The PTAB Establishes Standards for Exercising Discretion to Deny Institution Under § 314(a) and § 325(d)

In AIA post-grant proceedings, petitioners occasionally present challenges based on prior art or argumentation that was previously presented to the Patent Office. In some cases, the Patent Trial and Appeal Board (PTAB) has exercised its discretion to deny institution based on the fact that the Patent Office has already considered such prior art or argumentation. Similarly, the PTAB has in some cases denied “follow-on” petitions where a petitioner seeking another bite at the apple files a subsequent petition challenging the same claims that were challenged in an earlier-filed petition.

In such decisions denying institution, the PTAB routinely cites 35 U.S.C. § 325(d) and/or 35 U.S.C. § 314(a) as the basis for exercising its discretion to deny institution. Discussed below are decisions recently designated by the PTAB as informative or precedential which provide guidance on the factors the PTAB considers in determining whether to exercise its discretion under § 325(d) and § 314(a) to deny institution.

Petitioners should provide a reason why the prior art or argumentation relied on in the petition differs from what was previously presented to the Patent Office

Under 35 U.S.C. § 325(d), the PTAB may take into account whether “the same or substantially the same prior art or arguments previously were presented to the Office,” and deny institution on such grounds. In Unified Patents Inc. v. Berman, IPR2016-01571, Paper 10 (PTAB Dec. 14, 2016) (informative), the PTAB exercised its discretion under § 325(d) to deny institution in light of the fact that the prior art reference cited in the petition was previously considered during prosecution of the challenged patent. During prosecution, the examiner made a rejection based on the reference, but the claims which ultimately issued were never formally rejected based on the reference. Nevertheless, the PTAB gave weight to the examiner’s statement that a subset of the issued claims overcame the reference and the prior art of record, and thus determined that the reference “was substantially considered by the Examiner during the prosecution of these claims.”

In deciding to exercise its discretion under § 325(d), the PTAB noted that the petition did not “present any argument distinguishing the Examiner’s prior consideration of [the reference] or . . . provide a compelling reason why [the PTAB panel] should readjudicate substantially the same prior art and arguments as those presented during prosecution and considered by the Examiner.” Accordingly, the PTAB placed the burden on the petitioner to either explain why the prior art was being applied in the petition in a manner different from the manner in which the prior art was considered during prosecution, or to provide some other compelling reason as to why reconsideration of the prior art and arguments is warranted. The PTAB found that the petitioner had failed to do so, and thus exercised its discretion under § 325(d) to deny institution.

In light of the rationale in Unified Patents, petitioners should consider providing, in the petition, reasons why consideration of prior art or argumentation previously presented to the Patent Office is warranted.

Patent owners should explain why each reference of an alleged combination was previously considered by the Patent Office

In Unified Patents, the PTAB declined to exercise its discretion under § 325(d) to deny institution of a challenge based on a combination of two prior art references. The PTAB determined that the primary reference was previously considered during prosecution of the challenged patent. However, the patent owner did not present any argument as to why the secondary reference was previously considered. Since the patent owner failed to establish that the secondary reference (or art substantially the same as the secondary reference) was previously considered, the PTAB was not persuaded that “the same or substantially the same prior art or arguments previously were presented to the Office,” and declined to deny institution for the obviousness challenge.

Thus, where a patent owner seeks denial under § 325(d) of a patentabiliy challenge relying on a combination of references, the patent owner should consider providing an explanation as to why each and every reference of the combination was previously considered by the Patent Office, not merely the primary reference.

Institution denials under § 325(d) can arise from a previous determination concerning entitlement to priority

In Hospira, Inc. v. Genentech, Inc., IPR2017-00739, Paper 16 (PTAB July 27, 2017) (informative), the petitioner argued that the challenged claims were not entitled to the priority date of an earlier-filed application. The petitioner sought to apply intervening prior art in view of the assertion that the priority claim was invalid.

The PTAB exercised its discretion under § 325(d) to deny institution. The PTAB based its decision on the determination that, during prosecution, the examiner had already considered the dispositive issue of whether the claims were entitled to the priority date of the earlier-filed application. The fact that the examiner had “fully” considered the priority issue during prosecution, and the lack of any new persuasive evidence or arguments presented by the petitioner, weighed in favor of denial:

[T]he Examiner considered fully the written description and enablement issues underlying Applicant’s claim to priority in allowing the claims to issue, and Petitioner has not presented new evidence or arguments that would convince us that the Examiner’s determination was unreasonable.

Although § 325(d) issues often arise in the context of whether the Patent Office previously considered the scope and content of the prior art compared with the challenged claims, the application of § 325(d) is not limited to this context. As seen in Hospira, § 325(d) denials can also arise from the Patent Office’s prior consideration of priority entitlement issues which ultimately have bearing on prior art qualification.

Third party submissions may give rise to denial under § 325(d)

In Cultec, Inc. v. Stormtech LLC, IPR2017-00777, Paper 7 (PTAB Aug. 22, 2017) (informative), the PTAB exercised its discretion under § 325(d) to deny institution because the prior art reference asserted in the petition was previously considered by the examiner in a third party submission filed during prosecution of the challenged patent. The third party submission was filed with a claim chart comparing the claimed subject matter to the prior art reference. The PTAB determined that “[t]he claim charts submitted with the Petition are an expanded version of the claim chart submitted with the Third Party Submission,” and thus concluded that the prior art reference was previously considered by the Patent Office. The PTAB also noted that the third party submission was filed by the petitioner’s lead counsel in the IPR proceeding.

Unified Patents and Cultec exemplify the PTAB’s flexible approach to determining whether prior art or argumentation was previously considered by the Patent Office. The PTAB does not strictly require a prior art reference to have been formally applied in a rejection during prosecution in order to be deemed “considered” for purposes of § 325(d). Rather, statements made by the examiner during prosecution and third party submissions can serve as the basis for the PTAB exercising its discretion under § 325(d) to deny institution.

The PTAB’s discretion to deny institution under § 314(a) is not limited to the specific factors set forth in § 325(d)

In General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (Sep. 6, 2017) (precedential as to section II.B.4.i.), the PTAB held that “§ 325(d) is not intended to be the sole factor in the exercise of discretion under § 314(a).” The PTAB explained that § 314(a) provides the PTAB with broad discretion because it “does not specify any particular circumstance in which review must be authorized.” Since the exercise of discretion under § 314(a) is not limited to the factors set forth § 325(d), a denial of institution under § 314(a) need not follow the “same or substantially the same prior art or arguments” standard set forth in § 325(d).

Factors for denying follow-on petitions under § 314(a)

In contrast with § 325(d), the PTAB indicated that its discretion to deny institution under § 314(a) is specifically applicable to situations involving follow-on petitions. In General Plastic, the PTAB set forth the NVIDIA factors for determining when it is appropriate to exercise its discretion to deny institution under § 314(a):

1. whether the same petitioner previously filed a petition directed to the same claims of the same patent;

2. whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;

3. whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition;

4. the length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;

5. whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;

6. the finite resources of the Board; and

7. the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.

Petitioners should consider including in a follow-on petition an explanation as to why the NVIDIA factors weigh in favor of consideration of such follow-on petition.

Conclusion

Patent owners have expressed concerns about the potential harassment and judicial inefficiencies caused by multiple challenges. By designating the above decisions as informative or precedential, the PTAB has established standards under § 314(a) and § 325(d) for denying follow-on petitions and petitions which attempt to relitigate issues already considered by the Patent Office.

There are risks associated with relying on prior art or argumentation previously considered by the Patent Office or previously presented in an earlier AIA petition. In Unified Patents, Hospira, and Cultec, the PTAB took a flexible and inclusive approach in determining whether the same or substantially the same prior art or argumentation was “considered” by the Patent Office and whether such prior consideration warrants denial under § 325(d). While these decisions designated as “informative” are not binding authority, they nevertheless provide guidance on how PTAB panels may exercise their discretion under § 325(d) to deny institution.

In General Plastic, the PTAB was careful to note that under § 314(a), “[t]here is no per se rule precluding the filing of follow-on petitions after the Board’s denial of one or more first-filed petitions on the same patent.” However, one could argue that the NVIDIA factors generally weigh in favor of denying institution of follow-on petitions filed by the same petitioner. Thus, petitioners filing follow-on petitions, particularly after denial of an earlier-filed petition, should consider providing compelling reasons as to why the follow-on petition should be instituted in view of the NVIDIA factors.

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