P TA B G A M E T H E O RY:
PAT E N T O W N E R V E R S U S P E T I T I O N E R
M AY 11 , 2 0 1 7
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OVERVIEW
1. Pre-filing
2. Preliminary Patent Owner Response
3. Experts
4. Preserving issues for appeal
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PHASE ONE: PRE -FILING
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PAT E N T O W N E R : P R E - F I L I N G
Ways to assist in controlling the filing or number of
PTAB petitions that may be filed against the patent
owner:
– Enter into a standstill agreement pre-suit
– Identifying all patents and claims to be asserted
– Number of patents and claims to assert
– Fighting two fronts in the PTAB and district court
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PETITIONER: PRE-FILING
Creating a plan to cause the most pressure and result in a
successful outcome:
– Patents and claims to challenge
– A+ art or the A- art in the petition?
• The estoppel provision in PTAB proceedings is not as broad as
originally expected.
– Shaw Industries Group Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed.
Cir. 2016).
– Intellectual Ventures I LLC v. Toshiba Corp., No. 13-453, 2016 WL 7341713 (D. Del.
Dec. 19, 2016)(Robinson, J.)
– Pre-suit filing of PTAB petitions
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PHASE TWO:
PRELIMINARY PATENT OWNER
RESPONSE;
PETITIONER’S REPLY BRIEF
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PAT E N T O W N E R : P R E L I M . P O R E S P O N S E
A major consideration is whether to include an expert
declaration with the preliminary patent owner response:
– May help explain technical errors made in the petition.
• Denial of the petition is a major victory given the limited appellate
review of an institution decision.
– Cuzzo Speed Techs., LLC v. Lee, 136 S.Ct. 2131 (2016).
– To date, expert declarations have not resulted in an increase in
denials.
• Current institution rate since rule change on all challenged claims is
about 50%.
– Use of more than one expert may improve the chances.
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PAT E N T O W N E R : P R E L I M . P O R E S P O N S E
Two main approaches that seem to be the most
successful in defeating a petition:
– Identifying procedural errors in the petition
– Identifying missing claim elements in the reference(s)
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P E T I T I O N E R : R E Q U E S T A R E P LY B R I E F ?
Petitioner may want to request a reply brief if a patent
owner submits an expert declaration.
– Given limited appellate review of the institution decision, may
not want to keep the “powder dry”
– Highlight that a reasonable likelihood of invalidity exists
• Don’t have to “win” the case in the reply brief at this stage
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PHASE THREE:
EXPERTS
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EXPERTS ARE CRITICAL FOR BOTH SIDES
Selection criteria:
– Needs to be as close to the relevant field as possible as paper
credentials matter to the PTAB
– Needs to be effective under cross examination
• But does not need to be loved by the jury
– Needs to be able to persuasively describe why or why not
there is motivation or likelihood of success for the proposed
combination
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T I M E L I N E R E L AT E D T O E X P E R T S
Petitioner’s
expert
declaration
with petition
Institution
Decision
Deposition
of
Petitioner’s
expert
Petitioner’s
expert
declaration
with the
reply brief
START
(Potential)
Patent Owner’s
expert
declaration with
POPR
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Deposition
of Petitioner’s
expert reply
declaration
FINISH
Patent Owner’s
expert
declaration with
patent owner
response
Deposition
of Patent
Owner’s
expert
Motion for
observation
s on crossexamination
PAT E N T O W N E R : E F F E C T I V E U S E O F E X P E R T
Time and effort needs to be spent at the outset to build
the most persuasive expert declaration:
– Need to identify and work with an expert soon after the petition
is filed
– Secondary considerations need to be developed starting on
day one.
• Any discovery that may be needed should be identified and ready
to be served upon institution.
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PAT E N T O W N E R : E F F E C T I V E C R O S S
Targeted approach to petitioner’s expert is most
effective:
– Box expert in as to what the references do and do not disclose
– Admit facts helpful to disprove motivation to combine or
likelihood of success
– Lack of experience and credentials in the field of technology at
issue
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P E T I T I O N E R : R E P LY E X P E R T D E C L A R AT I O N
A petitioner should consider serving a reply expert
declaration.
– As long as responding to patent owner’s arguments, PTAB
provides a wide latitude in what is permissible testimony in
reply.
– PTAB has recently been providing patent owner’s sur-replies
(limited to argument and no additional evidence) to address
concerns of sandbagging by the petitioner.
– Still can get a sur-sur-reply to have the last word.
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PHASE FOUR: PRESERVATION OF
APPEAL ISSUES
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PAT E N T O W N E R
 A few grounds have been successful on appeal:
– A claim construction issue
• Make sure to re-raise any claim construction issue in the POR
– A poor board decision with no reasoning
– No opportunity to respond to an argument or evidence
– A combination of genius and luck!
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PETITIONER
 Preserving the win:
– If claim construction was too broad, argue invalidity under
both theories in the reply brief.
– If the Board failed to articulate the reason for invalidating a
claim, may want to request for reconsideration.
– Make a clear record that Patent Owner either had plenty of
opportunity to be heard, or failed to ask to be heard
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PETITIONER
 Items to keep in mind:
– There has never been a reversal of a total loss
– If only some claims were invalidated, you may be able to get
more invalidated on appeal.
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GOOD TO BE THE APPELLEE
If you won at the PTAB, the odds are still
in your favor.
In 2016, 72% of PTAB decisions were affirmed.*
*Law360, Fed. Circ. Taking Harder Look at PTAB Appeals, Mar. 1, 2017, https://www.law360.com/articles/894919/fed-circtaking-harder-look-at-ptab-appeals
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M I C R O S O F T V. P R O X Y C O N N , 7 8 9 F. 3 D 1 2 9 2
(FED. CIR. 2015)
Reversed based on claim construction errors
 Fed. Cir. determined that the Board erred in construing “two
other computers” to include a separately identified “caching
computer,” holding that the word “other” denoted a
distinction between those two computers and the caching
computer separately recited in the claim.
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I N R E M A G N U M O I L T O O L S I N T ' L , LT D . , 8 2 9
F. 3 D 1 3 6 4 ( F E D . C I R . 2 0 1 6 )
Reversed because the PTAB incorrectly placed burden of
proof of obviousness on the patent owner
 Fed. Cir. disagreed with the PTO’s argument that when the
Board institutes an IPR, it necessarily finds that the
petitioner has established a reasonable likelihood of
success, so the burden shifts to the patentee to establish
non-obviousness
 Fed. Cir. held that the PTO’s argument was directly at odds
with Fed. Cir. precedent and that the burden remains on the
challenger after institution
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I N R E : N U VA S I V E , I N C . , N O . 2 0 1 5 - 1 6 7 2 , 1 6 7 3
( F E D . C I R . N O V. 9 , 2 0 1 6 )
Vacated and remanded based on Board’s violation of the
Administrative Procedures Act
 The Board relied in its final decision on a portion of a prior
art reference that the Petitioner raised for the first time on
reply. The Board did not give Patent Owner a surreply or
other opportunity to respond
 Fed. Cir. noted that the cited portion was an essential part
of the Board’s obviousness finding
 Fed. Cir. found this to be a violation of the APA
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QUESTIONS & ANSWERS
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Cyrus Morton
Sam Walling
Partner in the IP and
Technology Litigation Group
[email protected]
612 349 8772
Partner in the IP and
Technology Litigation Group
[email protected]
612 349 8541
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