Recent PTAB Discretionary

Denials Rulings - Changes to

§ 314 and § 325
 8th Annual Patent
Administrative Law
Conference
Chatham House Rule
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 Speakers

Jonathan Stroud Joshua Stern Mark Taylor

Chief IP Counsel – Unified Patents Partner - WilmerHale Assistant General Counsel - Microsoft

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 Recent PTAB
Discretionary Denials
Rulings - § 314
 Statutory Basis for Institution Discretion

35 U.S.C. § 314. Institution of inter partes review

▪ (a) Threshold.-The Director may not authorize an inter partes review to

be instituted unless the Director determines that the information
presented in the petition filed under section 311 and any response filed
under section 313 shows that there is a reasonable likelihood that the
petitioner would prevail with respect to at least 1 of the claims
challenged in the petition.

See also § 324 (institution threshold for PGR)

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 § 314(a) Discretion

Serial Discretion
General Plastic, § II.B.4.i designated precedential on October 18, 2017
Valve I and II

Parallel Discretion
Comcast v. Rovi
2019 Trial Practice Guide Update

Trial Discretion
NHK Spring
Oticon Medical
Apple v. Fintiv
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 Serial Discretion

General Plastic Factors

(1) whether the same petitioner 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 POPR to the
first petition or received the Board’s institution decision for 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 § 316(a)(11) to issue a FWD not later than 1 year after the date of
institution.

Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper No. 19 (Sept. 6, 2017)
(designated precedential in relevant part, Oct. 18, 2017)

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 Serial Discretion
Gen. Plastic Indus. Co. v. Canon Kabushiki Kaisha, IPR2016-01357, Paper
No. 19 (Sept. 6, 2017) (§ II.B.4.i designated precedential)

Petitioner filed 2 petitions – one petition for each of two challenged patents – that were both denied
on the merits

Board denied 5 “follow-on petitions” filed 9 months later by the same petitioner challenging the
same patents under § 314(a)
Reasoned that § 314(a) recites “may not” when referring to authorization for IPR and does not
specify any circumstance in which review must be authorized

“In exercising discretion under 35 U.S.C. § 314(a) . . . we are mindful of the goals of the AIA—namely,
to improve patent quality and make the patent system more efficient by the use of post-grant review
procedures”

Reasoned that without restrictions on follow-on petitions, petitioners could strategically stage their
prior art and arguments in multiple petitions, using Board decisions as roadmaps, risking harassment
of patent owners, fundamental fairness, and frustration of Congressional intent
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 Serial Discretion

Valve I, IPR2019-00062, Paper 11 (Apr. 2, 2019) (precedential)

Valve and HTC’s relationship:
Co-defendants in parallel District Court litigation (Valve was voluntarily dismissed after
challenging venue)
HTC’s allegedly infringing VIVE devices incorporated technology licensed from Valve
Valve employees provided HTC with technical assistance during the development of the VIVE
devices

“[A]pplication of the General Plastic factors is not limited solely to instances where multiple petitions
are filed by the same petitioner. Rather, when different petitioners challenge the same patent, we
consider any relationship between those petitioners when weighing the General Plastic factors.”

“The complete overlap in the challenged claims and the significant relationship between Valve and
HTC favor denying institution.”

Even though Valve had never challenged the patent previously, GP Factor # 1 weighed against
institution because Valve was “similarly situated” to HTC.

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 Serial Discretion

Valve II, IPR2019-00064, Paper 10 (May 1, 2019) (precedential)

Valve’s petitions denied institution after Valve previously joined an instituted petition
filed by co-defendant HTC

The first General Plastic factor weighed against institution because “Valve has joined the
ongoing [HTC] proceeding, and therefore has filed a petition directed to the same
claims of the same patent”
Board also noted the significant relationship between Valve and HTC under which it
denied Valve’s petition in Valve I similarly existed in Valve II

“These serial and repetitive attacks implicate the efficiency concerns underpinning
General Plastic and, thus, favor denying institution”

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 Parallel Discretion
Comcast Cable Comm’s. v. Rovi Guides, Inc., IPR2019-00224, Paper 10 (Apr. 3, 2019)
[case management order]
Comcast filed six concurrent petitions challenging the same claims of the same patent

Rovi argued the petitions were “substantively redundant”

Board ordered Comcast to provide a 5-page notice that

1. ranked the Petitions in the order in which it wished the panel to consider the merits, if the Board
uses its discretion to institute any of the Petitions, and
2. a succinct explanation of the differences between the Petitions, why the differences are material,
and why the Board should consider the additional Petitions

PO allowed a 5-page reply

Five of the six petitions denied (see IPR2019-00225, Paper 14 (June 3, 2019))

“Petitioner contends additional proceedings are necessary due to its concerns relating to
potential arguments Patent Owner may raise regarding, among other things, priority date, 35
U.S.C. § 325(d), or specific claim limitations”

“we do not find these differences sufficiently material and in dispute to support the inefficiencies
and costs associated with instituting an additional five inter partes reviews”
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 Parallel Discretion
Trial Practice Guide Update (July 2019)
Strongly suggests only one petition per patent
“multiple petitions by a petitioner are not necessary in the vast majority of cases”
“Two or more petitions filed . . . may place a substantial and unnecessary burden on the
Board and the patent owner and could raise fairness, timing, and efficiency concerns.”

Some exceptions for two petitions

1. “patent owner has asserted a large number of claims in litigation,” or
2. “when there is a dispute about priority date requiring arguments under multiple prior art
references”

But not three

“the Board finds it unlikely that circumstances will arise where three or more petitions by a
petitioner with respect to a particular patent will be appropriate“

Incorporates Comcast v. Rovi guidance that a petitioner should rank multiple petitions and
explain why the Board should institute more than one
Ranking and explanation can be in separate 5-page paper to which the PO can reply

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 Trial Discretion: NHK Spring

NHK Spring Co. Ltd. v. Intri-Plex Techs. Inc., IPR2018-00752, Paper

8 (Sept. 12, 2018) (designated precedential, May 7, 2019)

Denial primarily based on § 325(d)

“simply because we exercise our discretion to deny the Petition under § 325(d) does not mean
that we cannot consider and weigh additional factors that favor denying institution under §
314(a)”

Parallel district court proceeding with same prior art and arguments nearing final stages
Claim construction complete
Expert discovery ending in 2 weeks
Jury trial scheduled for 6 months before IPR FWD

“[T]he advanced state of the district court proceeding is an additional factor that weighs in favor of
denying the Petition under § 314(a)”
Institution would not “provide an effective and efficient alternative to district court litigation”

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 Trial Discretion: Distinguishing of NHK Spring

Oticon Medical AB v. Cochlear Ltd., IPR2019-00975, Paper 15

(Oct. 16, 2019) (designated precedential, Mar. 24, 2020)

PO contended that Petitioner benefitted from PO’s responses to District Court invalidity
arguments and used them to add a reference (Choi) to counteract a weakness

Board distinguished NHK and instituted petition:

Proceeding not “directly duplicative of the District Court consideration of validity”
because Choi would not be considered in District Court case
PO argued that discovery was well underway and the case was likely to be on the
eve of trial or past trial by the FWD, but provided no District Court scheduling order

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 Trial Discretion: Expansion of NHK Spring
Panels have expanded the reasoning in NHK to deny institution
solely because the related district court case would go to trial before
the Board would issue a FWD.
Sand Revolution II, IPR2019-01393, Paper 12 (denied)
▪ “Here, [General Plastic] factors 1-5 and 7 might be found to weigh in favor of not denying institution
under 35 U.S.C. § 314(a). However, the precedential NHK decision nevertheless constrains our
discretion and compels us to deny institution in the circumstances present here.” Id., 18.
Trial in WDTX scheduled to begin in July 2020. Board would not have issued a FWD until February
2021.
Other panels have rejected a per se rule suggested by Sand
Revolution.
Intuitive Surgical, IPR2018-01703, Paper 7 (instituted)
“[T]here is no per se rule against instituting an [IPR] when any Final Decision may issue after a district
court has addressed the patentability of the same claims. Nor should there be. Instituting under such
circumstances gives the district court the opportunity, at its discretion, to conserve judicial resources
by staying the litigation until the review is complete, thus satisfying the AIA’s objective of providing
‘an effective and efficient alternative to district court litigation.’” Id., 11-12.
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 Trial Discretion: New Ruling on NHK Spring
Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (May 13, 2020)
(denying institution)

Identified the following factors to be considered when there is a related district court trial:

1. Whether the court granted a stay or evidence exists that one may be granted if a
proceeding is instituted;
2. Proximity of the court’s trial date to the PTAB’s projected statutory deadline for a
final written decision;
3. Investment in the parallel proceeding by the court and the parties;
4. Overlap between issues raised in the petition and in the parallel proceeding;
5. Whether the Petitioner and the defendant in the parallel proceeding are the same
party; and
6. Other circumstances that impact the PTAB’s exercise of discretion, including the
merits.
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 Trial Discretion: Application of Fintiv Factors
Apple Inc. v. Fintiv, Inc., IPR2020-00019, Paper 15 (May 13, 2020) (denying
institution)

Parallel WDTX litigation

Markman hearing conducted and claim construction order issued
Trial scheduled to occur approximately two months before FWD would issue
Petition filed 10 months after service of infringement complaint

Apple argued that denying petitions filed within the one-year bar based on trial dates in faster-
moving districts encourages forum shopping

▪ The panel was not persuaded: “[I]t always has been the case that some district courts move
faster than others, and patent owners seeking to enforce patents may be inclined to file suit in
a district that moves relatively quickly. It is up to a district court to determine whether
adequate ties exist between the defendant and the selected district….[I]n this case, the District
Court determined that venue was proper….[U]nder certain circumstances, considerations of
the state of a parallel proceeding may require petitioners to act more quickly than the
maximum amount of time permitted by Congress.”
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 Recent PTAB
Discretionary Denials
Rulings - § 325
 § 325(d) Statutory Basis

35 U.S.C. § 325. Relation to other proceedings or actions

– (d) MULTIPLE PROCEEDINGS.—… In determining whether to institute or

order a proceeding under this chapter, chapter 30, or chapter 31, the
Director may take into account whether, and reject the petition or request
because, the same or substantially the same prior art or arguments
previously were presented to the Office.

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 Discretion
2019 Trial Practice Guide, Section II.D.2: 35 U.S.C. § 325.

– "fact-dependent decision, in which the Board balances the petitioner’s desire to

be heard against the interest of the patent owner in avoiding duplicative
challenges to its patent.”

– “Board also takes into account the ‘efficient administration of the Office,’ see 35
U.S.C. § 316(b), which may be affected by consideration of trial petitions that raise
the same or substantially the same prior art or arguments presented previously to
the Office”

– Cites Becton, Dickinson factors as non-exclusive factors

– Notes that Office may not necessarily consider factors in ex parte reexamination
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 § 325(d) Discretion

• Key Precedential Decisions

• Becton, Dickinson (designated August 2019)

• Advanced Bionics (designated March 2020)
• Oticon (designated March 2020)
• NHK Spring (designated May 2019)

• Recent Informative Decision

• Puma (designated March 2020)

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 § 325(d) Discretion
Becton, Dickinson Factors

a) The similarities and material differences between the asserted art and the prior art
involved during examination;
b) The cumulative nature of the asserted art and the prior art evaluated during
examination;
c) The extent to which the asserted art was the basis for rejection;
d) The extent of the overlap between the arguments made during examination and the
manner in which Petitioner relies on the prior art or Patent Owner distinguishes the
prior art;
e) Whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation
of the asserted prior art;
f) The extent to which additional evidence and facts presented in the Petition warrant
reconsideration of the prior art or arguments.

Becton, Dickinson & Co. v. B. Braun Melsungen AG, IPR2017-01586, Paper No. 8 (Dec. 15, 2017)
(§III.C.5 first paragraph designated precedential on August 2, 2019)
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 § 325(d) Discretion

Advanced Bionics: Two-Part Framework

1. Whether the same or substantially the same art previously was

presented to the Office or whether the same or substantially the same
arguments previously were presented to the Office

2. If either condition of the first part of the framework is satisfied, whether

the petitioner has demonstrated that the Office erred in a manner
material to the patentability of challenged claims.

Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (Feb.
13, 2020) (designated precedential March 24, 2020)

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 § 325(d) Discretion

Advanced Bionics: Part One (Same or Substantially Same Art/Arguments)

325(d) identifies two issues for the Director to consider in exercising discretion to
deny institution of review:
Does the petition present the same or substantially the same art?
Does the petition present the same or substantially the same arguments?

Previously presented art may include art made of record by the Examiner and art
provided by applicant, including on an Information Disclosure Statement

Prior proceedings include examination, reexamination, reissue, and AIA post-grant

proceedings

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 § 325(d) Discretion
Advanced Bionics: Part Two (Material Error)

“If the ‘same or substantially the same prior art or arguments’ previously were presented to the
Office, then the Board’s decisions generally have required a showing that the Office erred in
evaluating the art or arguments…. If the petitioner fails to show that the Office erred, the
Director may exercise his discretion not to institute inter partes review.” (citations omitted)

Absent material error, “generally” will exercise discretion not to institute IPR

“An example of a material error may include misapprehending or overlooking specific

teachings of the relevant prior art where those teachings impact patentability of the challenged
claims. Another example may include an error of law, such as misconstruing a claim term,
where the construction impacts patentability of the challenged claims.”

“If reasonable minds can disagree regarding the purported treatment of the art or arguments,
it cannot be said that the Office erred in a manner material to patentability. At bottom, this
framework reflects a commitment to defer to previous Office evaluations of the evidence of
record unless material error is shown.”
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 § 325(d) Discretion

Advanced Bionics: Becton, Dickinson Recites Factors for Framework

Becton, Dickinson factors should be read broadly and used to conduct factual
inquiry regardless of when the art or argument was presented to the Office

Factors (a), (b), and (d) relate to Part 1; (c), (e), and (f) to Part 2 of two-part
framework

The showing of material error required depends on the context in which the art
was presented and considered. Factor (c), the extent to which the asserted art was
evaluated, informs factors (e) and (f).

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 § 325(d) Discretion
Advanced Bionics: Application of Two-Part Framework

Petitioner relied on reference that had been considered during prosecution in

combination with additional references that had not been before the Office

Board found that although petitioner identified new references, petitioner relied on
those references as disclosing certain limitations in the same manner as the previously
considered reference or did not rely on new reference to disclose a limitation the
Examiner found was missing from the previously considered reference, such that it was
the same or substantially the same prior art

Did not reach whether same or substantially the same arguments previously presented

Board found that petitioner did not show Examiner materially erred because new prior
art did not cure deficiency in prior prior art identified by Examiner during prosecution

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 § 325(d) Discretion
Oticon: Applying Becton, Dickinson Factors

Petitioner relied on two references considered by Examiner and an additional reference not
considered by Examiner

Board rejected 325(d) argument, finding that Patent Owner was incorrect that additional reference
was cumulative of another reference considered during prosecution
In fact-based analysis, found that references disclosed different structures with different
purposes and that new reference disclosed additional motivation to combine

Under Becton, Dickinson factors (e) and (f), found that Examiner erred because Office was not aware
of prior art presented in IPR

As discussed, Board also rejected 314(a) argument

Oticon Medical AB v. Cochlear Limited, IPR2019-00975, Paper 15 (Oct. 16, 2019) (§§ II.B & II.C
designated precedential March 24, 2020)
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 § 325(d) Discretion
NHK Spring: Applying Becton, Dickinson Factors
Board denied institution under both 325(d) and 314(a).

Under 325(d), found that the same prior art was presented during prosecution, that petitioner
made substantially the same arguments, and that Examiner evaluated the prior art during
prosecution.

Petitioner argued that Examiner “overlooked” specific aspect of the prior art (a table of
values), but Board rejected argument because petitioner’s arguments did not rely solely on
that table and “substantially overlapped” with Examiner’s findings.

Board also rejected argument that IPR expert declaration was enough to warrant
reconsideration, as declaration largely overlapped with petition and was not supported by
additional objective evidence.

NHK Spring Co. Ltd. v. Intri-Plex Techs. Inc., IPR2018-00752, Paper 8 (Sept. 12, 2018)
(designated precedential, May 7, 2019) 30
 § 325(d) Discretion
Puma: Applying Becton, Dickinson Factors
Petitioner presented same prior art considered during prosecution, which the Examiner relied on to
reject claims as obvious twice

In fact-specific arguments, Petitioner identified two purported errors in Examiner’s analysis

Board found that Petitioner’s arguments about the merits “do[] not identify error on the Examiner’s
part.” Rather, the Board found that “Petitioner disagrees with [Examiner’s] determination, but has
not articulated how or why the Examiner erred.”

Board also found that testimony of petitioner’s expert was insufficient to identify that a limitation was
a matter of aesthetic design choice, finding that expert “fail[ed] to identify any fact-based reasoning
to support [the] statement.”

PUMA North America, Inc. v. NIKE, Inc., IPR2019-01042, Paper 10 (Oct. 31, 2019) (designated
informative, Mar. 24, 2020)
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USPTO Institution Data
314 Denials Study
Falling Institution Rates

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Outcomes of PTAB Proceedings

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Total Institutions & Denials

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Total Institutions & Denials by Reason

Not Instituted Not Instituted

Institutions - Merits - Procedural § 314(a)

2016 944 390 77 5

2017 974 523 84 15

2018 792 380 117 45

2019 795 359 154 75

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§ 314 Denials by Year

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Procedural Denials vs. All Decisions

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Discretionary Denials – Percentage of Institution

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§ 314 Denials – Percentage of Denials

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Questions?