PTAB Corrects Error and Institutes a Previously Denied IPR

Rothwell, Figg, Ernst & Manbeck, P.C.
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[author: Kristen Logan]

Earlier this month, the Patent Trial and Appeal Board granted a request for rehearing in Maxlite, Inc. v. Jiaxing Super Lighting Elec. Appl. Co., Ltd., No. IPR2020-00208, Paper 14 (P.T.A.B. June 1, 2021), thereby instituting a previously-denied Inter Partes Review. In the decision, the Board admitted to abusing its discretion in initially denying Institution.

In Maxlite, the Petitioner submitted a request for rehearing under 37 C.F.R. § 42.71(d), which provides that:

A party dissatisfied with a decision may file a request for rehearing. The burden of showing a decision should be modified lies with the party challenging the decision. The request must specifically identify all matters the party believes the Board misapprehended or overlooked, and where each matter was previously addressed in a motion, opposition, or a reply.

The Petitioner sought rehearing on two grounds. First, “[t]he Board’s denial of Institution was based on an erroneous conclusion of law that improperly shifts the burden to [Petitioner] to bring forth all arguments with respect to why the challenged claims are not entitled to an earlier priority date.” Second, “the Board improperly shifted the burden to [Petitioner] with respect to the ’636 [Chinese] application inventorship issue.”

As for the first issue, the Board incorrectly shifted the burden of production back to the Petitioner notwithstanding that the Patent Owner failed to support the priority date with respect to all limitations of the challenged claims. The Petitioner made the initial showing that the challenged patent was potentially obvious because of a prior art patent. Typically, when a Petitioner makes this showing, the burden then shifts to the Patent Owner to provide evidence that the challenged patent has a priority date before the priority date of the asserted prior art. Here, the Patent Owner relied on the priority date of a Chinese application that was an ancestor to the challenged patent. In doing so, the patent owner made a showing that the ancestor application supported just one of the limitations in the challenged claims. At first, the Board incorrectly found this support sufficient to satisfy the Patent Owner’s burden to claim priority from the ancestor application. However, on rehearing, the Board recognized that this ruling was in error because the Patent Owner needed to show that the ancestor application supports all the limitations in the challenged claims before shifting the burden back to the Petitioner.

As for the second issue, the Board did not address inventorship of the Chinese application when it first denied Institution. On rehearing, the Petitioner contended that the Board “erroneously failed to consider [Petitioners]’s argument that Patent Owner is not entitled under 35 U.S.C. § 119(a) to rely on the [ancestor] application because that application does not share a single common inventor with the [challenged] patent.” According to the Federal Circuit, a foreign application may only create priority under 35 U.S.C. § 119(a) “if that application was filed by either the U.S. applicant himself, or by someone acting on his behalf at the time the foreign application was filed.” However, in MaxLite, the ancestor application and the challenged patent did not share common inventors, nor was there evidence that the ancestor application was filed on behalf of the inventors of the challenged patent. The Patent Owner sought to allege a sufficient nexus between the ancestor application and the challenged patent by showing that both shared a common assignee. On rehearing, the Board found that the Patent Owner’s assertion was insufficient to satisfy its burden of proving inventorship. Instead, the Board found no nexus between the inventors of the ancestor application and the challenged patent. Thus, the Patent Owner did not provide adequate evidence to support a finding that the challenged patent can properly claim the priority of the ancestral application.

This case demonstrates a viable recourse exists for Petitioners who might be dissatisfied with the Board’s denial of Institution. Because the Board is willing to reverse denials of Institution when it abuses its discretion, Parties should keep in mind 37 C.F.R. § 42.71(d) and conduct a thorough review of the Board’s decision. In reviewing the Board’s decision, Parties should especially keep an eye out for issues that the Board might have decided incorrectly or failed to address entirely. While the granted rehearing seen in Maxlite is rare, 37 C.F.R. § 42.71(d) and the Board’s decision provide hope to Parties initially denied Institution.

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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