On August 5, 2014, a milestone was reached for AIA trials. For
the first time, a petition for a Post Grant Review (PGR) was
filed.1 As was the case with the first covered business
method review2, the first PGR will likely be quite
instructive to practitioners as to how the Patent Trial and Appeals
Board (PTAB) will conduct these proceedings.
PGRs are only available for patents that are filed under the
AIA's first-to-file provisions (i.e. patents that
issue from applications that contain a claim having a filing date
on or after March 16, 2013). PGRs are not limited to prior art as
the basis for patent invalidity; lack of patentable subject matter
and failure to comply with 35 U.S.C. § 112 may also be used as
a basis for patent invalidity. However, a PGR has to be filed no
later than nine months after the issuance of the patent. As with an
inter partes review (IPR), the filing of a PGR gives rise
to estoppel for any grounds of invalidity that was raised or could
have been raised in during the PGR. 3
The first PGR concerns U.S. Patent No. 8,684,420 (the '420
patent), which issued on April 1, 2014 based on an application
filed on July 26, 2013. The '420 patent claims priority to a
provisional application filed in 2010. Generally, the '420
patent is directed to a kit and a device for creating a linked
item, which is commercially sold as a Rainbow Loom® product. On
August 5, 2014, LaRose Industries, LLC (LaRose) petitioned for PGR
alleging that all but one of the claims of the '420 patent are
unpatentable under 35 U.S.C. §§ 102, 103, and
112.4 Specifically, LaRose alleged that these
claims are invalid for being indefinite, not being enabled, and for
failing to comply with written description requirement.5
Moreover, the claims were also allegedly anticipated and
obvious.
As is not uncommon with AIA trials, LaRose and patent owner
Choon's Design (Choon) are also currently involved in a patent
infringement litigation in the Eastern District of Michigan. In the
District Court litigation, Choon initially alleged infringement of
related patent U.S. 8,485,565 (the '565 patent). The '420
patent is a continuation of an application which is a continuation
of the '565 patent. Choon amended the complaint to
include the '420 patent once it issued.
The first PGR petition presents an interesting threshold issue for
the PTAB. As discussed, a PGR is only available for patent subject
to the first-to-file provisions of the AIA. However, the '420
patent has a priority claim back to 2010 – before the
critical March 16, 2013 date. Thus, if the '420 patent is
entitled to the priority claim, its validity cannot be challenged
via a PGR. To establish that the '420 patent can be challenged
by a PGR, LaRose's petition outlined in much detail why the
'420 patent is not entitled to the priority date. Since this is
the first time that the PTAB will have to analyze the issue as to
whether a patent may be challenged via a PGR, it is likely that the
PTAB response to the Petition (i.e., either the Decision
to Institute or the Denial of the Petition) will provide an
analytical framework for subsequent PGR petitioners to
follow.
Also of interest in the first PGR is the potential issue of
patentee estoppel. Pursuant to 37 C.F.R. § 43.73(d)(3), a
patentee is "precluded from taking action inconsistent with
the adverse judgment [in an AIA trial], including obtaining in any
patent... that is not patentably distinct from a finally refused or
canceled claim...." LaRose previously challenged the validity
of the '565 patent via an IPR.6 The outcome of
the IPR was a Final Written Decision with an adverse judgment
against the patent owner.7 Specifically, the IPR was
resolved by the patent owner filing a Disclaimer to allow
cancellation of the claims being challenged in the IPR and
requesting that the adverse judgment be issued.8 As
such, Choon, the patent owner, is subject to the estoppel provision
of 37 C.F.R. § 43.73(d)(3).
In what may likely be the first instance of 37 C.F.R. §
43.73(d)(3) being invoked by a petitioner, LaRose is trying to rely
on this adverse judgment to allege that Choon is estopped from
contesting the invalidity of the claims of the '420 patent.
Specifically, LaRose alleges that the claims of the '420 patent
are not patentably distinct over those of the '565 patent.
LaRose also alleges that Choon acquiesced to the claims being
patentably indistinct because Choon filed a terminal disclaimer in
the'420 patent to overcome an obviousness-type double patenting
rejection over the '565 patent.
Thus, the first PGR presents significant issues of first impression
to the PTAB. Not only will the first PGR likely serve as a model
for subsequent PGRs, LaRose' petition will also provide an
analytical framework as to how to apply patentee estoppel and how
to conduct a priority analysis.
Footnotes
1 PGR2014-00008
2 SAP America, Inc. v. Versata Development Group, Inc., CBM2012-00001
3 35 U.S.C. § 325(e)(1).
4 PGR2014-00008, Paper 1 at 1.
5 Id.
6 PGR2014-0008, Paper 1 at pg. 39.
7 Id.
8 Id.
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