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In light of continuing criticism that the PTAB’s rules unfairly disadvantage patent owners, Gerald Murphy of Birch, Stewart, Kolasch & Birch looks at the flipside and considers whether petitioners are getting a raw deal.
Since the very first Patent Trial and Appeal Board (PTAB) trial, some aggrieved parties and commentators have criticised the fairness of the trials. These criticisms have been made mostly by patent owners, who generally prefer to have patentability issues settled in court. This article will address fairness issues that are more applicable to the petitioner.
The US Patent and Trademark Office (USPTO) rules indicate that the laws governing PTAB trials “shall be construed to secure the just, speedy, and inexpensive resolution of every proceeding”. The Administrative Procedures Act (APA) also imposes certain procedural requirements, including timely notice of “the matters of fact and law asserted” and an opportunity to submit facts and argument.
This article summarises some of the perceived fairness issues in PTAB proceedings, reviews whether the rules are fair, and evaluates whether the PTAB fairly applies the rules.
Stage-by-stage fairness issues
A petitioner is not usually in a position to complain about the fairness of the PTAB rules when the petition is filed, as the petitioner is a voluntary participant in the proceeding. It is possible that the word limits in the petition may be unfair. However, the constraints of the word limits can be avoided by drafting a more focused petition or by filing multiple petitions directed to different claims or different grounds.
"A petitioner is not usually in a position to complain about the fairness of the PTAB rules when the petition is filed, as the petitioner is a voluntary participant in the proceeding."
The institution decision (ID) sets forth the “grounds” upon which trial is instituted. Each ground identifies
(1) the involved claims;
(2) the statutory basis for the challenge; and
(3) the prior art references being relied on with respect to each claim, when the challenge is based on prior art.
The ID should clearly identify the references being relied on for each limitation of each claim. Thus, it is improper and unfair for the PTAB to rely on a reference in a final written decision (FWD) for its teachings of a particular claim element, where such specific reliance could not be gleaned from either the petition or the ID.
Patent owner response
The patent owner response (POR) is a reply to the ID and the petition, as modified or limited by the ID. If there are any perceived fairness issues at this stage,
it is best to raise them before the POR is filed, although the mechanisms to raise them before this time are limited.
The petitioner reply is the only filing on the merits, after institution of trial, guaranteed to the petitioner. It is an extremely important document as it focuses the legal and technical issues the PTAB will have to resolve to render a decision. A reply is not a “redo” of the petition and may only respond to arguments raised in the corresponding opposition or POR.
Submission of new evidence to make out a prima facie case at the reply stage or to submit new evidence that could have been presented in a prior filing is normally not proper.
However, the parties may often vigorously dispute whether a reply is an attempt to cure a defective petition or is a proper reply to the POR. A good rule of thumb is that new arguments or evidence are fair game for a reply if they are responsive to (1) unexpected issues in the POR or ID; (2) issues on which the patent owner has the burden (non-enablement of prior art); or (3) an issue that a patent owner may raise to rebut a prima facie case (such as secondary considerations).
One issue is what can be submitted at the reply stage when the patent owner has proposed an unexpected claim interpretation that, if accepted by the PTAB, casts doubt on the sufficiency of the petition. Such a claim interpretation could end up meaning that a claim element is missing from a reference, possibly resulting in a FWD denying the challenge. This would seem unfair to the petitioner.
I would posit that as long as the petition has not completely ignored claim interpretation issues, the petitioner should be able to come in with new arguments and new evidence (new patents, literature and/or perhaps declaration testimony) to deal with the contingency that the patent owner’s unanticipated claim interpretation is accepted by the PTAB (or the US Court of Appeals for the Federal Circuit on appeal).
The Federal Circuit has held that the PTAB may not change claim interpretation theories midstream without giving the patent owner reasonable notice of the change and an opportunity to present argument under the new theory. It follows that the petitioner should also be given a full opportunity to respond to a claim interpretation issue not anticipated when the petition was filed.
The final written decision
The FWD should be limited to resolving the grounds set forth in the ID under theories to which both sides were given notice and opportunity to respond. The FWD will not always track the ID exactly because the purpose of a trial (which occurs after the ID) is “to give the parties an opportunity to build a record by introducing evidence—not simply to weigh evidence of which the board is already aware”.
The PTAB has a difficult job in balancing the interests of both parties to secure a “just, speedy, and inexpensive resolution” in PTAB trials. The PTAB should be commended for taking this mandate seriously and for attempting to treat both parties fairly.
Gerald Murphy is a partner at Birch, Stewart, Kolasch & Birch and has been lead counsel in a number of inter partes matters at the USPTO, including mainly interferences and inter partes reviews (IPRs). He has been lead counsel in appeals to the US Court of Appeals for the Federal Circuit from decisions of the PTAB in IPRs. He can be contacted at: firstname.lastname@example.org
Gerald Murphy, Birch Stewart Kolasch & Birch, PTAB, patent owners, IPR petitioners, USPTO, procedural fairness, Administrative Procedures Act