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Relying on Outside Prior Art in an IPR – Not so fast!

The Court of Appeals for the Federal Circuit (CAFC) has recently reminded the Patent Trial and Appeal Board (the Board) that it may not rely on evidence and arguments that fall outside the scope of the instituted grounds during Inter Partes Review (IPR) proceedings. In re IPR Licensing, Inc., No. 2018-1805 (Fed. Cir. Nov. 22, 2019).  An IPR begins when a petitioner submits a petition presenting one or more grounds that certain claims of a patent are invalid, where each discrete ground includes arguments and evidence purporting to show invalidity of the challenged claims of a patent. The Board may then institute a review and consider the evidence on those grounds.  Importantly, the scope of the IPR is defined by the petition.

When deciding the validity of a claim on one ground, is it proper for the Board to rely on evidence presented only in a different (in this case non-instituted) ground? The CAFC addressed this issue and decided in the negative: “The Board … cannot rely on evidence relating solely to grounds on which it never instituted.”

The Court reasoned that allowing the Board to rely on evidence from other non-instituted grounds would unfairly disadvantage patent owners because they would not have the opportunity to rebut or anticipate the evidence that would be used against them. Citing In re Magnum Oil Tools Int'l, Ltd., 829 F.3d 1364, 1381 (Fed. Cir. 2016), the Court reminded the Board that it “must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond.”  Thus, any decision that relies on other evidence is erroneous.  The CAFC’s citation to Magnum Oil reinforces the point that the Board should not be entertaining new arguments and evidence relating to a ground that were not made in the petition, even if similar arguments and evidence were made in the petition related to other instituted or non-instituted ground.

In light of the recent SAS Institute decision, the specific situation that occurred in In re IPR Licensing is unlikely to occur again because the procedure of litigating IPRs has changed. As we explained in more detail previously, because the Board will now institute IPR petitions on all grounds if it decides to institute, there cannot be any non-instituted grounds alongside instituted grounds as had occurred in In re IPR Licensing. However, the Court’s holding is still an important reminder that the Board’s decisions must be confined to the evidence and arguments actually presented in the petition. It is therefore important that petitioners include all the evidence and arguments for each ground that they need to rely on in the petition at the first instance, and that patent owners diligently police any attempt by petitioners to incorporate arguments into one ground that were only made in other grounds.

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Daniel Weinger

Serge Subach