April 28, 2016 Practice Points

Inter Partes Review Petitions: Heads I Win, Tails You Lose

Unfortunately for patent owners, when it comes to inter partes reviews, any conclusive effect intended by the legislature has been severely diluted.

By Robert M. Asher

Inter partes reviews (IPRs) are, plain and simple, a tool for killing patents.  In view of rules implemented by the USPTO and the courts' interpretations of the AIA statute, it would be ill-deserved to refer to these proceedings as a litigation alternative. Litigation in courts offers opposing parties an opportunity to discover and present evidence in support of their respective positions. At the end of the litigation, there should be a judgment that resolves the contested issues between the parties. Unfortunately for patent owners, when it comes to inter partes reviews, any conclusive effect intended by the legislature has been severely diluted.

According to USPTO rules as practiced by the Patent Trial and Appeal Board (PTAB), inter partes reviews do not necessarily address all of the claims of a patent. In fact, not even all of the claims attacked in the petition need be considered in an inter partes review trial. An inter partes review may not be instituted unless "there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition." 35 U.S.C. § 314(a). Yet a final written decision must issue with respect to "any patent claim challenged by the petitioner." 35 U.S.C. § 318(a). The Federal Circuit found the different wording to describe the claims highly significant. It held that because § 318(a) did not use the language "the claims challenged in the petition," the Board may institute  and issue a final decision according to its rules as to only the claims and grounds on which it institutes review. Synopsys, Inc. v. Mentor Graphics Corp., 117 U.S.P.Q. 1753 (Fed. Cir. 2016).

It may seem beneficial to the patent owner to avoid an inter partes review trial on patent claims for which inter partes review is not instituted. But instead of benefiting from a determination that a probable showing of invalidity has not been made out, the patent owner may be forced to defend against the invalidity challenge again in court. On March 23, the Federal Circuit Court of Appeals addressed whether an unsuccessful petitioner could raise a non-instituted validity challenge later in court. "We agree with the PTO that §315(e) would not estop [petitioner] from bringing its [non-instituted invalidity argument] in either the PTO or the district courts." Shaw Industries Group, Inc. v. Automated Creel Systems, Inc., (Fed. Cir. March 23, 2016). Rather than resolving the validity challenge, the inter partes review petition has given the challenger a first chance to try out its invalidity argument and if it does not work, an unhindered opportunity to revise its challenge and assert it again in court. This is because estoppel does not apply to grounds raised in a petition, which were not permitted into the inter partes review trial.

According to the statute, estoppel extends to grounds that reasonably could have been raised in the IPR. Grounds that were not instituted could not have been raised during the IPR trial, so the non-instituted grounds may be raised later in court. What about grounds that weren't presented in the petition, but could have been? Judge Lefkow of the Northern District of Illinois appears to be the first to consider what is meant by "reasonably could have been raised." Her analysis found a loophole for petitioners.  Judge Lefkow held that a petitioner can try again in court by including at least one reference, which would not have been found by a skilled searcher, even if that reference discloses no more than references that were readily available. Clearlamp, LLC v. LKQ Corp., No. 12-cv-2533, (N.D. Ill. March 18, 2016). The question put by the court is not whether the prior art content was reasonably available to the petitioner but rather whether the asserted document itself could have been found. The court placed the burden on patent owner to show that the new reference being raised in court reasonably could have been raised in the IPR. Thus, patent owner must show a skilled searcher would have found the reference at the time the petition was prepared.

In Clearlamp, the defendant found a datasheet through a third party subpoena. Although the datasheet had been published on the manufacturer's website in 2001, it was not shown to have been readily available to a searcher at the time of the IPR petition. So even though the datasheet might have been redundant of prior art that was readily available, the datasheet itself could not reasonably have been raised. Thus, the court allowed the invalidity challenge against a claim that had survived the IPR. The claim was invalidated on the basis of references raised in the IPR plus the datasheet. The petitioner was able to overcome its failure in the PTAB by locating a hard-to-find prior art document, which may have disclosed no more than was available to the petitioner at the time of filing its petition.

Patent owners faced with an IPR fear of losing their patents in the IPR proceeding. Oddly enough, winning at the PTAB will not allay those fears. Of particular concern, the PTAB may have refused to consider "redundant" grounds for invalidity. This opens the door to the petitioner to raise those grounds, perhaps with a fuller or better-reasoned presentation, later in court. The weakness of the estoppel provisions puts patent owners in what may seem like a never-ending battle to defend their patents.

Keywords: intellectual property, litigation, patents, patent owners, inter partes review, USPTO

Robert M. Asher is with Sunstein Kann Murphy & Timbers, LLP, in Boston, Massachusetts.


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Robert M. Asher – April 28, 2016