In SAS Institute, Inc. v. Iancu, 138 S.Ct. 1348 (2018), the Supreme Court held that a Patent Trial and Appeal Board (PTAB) decision on institution of an inter partes review (IPR) petition must be binary - either all challenged claims are instituted or all are denied. The USPTO and Federal Circuit both interpreted SAS to further require that that all grounds be either instituted or denied. See Guidance on the impact of SAS on AIA trial proceedings (April 26, 2018), PGS Geophysical AS v. Iancu, 891 F.3d 1354, 1360 (Fed. Cir. 2018). But what happens when the PTAB concludes that the petitioner has met the threshold with respect to some grounds or some claims but has not met the threshold with respect to all?

Of course, if the PTAB finds the unpatentability threshold is met for even one claim on one ground, the PTAB can institute. This is after all how 35 U.S.C. §314(a) reads: institution is authorized if there is “a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” (emphasis added). Shortly after the PTAB released its guidance on the impact of SAS, it stated in Q&As regarding SAS that it “does not contemplate a fixed threshold for a sufficient number of challenges for which it will institute.” SAS Q&As, question D3. This left open the question as to when the PTAB would institute and when the PTAB would deny institution on a mixed conclusion as to a reasonable likelihood of unpatentability; whether strong grounds in a petition would pull weaker grounds along for the ride, or whether weaker grounds would undermine institution.

In practice, when the PTAB analysis comes to mixed conclusions on multiple grounds, the clear tendency shown so far is to institute. In fact, in a sample of 50 post-SAS IPR institution decisions, we found 17 with a “mixed” conclusion and in all 17 the PTAB instituted the IPR.

In recent decisions, however, the PTAB has come to “mixed” conclusions and denied institution. It is not clear if this is a trend, but these cases show how the Board analyzes each case carefully. And, as a patent owner, pointing out weaknesses in the petition remains a good strategy for obtaining a denial. 

In Biofrontera Inc. v. DUSA Pharms., Inc., IPR2018-01585, Paper 10 (P.T.A.B. Feb. 26, 2019), Petitioner Biofrontera challenged 19 claims with two anticipation grounds and six obviousness grounds. (See also Biofrontera Inc. v. DUSA Pharms., Inc., IPR2018-01586, Paper 10). The PTAB found one ground met the “reasonable likelihood of showing unpatentability” threshold with respect to 3 claims, but nevertheless denied institution because the benefits of holding a trial “would be overwhelmed by the burden of addressing the challenges having no reasonable likelihood”:

Petitioner has established a reasonable likelihood of success on only 1 of 8 grounds. If we were to institute a trial, Petitioner currently stands reasonably likely to have 3 claims held unpatentable, including the sole independent claim, but does not have a reasonable likelihood for the remaining 16 claims. Although we do not look strictly at precise percentages of institutable grounds and/or claims, this case presents a clear instance where the benefits of holding a trial to resolve the challenges having a reasonable likelihood would be overwhelmed by the burden of addressing the challenges having no reasonable likelihood.  In conclusion, we exercise our discretion not to institute because institution would not serve the just, speedy, and inexpensive resolution of the parties’ dispute, or of inter partes reviews as a whole.

In Adaptics Ltd. v. Perfect Co., IPR2018-01596, Paper 20 (P.T.A.B. March 6, 2019), the PTAB denied institution after finding that the petitioner failed to satisfy 35 U.S.C. §312(a) requirement to identify “with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim.” The PTAB concluded that petitioner’s use of the “and/or” grammatical construct to link up to six secondary references in multiple obviousness grounds resulted in “voluminous and excessive grounds” with a “lack of particularity.”

More specifically, the petitioner challenged 9 independent claims on 4 grounds based on 12 references and an expert declaration. The PTAB took particular exception to what it characterized as petitioner’s “worst offender,” its third “catch-all” ground:

Petitioner’s third obviousness ground is a “catch-all” ground. Petitioner contends that “[i]f Bendel and Sartorius are not anticipatory, the challenged claims are obvious over these references in combination with each other, Williams, Turnage, Abrams, Bordin, Mettler, Digi-Star, Yuyama, and/or Wright.”  Pet. 62.  According to Petitioner, “[t]hese combinations were obvious for, and would have been motivated by, the same basic reasons outlined above for Williams and Turnage with each of these secondary references.”  Id.

Id. at 14-15.

We agree with Patent Owner that Petitioner’s reliance on up to ten references connected by the conjunction “and/or” results in a multiplicity of grounds, none of which is presented with sufficient particularity. Even if we were to disregard the order of references and consider only the two-reference combinations encompassed by Petitioner’s asserted ground, Petitioner’s contention encompasses nine combinations with Bendel and another eight distinct combinations with Sartorius, for a total of seventeen possible combinations. Even that conservative interpretation of Petitioner’s contention yields an unduly burdensome number of combinations. Petitioner’s use of “and/or,” however, expands the ground to include combinations of three, four, or more references, yielding hundreds of possible combinations.

Id. at 18-19.

The PTAB found that found Petitioner’s large number of contentions was “unduly burdensome” on both the patent owner and the PTAB:

Petitioner’s “catch-all” ground attempts to require Patent Owner to address whether each and every claim limitation is taught not only by each of Bendel and Sartorius, but by each of these references in combination with one or more of the other references asserted in the proceeding. In this way, Petitioner’s “catch-all” ground is not reasonably bounded in scope and unduly burdensome for both Patent Owner and the Board to address.

Id. at 20-21.

The PTAB took note that “[t]he statutory requirement for particularity in a petition for IPR takes on heightened importance when considered in conjunction with SAS’s “all-or-nothing” approach” and “[e]ven when a petitioner demonstrates a reasonable likelihood as to at least one claim, however, institution of an IPR remains discretionary.” Id. at 17. The PTAB found that although ground 3 was the “worst offender,” grounds 1 and 2 also lacked particularity.

The PTAB concluded:

Considering the totality of the issues addressed above, we determine that the Petition fails to meet the particularity requirement of 35 U.S.C. § 312(a)(3) and that the lack of particularity results in voluminous and excessive grounds.  We further determine that, in the interests of efficient administration of the Office and integrity of the patent system and as a matter of procedural fairness to Patent Owner, the entire petition should be denied under 35 USC § 314(a).  See 35 U.S.C. § 316(b); see also SAS Q&As, question D2.

Id. at 24.

Takeaways and Lessons Learned:

The PTAB’s decision to institute is discretionary and, generally, non-appealable. 35 U.S.C. §314(a). The reality petitioners face, therefore, is one where every effort has to be made to convince the PTAB that on balance, their position is the one that will lead to a “speedy, just, and inexpensive” resolution of the case.

For the party considering filing a petition challenging patent claims, these cases show that careful consideration must be taken with respect to how many claims and grounds to include in each petition. More is not necessarily better. Indeed, the shot-gun approach in Adaptics failed for the petitioner. If there are too many claims/grounds, page limits also may preclude presentation of sufficient support, leading the PTAB to exercise its discretion and deny the entire petition. Try to focus your grounds so you can argue them sufficiently to meet the requirements of 35 U.S.C. §312(a) within the page limit. Alternatively, the petitioner can file multiple petitions.

In light of the Biofrontera cases, a petitioner may wish to choose fewer claims/grounds to challenge. Failing to take this point into consideration could lead the PTAB to conclude that “not enough” claims/grounds reasonably likely establish unpatentability, leading to a discretionary denial of the entire petition.

The petitioner, moreover, cannot take too much comfort from a situation where the PTAB found that some claims were reasonably likely to be unpatentable but still denied institution. Even if the “likely unpatentable” conclusion is considered in a district court proceeding, it may not control where claims are presumed to be valid and where invalidity must be shown by clear and convincing evidence; the PTAB made its threshold determinations based on the lower standards of a preponderance of evidence and no presumption of validity.

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.