggrieved patent owner’s petition for rehearing en banc. We wrote about this decision a few months ago:
The Federal Circuit confirmed in a precedential opinion that the burden to prove patentability of an amended claim in an IPR proceeding rests squarely with the patentee, and in deciding a motion to amend claims, the Board only need consider the arguments presented by the patentee, not perform a full reexamination of the proposed claims. In In re Aqua Products, Inc., Appeal No. 2015-1177 (Fed. Cir. May 25, 2016), the Federal Circuit affirmed the PTAB’s denial of patentee Aqua’s motion to substitute claims because Aqua failed to prove patentability of the substitute claims.
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Secondary Considerations Change Panel’s Mind after Institution
The PTAB is not often persuaded by objective evidence of non-obviousness, i.e., secondary considerations, when the scope and content of the prior art includes all of the features recited in the claims. However, a pair of recent PTAB decisions, Innopharma Licensing, Inc. v. Senju Pharmaceutical Co., LTD., IPR2015-00902, Paper 90, and IPR2015-00903, Paper 82 (PTAB July 28, 2016), provides a rare example where the PTAB completely changed its mind after instituting the IPRs. The decisions offer the same message, and this post focuses on the decision in IPR2015-00902, where the PTAB found all of the challenged claims of U.S. Patent No. 8,669,290 not obvious over the applied prior art references based on the objective evidence of non-obviousness.
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Analogous Art: A Tale of Two Decisions
In two recent PTAB decisions, Tissue Transplant Technology Ltd. & Human Biologics of Texas, Ltd., v. Mimedx Group, Inc., Case IPR2015-00420, Paper 25 (PTAB July 7, 2016) and Dexcowin Global, Inc., v. Aribex, Inc. Case IPR2016-00440, Paper 13 (PTAB July 7, 2016), the Board reached opposite conclusions regarding whether the petitioner’s prior art was analogous to the challenged patents. It is well established that art is analogous when it is: (1) from the same field of endeavor as the claimed invention; or (2) reasonably pertinent to the particular problem faced by the inventor, if the art is not from the same field of endeavor. In re Bigio, 381 F.3d 1320, 1325-1326 (Fed. Cir. 2004). However, as these two decisions demonstrate, overcoming a non-analogous art challenge depends on how the petitioner characterizes the problem to be solved by the challenged claims and whether the petitioner can point to some area of overlap in the fields of endeavor of the prior art reference and the patented invention.
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Government Weighs in on Constitutionality of Inter Partes Review
Two petitions for certiorari are pending before the Supreme Court in which the aggrieved patent owners in MCM Portfolio LLC. v. Hewlett-Packard Co. and Cooper v. Lee are challenging the constitutionality of AIA trials. The Federal Circuit in MCM Portfolio upheld the PTAB’s authority to adjudicate the validity of issued patents, determining that IPR proceedings are not unconstitutional under Article III or the Seventh Amendment right to a jury trial. MCM Portfolio LLC. v. Hewlett-Packard Co., 812 F.3d 1284 (Fed. Cir. 2015). In Cooper, the district court granted summary judgment against Cooper on administrative exhaustion grounds and the Federal Circuit summarily affirmed. Cooper v. Lee, 86 F.Supp.3d 480 (2015); Cooper v. Lee, Nos. 2015-1483, 2016-1071 (Fed. Cir. 2016). The Government filed briefs in opposition to both petitions – the Cooper opposition brief was filed in April, and the MCM opposition brief was filed in June. A decision on the petitions is expected at the beginning of the Supreme Court’s October 2016 term.
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PTAB Improperly Shifted Burden of Proof in IPR
In In Re Magnum Oil Tools International Ltd., the Federal Circuit reversed the PTAB’s final decision cancelling challenged claims for obviousness because the record did not include substantial evidence of a motivation to combine references, and because the PTAB improperly shifted the burden of proof on this issue to the patent owner.
Petitioner McClinton Energy Group filed an IPR petition challenging claims of a patent relating to technology for “fracking” (oil drilling using hydraulic fracturing). In fracking, a wellbore is drilled into the earth, and a fluid mixture is injected into the wellbore. Downhole plugs are used to divide the wellbore into separate sections so that different sections of the wellbore may be fracked at different times.
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Advise Petitioner to File Supplemental Evidence Instead Of Information
In a bit of “inside baseball,” the PTAB recently clarified the difference between supplemental evidence and supplemental information. Practitioners would do well to give careful attention to this distinction. The difference can have profound consequences to an IPR Petitioner.
In Generico LLC v. Dr. Falk Pharma GmbH, IPR2016-00297, Paper No. 15 (July 15, 2016), the PTAB entered an order regarding the conduct of proceedings. The order addressed the Petitioner’s request to file a motion to supplement information pursuant to 37 C.F.R. §42.123. The Petitioner sought to file information in response to objections the Patent Owner made to evidence submitted by Petitioner. Specifically, the Patent Owner had objected that Petitioner’s prior art references would not have been relied upon by a person of ordinary skill in the art, and that the Petitioner’s declarant was not qualified to speak to the views of a person of ordinary skill in the art. To address these objections, the Petitioner sought the PTAB’s authorization to file a supplemental declaration and documents from a parallel district court litigation.
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Priority Claims Unchallenged In Prosecution Can Be Weak Links
IPR2015-00291 decided a petition filed by Daiichi Sankyo Co. Ltd. against USPN 8,168,181 owned by Alethia Biotherapeutics, Inc. The ‘181 patent issued from a continuation-in-part of the U.S. national phase of a PCT application and contains claims drawn to methods of impairing osteoclast differentiation, useful in treating various bone diseases. The Board denied the Patent Owner’s priority claim and found an attempt to antedate intervening art inadequate, leading to a holding that the ‘181 claims were unpatentable under 35 U.S.C. § 102(a). The decision illustrates the potential of intervening art not considered during prosecution and also illustrates the shifting legal view of the patentability of antibody-based technologies.
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“Providing . . . information” Step Given No Patentable Weight
The PTAB recently addressed the limits on strategies to patent drug labeling, canceling claims directed to a method of supplying a pharmaceutical product where the method includes a step of providing certain “information” to the medical provider. According to the PTAB, the claimed step of providing the information is entitled to no patentable weight under the “printed matter” doctrine where it is not functionally related to other elements of the claimed method. Specifically, even if the claim says that the information is “sufficient to” cause some effect (e.g., for a medical provider to avoid treating a patient) there is no functional relationship with the claim if the claim doesn’t recite that effect. Praxair Distribution Inc. v. Mallinckrodt Hospital Prods. IP Ltd., IPR2015-00529.
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The Three-Front Assault: PeroxyChem Uses IPR, PGR and District Court to Challenge Opponent
In what could become a common patent challenge strategy, PeroxyChem, a chemical company that sells products useful in water and soil remediation, has employed a three-front assault—combining the relatively young post-grant review procedure, with an IPR and litigation–to take on one of its competitors, Innovative Environmental Technologies (IET). Litigation together with an IPR has become a rather common means to challenge a competitor’s patent. However, post grant review is gaining in popularity among litigants, adding to the available strategies of overcoming potential barriers to market entry for companies. For example, while 12 Petitions for PGR were filed in all of 2015, 15 have been filed so far in the first half of 2016.
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