General Plastic Industrial Co., Ltd. v. Canon Kabushiki Kaisha. (IPR2016-01357 through IPR2016-01361; “Decision”)
In an expanded panel where General Plastics sought reversal of multiple decisions that denied instituting follow-on petitions, the PTAB confirmed these decisions were proper based on the factors established in NVIDIA. This decision has been added to the PTAB’s list of precedential decisions. The panel denied all five of General Plastic’s Requests for Rehearing in which General Plastic requested that the PTAB’s withdraw its prior decision denying institution. Each Request alleged that the PTAB misapplied the factors establish in the Board’s NVIDIA decision. See generally, NVIDIA Corp. v. Samsung Elec. Co., Case IPR2016-00134 (PTAB May 4, 2016) (Paper 9) (hereinafter, “NVIDIA”). Upon review of each factor, the expanded panel denied each of General Plastic’s Request for Rehearing.
Upon review for an abuse of discretion, the Board considered the NVIDIA factors:
1. whether the same petitioner previously filed a petition directed to the same claims of the same patent;
2. whether at the time of filing of the first petition the petitioner knew of the prior art asserted in the second petition or should have known of it;
3. whether at the time of filing of the second petition the petitioner already received the patent owner’s preliminary response to the first petition or received the Board’s decision on whether to institute review in the first petition;
4. the length of time that elapsed between the time the petitioner learned of the prior art asserted in the second petition and the filing of the second petition;
5. whether the petitioner provides adequate explanation for the time elapsed between the filings of multiple petitions directed to the same claims of the same patent;
6. the finite resources of the Board; and
7. the requirement under 35 U.S.C. § 316(a)(11) to issue a final determination not later than 1 year after the date on which the Director notices institution of review.
The multiple petitions were initially denied based on these factors because: (1) the same claims were at issue in the follow-on petitions; (2) the petitioner provided no meaningful explanation for its 9 month delay in filing the follow-on petitions; (3) the new prior art searches upon which the follow-on petitions were based did not commence until after the first-filed petitions were denied; (4) the Petitioner failed to provide any explanation of any unexpected circumstance that prompted the new prior art searches; and (5) the Board’s resources would be more fairly expended on initial petitions, rather than follow-on petitions. Decision, p. 10.
Referring to some legislation history behind 35 U.S.C. §314(a), the Board explained that while they “recognize that an objective of the AIA is to provide an effective and efficient alternative to district court litigation, we also recognize the potential for abuse of the review process by repeated attacks on patents.” Decision, pp. 16-17. Consequently, the Board applies the NIVIDIA factors in view of this policy. As such, factors 2-5 raise the burden for instituting follow-on petitions after first-filed petitions are denied. To have a follow-on petitions instituted in this circumstance, the petitioner must explain why newly cited prior art could not have been found using reasonable diligence and why changed circumstances reasonably justify the follow-on petitions. Decision, pp. 19-22.
In this case, the General Plastic failed to explain why the newly cited prior art could not have been found using reasonable diligence. They also failed to argue any changed circumstances in their Replies to the Patent Owner’s Preliminary Responses that may require additional prior art. Lastly, General Plastic’s contention that it was surprised by the Board giving weight to the preamble term “toner supply container” was not found to be reasonable. It appears that obtaining institution of follow-on petitions after receiving a denial of a first-filed petition will be a high burden to overcome.
Mr. Emery practices in all areas of patent law including: patent preparation and prosecution; patent litigation; patent reexamination (ex parte and inter partes); and counseling clients on intellectual property matters. He also engages in patent infringement and validity opinion practice and counseling, freedom to operate analysis, and due diligence and product clearance work.
His experience includes a wide range of electrical and mechanical technologies, including medical devices, heating and cooling systems, hydraulic applications, semiconductor design and manufacture, telecommunications equipment, automotive technologies, electrical power generation equipment, electrical transmission components, electric vehicles, welding equipment, image display devices, fiber optic distribution, and various computer and printer related technologies.
En banc Federal Circuit holds that Petitioner has the burden to prove unpatentability for amended claims added during IPR
In Aqua Products, Inc., v. Matal, 2015-1177, Oct. 4, 2017, the en banc Federal Circuit cut against the grain of current PTAB proceeding and held that the petitioner in an inter partes review proceeding has the burden to prove unpatentability for amended claims.
The patent owner in a patent office trial may file one motion to amend the patent. See 35 U.S.C. 316(d), 326(d). However, the Patent Trial and Appeals Board had previously required the patent owner to prove that an amended claim is patentable. Last year, a panel of the Federal Circuit found that the Board was justified in placing the burden to establish patentability of proposed substitute claims on the patent owner because substitute claims have never been examined. See Nike, Inc. v. Adidas AG, 812 F.3d 1326 (Fed. Cir. 2016).
The Board has rarely granted requests to amend the claims. The Federal Circuit in Aqua Products noted that the only six of the first 118 motions to amend were granted. See Aqua Products at p. 12. In view of these low odds, many patent owners have chosen not to file motions to amend.
Six of the eleven judges that participated in the Aqua Products decision agreed that the petitioner in an inter partes review proceeding has the burden to prove unpatentability for amended claims. See Aqua Products, at page 5, opinion of the court by O’Malley, in which Newman, Lourie, Moore, and Wallach join. Dyk and Reyna, concurred in the result only. The judges agreed on little else.
Five of the eleven judges, O’Malley, Newman, Lourie, Moore, and Wallach, found that the statute “unambiguously requires the petitioner to prove all propositions of unpatentability, including for amended claims.” See Aqua Products at page 5. 35 U.S.C. § 316(e) recites:
(e) EVIDENTIARY STANDARDS.—In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.
The five judges pointed to, among several other reasons, the fact that the 316(e) evidentiary standard “immediately follows the subsection discussing the requirements for amended claims in IPRs” (i.e., 35 U.S.C. 316(d)) to support their view that the statute is unambiguous as to the petitioner having the burden of proving unpatentability of amended claims. See Aqua Products at page 28.
The six other judges disagreed, finding that the statute was ambiguous. Four of these judges, Taranto, Prost, Chen, and Hughes, disagreed with the holding and would have found that Chevron deference allows the Director to decide that the burden of persuasion falls on the patent owner.
The other two judges, Dyk and Reyna, found that the statute was ambiguous, but believed that Chevron deference does not apply because the Board has not promulgated a regulation consistent with the Administrative Procedures Act. See Aqua Products, opinion by Reyna, joined by Dyk (also joined by Prost, Taranto, Chen, and Hughes as to Part III. only) at pages 8-11. The Board had not established that the burden of persuasion any regulation. Instead, the Board specified that the burden of persuasion is on the patent owner in dicta found in the Board’s Idle Free decision.
After the Aqua Products decision, patent owners may be more willing to file a motion to amend.
John M. Bird is a partner in the Washington, DC Office of Sughrue Mion PLLC. His focus is on the protection and enforcement of designs and a wide range of electrical and mechanical technologies, including analytical/measurement systems, medical devices, HVAC systems, printers/copiers, telecommunications systems, data recording mediums, semiconductor fabrication, bearings, welding processes, sports equipment, footwear, and various automobile components, such as tires, transmissions, engines, fuel-injection systems, motors, lamps, steering systems, connectors/wiring, valves, and control/monitoring systems.
See his full biography here.