United States: PTAB Newsletter

In This Issue:

• Q&A with Arnold & Porter PTAB Practitioner Betsy Long
• Recent Director Review Decisions
  • Director Vidal Designates Precedential Sua Sponte Decision Vacating Adverse Judgments Entered Under 37 C.F.R. ¶ 42.73(b)(4): Apple, Inc. v. Zipit Wireless, Inc., IPR 2021-01124, 1125, 1126, 1129, Paper 14 (Dec. 21, 2022)
  • Director Vidal Issues Decisions on Director Review in Two Cases Involving Abuse of the IPR Process: OpenSky Industries LLC v. VLSI Technology LLC, IPR2021- 01064, Paper 121 (Dec. 22, 2022) and Patent Quality Assurance, LLC, v. VLSI Technology LLC, IPR2021-01229, Paper 102 (Dec. 22, 2022) (precedential)
• Recent PTAB Case Regarding Priority Issues in the Context of Section 325(d) and Alleged Stealth 112 Challenges: Motorola Mobility LLC v. Largan Precision Co., Ltd., IPR2022-01156, Paper 13 (Jan. 4, 2023)
• PTAB Decision Denying Institution of Post-Grant Review Which Included Section 101, 112, and 325(d) Issues: Risen (Suzhou) Pharma Tech. Co. Ltd. v. Alzheon, Inc., PGR2022-00051, Paper 14 (Jan. 13, 2023)
• Recent PTAB Decision Applying and Distinguishing the Director's OpenSky Decision: Cisco Systems, Inc. v. Centripetal Networks, Inc., IPR2022-01151, Paper 12 (Jan. 4, 2023)
• Upcoming Events and Speaking Engagements
• Other Notable Developments

How would you describe your practice?

When I first started practicing law, I worked on a wide range of technologies in district court proceedings. I then spent a decade working for the government doing appellate work. Since coming back to private practice, I have focused mainly on technology patents in district court proceedings, PTAB proceedings, and Federal Circuit appeals.

How long have you been practicing in front of the USPTO and in front of the PTAB?

I wisely took the patent bar exam while in law school (when it was still the BPAI). I had just started working as a technical assistant at the Federal Circuit when the AIA went into effect, so I worked on the PTAB appeals from the beginning. The appeals were really interesting because the issues were all a matter of first impression since the PTAB was brand new and it was all unchartered waters. Since returning to private practice, along with working on district court cases, I have been working on inter partes reviews at the PTAB.

Why were you interested in practicing before the PTAB, and how did you get involved in the practice?

In my role at the Federal Circuit, I supported neutral decision makers whose job was to reach the correct outcome based on the record. After working on PTAB appeals while at the Federal Circuit, I was eager to work on PTAB matters as a private practitioner where you get to be the advocate. It is a different mindset, but my time at the Federal Circuit has helped me bring a different perspective to the advocacy role. 

How would you like to grow your practice before the PTAB?

I would like to continue to hone my IPR skills. Every IPR is a new challenge, and you always learn something new that you can use going forward.

What do you enjoy about practicing at Arnold & Porter?

The people at Arnold & Porter are amazing. It goes without saying that the legal work is topnotch but, in addition, they really care about their work, their clients, and their colleagues. In the short time I have been here, I have met so many great people and already feel like I am part of the team.

What do you like to do in your spare time?

Attempting to see, do, and eat everything in New York. I get all of the emails about the latest shows and new restaurants. Recent shows I've enjoyed include Emma Rice's Wuthering Heights and the wild ride that is Titanique. As for restaurants, the list is endless, but Bonnie's and Dhamaka both lived up to the hype.

Recent Director Review Decision

Director Vidal Designates Precedential Sua Sponte Decision Vacating Adverse Judgments Entered Under 37 C.F.R. ¶ 42.73(b)(4): Apple, Inc. v. Zipit Wireless, Inc., IPR 2021-01124, 1125, 1126, 1129, Paper 14 (Dec. 21, 2022)

On January 4, 2023, Director Vidal designated precedential a sua sponte decision in Apple Inc. v. Zipit Wireless, Inc., IPR2021-01124, Paper 14 (December 21, 2022), addressing adverse judgments the Board had entered in four related IPRs under 37 C.F.R. § 42.73(b)(4). In the four related IPRs, Patent Owner declined to file Patent Owner Responses. Subsequently, during a hearing regarding companion IPRs, the Board questioned Patent Owner regarding its position in the four related IPRs. The Director summarized Patent Owner's statements during the hearing as follows:

Order at 3 (emphasis added). In light of Patent Owner's statements, the Board determined that “Patent Owner failed to file responses to the Petition, which is consistent with abandonment of the contest.” IPR2021-01124, Paper 13 at 2 (Dec. 13, 2022). The Board made a similar finding in the other three related IPRs and entered adverse judgments for each. Id., Paper 14 at 3.

Contrary to the Board, the Director found that Patent Owner's statements during the hearing did not constitute unequivocal abandonment because Patent Owner's position was contingent on the Board finding that Petitioner had met its burden of proving unpatentability. Thus, the Director vacated the adverse judgments and remanded to the Board to either issue a show cause order clarifying whether Patent Owner was abandoning the contest or issue final written decisions addressing patentability.

Director Vidal Issues Decisions on Director Review in Two Cases Involving Abuse of the IPR Process: OpenSky Industries LLC v. VLSI Technology LLC, IPR2021-01064, Paper 121 (Dec. 22, 2022) and Patent Quality Assurance, LLC, v. VLSI Technology LLC, IPR2021-01229, Paper 102 (Dec. 22, 2022) (precedential)

(Editor's Note: These cases have a long and detailed history. We have summarized key aspects of that history to provide some context for the December 2022 Director Review decisions. These summaries are not meant to be comprehensive, and we have linked the source materials for those interested in the full details.)

As background, Intel had previously challenged the patents at issue in IPRs, but the Board denied institution based on Fintiv. Ultimately, the district court cases against Intel proceeded to trial with the jury awarding significant damages for infringement to patent owner VLSI.

Following the verdict, two new petitioners, OpenSky Industries LLC (OpenSky) and Patent Quality Assurance, LLC (PQA) filed IPRs challenging VLSI's patents; those petitions were essentially copycats of Intel's earlier petitions and included, as exhibits, copies of the prior expert declarations. The Board instituted OpenSky's IPR as to one of the patents, but denied institution as to the OpenSky IPR on the other patent because PQA asserted it had exclusively retained the expert as to that patent. The Board instituted PQA's IPR as to that patent, and the Board granted Intel's motions to join both instituted IPRs.

The day after the Board's decisions granting joinder (on June 7, 2022), the Director sua sponte ordered Director review in both proceedings. The Director's December 22 decisions, discussed further below, clear the way for the Board to issue a Final Written Decision on the merits in both proceedings with Intel remaining as the lead petitioner and OpenSky and PQA both dismissed, other than as to the issue of further sanctions.

OpenSky Industries LLC v. VLSI Technology LLC, IPR2021-01064, Paper 121 (Dec. 22, 2022)

Following the Director's order commencing Director review in June 2022, the Director issued a decision in the OpenSky proceeding in October 2022 finding that OpenSky had abused the IPR process and sanctioning OpenSky by precluding it from actively participating in the proceeding. The Director elevated Intel to lead petitioner status, and remanded for the Board to determine whether OpenSky's Petition, based only on the record prior to institution, presented a compelling, meritorious challenge. The Board concluded that it did, and the Director sua sponte ordered Director review of that determination.

On December 22, 2022, the Director issued a decision and dismissed OpenSky from the case “to ensure that OpenSky does not benefit from its abuse of IPR process,” while continuing to retain jurisdiction over the issuance of sanctions. The Director also found that the patent owner (VLSI) had supported its rehearing request of the Board's compelling merits decision with misleading statements of fact and law, and ordered patent owner to show cause why it should not be ordered to pay Intel its reasonable attorney fees incurred in responding to the rehearing request. Finally, the Director affirmed the Board's compelling merits determination and lifted the stay of the underlying proceeding.

Patent Quality Assurance, LLC, v. VLSI Technology LLC, IPR2021-01229, Paper 102 (Dec. 22, 2022) (precedential)

Following the Director's June 7 order commencing Director review in the PQA proceeding, the Director ordered briefing and discovery responses from the parties. On December 15, 2022, the Director ordered the underlying proceeding stayed while she completed Director review.

One week later, the Director issued a precedential decision, addressing the issues on Director review. The Director determined that PQA engaged in discovery misconduct by failing to comply with the Director's mandated discovery and applied a negative inference to PQA (holding disputed facts for abuse of the IPR process as established against PQA). The Director found that PQA had abused the IPR process by (1) misrepresenting that it had exclusively engaged the expert witness on whom OpenSky had also relied and (2) filing its petition and threatening to seek to join OpenSky's petition to extract payment from patent owner. The Director found that PQA's behavior “may not be as egregious as that of OpenSky,” but nevertheless found PQA's behavior amounted to an abuse of process, in part because of the adverse inference. The Director thus dismissed PQA from the proceeding, while retaining jurisdiction over the issuance of sanctions. As to sanctions, the Director ordered PQA to show cause why it should not be ordered to pay VLSI compensatory damages, including attorney fees, related to the proceeding. Finally, the Director found that PQA's petition, based only on the record prior to institution, presented a compelling, meritorious challenge and lifted the stay to allow the underlying proceeding to continue.

Recent PTAB Case Regarding Priority Issues in the Context of Section 325(d) and Alleged Stealth 112 Challenges: Motorola Mobility LLC v. Largan Precision Co., Ltd., IPR2022-01156, Paper 13 (Jan. 4, 2023)

In Motorola Mobility LLC v. Largan Precision Co., Ltd., IPR2022-001156, the challenged patent had an extensive priority chain going back almost seven years before the application leading to the challenged patent was filed. The IPR petition included a single anticipation challenge based on Chen-069, the publication of an application in the challenged patent's priority chain. Petitioner argued that that reference qualified as prior art because the priority chain for the challenged patent was broken.

As an initial matter, Patent Owner argued that institution should be discretionarily denied under Section 325(d) because the Examiner had addressed priority during prosecution. The Board disagreed with the Patent Owner's arguments about the prosecution history because Chen-069 was not previously presented to the Office in the context of determining patentability and because there were no disputes between the Examiner and the applicant regarding priority during prosecution. Instead, the Examiner had made an unsolicited statement about priority, which the Board found was “not an argument previously presented to the Office under the Advanced Bionics framework.” Thus, the Board found that the same or substantially the same art had not been presented to the Office. Further, the Board found that, even assuming the first part of the Advanced Bionics framework was met, the Petitioner had sufficiently demonstrated that the Examiner erred in determining priority.

Patent Owner also argued that Petitioner's challenge was really an impermissible challenge under 35 U.S.C. § 112. Specifically, because all the applications in the priority chain were identical, Patent Owner argued that Petitioner's argument as to a priority break was “really an assertion that the [challenged patent] specification itself lacks written description support for the challenged claims.” Thus, Patent Owner argued the Board should exercise its discretion to deny institution on that basis. The Board disagreed, noting that in determining patentability based on asserted prior art patents and printed publications, under 35 U.S.C. § 311(b), the Board routinely makes determinations regarding priority dates of challenged claims and often analyzes whether the challenged claims have written description support from earlier applications in a priority chain. The Board rejected the argument that the shared disclosure in this case counseled otherwise.

Recent PTAB Decision Denying Institution of Post-Grant Review Which Included Section 101, 112, and 325(d) Issues: Risen (Suzhou) Pharma Tech. Co. Ltd. v. Alzheon, Inc., PGR2022-00051, Paper 14 (Jan. 13, 2023)

On January 13, 2023, in Risen (Suzhou) Pharma Tech. Co. Ltd. v. Alzheon, Inc., the Board denied institution of a post-grant review that had challenged claims of an Alzheon patent on the grounds of patent ineligibility, lack of written description, and lack of enablement. The Board further exercised its discretion to deny institution under § 325(d).

Representative claims of the challenged patent include (i) a method of treating Alzheimer's Disease in a subject, comprising administering to the subject a pharmaceutical composition comprising a specific small molecule prodrug “in an amount effective to reduce cognitive decline,” “only if the subject is determined to” satisfy two recited criteria and (ii) a method of selecting and treating a patient suffering from Alzheimer's Disease, comprising a patient selection step and an administration step to administer to the selected patient a specific small molecule prodrug “at an amount effective to reduce cognitive decline.

First, the Board found that the challenged claims are not directed to patent ineligible subject matter. Although the claims may involve the natural phenomenon that a certain patient population responds better to the recited treatment, the claims require administration of a specific compound at an effective amount to that specific patient population to reduce cognitive decline. Thus, the Board found that the challenged claims are directed to “a specific method of treatment for specific patients using a specific compound at specific doses to achieve a specific outcome,” similar to the patent-eligible claims in Vanda Pharm. Inc. v. West-Ward Pharm. Int'l Ltd., 887 F.3d 1122 (Fed. Cir. 2018). The Board further distinguished the challenged claims from the patent-ineligible subject matter in INO Therapeutics LLC v. Praxair Distribution, Inc., 782 F. App'x 1001, 1005 (Fed. Cir. 2019), where the focus was on the instruction “not to treat” certain patients.

Second, the Board found that the specification provides sufficient written description support for treating the recited patient population. In particular, the Board highlighted the specification's disclosure of the claimed patient subpopulation showing the “highest efficacy,” which provides a “blaze mark” directed to the claimed treatment population. The Board also rejected Petitioner's requirement for disclosure of unconventional and non-routine techniques for the administration limitations. The Board emphasized that the written description requirement is satisfied when the specification “set[s] forth enough detail to allow a person of ordinary skill in the art to understand what is claimed and to recognize that the inventor invented what is claimed.” University of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916, 928 (Fed. Cir. 2004).

Third, the Board rejected Petitioner's argument that the subject specification fails to enable the full range of doses being administered in the challenged claims. In determining whether undue experimentation would be required to practice the full scope of the claimed doses, the Board performed a Wands factors test. The Board determined that there would not be undue experimentation because (i) the scope of the claims are relatively narrow as a specific subset of patient is claimed; (ii) the relative skill in the art is high; and (iii) the specification provides sufficient guidance through its description of the components for pharmaceutical compositions, potential dose ranges, and working examples.

Lastly, in addressing Petitioner's obviousness grounds, the Board exercised its discretion to deny institution under § 325(d). The Board agreed with the Patent Owner that each reference asserted by the Petitioner was either considered by the Office during examination or is substantially similar to a reference that was considered by the Examiner. The Board further concluded that the evidence of record does not establish that the Examiner erred in any material manner. Specifically, because the Examiner had made rejections based on similar teachings, the Board found that Petitioner made an insufficient showing that the Examiner erred in failing to appreciate and in misunderstanding the asserted teachings. Petitioner also failed to establish that the Examiner erred in considering certain efficacy results as being “surprising” and “unexpected” because Petitioner and its expert did not provide any data to support its position. Without any data to support the allegation, the Board concluded that the Examiner's determination of surprising and unexpected results was “an exercise of judgment on which reasonable minds can disagree,” rather than a material error.

Recent PTAB Decision Applying and Distinguishing the Director's OpenSky Decision: Cisco Systems, Inc. v. Centripetal Networks, Inc., IPR2022-01151, Paper 12 (Jan. 4, 2023)

In a January 4, 2023 Institution Decision in Cisco Systems, Inc. v. Centripetal Networks, Inc., IPR2022- 01151, the Board granted Petitioner's motion for joinder and distinguished OpenSky Industries, LLC v. VLSI Technology LLC, IPR2021-01064, Paper 102 (PTAB Oct. 4, 2022).

Specifically, in the IPR to which Cisco sought joinder, the Board determined that the petitioner satisfied the “reasonable likelihood” standard for instituting trial. Cisco presented substantively identical challenges in its joinder petition. Patent Owner argued that Cisco's petition should be denied because the Board wrongly determined that the earlier petition satisfied the “reasonable likelihood” standard for instituting trial.

Citing OpenSky, Patent Owner asserted that the Board should reconsider the earlier petition using a “compelling merits” standard instead of a reasonable likelihood standard and contended that the first petitioner “filed its petition for many of the same ‘improper purposes' as the petitioner” in OpenSky. The Board rejected Patent Owner's argument, noting that “the issue in this proceeding is whether to join Petitioner as a party to the ongoing trial, not whether to conduct a completely separate trial” and that the facts in the instant petition “differ dramatically from” OpenSky. The Board noted that in OpenSky, the Director determined that “OpenSky engaged in abuse of process and unethical conduct by offering to undermine and/ or not vigorously pursue this matter in exchange for a monetary payment.”

Here, the Board found that Patent Owner pointed to no evidence that the first petitioner filed its petition for the “same ‘improper purposes' as the petitioner” in OpenSky and, instead, “seeking to demonstrate some impropriety,” Patent Owner discusses the second petitioner's conduct—Cisco's district court invalidity position. The Board noted that the remedy in OpenSky resulted from “OpenSky's abuse of the process,” not the joinder applicant's conduct.

The Board also noted that the Director in OpenSky explained that IPRs have “repeatedly” been instituted “where the petitioner has not been sued for infringement” and that there may be circumstances where a petitioner has not yet been sued, but “believes it may be, or otherwise wants to make sure it has the freedom to operate.” Applying that here, the Board pointed out that the earlier Institution Decision noted that (1) Patent Owner alleged in a 2021 civil action that the first petitioner infringed thirteen patents and (2) that the first petitioner subsequently filed petitions on all claims of the thirteen patents, as well as petitions on claims in three additional patents, including the patent at issue in the instant petition. The Board further noted that the earlier Institution Decision explained that the earlier petitioner “expresses reasonable concern that Patent Owner may initiate additional litigation” involving the patent at issue here.

The Board noted that “insofar as there are pending applications or other patents in the same family as the patent at issue here, an adverse judgment against Patent Owner in the earlier IPR would preclude Patent Owner ‘from taking action inconsistent with the adverse judgment,' including obtaining in any patent any claim ‘that is not patentably distinct from a finally refused or canceled claim,'” so the first petitioner may want to “make sure it has the freedom to operate.” Finally, the Board stated that “[c]onsistent with this,” the first petitioner stated that it challenged the patent because it (1) “is directly related” to patents that Patent Owner has asserted against the earlier petitioner and (2) “includes overlapping claims/specification/terms.” Based on the above, the Board declined to depart from the “reasonable likelihood” standard.

Upcoming Events and Speaking Engagements

Upcoming 2023 PTAB Bar Association Annual Conference: The conference will be held in person March 8-10, 2023 at the Ritz-Carlton in Washington, DC with virtual and live stream options available. Conference topics and events will include:

• An afternoon with direct Administrative Patent Judge interaction (APJ Day)
• Panel discussion of issues before the PTAB
• The effective use of expert witnesses
• APJ insights and tips on practice before the PTAB
• IPR petitions and POPRs
• PTAB appeals and reexamination strategies
• The state of Section 112
• An appellate perspective
• Sessions on ethics, diversity, equity, and inclusion issues

More details and registration information can be found here.

Upcoming Patent Law Institute 2023: Conference on Critical Issues and Best Practices. Arnold & Porter partner Jessica Kaiser will be presenting on a panel with the focus: “A Look at PTAB Proceedings as We Enter Decade Two.” Specific panel topics include:

• Latest statistics on PTAB proceedings
• Rise and fall (or not) of Fintiv
• Procedural and caselaw changes impacting PTAB practices
• Tips and insights for practicing before the PTAB

The conference will occur April 27-28, 2023 in San Francisco and will be webcast live at www.pli.edu. More details and registration information can be found here.

Other Notable Developments

Unleashing American Innovators Act of 2022/Director's Blog: This act passed into law December 6, 2022 as part of the Consolidated Appropriations Act, 2023. It includes several provisions for increasing the inclusiveness of innovation. The following are some provisions of the law:

• Increases discounts for small entity fee discounts (50 percent to 60 percent) and micro entity fee discounts (75 percent to 80 percent)
• Requires regional patent office outreach activities to target underrepresented groups in patent filings (e.g., low-income, veterans, and certain geographic groups)
• Requires the patent office to target new patent examiner and Administrative Patent Judge hires from economically, geographically, and demographically diverse backgrounds
• Requires the PTO to establish a new satellite office in the southeastern US within three years and four new community outreach offices within five years
• Requires the PTO enact a pilot program to help prospective first-time applications assess strengths and weaknesses of a potential patent application
• Requires the PTO to conduct and report a study on patent pro bono programs to Congress

IP Policy and International Affairs Economic Note: A USPTO Pilot Program Reduced Gender Disparities in Patenting: In Issue No. 102, the Office of the Chief Economist reported that the USPTO's Pro Se Pilot Examination Unit successfully reduced gender disparities in patenting. Started in October 2014, the Unit was created to help applicants lacking legal representation navigate the patenting process. A study showed this examination program increased the likelihood that women pro se applicants would receive a patent by 16.8 percentage points.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.