Updated Trial Practice Guide: Impact on Strategies in AIA Trial Proceedings

As previously discussed, the USPTO has provided an update to the Office Patent Trial Practice Guide (“Practice Guide”).  The Practice Guide Update addresses areas of practice and procedure which have evolved and developed since the inception of AIA trial proceedings and the issuance of the original Practice Guide in August 2012. Highlights of the Practice Guide Update are discussed below.

Limitations on the Use of Expert Testimony

The Practice Guide Update provides guidance concerning the use of expert testimony in AIA trial proceedings. Expert testimony may be presented for a variety of purposes, including to explain the relevant technology, establish the level of skill in the art, and describe the person of ordinary skill in the art. Experts may opine on the teachings of the prior art and how they relate to patentability including whether there would have been a reason to combine references in a certain way, or if there may have been a reasonable expectation of success in doing so. Experts may testify concerning evidence of objective indicia of nonobviousness.

The PTAB has broad discretion to assign weight to expert testimony submitted by parties. However, expert testimony cannot take the place of a prior art disclosure when that disclosure is required as part of the unpatentability analysis:

Expert testimony, however, cannot take the place of a disclosure in a prior art reference, when that disclosure is required as part of the unpatentability analysis. For example, because “[a] claim is anticipated only if each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference,” [citation omitted], a petitioner asserting anticipation cannot rely on its expert to supply disclosure of a claim element that is not expressly or inherently present in the reference. Similarly, in an obviousness analysis, conclusory assertions from a third party about general knowledge in the art cannot, without supporting evidence of record, supply a limitation that is not evidently and indisputably within the common knowledge of those skilled in the art. [Citation omitted]. Furthermore, because an inter partes review may only be requested “on the basis of prior art consisting of patents or printed publications,” 35 U.S.C. § 311(b), expert testimony cannot take the place of disclosure from patents or printed publications. In other words, expert testimony may explain “patents and printed publications,” but is not a substitute for disclosure in a prior art reference itself.

Practice Guide Update at 4-5. Petitioners and patent owners should consider the PTAB’s guidance on expert testimony when developing and responding to grounds of challenge and crafting replies and responses.

Denial Under § 314(a) Is Not Limited to “Follow-On” Petitions

As previously discussed, the PTAB designated as precedential its decision in General Plastic Co., Ltd. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper 19 (PTAB Sept. 6, 2017) (precedential as to Section II.B.4.i.). In General Plastic, the PTAB denied a “follow-on” petition which challenged the same patent as challenged in a previous petition. The Practice Guide Update sets forth the non-exclusive factors articulated in General Plastic for determining whether “follow-on” petitions should be denied. Interestingly, the PTAB states that there may be other circumstances in addition to the “follow-on” petition context which warrant denial of institution:

The General Plastic factors are also not exclusive and are not intended to represent all situations where it may be appropriate to deny a petition . . . . There may be other reasons besides the “follow-on” petition context where the “effect . . . on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings,” 35 U.S.C. § 316(b), favors denying a petition even though some claims meet the threshold standards for institution under 35 U.S.C. §§ 314(a), 324(a). This includes, for example, events in other proceedings related to the same patent, either at the Office, in district courts, or the ITC. See NetApp, Inc. v. Realtime Data LLC, Case IPR2017-01195, slip op. at 12–13 (PTAB Oct. 12, 2017) (Paper 9) (denying institution under § 314(a) of a follow-on petition filed by a different petitioner where, due to petitioner’s delay, the Board likely would not have been able to rule on patentability until after the district court trial date). Accordingly, parties may wish to address in their submissions whether any other such reasons exist in their case that may give rise to additional factors that may bear on the Board’s discretionary decision to institute or not institute, and whether and how such factors should be considered along with the General Plastic factors.

Practice Guide Update at 10-11.

Thus, the PTAB may be willing to consider arguments outside of the “follow-on” petition context. In developing such arguments, patent owners should consider the impact institution would have on the factors set forth in § 316(b), i.e., “the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings.”

The PTAB Is Not Limited to Considering the Becton Dickinson Factors When Making a § 325(d) Determination

Under § 325(d), the Director may deny a petition when the same or substantially the same prior art or arguments presented in the petition previously were presented to the Office. As previously discussed, the PTAB has designated a number of cases involving § 325(d) as informative. These informative decisions provide guidance on the factors considered by the PTAB when making a § 325(d) determination.

Specifically, the Practice Guide Update reproduces the non-exclusive factors articulated in Becton Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper 8, at 17-18 (PTAB Dec. 15, 2017) (informative) for evaluating whether to deny institution on the basis of § 325(d):

  1. the similarities and material differences between the asserted art and the prior art involved during examination;
  2. the cumulative nature of the asserted art and the prior art evaluated during examination;
  3. the extent to which the asserted art was evaluated during examination;
  4. the extent of the overlap between the arguments made during examination and the manner in which a petitioner relies on the prior art or a patent owner distinguishes the prior art;
  5. whether a petitioner has pointed out sufficiently how the Office erred in evaluating the asserted prior art; and
  6. the extent to which additional evidence and facts presented in the petition warrant reconsideration of the prior art or arguments.

Practice Guide Update at 12. The PTAB has indicated that the Becton Dickinson factors are not exclusive. When crafting § 325(d) arguments, patent owners should consider addressing any additional factors that are relevant to the Board’s exercise of discretion to deny institution.

Patent Owner Sur-Replies Replace Observations on Cross-Examination

The PTAB has replaced the previous practice of filing observations on cross-examination testimony with a more robust sur-reply practice. Unlike observations on cross-examination testimony, the sur-reply can contain arguments that are responsive to the petitioner reply:

Sur-replies to principal briefs (i.e., to a reply to a patent owner response or to a reply to an opposition to a motion to amend) normally will be authorized by the scheduling order entered at institution. The sur-reply may not be accompanied by new evidence other than deposition transcripts of the cross-examination of any reply witness. Sur-replies should only respond to arguments made in reply briefs, comment on reply declaration testimony, or point to cross-examination testimony. As noted above, a sur-reply may address the institution decision if necessary to respond to the petitioner’s reply. This sur-reply practice essentially replaces the previous practice of filing observations on cross-examination testimony.

Practice Guide Update at 14.

The sur-reply practice set forth in the Practice Guide Update provides patent owners with significantly more latitude to present arguments in comparison with observations on cross-examination. Previously, observations on cross-examination were limited to comments on the relevance of deposition testimony and could not raise new issues, re-argue issues, or pursue objections. 77 Fed. Reg. 48768. PTAB panels have refused entry of observations which failed to comply with these requirements. See, e.g., Medtronic, Inc. v. NuVasive, Inc., IPR2013-00506, Paper 37, at 4 (PTAB Oct. 15, 2014); Xilinx, Inc. v. Papst Licensing GMBH & Co., KG, IPR2016-00104, Paper 22, at 9-10 (PTAB May 3, 2017). Patent owners are no longer required to follow the rigid format of observations on cross-examination, and are now free to present arguments responsive to the petitioner reply, comment on reply declaration testimony, and point to cross-examination testimony. However, the sur-reply may not include new evidence other than cross-examination testimony. Sur-reply practice may provide patent owners with the ability to file the final substantive brief prior to the hearing.

Replies and Sur-Replies May Not Contain New Arguments “Necessary to Make Out Petitioner’s Case-in-Chief”

The Practice Guide Update provides guidance on the permissible scope of replies and sur-replies. Citing Federal Circuit decisions, the PTAB provides the following guidance:

While replies and sur-replies can help crystalize issues for decision, a reply or sur-reply that raises a new issue or belatedly presents evidence may not be considered. The Board is not required to sort proper from improper portions of the reply or sur-reply.

Examples of new issues are new theories or arguments necessary to make out petitioner’s case-in-chief for the unpatentability of an original or proposed substitute claim, such as a newly raised rationale to combine the prior art references that was not expressed in the petition. See Intelligent Bio-Systems, Inc. v. Illumina Cambridge Ltd., 821 F.3d 1359, 1369–70 (Fed. Cir. 2016) . . . . It is also improper to present in reply new evidence (including new expert testimony) that could have been presented in a prior filing, for example newly cited prior art references intended to “gap-fill” by teaching a claim element that was not present in the prior art presented with the petition. See Genzyme Therapeutic Prods. Ltd. v. Biomarin Pharm. Inc., 825 F.3d 1360, 1365–69 (Fed. Cir. 2016) . . . .

Practice Guide Update at 15. Parties should consider whether replies and sur-replies filed by an opposing party exceed the permissible scope set forth in the Practice Guide Update.

Parties May Seek Early Resolution of Motions to Exclude When the Evidence Is Central to the Dispute

The Practice Guide Update states that in cases where objected-to evidence is “central to the parties’ dispute,” parties can request a pre-hearing conference to seek early resolution of the motion to exclude:

In the Board’s experience, consideration of the objected-to evidence is often unnecessary to resolve the patentability of the challenged claims, and the motion to exclude is moot. Nevertheless, in certain circumstances, the evidence may be so central to the parties’ dispute that mootness is unlikely and early resolution of the motion to exclude may be warranted. In such cases, a party may request a pre-hearing conference with the panel to seek early resolution of a motion to exclude on a limited number of objections. The Board will preferably rule on such a motion during the pre-hearing conference (or after the pre-hearing conference but before the oral hearing), but may also defer ruling until the oral hearing or thereafter.

Practice Guide Update at 17. Parties should consider whether there is any objected-to evidence that is central to the dispute, and whether it may be advantageous to seek early resolution concerning admissibility of such evidence.

Motions to Strike Are “Exceptional” Remedies that Are Rarely Granted

Motions to strike may be appropriate in situations where a brief filed by an opposing party raises new issues, is accompanied by belatedly presented evidence, or otherwise exceeds the proper scope of reply or sur-reply. The Practice Guide Update states that a motion to strike is an “exceptional remedy that the Board expects will be granted rarely”:

In most cases, the Board is capable of identifying new issues or belatedly presented evidence when weighing the evidence at the close of trial, and disregarding any new issues or belatedly presented evidence that exceeds the proper scope of reply or sur-reply. As such, striking the entirety or a portion of a party’s brief is an exceptional remedy that the Board expects will be granted rarely. In some cases, however, whether an issue is new or evidence is belatedly presented may be beyond dispute, or the prejudice to a party of waiting until the close of the evidence to determine whether new issues or belatedly presented evidence has been presented may be so great, that the facts may merit considering a motion to strike.

Practice Guide Update at 17-18. Prior to filing a motion to strike, parties should consider the chances of success and develop arguments which demonstrate that the facts justify this remedy.

Parties May Request a Pre-Hearing Conference to Preview Issues

Parties may request a pre-hearing conference call to “preview (but not argue) the issues to be discussed at the oral hearing”:

The purpose of the pre-hearing conference is to afford the parties the opportunity to preview (but not argue) the issues to be discussed at the oral hearing, and to seek the Board’s guidance as to particular issues that the panel would like addressed by the parties. The parties may also discuss with the Board any pending motions to strike, request an early decision on the admissibility of a limited number of exhibits subject to a motion to exclude, and discuss any unresolved issues with demonstrative exhibits. The Board will preferably rule on pending motions and limited numbers of objections and disputed exhibits during the pre-hearing conference (or after the pre-hearing conference but before the oral hearing), but may also defer ruling until the oral hearing or thereafter.

Practice Guide Update at 19-20. Conducting a pre-conference call may provide insight into the Board’s expectations and help ensure that counsel is prepared for questions likely to arise during the hearing.

Conclusion

Looking forward, parties in AIA trial proceedings should develop strategies in view of the guidance provided in the Practice Guide Update. Counsel should consider the impact of the availability of sur-replies, early rulings on motions to exclude, and pre-hearing conferences on trial strategy.

The Practice Guide Update, which contains sections of the Practice Guide that have been changed or added, is available here. The original Trial Practice Guide published in August 2012 is available here. The PTAB has indicated that it may issue additional updates to the Practice Guide on a rolling basis.

 

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