In Xerox Corp. v. Bytemark, Inc,1 Director Vidal initiated sua sponte Director Review of the Board's decision denying institution of Xerox's IPR, affirmed the Board's ruling, and designated it as precedential. The decision highlights the importance of presenting evidence and technical reasoning in expert declarations to support petition arguments.
Xerox's IPR challenged U.S. Patent No. 10,360,567 (the '567 patent), which claims a mobile ticketing system that detects fraudulent ticket activity by identifying mismatches between transmitted and received ticket data. Specifically, the claims recite a system that detects a user's fraudulent activity and stores the occurrence of such activity as a "data value" in the data record associated with the user's account.
In challenging the '567 patent claims, Xerox asserted a reference called Terrell, which disclosed that, upon the detection of fraudulent activities, ticket purchasers "could be blocked from further use of the system."2 Xerox conceded that Terrell did not explicitly teach storing of a data value, as claimed in the '567 patent, but argued that Terrell's disclosure of blocking a ticket purchaser against potential fraud would either "require" storing such a data value or render such functionality obvious.3 In support, Xerox relied on its expert's declaration, which stated that a skilled artisan "would understand that [] blocking would require recording the blocking in a data record associated with that user's account," and "would find it obvious that blocking the account of the purchaser from further use of the system would include storing a data value indicating the fraudulent activity in a data record associated with the user account."4 The Board, however, determined the declaration testimony to merely repeat Xerox's attorney argument verbatim, without providing any additional evidence or technical reasoning.5 Consequently, the Board gave little weight to the expert testimony and denied institution.6 Xerox requested rehearing and Precedential Opinion Panel (POP) review of the Board's decision,7 but Director Vidal initiated sua sponte Director Review, which dismissed the rehearing and POP request.8
The Director Review specifically addressed "the Board's consideration of expert testimony."9 First, the Director rejected Xerox's new obviousness arguments raised for the first time in its rehearing request that attempted to remedy the shortcomings of its petition, finding the arguments both untimely and lacking support in expert testimony.10 Then, relying on Federal Circuit precedent, the Director determined that the Board was "correct in giving little weight" to the expert testimony because the "declaration merely offered conclusory assertions without underlying factual support and repeated, verbatim, [Xerox's] conclusory arguments."11 In particular, the Director noted the expert's declaration failed to "provide any technical detail, explanation, or statements" as to why Terrell's disclosure about blocking a user required or rendered obvious storage of a data value in the data record associated with the user's account, as recited in the '567 patent claims.12 The Director found that, rather than "setting forth facts and evidence in support of [Xerox's] assertions," the expert testimony merely "set[] forth [Xerox's] conclusory assertions as though they [were] facts."13 Thus, the Director agreed with the Board that the expert declaration "is conclusory and unsupported, adds little to the conclusory assertion for which it is offered to support, and is entitled to little weight."14
Take Away
The Board may give little to no weight to expert declarations that merely restate conclusory attorney argument verbatim without supporting evidence and technical reasoning.
Footnotes
1. No. IPR2022-00624, Pap. No. 12 (PTAB Feb. 10, 2023) (Vidal, Dir.).
2. Xerox Corp. v. Bytemark, Inc., No. IPR2022-00624, 2022 WL 3648989, at *4 (PTAB Aug. 24, 2022).
3. Id. at *5.
4. Xerox, No. IPR2022-00624, Ex. 1003, at ¶ 54.
5. Xerox, 2022 WL 3648989, at *6.
6. Id. at *6-7.
7. Xerox, No. IPR2022-00624, Pap. No. 10.
8. Xerox, No. IPR2022-00624, Pap. No. 13.
9. Xerox, No. IPR2022-00624, Pap. No. 12, at 2.
10. Id. at 4-5.
11. Id. at 5.
12. Id.
13. Id.
14. Id.
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