IPR Update – Prosecution Bars

by McDonnell Boehnen Hulbert & Berghoff LLP

USPTO SealAre proceedings before the Patent Trial and Appeals Board ("PTAB") more like prosecution or more like litigation?  This might appear to be a purely academic question, except for one significant issue -- litigation prosecution bars.  Prosecution bars are often included in Protective Orders or Discovery Confidentiality Orders to prevent litigation counsel from using the confidential information produced in a lawsuit during subsequent prosecution before the Patent Office.  Of course, with the advent of the PTAB's post-issuance proceedings, the issue of whether practice before the Board should be subject to such bars needed to be resolved.

The PTAB – IPRs are Litigation

Earlier this year, the PTAB addressed the issue, concluding that its proceedings were more like litigation.  In Google Inc. v. Jongerious Panoramic Techs., LLC (Case IPR2013-00191), the Board concluded that "[a]n inter partes review is neither a patent examination nor a patent reexamination."  See id. Paper No. 50, at 4 (P.T.A.B. Feb. 13, 2014).  The issue being decided was whether petitioner's litigation counsel could be admitted pro hac vice.  The requirement for the Board to recognize counsel pro hac vice is good cause, provided lead counsel is a registered practitioner.  See 37 C.F.R. § 42.10(c).  In this case, Mr. James R. Batchelder submitted a declaration in which he indicated that he had extensive experience litigating patent cases, and that he had familiarity with the relevant subject matter because of his representation of Apple in district court litigation involving the same patents (Apple was co-petitioner with Google).  Not surprisingly, the Patent Owner argued that the prosecution bar in the underlying litigation should prevent Mr. Batchelder from participating in the IPR.  That protective order precluded attorneys receiving access to confidential information from engaging in "prosecution activities," and therefore the Patent Owner believed that it would be a violation if Mr. Batchelder were admitted in the case.  See Google Inc., Paper No. 50, at 4.

In that case, the PTAB was unpersuaded by the Patent Owner's arguments.  The Board observed that an IPR is "a trial, adjudicatory in nature and constitutes litigation."  Id.  The Board also noted that, even though it prohibited "prosecution activities, the protective order was silent regarding trials before the PTAB.  Also, all of the substantive briefings had been filed in the case already.  Most importantly, however, the PTAB appeared to shift the focus back to the district court.  Mr. Batchelder was still subject to sanctions if he violated the order.  The Patent Owner did not suggest that Mr. Batchelder was in violation of the protective order, even though he had already been assisting the Petitioner's counsel.  If the Patent Owner believed that Mr. Batchelder was violating the protective order, it could seek relief at the district court.  Of course, this left open the question of how a district court would handle such prosecution bars.

District Court – Counsel May Participate in IPR Proceeding Regardless of Prosecution Bar

The United States District Court for the Southern District of New York recently answered that question in a similar manner, but took it an additional step.  The litigation entailed 11 separate lawsuits against several different ANDA filers that were attempting to market generic versions of OPANA® ER, an opiod painkiller.  The relevant case for these purposes was Endo Pharmaceuticals Inc. v. Amneal Pharmaceuticals, LLC, 12 Civ. 8115 (TPG).  Endo was represented in the litigation by the law firm of Dechert LLP.  Amneal filed an IPR before the PTAB related to the validity of three of the patents involved in the lawsuit -- U.S. Patents 8,309,122, 8,329,216, and 7,851,482.  Endo retained the law firm of Mayer Brown LLP to serve as its primary counsel in that proceeding, but desired to have the two firms collaborate about claims and defenses at issue in both proceedings.  The problem was that a protective order had been filed in the litigation preventing the Dechert attorneys from engaging in patent prosecution or claim amendment before the PTO.

In its decision of August 13, 2014, the District Court noted that the protective order did not specifically bar participation in IPR proceedings, citing the Board's Google decision approvingly.  The Court also noted that both Dechert and Endo had assured the court that the attorneys involved will not participate in claim amendment proceedings.  These, in and of themselves, would have been sufficient to allow Dechert's participation in the IPR.  Nevertheless, the Court went on to conclude that even if the protective order did bar the attorneys from IPR participation, it would have made an exception on the facts of this case.

The Court cited the Federal Circuit's In re Deutsche Bank Trust Co. Americas case, which provided factors to evaluate a party's request for an exemption from a prosecution bar.  First, it must be shown that "representation of the client in matters before the PTO does not and is not likely to implicate competitive decisionmaking related to the subject matter of the litigation so as to give rise to a risk of inadvertent use of confidential information learned in litigation . . . ."  Deutsche Bank, 605 F.3d 1373, 1381 (Fed. Cir. 2010).  The District Court noted that the questions at issue in this case, obviousness and the relevant prior art, would not implicate competitive decisionmaking or claim amendments.  The second factor entails a weighing of the potential injuries: whether "the potential injury to the moving party . . . outweighs the potential injury to the opposing party . . . ."  In this case, the District Court noted that there was minimal risk of inadvertent disclosure, because Dechert's attorneys are explicitly prohibited from participating in claim amendment discussions.  In contrast, the injury to Endo would be significant because the prior art references are the same in both proceedings.  Mayer Brown simply did not have Dechert's considerable expertise and extensive knowledge regarding those references.  Finally, the Court noted the policy concerns of allowing a petitioner/alleged infringer to prevent trial counsel from participating in PTAB proceedings.  The result would be that a patent holder would be required to defend a patent in two separate venues with two sets of attorneys, resulting in a waste of time and resources.  Moreover, the decision at the PTAB would have direct consequences on the district court proceedings, and therefore patent holders have a legitimate interest in formulating consistent strategies.

Even though this was a positive result for patent holders embroiled in both litigation and IPR proceedings, it is only one case.  Therefore, it will be interesting to see how other jurisdictions handle similar questions regarding prosecution bars.  We will continue to monitor and report on any significant updates.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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