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Indian tribes ability to shield patents from review at the United States Patent and Trademark Office’s (“USPTO”) Patent Trial and Appeal Board (“PTAB”) took another blow at the Federal Circuit.  The Federal Circuit in a precedential decision, affirming the decision of the PTAB, held that tribal sovereign immunity cannot be asserted in inter partes review (“IPR”) proceedings before the PTAB.[1]

The Federal Circuit based the decision on two principles extrapolated from Supreme Court decisions.  First, the general proposition that “immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action.”[2]  Second, the Supreme Court’s recognized distinction between adjudicative proceedings brought by a private party against a state, on the one hand, and federal agency-initiated enforcement proceedings, on the other.  According to the Federal Circuit, immunity may generally be invoked in the private party actions, but not in the federal agency-initiated enforcement proceedings. Continue Reading Tribal Immunity Cannot Be Asserted to Escape IPR Proceedings

The USPTO announced today proposed rulemaking for changing its policy related to claim interpretation in Patent Trial and Appeal Board (“PTAB”) proceedings (not including patent examination). Currently, the broadest reasonable interpretation (“BRI”) standard is applied when analyzing claims. The proposed new rules would result in “the same as the standard applied in federal district courts and International Trade Commission (“ITC”) proceedings;” i.e., “ordinary and customary meaning” according to “a person of ordinary skill in the art in question at the time of the invention,”[1] and “reasonable certainty” for definiteness analysis[2]. In addition, it is proposed that the USPTO/PTAB “will consider any prior claim construction determination concerning a term of the involved claim in a civil action, or an ITC proceeding, that is timely made of record in an IPR, PGR, or CBM proceeding.” Continue Reading USPTO Announces Notice of Proposed Rulemaking for Claim Construction Standard used in PTAB Proceedings

The Federal Circuit on Wednesday reversed Court precedent and long held belief that inter partes review (“IPR”) institution decisions were categorically non-reviewable. The Court, sitting en banc, held that the issue of whether a petitioner is time-barred from filing an IPR petition  under 35 U.S.C. § 315(b) is in fact reviewable.[i]

This case arose when the patent owner alleged that an IPR petition was time barred based on the petitioner being privy with parties sued over the patent more than a year before the petition was filed. The IPR was instituted and a final written decision was published.

Congress granted the Director of the USPTO, subject to certain requirements, the sole discretion in whether to institute an IPR.  It is the extent of that discretion that the Court clarified on Wednesday. The Court honed in on two sections of the AIA—§§ 314 and 315. Section 314(a) authorizes the Director to institute an IPR if there is a “reasonable likelihood” that the petitioner will prevail with respect to at least one claim challenged in the petition. Section 315(b) on the other hand is a statutory time bar provision that limits a petitioner’s ability to successfully pursue an IPR proceeding if the “petitioner, real party in interest, or privy of the petitioner” was served with a complaint alleging infringement of the patent more than one year before the IPR petition was filed. The question answered by the court was whether § 314(d), which deems the Director’s decision to institute an IPR “under this section” final an nonappelable, extends to the time bar set out in § 315(b). According to the court, § 314(d) does not extend to § 315(b), but it is unclear if other determinations may soon be reviewable.

In concluding that the time bar determination is appealable, the Court highlighted the “fundamentally different” analysis of § 314 and § 315. On one hand, § 314(a) relates to a substantive analysis of the merits—a “preliminary patentability determination.” On the other hand, § 315(b) is a “condition precedent to the Director’s authority to act.” In other words, § 315(b) is precondition that if met grants the Director the authority to make a determination under § 314(a). According to the Court, the lack of a clear indication that Congress intended to bar appeals related to § 315(b) gave way to “the strong presumption in favor of judicial review of agency actions.”

This decision, although limited to time bar appeals, opens the door for other challenges to the Director’s “sole discretion.” Based on the Court’s heavy reliance on the language of § 314 being directed to preliminary patentability determinations, it is possible that the Court may be amenable to further appeals that do not relate directly to the “patentability merits of the claims.” Other AIA threshold requirements that may be challenged include the requirement that petitioner name all interested parties in the case and the AIA estoppel provisions.

[i] The case is Wi-Fi One LLC v. Broadcom Corp., Nos. 15-1944, 15-1945, and 15-1946 (Fed. Cir. Decided January 8, 2018).

It was a busy year for patent litigation across the broad, including the U.S. Patent and Trademark Office Patent Trial and Appeals Board (PTAB), U.S. District Courts (USDC), Court of Appeals for the Federal Circuit (CAFC), and the Supreme Court of the United States (SCOTUS). A quick look at the number of patent litigation cases filed over the years, particularly the last five years, show that while there has been a decrease in the number of cases filed with the USDC, the filings with the PTAB and CAFC saw a significant increase.

Total Number of Patent Litigation Cases 2008 to 2017

USDC patent case counts include cases addressing the infringement, validity, or enforceability of a U.S. patent that are pending in a U.S. district court or the Court of Federal Claims. This encompasses cases flagged with Nature of Suit (“NOS”) 830 in the PACER system as well as other cases that are known to meet the above criteria. Transferred, consolidated, coordinated, or bifurcated actions may contribute to the number of cases counted.

PTAB cases include applications to the PTAB for inter partes reviews and post-grant reviews pursuant to 35 U.S.C. § 6(a)(4), as reported in the PTAB’s Patent Review Processing System (“PRPS”). The term does not include proceedings conducted pursuant to 35 U.S.C. § 6(a)(1)-(3) such as appeals of adverse decisions of examiners, appeals of reexaminations, or derivation proceedings. Data obtained from Docket Navigator analytics.

SCOTUS was called upon to make important decisions ranging from patent venue laws, patent exhaustion to a U.S. manufacturer’s liability for exporting components later incorporated into an infringing product, including amendments during inter partes review. The year started with predictions as to whether the Supreme Court will consider the issue of whether IPR violates the U.S. Constitution by extinguishing private property rights through a non-Article III forum without a jury, in Oil States Energy Services LLC v. Greene’s Energy Group, LLC, and ended with predictions regarding the outcome of the oral arguments heard by the Court in November. Although faced with the issue before, the fact that Supreme Court decided to hear the issue now is not surprising given the increasing number of IPRs being filed with the PTAB and a slow decrease in the number of IPR petitions being instituted (coupled with increase in the number of IPR petitions being denied).

Institution Rates from FY13 to FY18 (Source: PTAB)

The number of post-grant proceedings filed in the technologies related to Electrical/Computer & Mechanical are much higher than those filed in the Bio/Pharma and Chemical technology areas. However, the rate at which the petitions are instituted is similar in each of the technology areas.

Institution Rates by Technology 09/16/2012 to 11/30/2017(Source: PTAB)

Also, the post- and pre-institution settlement rates have remained the same for the last two years, which are noticeably lower as compared to two years prior to that and significantly lower (at least for post-settlements) compared to five years ago. Although it may be tempting to associate this decrease in settlements to the predictions of Oil States’ challenge for the constitutionality of IPR proceedings, it would not be appropriate to do so given that the issue has been discussed previously.

Pre-Institution Settlements (Source: PTAB)

Post-Institution Settlements (Source: PTAB)

The Supreme Court’s decision in Oil States could have a major impact on the patent world, and is clearly the center of attention as the new year begins. Certainly, the decision in TC Heartland has proved to be a game-changer in patent filings. According to a recently published report by Fried, Frank, Harris, Shriver & Jacobson LLP, a substantial difference was noticed in the patent infringement filings from May 2017 to September 2017 when compared to the same period in 2016 in at least two of the top ten District Courts. The patent filings in the Eastern District of Texas, which is considered a plaintiff-friendly jurisdiction, decreased from 39.61% in 2016 to 15.04% in 2017; while the district of Delaware saw a rise in the filings, which is not surprising given most companies are either based out of, or majorly operate, in Delaware.

Top 10 District Courts: Pre- and Post-TC Heartland

It is not unusual that a decision, even by the Supreme Court, sometimes tends to pose more questions than it answers. The decision in Life Technologies Corp v. Promega Corp. is certainly amongst the top in 2017, wherein the Supreme Court had to address the issue of a U.S. manufacturer’s liability for exporting components later incorporated into an infringing product. While addressing a specific dispute pertaining to diagnostic kits between the parties, the Court raised many questions without providing any guidance as to the answers for those questions. The court held that the term “substantial portion” in Section 271(f)(1) has a quantitative, not a qualitative, meaning. More specifically, the court held that the phrase “substantial portion” in the statute does not cover the supply of a single component of a multicomponent invention. One of the obvious questions this decision raises is what if the invention is a two-component invention?” Would the supply of a single component of a two components invention still be outside the scope of the statute? Given the continuing growth in international commerce, it is fair to predict that the Courts might have to address this issue sooner than later.

This year was also marked by the Supreme Court deciding on its first case related to Biologics Price Competition and Innovation Act (“BPCIA”). The Court was called upon to review an issue regarding the notice requirements of BPCIA. Although, the Court provided clear guidance that biosimilar applicants may provide 180-day notice of commercial marketing prior to the FDA’s approval of the application, it left some questions for the CAFC to decide. The Court held that the Federal law does not provide for an injunction requiring a biosimilar applicant to start the patent dance by providing its application and manufacturing information to the reference product’s sponsor under 42 U.S.C. § 262(l)(2)(A) and remanded the case to CAFC for further proceedings. In December, the CAFC held that BPCIA preempts any state law remedies for failure to comply with § 262(l)(2)(A) and concluded that applying state law would create a conflict with the careful balance struck by Congress in establishing the BPCIA.

The CAFC also had its share (65% of its docket) of intellectual property law cases, including 29% resulting from appeals from the District Court decisions and 33% resulting from appeals from the PTAB.

Appeals Filed, by Category for FY 2017 (Source: CAFC)

A review of filings over the last 10 years reveals that the number of appeals filed with the Federal Circuit resulting from the PTAB have risen significantly in the last 4 years.

Appeals Filed, by Category for FY 2006 to FY 2017 (Source: CAFC)

This increase in the appeals resulting from PTAB is consistent with the number of petitions for post-grant proceedings filed with the PTAB. It will be interesting to see how the trend, particularly in inter-partes review filings, will change once the Supreme Court issues its final written decision.

In an unprecedented move by the U.S. Patent and Trademark Office (USPTO), the Patent Trials and Appeals Board (PTAB) has permitted the filing of amicus briefs on whether the Saint Regis Mohawk Tribe (“Tribe”) should be permitted to terminate the inter partes review of Allergan’s patents contested in IPR2016-00127, IPR2016-01128, IPR2016-01129, IPR2016-01130, IPR2016-01131, and IPR2016-01132. Allergan assigned the patents challenged in these IPRs to the Tribe, while retaining an exclusive license in exchange for ongoing payments. As a sovereign entity, the Tribe seeks to terminate the IPR challenges of these patents, a move which the PTAB had ruled in 2016 shielded the University of Florida Research Foundation as a sovereign entity from IPRs. See Covidien LP v University of Florida Research Foundation Inc., IPR2016-01274, Paper 21 (PTAB Jan. 25, 2016). Amicus briefs of no more than 15 pages are due to be filed by December 1, 2017, and the Petitioners and Tribe are each authorized to file a single response to any amicus brief by December 15, 2017.

This maneuvering has caught the attention of many, including members of Congress and the district court specifically addressing the validity of these patents. In response to a bipartisan committee investigating the Allergan-Tribe deal, Senator McCaskill has already drafted a bill to block tribal claims of sovereign immunity, which could otherwise preclude USPTO review of patents assigned to tribes. Court of Appeals for the Federal Circuit Judge William Bryson, sitting by “designation” in the Eastern District Court of Texas, expressed concerned that Allergan sought to “rent” sovereign immunity from the Tribe. On the other hand, heralded as an innovative defense, patent attorneys now seek such a defense to patent challenges before the USPTO. The Saint Regis Mohawk Tribe has reportedly already taken ownership of patents from SRC Labs and is in discussion with another technology company.

Interestingly, the district court under Judge Bryson recently found four of the six patents invalid, a decision which will likely be appealed to the CAFC. However, the PTAB nevertheless will need to answer, inter alia, the question of  whether the Tribe’s right as a sovereign immunity will shield the Allergan patents from IPRs. Due to additional parties joining as Petitioner and the complicated issues surrounding this challenge, the PTAB has extended a deadline to render its final decision in the IPR from December 8, 2016, to April 6, 2018.

The America Invents Act (“AIA”) provides for post grant challenges of U.S. patents in the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. One type of AIA proceeding, Inter Partes Review (“IPR”), came into effect in September 2012, and provides a process for relatively quick determination of invalidity of challenged patent claims based on published prior art. [1] IPR decisions rendered in the past five years have created a body of law addressing a variety of issues related to invalidity challenges before the PTAB. In a recent IPR proceeding, a novel strategy has arisen that posts an interesting question of first impression, whether the assignment of a patent involved in an IPR proceeding to a U.S. Indian tribe can avoid an IPR proceeding based on a sovereign immunity defense. The present blog post summarizes the new issue that the PTAB will be required to decide in the IPR. Continue Reading Indian Tribal Sovereign Immunity Asserted in an IPR