PTAB Litigation 2016 Part 9 – Final Written Decision and Appeal 1

Final Written Decision 2

At the end of trial, Board issues a Final Written Decision detailing whether the petitioner has met its burden of showing unpatentability of claims by a preponderance of evidence; Final Written Decision must be issued within 1 year of institution unless good cause 37 C.F.R. § (c); Board has not gone beyond 1 year (other than in joinder cases); Board will discuss substance of arguments and motions to exclude (sometimes in separate paper); This document provides the necessary documentation of the proceedings for Federal Circuit review. 3

Final Written Decision – Petitioner Estoppel at Office General rule on petitioner estoppel at Patent Office: –35 U.S.C. § 315(e)(1): “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.” 4

Estoppel – Patent Office Interpretation Attaches at Final Written Decision Claim-by-claim basis – PTAB says this means estoppel only applies to claims addressed in Final Written Decision, estoppel does not apply to non- instituted claims. Westlake Services LLC v. Credit Acceptance Corp., CBM Does not apply to grounds not instituted as redundant. Apotex v Wyeth, IPR

Final Written Decision – Petitioner Estoppel at District Court General rule on petitioner estoppel in civil actions and other proceedings: –35 U.S.C. § 315(e)(2): “The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or could have raised during that inter partes review.” 6

Estoppel – District Court Interpretation Limited analysis of petitioner estoppel outside of the Patent Office to date; Almost certainly does not apply to §§ 101, 112 grounds that are not available to IPR petitioners; Oilwell Varco LP v. Omron Oilfield & Marine Inc., (W.D. Tex. Dec. 2, 2013) held that estoppel did not apply to non-instituted claims; Star Envirotech Inc. v. Redline Detection LLC., (C.D.Ca. Jan. 29, 2015) held that prior use/sale invalidity defenses are not barred. 7

Appeal Two opportunities – Request for Rehearing and then further Appeal to Federal Circuit; Request for Rehearing is optional; Low success rate – but Board will provide a decision on the request, which could help clarify the record for appeal. 8

Request for Rehearing Under 37 CFR § 42.71(c), “[w]hen rehearing a decision on petition, a panel will review the decision for an abuse of discretion.” While not explicitly stated in the regulations, the Board in practice has extended this standard to other motions for rehearing, regardless of cause. “The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and the place where each matter was previously addressed in a motion, an opposition, or a reply.” 37 C.F.R (d). 9

Request for Rehearing - Timing Requests for rehearing must occur: Within 14 days of an Institution Decision that results in a trial or other non-final decision; Within 30 days of a Final Written Decision or denial of institution; Fifteen pages; Opposing party not permitted to respond unless requested to by Board; Historical success rate ~ 5%. 10

Requests for Rehearing - Successes Misapplication of the law – PNY Techs. Inc. v. Phison Elecs. Corp., IPR ; Overlooking Explicitly Made Arguments – Illumina Inc. v. The Trustees of Columbia Univ. in the City of New York, IPR ; Veeam Software Corp. v. Symantec Corp., IPR ; Administrative errors – Facebook, Inc. v. Software Rights Archive, LLC, IPR (Board found in petitioner’s favor in body of Institution Decision but did not note that ground in its concluding statement identifying grounds for trial). 11

Split Panels – Opportunity for Reversal Requests for Rehearing are rarely granted; Asking panel to review its own decision; Must show something the Board overlooked; About 5% success; Sometimes not worth filing such requests; While most decisions are unanimous, sometimes there will be a dissent; Dissents signal possibility to turn the tide. 12

Rehearing - Expanded Panels PTAB Standard Operating Procedures enable a party to request that five judges hear a rehearing request instead of the original three: Reasons for expanding a panel include:... (2) Consideration by an expanded panel is necessary to secure and maintain uniformity of the Board’s decisions, such as where different panels of the Board render conflicting decisions on issues of statutory interpretation or rule interpretation, or a substantial difference of opinion among judges exists on issues of statutory interpretation or rule interpretation. 13

Expanded Panel Example Broad Ocean v. Nidec, IPR ; Board denied joinder of IPR in a 2-1 decision; Broad Ocean requested rehearing with expanded panel based on conflicting Board decisions regarding a party bringing a second IPR with additional grounds after the 1-year bar and requesting joinder; 2 fresh sets of eyes made the difference; Rehearing request granted in 3-2 decision, with 2 new judges being in favor of granting. 14

Appeal – Notice of Appeal Deadline Notice of Appeal due within 63 days of Final Written Decision if no Request for Rehearing filed; Otherwise due 63 days after Board action on Request for Rehearing; Cross-appeal notices due within 14 days of first filer’s notice. 15

Appeal - Mechanics Notice of Appeal identifies party appealing, decision being appealed, and identifies Federal Circuit as destination; Should include enough information for PTO to determine whether to intervene; Best practice is to include issues on appeal; Provide 3 copies of notice to Federal Circuit clerk with docketing fee, file notice in PTAB docket, mail to USPTO Director at Office of General Counsel, and serve on each opposing party; USPTO director will transmit certified record to Federal Circuit – decision will likely be 9-12 months from receipt of the record. 16

Appeal – Decisions So Far Federal Circuit has largely ratified PTAB rules and procedure; Supreme Court has recently granted cert for questions of whether Broadest Reasonable Interpretation is correct standard and whether Institution Decisions are really non- appealable outside of mandamus conditions; Federal Circuit has generally concluded that writs for mandamus are inappropriate means to seek appeal of interlocutory decisions – In re MCM Portfolio; In re Telefonaktiebolaget LM Ericsson; In re Redline Detection. 17

Appeal – Decisions So Far Federal Circuit has issued 39 decisions on PTAB Final Written Decision appeals so far; Affirmed – 34 cases 87.2%; 25 as Rule 36 affirmances without opinions; 9 with opinions; Vacated or reversed and remanded – 3 cases; Mixed rulings – 2 cases. 18