United States: Winning It On Appeal: How To Avoid Remand And Reverse The Board's Validity Determination At The Federal Circuit

Originally appeared in Kaye Scholer's Spring 2016 PTAB Monitor: Developments in Inter Partes Review Practice.

A final determination of validity or invalidity in an AIA trial is not the end of the road. Recent Federal Circuit cases show that despite the Federal Circuit's track record of affirming most appeals from AIA final determinations, it is possible to vacate and even reverse the Board's validity findings on appeal. But to do so, practitioners need to carefully establish a record during trial and tailor their arguments on appeal.

Making the Right Arguments on Appeal

Unlike other appeals to the Federal Circuit, when appealing an AIA final determination the appellant must have a good idea of what the issues are for appeal early on because the appellant must not only provide the typical "brief statement of the issues to be raised on appeal" required by Form 8, but must also "provide sufficient information to allow the Director to determine whether to exercise the right to intervene."[i]

In evaluating the issues to raise on appeal, practitioners should pay close attention to the[ii] applicable standards of review because in order to achieve a reversal the appellant will not only have to prove that the Board made a mistake below, but that the mistake was sufficient enough to warrant a reversal. If an appellant challenges a Board decision that is entitled to be reviewed with deference on appeal (e.g., the scope and content of the prior art, the differences between the prior art and the claims at issue, the level of ordinary skill in the art at the time the invention was made or objective evidence of nonobviousness), then practitioners typically need to prove that not only did the Board get it wrong, but that there isn't "substantial evidence" in the record that could even support the Board's position. For example, in Merck v. Gnosis S.P.A., the appellant argued that the Board erred in weighing its objective indicia of nonobviousness.[iii] In rejecting Merck's argument, the majority explained that "[a]lthough another factfinder may have reasonably evaluated Merck's evidence of objective indicia of nonobviousness differently in the first instance, the Board's conclusion that this evidence was not persuasively tied to the novel features of the asserted claims is supported by substantial evidence."[iv]

However, if arguing that the Board made an error that is reviewed with no deference (i.e., de novo) on appeal (e.g., claim construction, obviousness determination), then practitioners only need to convince the Federal Circuit that the Board got it wrong.[v] For example, there have been six Federal Circuit cases where the appellant successfully argued that the Board came to the wrong conclusion on claim construction, and consequently the Federal Circuit either vacated or reversed the associated invalidity finding on appeal.[vi] In another example, in Belden v. Berk-Tek the (cross) appellant successfully argued that the Board made a legal error in its obviousness analysis and consequently the Federal Circuit reversed the Board's validity determination on appeal.[vii]

But practitioners should also pay close attention to the relief they are requesting from the Federal Circuit. For example, in Microsoft v. Proxyconn the (cross) appellant successfully convinced the Federal Circuit to reverse the Board's claim construction, which resulted in the Federal Circuit vacating the Board's validity determination and remanding the IPR back to the Board for further proceedings consistent with the Federal Circuit's new claim constructions.[viii] While that strategy gave the patent owner appellant another chance to defend the validity of its claims in front of the Board, in a December 9, 2015 decision the Board once again held those claims invalid on remand.[ix]

To avoid the risk of another Board trial, practitioners should attempt to tailor their appellate arguments so that they do not depend on additional factual determinations that have not yet been made. That way, if the Federal Circuit agrees that an error was made below, the record is clear as to what the resulting conclusion should be and the Federal Circuit can close the case without remand. For example, in Belden v. Berk-Tek the (cross) appellant successfully argued that the[x] Board not only made "legal errors" when determining that certain claims were valid, but also erred in not affirmatively finding those claims invalid. As a result, because the Federal Circuit agreed that legal errors were made and that "the record [was] one-sided," the Federal Circuit found no need to remand the case to the Board and itself entered a finding that the claims were obvious and invalid.[xi]

Building the Trial Record with an Eye for Appeal

Unlike a district court trial, an AIA trial is short and can be somewhat rigidly formalistic, and as such, there are limited opportunities to add to the trial record. There is limited discovery, few documents are exchanged, typically a single expert deposition is taken and defended by each side, and one oral argument is conducted before the Board issues its final decision.[xii] Similarly, there are limited opportunities to file papers with the Board. In a typical IPR each party only gets to file two papers; the petitioner gets to file a petition and reply[xiii] and the patent owner gets to file a preliminary response and response.[xiv]

But in using those limited opportunities, practitioners should look beyond the AIA trial at hand and assure that they are creating the fullest record for appeal. In doing so, practitioners should make sure to articulate all of their affirmative arguments as well as sufficiently address each and every argument made by their opponent in their AIA trial papers in order to preserve those arguments for appeal. For example, in MCM Portfolio LLC v. Hewlett-Packard Co., the Federal Circuit found that MCM waived arguments made on appeal because in one instance "MCM candidly admit[ted] that it only raised th[e] argument in a few scattered sentences at the oral hearing below" and in another instance "MCM provide[d] no citation to th[e] proposition."[xv]

Similarly, practitioners should make sure to get any and all relevant evidence into the record during the trial, so that if appealing an adverse position they have sufficient supporting evidence. For example, while the burden of proof in an AIA trial may be by "a preponderance of evidence,"[xvi] the Federal Circuit may require something more when deciding whether to enter a finding of invalidity for the first time on appeal or remand for further consideration by the Board. In Belden v. Berk-Tek, the Federal Circuit entered a determination that Berk-Tek proved invalidity of the claims by a preponderance of the evidence because "the record [was] one-sided" on the issue.[xvii]

Tying It All Together

The Federal Circuit has many reasons to defer to the Board's decisions in an AIA proceeding. Unlike a district court proceeding that is decided by a single judge, an AIA proceeding is decided by a three-judge panel. Additionally, unlike a district court judge, the three judges on the AIA trial panel typically have technical degrees and oftentimes experience in the technical area of invention.[xviii]

Yet, the Federal Circuit has shown that it may vacate or even reverse a Board determination under the right circumstances. For example, recent Federal Circuit cases have illustrated (1) that the Federal Circuit will reverse the Board when its decision on a particular issue is not entitled to deference on appeal (e.g., claim construction and errors of law); (2) that the Federal Circuit will vacate the Board's Final Written Decision when it does not thoroughly address an issue and remand the case for further proceedings; and (3) that the Federal Circuit will even completely reverse a Board validity finding if the record is one-sided regarding the underlying issue. Thus, practitioners should not only be careful to create a full record during trial, but should also carefully focus the issues on appeal to those that are entitled to the least amount of deference and to those that, if won, demand that the desired judgment be entered on appeal.


» Click here to read more articles from our latest PTAB Monitor: Developments in Inter Partes Review Practice


[i] 37 C.F.R. 90.2(a)(3)(ii).

[ii] See, e.g., Merck & Cie v. Gnosis S.P.A., 808 F.3d 829, 833 (Fed. Cir. 2015) (citing In re Gartside, 203 F.3d 1305, 1313 (Fed. Cir. 2000); In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1280 (Fed. Cir. 2015); In re Mouttet, 686 F.3d 1322, 1330–31 (Fed. Cir. 2012)).

[iii] Merck, 808 F.3d at 831.

[iv] Merck, 808 F.3d at 838-39.

[v] See, e.g., Merck, 808 F.3d at 833 (citing In re Gartside, 203 F.3d at 1313; In re Cuozzo Speed Techs., 793 F.3d at 1280; In re Mouttet, 686 F.3d at 1330-31).

[vi] See Microsoft Corp. v. Proxyconn, Inc., 789 F.3d 1292, 1308-09 (Fed. Cir. 2015); Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d 1356, 1363 (Fed. Cir. 2015); Cutsforth, Inc. v. MotivePower, Inc., No. 2015-1314, 2016 WL 1358628, at *4 (Fed. Cir. Apr. 6, 2016); Dell Inc. v. Acceleron, LLC, No. 2015-1513, 2016 WL 1019075, at *7 (Fed. Cir. Mar. 15, 2016); Pride Mobility Prods. Corp. v. Permobil, Inc., No. 2015-1585, 2016 WL 1321145, at *6 (Fed. Cir. Apr. 5, 2016); PPC Broadband, Inc. v. Corning Optical Commc'ns RF, LLC, 815 F.3d 747, 756-57 (Fed. Cir. 2016).

[vii] Belden Inc. v. Berk-Tek LLC, 805 F.3d 1064, 1075 (Fed. Cir. 2015).

[viii] Microsoft, 789 F.3d at 1299.

[ix] Microsoft Corp. v. Proxyconn, Inc., IPR2012-00026, 2015 WL 8536725, at *8 (Dec. 9, 2015).
Similarly, there have been four appeals to the Federal Circuit where the appellant successfully argued that the Board's Final Written Decision was not thorough or clear enough on a specific issue. As a result, the Federal Circuit vacated and remanded the Board's Final Written Decision for further proceedings on those issues. See Nike, Inc. v. Adidas AG, 812 F.3d 1326, 1340 (Fed. Cir. 2016); Cutsforth, Inc. v. MotivePower, Inc., No. 2015-1316, 2016 WL 279984, at *4 (Fed. Cir. Jan. 22, 2016); Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359, 1366 (Fed. Cir. 2015); PPC Broadband, Inc. v. Corning Optical Commc'ns RF, LLC, 815 F.3d 734, 744 (Fed. Cir. 2016).

[x] Belden, 805 F.3d at 1077 ("The Board erred in determining that Berk-Tek had not proven the obviousness of the methods of claims 5 and 6 of the '503 patent by a preponderance of the evidence.").

[xi] Belden, 805 F.3d at 1077. See also Cutsforth, 2016 WL 1358628, at *4 (reversing the Board's claim construction and entering a validity finding on appeal); Pride Mobility, 2016 WL 1321145, at *6 (reversing the Board's claim construction and entering a validity finding on appeal).

[xii] 35 U.S.C. § 316(a)(5); id. at § 316(a)(10).

[xiii] 35 U.S.C. § 312; id. at § 316(a)(13).

[xiv] 35 U.S.C. § 313; id. at § 316(a)(8).

[xv] MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1294 n.3 (Fed. Cir. 2015).

[xvi] 35 U.S.C. § 316(e).

[xvii] Belden, 805 F.3d at 1077.

[xviii] Belden, 805 F.3d at 1079 ("Board members, because of expertise, may more often find it easier to understand and soundly explain the teachings and suggestions of prior art without expert assistance.").

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