Patent Law Practice Center

Finjan shows patent owner can prevail at IPR institution stage

Finjan Holdings, Inc. (NASDAQ: FNJN), the parent of wholly owned subsidiary Finjan, Inc., recently announced that the Patent Trial and Appeal Board (PTAB) for the United States Patent & Trademark Office (USPTO) denied six of Symantec Corporation’s petitions for inter partes review (IPR) of Finjan patents.

“This is an unprecedented response by the US Patent Office,” stated Phil Hartstein (left), President and CEO of Finjan, upon learning of the decision of the PTAB.

The word “unprecedented” gets thrown around all too frequently, but the use of the word here does seem entirely appropriate. That Finjan would prevail in six separate IPR institution decisions relating to the same patent litigation seems nothing short of extraordinary given that the PTAB is instituting 80% of IPR petitions, and given how slanted IPR rules are against the patent owner, particularly at the institution stage.

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Federal Circuit shines ray of hope for substitute claims in IPR

Recently, the United States Court of Appeals for the Federal Circuit issued a decision in Nike, Inc. v. Adidas AG, relating to an appeal from the inter partes review (IPR) of U.S. Patent No. 7,347,011, owned by Nike.

The Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) granted the IPR petition filed by Adidas AG and instituted inter partes review of claims 1–46 of the ’011 patent. Nike then filed a motion to amend in which it requested cancellation of claims 1–46 and proposed substitute claims 47–50. The PTAB granted the motion to cancel claims 1-46, but denied the motion to substitute claims, as has become the norm in virtually all cases.

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Supreme Court accepts Inter Partes Review Appeal

On Friday, January 15, 2016, the United States Supreme Court accepted the petitioner’s request to hear Cuozzo Speed Technologies v. Lee, a case that will now require the Court to address two questions about inter partes review (IPR) proceedings.

IPR proceedings were created by the America Invents Act (AIA), which was signed into law by President Barack Obama on September 16, 2011. IPR and the other two forms of post-grant challenge to issued patents — Post Grant Review (PGR) and Covered Business Method (CBM) Review — did not become available as a procedure to challenge patents until September 16, 2012. Thus, these proceedings are quite new and Cuozzo will be the first opportunity for the Supreme Court to weigh in on these controversial administrative proceedings.

According to the statute, “[a] person who is not the owner of a patent may file a petition to institute an inter partes review of the patent.” 35 U.S.C. 311(a). Significantly for this appeal, the statute also says: “The determination by the Director whether to institute an inter partes review under this section shall be final and nonappealable.” 35 U.S.C.314(d). Additionally, although the statute is silent as to the proper claim construction standard to use in post grant proceedings, the United States Patent and Trademark Office (USPTO) has decided to apply the familiar standard used elsewhere throughout the Office, which is the broadest reasonable interpretation (BRI) rather than the so-called “Phillips standard” that is used in district court litigation and narrowly construes claims in an already issued patent. (more…)

USPTO proposes new rules for PTAB administrative trials

Several weeks ago, the United States Patent and Trademark Office published proposed rule changes that will, if adopted, amend the rules for practice before the Patent Trial and Appeal Board (PTAB). The deadline to comment on the USPTO proposed rule changes will be 60 days after publication in the Federal Register, which should be Monday, October 19, 2015. Comments should be sent by electronic mail message over the Internet addressed to: trialrules2015@uspto.gov. Comments may also be submitted by mail addressed to: Mail Stop Patent Board, Director of the United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450, marked to the attention of Lead Judge Susan Mitchell, Patent Trial Proposed Rules.

Claim Construction

In the initial request for comments, the Office asked the patent community, “Under what circumstances, if any, should the Board decline to construe a claim in an unexpired patent in accordance with its broadest reasonable construction in light of the specification of the patent in which it appears?”

Not surprisingly, by and large, the Office decided to stick with the broadest reasonable interpretation (“BRI”) approach, explaining that the United States Court of Appeals for the Federal Circuit recently determined that that the Office is authorized to employ the broadest reasonable interpretation approach when construing terms of an unexpired patent at issue in an inter partes review. The Office did, however, choose to adopt the Phillips standard for claim construction for claims of a patent that will expire prior to the issuance of a final decision.

Motions to Amend

One of the biggest issues many have had with current PTAB trial practice relates to the fact that the law says that the patent owner has a right to amend, but that well over 90% of the time, the PTAB denies patent owners the ability to amend. The Office asked for comments on the following topic: “What modifications, if any, should be made to the Board’s practice regarding motions to amend?”

In declining to make substantive changes to amendment practice, the Office explained that  MasterImage 3D, Inc. v. RealD, Inc. Case IPR2015-00040 clarifies that a patent owner must argue for the patentability of the proposed substitute claims over the prior art of record, including any art provided in light of a patent owner’s duty of candor, and any other prior art or arguments supplied by the petitioner, in conjunction with the requirement that the proposed substitute claims be narrower than the claims that are being replaced. Further, the decision also stands for the proposition that the burden of production shifts to the petitioner once the patent owner has made its prima facie case for patentability of the amendment, although the ultimate burden of persuasion remains with the patent owner.

Other Issues

Other issues addressed in the proposed rules include: (1) amending the rules to allow the patent owner to file new testimonial evidence with its preliminary response; (2) the Office declining to adopt a mandatory rule regarding additional discovery of secondary considerations; (3) permitting a patent owner to raise a challenge regarding a real party-in-interest or privity at any time during a trial proceeding; (4) declining a proposal that would allow a petitioner’s reply as of right in the pre-institution phase of an AIA review; (5) denying to provide for small entity and micro-entity filing fee reduction for reviews under AIA; and (6) Rule 11-type certification for all papers filed with the Board with a provision for sanctions for noncompliance.

USPTO seeks comment on post grant initiation pilot program

The United States Patent and Trademark Office (USPTO) has published a request for comments on a proposed pilot program pertaining to the institution and conduct of post grant administrative trials. The America Invents Act (AIA), which was signed into law on September 16, 2011, provides for the following post grant administrative trials: Inter Partes Review (IPR), Post-Grant Review (PGR), and Covered Business Method Review (CBM). These new administrative procedures became available on September 16, 2012, one year after the signing of the AIA.

The USPTO currently has a panel of three Administrative Patent Judges (APJs) determine whether to institute a trial, and then normally has the same panel conduct the trial, if a decision is made to institute a trial. The USPTO is now considering a pilot program where the determination of whether to institute an IPR would be made by a single APJ. If the decision is to institute a proceeding, two additional APJs would be assigned to the IPR, joining the APJ who decided to institute the trial. (more…)