Attorney Argument in Preliminary Response Continues to be Trumped by Expert Evidence from Petition

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Challenging two patents with a common parent application, Butamax Advanced Biofuels was able to get 28 challenged claims of one Gevo patent and 18 challenged claims of a second into separate trials for inter partes review, in cases styled as Butamax Advanced Biofuels LLC v. Gevo, Inc. (IPR2013-00214 and IPR2013-00215), involving U.S. Pat. Nos. 8,304,588 and 8,283,505.

The duo of patents both relate to a “method for recovering C3-C6 alcohols, including isobutanol, from dilute aqueous solutions, such as fermentation broths.”

The Board in both cases dealt with a handful of preliminary issues before delving into the analysis. The first issue regarded whether DuPont should have been named as a real party-in-interest by Patent Challenger. The Board rejected Patent Owner’s argument that inter partes review should be barred because of this issue, reasoning that the mere fact that DuPont and Butamax (who have board of directors’ members in common, among other tangential ties) share a common interest in the two patents does not necessarily make DuPont a real party-in-interest. The real party-in-interest inquiry is “fact-dependent” and Patent Challenger simply had not set forth persuasive evidence of DuPont’s ability to fund or direct the proceeding. IPR2013-00214 Order at 4. This issue is, of course, challenging for a Patent Challenger to prove in light of the Board’s high burden to obtain “additional discovery” that would help provide the persuasive facts for this fact-dependent inquiry.

The Board then rejected Patent Owner’s argument that inter partes review should be barred because the references relied upon and the arguments utilized were previously considered by the Examiner. In discounting Patent Owner’s argument, the Board simply stated that Patent Challenger’s arguments had merit. IPR2013-00214 Order at 5.

To conclude the preliminary matters, the Board rejected Patent Owner’s argument that expert testimony should be discredited because it was provided by an expert with a business relationship with DuPont (an alleged unnamed real party-in-interest), citing the expert’s qualifications and persuasive testimony. IPR2013-00214 Order at 6.

The Board’s analysis of the merits of the petitions contained a few interesting points. For example, in the 214 proceeding, the Board deemed the preambles of the challenged claims limiting, especially given that a portion of the preamble provided antecedent basis support for certain of the dependent claims. IPR2013-00214 Order at 9.

In the 215 proceeding, the Board considered Patent Owner’s argument that, by modifying one prior art reference’s disclosed process by including as step from another reference, the fundamental principles of operation of the process would be changed. Thus, per Patent Owner, the proposed modification would render the prior art invention inoperable. IPR2013-00214 Order at 11. The Board discounted this argument based on the rational that Patent Owner’s “argument improperly is based on what each reference teaches separately, and not on the teachings of the combined references.” Id. More specifically, the Board relied on the Federal Circuit’s decision in In re Keller, 642 F.2d 413, 425 (CCPA 1981) to not require “bodily incorporation” of a secondary reference into a primary reference.

This decision shows why there is a growing trend in IPR practice to waive the Patent Owner Preliminary Response or, at the least, to not focus on the merits of, for example, an obviousness analysis. Time and again in the Board’s decision, it discounted the attorney argument of Patent Owner and referred, instead, to the declaration testimony of Patent Challenger’s expert. Clearly, expert evidence, if properly presented, is provided great weight, as compared to mere attorney argument (and no expert testimony is, of course, allowed in such a Preliminary Response). As such, Patent Owners are reconsidering the forecast of arguments that could be made in the formal response to the petition, when expert testimony may be provided, given that the Board is not giving much weight to those arguments in the Preliminary Response.

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