Post-Grant Proceedings

On April 26, 2016, the Federal Circuit denied a petition for rehearing en banc, filed by Merck and Cie. The Federal Circuit maintained that the “substantial evidence” review standard applies for an appeal from an IPR proceeding. Judge O’Malley, with whom Judges Wallach and Stoll concurred in the denial of the petition, stated that in light of §§ 7 and 144 of Title 35, “we review Board decisions ‘on the record of an agency hearing provided by statute,’ and that we should therefore review Board fact-finding for ‘substantial evidence.’” The court explained its decision to deny the petition, “[i]n light of In re Gartside, [it] has reviewed all of the Board’s factual findings including those in IPRs, for substantial evidence.”
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On April 1, 2016, the U.S. Patent and Trademark Office (USPTO) released a number of amendments to the final rules of trial practices for post-issuance proceedings, i.e., inter parties review, post-grant review, the transitional program for covered business method patents, and derivation proceedings to be effective on May 2, 2016. In mid 2014, the USPTO had solicited input from practitioners on ways to make the trial proceedings more effective and fair. The final rules released on April 1, 2016 result from rulemaking related to some of the input. This article discusses some of the changes below.
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The PTAB recently deemed as precedential two decisions that further clarify when a petitioner can have a second chance to challenge a patent before the Board. In order for a PTAB to be designated precedential, it must be nominated – anyone can nominate, including the public. Then the chief judge, the director, and a majority of the PTAB judges who vote on it must agree that opinion should be precedential. Because of the length of the process, decisions are usually retroactively designated as precedential.
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In Ethicon Endo-Surgery, Inc. v. Covidien LP, a majority Federal Circuit held that neither the relevant statute nor the Constitution precludes the same Patent Trial and Appeal Board panel (“Board”) from making a decision to institute an inter partes review and from also making the final determination on the validity of the claims at issue.
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The Federal Circuit vacated the PTAB’s finding of nonobviousness of Verinata’s patent directed to methods of noninvasive prenatal testing, and remanded the case back to the Board. The Federal Circuit remanded because it couldn’t conclude whether the Board erred based on the PTAB’s opinion. The Board’s language was too vague to come to a definitive conclusion on this point. In its explanation for vacating and remanding the case, the Federal Circuit clarified the appropriate circumstances where the PTAB could limit its consideration of a prior art reference.
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For BioPharma patents, we were curious whether art that formed the basis for IPR institution was “newly discovered” prior art, or whether it was art that had previously been of record during prosecution. The answer to this question may help companies decide to take affirmative steps to discover and cite the most important art during prosecution of the patent application. If “newly discovered” prior art is generally used in IPR institution decisions, companies may be more likely to conduct affirmative prior art searches prior to prosecution to get all available art in front of the examiner. By conducting affirmative prior art searching, an examiner would possess the most important art, and theoretically the claims would be more resistant to an IPR. However, if art previously known during prosecution is generally used in IPRs, companies may feel justified in filing applications without conducting extensive prior art searches, believing that the presumption of the Examiner being aware of the prior art does not immunize the patent against a later IPR challenge.
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On August 20, 2015, the USPTO published additional proposed rules of practice for post-grant proceedings (IPR, CBM, and PGR; collectively “PGPs”) before the Patent Trial and Appeal Board (“PTAB”). The proposed rules are in response to comments provided by the public and practitioners in an effort to help make the proceedings more transparent and effective.
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