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The PTAB Designates Three Decisions Related to Discretion to Institute as Precedential or Informative

On Tuesday, March 24, 2020, the Patent Trial and Appeal Board (“PTAB”) designated two inter partes review (“IPR”) decisions as precedential and one as informative. These decisions concern PTAB’s discretion to deny institution of an IPR under 35 U.S.C. § 325(d) and 314(a).  Section 325(d) provides the PTAB discretion to deny institution when “the same or substantially the same prior art or arguments previously were presented to the Office,” while Section 314(a) provides wide discretion for the PTAB to deny institution for any reason, including due to follow-on petitions and parallel litigation (see previous post discussing the General Plastic factors). In designating these cases as precedential and informative, the PTAB emphasized its commitment to defer to previous decisions unless material error is shown, and also indicated that when presented with unique invalidity theories not presented in a parallel proceeding the PTAB will not invoke discretion under § 314(a). 

First, in Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469 (PTAB Feb. 13, 2020) (Paper 6) (precedential), the PTAB denied institution under § 325(d) because the same or substantially the same prior art was presented during original examination, even though two proposed grounds of unpatentability included prior art that the Examiner never considered.  In doing so, the PTAB explained that a two-part framework is used to exercise discretion under § 325(d): “(1) whether the same or substantially the same art previously was presented to the Office or whether the same or substantially the same arguments previously were presented to the Office; and (2) if either condition of first part of the framework is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims.”  To assist in this analysis, the PTAB applies the following, fact intensive factors:

  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, including whether the prior art was the basis for rejection;
  4. the extent of the overlap between the arguments made during examination and the manner in which Petitioner relies on the prior art or Patent Owner distinguishes the prior art;
  5. whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation of the asserted prior art; and
  6. the extent to which additional evidence and facts presented in the Petition warrant reconsideration of prior art or arguments.

Applying this framework, the PTAB found that, although the combinations of unpatentability relied upon new prior art, the teachings from the new art were the same as teachings from art already before the Examiner.  As a result, the first part of the framework was satisfied.  Next, the PTAB determined that the petitioner did not demonstrate that the Office made an error that was material to patentability. Specifically, the petitioner failed to show that “the Examiner misapprehended or overlooked specific teachings in the relevant prior art such that the error by the Office was material to patentability.”  As a result, the petition was denied. 

Second, in Oticon Medical AB v. Cochlear Limited, IPR2019-00975 (PTAB Oct. 16, 2019) (Paper 15) the PTAB designated sections II.B and II.C as precedential.  In II.B, the PTAB performed the fact intensive analysis of comparing the art asserted to that considered by the Office, and declined to exercise its discretion under 35 U.S.C. § 325(d) to deny institution.  Instead, the PTAB found that the cited prior art was not substantially the same as that considered during prosecution.  The PTAB also determined that the Examiner erred in failing to consider the newly asserted prior art during prosecution.

In II.C, the PTAB also declined to exercise its discretion to deny the petition based on parallel proceedings under 35 U.S.C. § 314(a).  In doing so, the PTAB noted the lack of a trial schedule in the evidence provided by the patent owner, and that the invalidity theory presented in the petition was distinct from the theories presented in the parallel proceeding.  Acknowledging the possibility that the petitioner gained an advantage by receiving patent owner’s validity contentions in a parallel action prior to filing the petition, the PTAB appeared to emphasize the presentation of a unique invalidity theory based on additional prior art not asserted in petitioner’s invalidity contentions at the district court, making the petition not redundant.

Lastly, in PUMA North America, Inc. v. NIKE, Inc., IPR2019-01042 (PTAB Oct. 31, 2019) (Paper 10) (informative), the PTAB exercised its discretion and denied institution of a footwear patent.  The PTAB evaluated the prosecution history and the parties’ arguments and determined that the Examiner previously rejected the challenged claims over the same combination of references, in the same manner the petitioner proposed.  In addition, the PTAB found that new evidence submitted by petitioner did not show an error by the Examiner, because the evidence merely asserted that a skilled artisan could have combined two references without explanation as to why a skilled artisan would do so.

Taken together, these newly designated decisions shed light on how the PTAB will approach arguments under 35 U.S.C. §§ 325(d) and 314(a).  These decisions show that Petitioners, prior to submitted petitions on art previously considered, should take care to ensure they can show the Office committed error in considering the art, or that the art is substantively different.  Patent owners should continue to police petitions based on previously considered art, and ensure defendants in parallel proceedings do not try to gain unfair advantage prior to filing petitions. 

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Daniel Weinger