Emerging Issues in PTAB Proceedings: New Developments in the Law of Obviousness Claire Laporte...

Emerging Issues in PTAB Proceedings:

New Developments in the Law of Obviousness

Claire LaporteConnecticut Intellectual Property

AssociationNovember 13, 2014

© 2008 Foley Hoag LLP. All Rights Reserved. Presentation Title | 22

Agenda

Background: Obviousness in the District Courts

PTAB Procedural Issues (1)PTAB’s Development of Secondary

ConsiderationsPTAB Procedural Issues (2)


Doctrine of Obviousness

Statute: “A patent … may not be obtained … if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious … to a person having ordinary skill in the art ….”

Proof of obviousness must be made by clear and convincing evidence (Microsoft v. i4i (S.Ct. 2011)


Doctrine of Obviousness

Complex, multifactorial test established in Graham v. John Deere (S.Ct. 1966): Scope and content of the prior art Differences between the prior art and the claims at issue;

Level of ordinary skill in the art; and Secondary considerations “might be utilized to give light to the circumstances.”Complexity of test leads to unpredictabilityRelationship between the first three factors and secondary considerations unclear

Development of doctrine has obscured fact that secondary considerations operate like affirmative defenses


Obviousness in District Court

Burden of proving invalidity: clear and convincing evidence

Mechanics of burden for secondary considerations: Galderma v. Tolmar (Fed. Cir. 2013)Challenger makes prima facie case of obviousness

Patentee then has “burden of production” to rebut

“Ultimate burden of proving obviousness” rests with challenger


Obviousness in District Court

Pre-trial disclosure regimes: ping-pong style Interrogatories Initial, answering, and rebuttal expert reports

Cases tried to juries Typically general verdicts or high-level interrogatories Patentee usually goes first and leads with invention story When challenger presents invalidity case, typically juries are unpersuaded unless art is anticipatory or presented by live non-expert witnesses

More than two references: a signal of a weak case? Typical obviousness narratives don’t stress secondary considerations

Focus leads to persuasion


Secondary Considerations in District Court:

The tail wagging the dog! Abundant disclosure, little mention at trial – even (usually) in bench trials


Agenda





What’s Different in the PTAB?

Many fewer opportunities to develop issues for presentation to tribunal




Patent Owner incentives to emphasize secondary considerations

Page limits restrict development of arguments



Fewer opportunities to narrow the issuesLess focused presentationProliferation of secondary considerations

argumentsAnd … by statute, lower burden of proof.


Agenda





Secondary Considerations

Commercial successLicensingCopying

Long-felt needSecondary considerations based on the

evaluation of skilled artisans:Failure of othersUnexpected results (against closest prior art)Teaching away (not always considered a “secondary consideration”)

Praise/skepticism


Commercial Success: Proving Nexus

Gnosis v. South Alabama Medical Science Foundation (PTAB 2014) (Final): mismatch between commercial folate supplements (including ingredients A-B) and claims (covering B-C)Constant references to the Patent Owner’s evidence as “unpersuasive”: how did panel handle burden of proof of unpatentability?


Commercial Success: Proving Nexus

Covidien v. Ethicon Endo-Surgery (PTAB 2014) (Final): commercial success could have resulted from unclaimed features; claims covered A-B, commercial products included A-C.

Apple v. Sightsound Technologies (PTAB 2014) (Final): Apple’s iTunes music store embodies numerous inventions, and Patent Owner did not show that iTunes’ commercial success “is due specifically to novel features of the challenged claims.”


Licensing Arguments: Proving Nexus

Illumina v. Columbia (PTAB 2014) (Final): Petitioner’s attempt to license challenged patent is “insufficient” evidence; petitioner may have been moved less by “the merits of the claimed invention” than by “knowledge of a patent potentially covering their own product.”And also, perhaps, a recognition of its validity?

Gnosis v. South Alabama Medical Science Foundation (PTAB 2014) (Final): Fact that companies licensed the challenged patent not enough; Patent Owner did “not indicate … whether these companies licensed other additional patents from Merck and/or others in order to manufacture and sell its products.”


Licensing Arguments: Proving Nexus

CBS Interactive v. Helferich Patent Licensing (PTAB 2013) (Institution): Licensing of patent family, rather than the challenged patent itself, insufficient to show commercial success; Patent Owner did not establish nexus between the merits of the invention and the licenses.

Generally: very hard for Patent Owner to connect claims to market-based events such as sales or licenses


Proving Long-Felt Need

Medtronic v. Nuvasive (PTAB 2014) (Institution): The problem and the components to the claimed invention existed for a long time. Yet, no one put them together before the challenged patent’s priority date.

PTAB: Not impressed. “[M]ere passage of time without the claimed invention is not evidence of nonobviousness.”

Evidence of long-felt need must show “an articulated, identified problem” and “unsuccessful efforts to solve that problem.”


Skill-Based Considerations: Teaching Away

Zodiac v. Aqua Products (PTAB 2013) (Institution) & (2014) (Final): nexus-type problems again!Claims drawn to self-propelling apparatus for cleaning pool or tank

Teaching away argument based on warning in prior art “regarding the potential dangers to swimmers presented by submerged electric motors”

Claim-to-argument mapping problem:Mismatch between claim (pool or tank) vs. swimmers (presumed to be in pools only)

Claim drawn to “water pump” that need not be an “electric motor”



Gnosis v. South Alabama Medical Science Foundation (PTAB 2014) (Final): nexus-type problems continueClaims drawn to class of chemical compounds that can be used to treat disease x.

Art at the time taught that one member of that class was “not indicated for use in the treatment of” disease x.

Not good enough! “Not indicated” is not the same as “not suitable,” because there may be other reasons for non-indication.

Claims were broader than the compound that was “not indicated” in the prior art



Fellowes v. Speculative Product Design (PTAB 2013) (Institution) Certain claims drawn to phone case with hard outer shell

cut away at corners Art reference X said that the corners “should not be cut

away.” Not good enough. To teach away, a reference must

“suggest[] that the developments flowing from its disclosures are unlikely to produce the objective of applicant’s invention. ‘A statement that a particular combination is not a preferred embodiment does not teach away absent clear discouragement.’”

Because a different reference taught a way of overcoming problems introduced by cutting away corners, reference X’s teaching was not sufficient to show teaching away.


Secondary Considerations

PTAB expects the Patent Owner to connect the dots in a very explicit way

Just looking and quacking like a duck is not enough: the whole duck must be there!Will be interesting to

see if Patent Owners can argue on appeal that the burden of proof has shifted improperly


Weight of Secondary Considerations

LKQ v. Clearlamp (PTAB 2014) (Final) Strong basis for obviousness because features of claims were well known in the art.

Patent Owner presented evidence of copying and commercial success.

“[S]econdary considerations of nonobviousness . . . simply cannot overcome a strong prima facie case of obviousness.”

“Indeed, where the inventions represented no more than predictable use of prior art elements according to their established functions, the secondary considerations are inadequate to establish nonobviousness as a matter of law.”


Agenda





PTAB Discovery

What if some secondary considerations evidence might be held by the Petitioner?

What if Petitioner: Sought a license?Copied a product covered by the patent?Would have profited enormously by being first to market, but wasn’t?

Expressed skepticism about the efficacy or operability of a covered product?

Achieved commercial success with a product infringing the claim?


PTAB Discovery

“Routine” and “additional” discovery: 37 CFR §§ 42.51(b), 42.224(a) (“Limited discovery”) “Routine” discovery includes exhibits cited but not attached, cross-examination of testimony provided by affidavit, and (fuzzier) time-relevant “information that is inconsistent with a position advanced by the party”

“Additional” discovery: “In the interests of justice” (IPR)“Good cause” (PGR, CBM)

Historical roots in interference discovery regime It’s the regime those of us who complain about

discovery cost have been waiting for!


PTAB Discovery

Garmin v. Cuozzo (PTAB 2013) (Discovery ruling): Fishing for potentially inconsistent statements without any foundation is not “routine” discovery:

Routine discovery cannot be “broadly directed to any subject area in general within which the requesting party hopes to discover … inconsistent information.”


PTAB Discovery: “Garmin” Factors

Factors for additional discovery “in the interest of justice”: “More than a possibility and mere allegation”: party seeking discovery “should already be in possession of evidence tending to show beyond speculation that in fact something useful will be uncovered.”

Litigation positions and basis for them is not “in the interest of justice.”

No discovery of things the discovering party could obtain itself or “generate equivalent information.”

Questions and instructions must be “easily understandable”

Requests not “overly burdensome to answer.”Bard case concerning copying


Garmin: Petitioner Fends off Secondary Considerations Discovery

Movant did not present a “threshold amount of evidence or reasoning tending to show beyond speculation that the information to be discovered will be ‘useful.’”

Insufficient showing of nexus between invention and requests

Failure of the single opposing party is not the same as failure of (plural) others

Movant made no threshold showing of Garmin’s trying and failing Garmin copying Garmin recognizing a long-felt need


PTAB Discovery: PGR & CBM

Bloomberg v. Markets-Alert (PTAB 2013) (Discovery ruling)The “interests of justice” standard for IPR is “slightly higher” than the “good cause” standard for PGR and CBM.

Slight difference reflects the more limited scope of issues raised in IPR petitions.

Notwithstanding the difference, PTAB considers the same five “Garmin” factors.


Discovery Denials: Commercial Success

Schott Gemtron v. SSW Holding (PTAB 2014) (Discovery ruling)Secondary considerations discovery refused Insufficient showing of nexus to support commercial success discovery even though Patent Owner showed that the Petitioner’s product infringed the claims.No showing that patented features drove sales.No showing of the significance of the overall sales within the market.



Microsoft v. Proxyconn (PTAB 2013) (Discovery ruling) Patent Owner’s request for additional discovery on commercial

success denied No showing of nexus: Patent Owner has the burden of showing

that patented feature Y drives sales of product containing features X-Z.

This finding despite contention by Patent Owner that two different versions of the product were differentiated mainly by the patented feature Y.



Apple v. SightSound Technologies (PTAB 2013) (Discovery ruling) Patent Owner’s request for additional discovery denied Request was for evidence to rebut Petitioner’s likely argument

that there was no nexus between patented features of product and commercial success

Request for evidence to rebut argument Petitioner “has not yet made” is “based on mere speculation.”But at trial, Petitoner successfully argued insufficient nexus between patent claims and commercial success.


Discovery Denials: Copying

Smith & Nephew v. Convatec (PTAB 2013) (Discovery ruling) Seemingly modest request for opponent’s FDA submission

as evidence of copying rejected on nexus grounds Seemingly modest request for documents backing up

assertions in foreign proceeding regarding copying rejected on the ground that the Patent Owner’s assertions in foreign proceeding did not fully support Petitioner’s argument



Zodiac Pool Systems v. Aqua Products (PTAB 2013) (Discovery request) Denied request for evidence of Petitioner's testing and

analysis of Patent Owner’s product even though Patent Owner provided Petitioner with information on its product and a sample for evaluation.

Petitioner did not establish that Petitioner conducted any analysis of the product and failed to show nexus between the alleged analysis and the challenged claims.



Google v. Jongerius Panoramic Technologies (PTAB 2013) (Discovery ruling) Denied request for evidence of Petitioner’s copying even

though Petitioner’s employees viewed Patent Owner’s website and downloaded its software

Patent Owner’s evidence insufficient because it could show only viewings and a single download, and did not demonstrate that Petitioner actually copied the software.

Identification of Petitioner through IP addresses associated with viewing and downloading was not enough to tie the activity to Petitioner.

… And there was insufficient nexus.


Discovery Denials: Long-Felt Need

Acco Brands v. Fellowes (PTAB 2014) (Discovery ruling)Request for evidence of Petitioner’s alleged failed attempts to solve problem labeled “fishing expedition” even though Petitioner had other patents and was thus working in the area.

Patent Owner did not present “threshold amount of evidence” that “[Petitioner] and its employees tried and failed to solve” problem in manner set forth in disputed patent.


Discovery: Context and Comparison

District court litigation: almost an order of magnitude more expensive, with discovery driving the differential

PTAB extremely pressed: Increasing volume Mandatory deadlines Need to create new procedures and new setting for application of law

Historical context for limited discovery: interference proceedings But interferences could be appealed to district court if a losing party felt that it needed discovery

Contrast AIA appeals – direct to CAFC, without any further opportunity for discovery

Emerging Issues in PTAB Proceedings:

New Developments in the Law of Obviousness

Claire LaporteConnecticut Intellectual Property

AssociationNovember 13, 2014

Emerging Issues in PTAB Proceedings: New Developments in the Law of Obviousness Claire Laporte...

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Transcript of Emerging Issues in PTAB Proceedings: New Developments in the Law of Obviousness Claire Laporte...