On September 6, 2017, an expanded panel of the Patent Trial and Appeal Board issued an “informative” decision in General Plastic Industrial Co., Ltd, v. Canon Kabushiki Kaisha setting forth the Board’s framework for analyzing follow-on inter partes review (IPR) petitions. In response to five concurrent requests for rehearing, a panel of seven administrative patent judges reviewed the factors articulated in NVIDIA Corp. v. Samsung Elec. Co., IPR2016-00134, Paper 9 (PTAB May 4, 2016) and, in doing so, denied all five requests. While acknowledging that multiple petitions challenging the same patent may be permitted based on specific facts of each case, the Board explained that follow-on petitions run the risk of undue inequities and prejudices to patent owners, and petitioner’s submission of multiple, staggered petitions constituted “an inefficient use of the inter partes review process and the Board’s resources.”
The public version of ALJ Shaw’s Initial Determination (ID) in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (1012 Investigation), provides important guidance on enforcement of standard-essential patents (SEPs) in the ITC. Respondent and accused infringer Sony argued that several of the patents asserted by patentee Fujifilm wereessential to the LTO-7 standard (relating to “linear tape open” magnetic media) and therefore that Fujifilm had waived its right to injunctive relief and was obligated to license its patents on FRAND terms. ALJ Shaw ultimately found that Sony had not met its burden of demonstrating essentiality, but he nevertheless provided helpful instructions on the quantum of proof necessary to make out such a claim, as well as other factors relevant to ITC enforcement of SEPs, all of which affirmed that the ITC is a viable forum for enforcement of SEPs. In sum he ruled that:
- The party arguing that a patent is essential bears the burden of proof on that point;
- Unless a patent is, in fact, essential to a given standard, there can be no breach of the standard-setting organization (SSO) agreement(s) giving rise to the FRAND obligation at issue;
- Breach of an SSO agreement and of forum selection clauses are not valid defenses in ITC investigations; and
- Respondents bear the burden of proving that a complainant/patentee relinquished its rights to equitable relief by joining the SSO in question.
The United States Court of Appeals for the Federal Circuit’s recent decision in Aqua Products Inc., v. Matal materially changes the burden of proof associated with the patentability of amended claims during an inter partes review (“IPR”), shifting the burden from the Patent Owner seeking the amendment to the IPR Petitioner opposing it.
Prior to the Aqua decision, if a Patent Owner sought to amend claims during an IPR, the Patent Trial and Appeals Board (the “Board”) placed the burden on the Patent Owner to prove that the proposed amended claims were patentable. When Patent Owner Aqua attempted to amend its claims during an IPR challenge to its U.S. Patent No. 8,273,183, the Board found that Aqua had not met its burden and denied Aqua’s motion to amend.
The decision in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (“1012 Investigation”), is still confidential, but the ITC has issued a notice stating that ALJ Shaw has ruled in favor of patentee Fujifilm against Sony and recommended that an exclusion order be issued. This is important because it is the first time the ITC has issued an exclusion order on standard-essential patents (SEPs), and may be the first time any U.S. tribunal has issued exclusionary or injunctive relief on patents which were declared standard essential. In the opinion, which should become public in a few weeks, ALJ Shaw, who presided over the case, is expected to address a number of key issues relating to the assertion of SEPs in general, and at the ITC specifically. In this case many of Sony’s affirmative defenses relate to the alleged essentiality of the asserted patents and the Administrative Law Judge was asked to answer a number of questions relating to SEPs generally and the ability to enforce them at the ITC.
In a first of its kind decision with important ramifications for patentees, the U.S. International Trade Commission (“ITC”) denied a petition to suspend or temporarily rescind remedial orders issued in Investigation No. 337-TA-945 pending appeal of the Patent Trial and Appeal Board’s (“PTAB”) separate finding that the patent claims at issue are invalid. The ITC has therefore decided to continue to exclude products it found to be infringing certain patents, regardless of the PTAB invalidating the very patents the exclusion order is based upon in separate IPR proceedings. While this decision aiding patentees may surprise some, it is consistent with the ITC’s practices regarding stays and of giving little deference to IPR proceedings.
In a move that could drastically change the patent law landscape, the United States Supreme Court recently granted certiorari in Oil States Energy Services LLC v. Greene’s Energy Group LLC, No. 16-712, to answer the question whether the inter partes review (IPR) process violates the U.S. Constitution by “extinguishing private property rights through a non-Article III forum without a jury.”
In 2001, Oil States Energy Services LLC (“Oil States”) was granted U.S. Patent No. 6,179,053 for a lockdown mechanism to ensure a mandrel is locked in an operative position during fracking. Oil States sued Greene’s Energy Group LLC (“Greene’s Energy”) in the Eastern District of Texas in 2012 for infringing this patent, and in turn, Greene’s Energy petitioned the United States Patent and Trademark Office (USPTO) to institute an IPR on the patent. This petition was granted. After the proceedings, the Patent Trial and Appeal Board (PTAB), the administrative body of the USPTO that handles IPRs, concluded the challenged patent claims were invalid. Oil States appealed to the Federal Circuit, which affirmed the decision, and Oil States then petitioned the Supreme Court for certiorari.
The Patent Trial and Appeal Board (“PTAB”) issued Final Written Decisions regarding Cisco’s U.S. Patent Nos. 6,377,577 (the “’577 Patent”) and 7,023,853 (the “’853 Patent”) on May 25, 2017 and U.S. Patent No. 7,224,668 (the “’668 Patent”) on June 1, 2017. The PTAB found the ’577 and ’668 Patents invalid but upheld the validity of the ’853 Patent. The Inter Partes Review (“IPR”) proceedings were brought by Arista Networks in retaliation to Cisco’s accusations of infringement brought in multiple venues, including at the U.S. International Trade Commission (“ITC”), which had just a few weeks earlier upheld the validity of these very same patents and determined that Arista infringed the ’577 and ’668 Patents, and issued exclusion and cease and desist orders accordingly. Since the IPR decisions issued Arista has filed a petition asking the ITC to suspend its limited exclusion order regarding the ’577 Patent based on the PTAB’s decision and is expected to file a similar request with respect to the ’668 Patent. On the other side, Cisco plans to appeal the PTAB’s decisions to the Federal Circuit. The uncertainty created by these inconsistent outcomes is an issue for patent owners, and it will be interesting to see how these cases are resolved. In addition, this case shows that even though the ITC does not stay its investigations for IPRs, IPRs may still impact ITC proceedings.
In its opinion in Aylus Networks, Inc. v. Apple Inc., the Federal Circuit expanded the scope of prosecution disclaimer to statements made by a patent owner during Inter Partes Review (IPR) proceedings. The Court explained that extending the doctrine to cover patent owner statements, made either before or after institution of an IPR, ensures that claims are not argued in one way to maintain patentability and a different way to support infringement allegations. The Court also noted that its conclusion promotes the public notice function of intrinsic evidence and protects the public’s reliance on statements made during IPR proceedings.
The Federal Circuit has now reversed the Patent Trial and Appeal Board’s decision in Synopsys, Inc. v. ATopTech, Inc. finding claims 1 and 32 of U.S. Patent No. 6,567,967 (the “‘967 patent”) as being “not supported by substantial evidence.”
Synopsys sued ATopTech in 2013 for allegedly infringing the ‘967 patent. ATopTech subsequently filed two inter partes review (IPR) petitions (IPR2014-01150 and IPR2014-01159) challenging the validity of all claims of the ‘967 patent. The ‘967 patent aims to improve circuit performance by splitting large components into small subcomponents and optimizing the connections between subcomponents. Claim 1 requires “flattening each of said plurality of hierarchically arranged branches by eliminating superfluous levels of hierarchy above said atomic blocks.” Claim 32 requires “determining optimal placement of each of the hard blocks, if any, within the predefined area.” The Board found both claims either obviousness or anticipated in view of the Fields and/or Su references.
Today, the Federal Circuit, vacated-in-part and remanded the Patent Trial and Appeal Board’s obviousness determination regarding a Securus Technologies patent directed to systems and methods for reviewing conversation data for certain events and bookmarking portions of the recording when something of interest is said, finding that the Board failed to provide any explanation for its decision with respect to certain challenged claims.