On March 24, the USPTO issued two precedential decisions and one informative decision that clarify the circumstances under which the PTAB will utilize its discretion to deny IPR institution under 35 U.S.C. § 325(d).  This section empowers the PTAB to deny a petition when “the same or substantially the same prior art or arguments previously were presented to the Office.”  The key takeaways from these cases are (1) that a petitioner will have to clearly show that the Examiner erred when attempting to use in an IPR petition the same prior art that was applied during prosecution and (2) that the PTAB is willing to consider on a detailed, reference-by-reference basis whether the prior art used in the petition is substantially the same or cumulative to prior art applied during prosecution when the petitioner cites new prior art.  Petitioners must take great care in evaluating the prosecution history and propose grounds in their petitions that are markedly different than what the Office saw before.  Patent owners, on the other hand, have a powerful tool to avoid institution.

Oticon Medical AB v. Cochlear Ltd., Case IPR2019-00975, Paper 15 (P.T.A.B. Oct. 16, 2019) (precedential)

The patent-at-issue concerned a bone anchor for implantation of an implant bone screw into the skull bone.  The petitioner, Oticon, asserted four grounds challenging the claims as unpatentable using different combinations of five prior art references, three of which were considered during prosecution.  The patent owner argued that the PTAB should exercise its discretion to deny institution under § 325(d).

The PTAB considered the Becton Dickinson factors, which include the following, non-exclusive factors:

(a) the similarities and material differences between the asserted art and the prior art involved during examination; (b) the cumulative nature of the asserted art and the prior art evaluated during examination; (c) the extent to which the asserted art was evaluated during examination, including whether the prior art was the basis for rejection; (d) the extent of the overlap between the arguments made during examination and the manner in which Petitioner relies on the prior art or Patent Owner distinguishes the prior art; (e) whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation of the asserted prior art; and (f) the extent to which additional evidence and facts presented in the Petition warrant reconsideration of prior art or arguments.

Factors (a) and (b):  The four proposed grounds each included a new reference, Choi.  So, the PTAB compared this reference to one used during prosecution (Härle).  The PTAB held that “Choi is not cumulative over Härle because Choi’s circumferential groove and Härle’s circumferential groove are different structures that serve different purposes.”  Moreover, the PTAB found that Choi provides “an advantage, i.e., dispersing stress on the cortical bone, which Petitioner relies on to provide the motivation.…”

Factors (c) and (d): The PTAB found these factors leaned in favor of the petitioner because Choi was not found to be cumulative over Härle.

Factors (e) and (f):  The PTAB found that “there was error in the prosecution … because Choi … was not considered.”  The PTAB also stated that it seemed “that the Examiner was simply not aware of Choi’s teaching” and that “[t]he Petition … presents different prior art than the Office was aware of.”  The PTAB thus did not exercise its discretion to deny institution.

The patent owner also argued that the PTAB should deny institution under 35 U.S.C. § 314(a) because the “Petitioner waited a year to file the Petition and used Cochlear’s responses in [the] District Court as a roadmap for the Petition; that Petitioner is using this proceeding to stall the district court litigation; and that the [PTAB] should not expend its limited resources because the District Court will likely determine the validity of the challenged claims in a similar timeframe.”  Under § 314(a), the PTAB has discretion to deny a petition that challenges a patent previously challenged before the PTAB (i.e., a “follow-on petition), and uses the General Plastic factors (which we have discussed here) to render its decision.  However, the PTAB noted those factors were inapplicable as this was not a “follow-on” petition because this was the first petition that Oticon had filed.

Even though the petition was not a “follow-on” petition, the PTAB considered whether there were other reasons to exercise its discretion, citing to NHK Spring Co. v. Intri-Plex Techs., Inc., Case IPR2018-00752, slip op. at 19-20, Paper 8 (P.T.A.B. Sept. 12, 2018) (precedential) (discussed here).  In NHK, the PTAB denied institution under § 314(a) because the co-pending district court litigation was set for trial in six months with the same prior art and arguments being advanced as in the IPR.  Here, the PTAB did not exercise its discretion to deny institution because the IPR proceeding “would not be directly duplicative of the District Court action.”

Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, Case IPR2019-01469, Paper 6 (P.T.A.B. Feb. 13, 2020) (precedential)

The patent-at-issue concerned implantable medical devices. The petitioner challenged the patent with two grounds, using some prior art previously considered during prosecution but also three new references that were not.

In analyzing § 325(d), the panel recognized the two-part framework that the PTAB uses:

(1) whether the same or substantially the same art previously was presented to the Office or whether the same or substantially the same arguments previously were presented to the Office; and (2) if either condition of [the] first part of the framework is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims.

Further, “[i]f a condition in the first part of the framework is satisfied and the petitioner fails to make a showing of material error, the Director generally will exercise discretion not to institute inter partes review.”  And if “reasonable minds can disagree” as to the treatment of the prior art or arguments, then “it cannot be said the [USPTO] erred in a manner material to patentability.”

The PTAB provided guidance on the Becton Dickinson factors in view of the two-part framework, explaining that factors (a) and (b) pertain to prior art evaluated during examination; factor (d) pertains to arguments made during examination; and if the review of factors (a), (b), and (d) demonstrate the same art or arguments were previously presented to the USPTO, then factors (c), (e), and (f) “relate to whether the petitioner has demonstrated a material error” by the USPTO.  The PTAB ultimately denied institution here because the primary reference relied on in the first ground was previously considered by the USPTO, that reference supplied nearly all of the limitations of the rejection, and the reference not previously made of record only disclosed limitations in the same manner as considered by the Examiner and supplied limitations the Examiner initially found present in the primary reference.  The second ground fared no better for the same reasons.

Turning to the second part of the framework—the question of whether the USPTO materially erred in its consideration of the same or substantially the same prior art during examination—the PTAB concluded that denial was warranted because the Examiner properly evaluated the prior art and was not persuaded that the Examiner overlooked or misapprehended anything in the prior art.  As a result, the PTAB denied institution under § 325(d).

Puma North America, Inc. v. Nike, Inc., Case IPR2019-01042, Paper 10 (P.T.A.B. Oct. 31, 2019) (informative)

The patent-at-issue concerned footwear, challenged via one ground with two references that the Examiner had previously considered, but the petitioner “contends that it ‘provides new evidence and argument’ that warrant consideration.”  In applying the Becton Dickinson factors, the PTAB found that factors (a)-(d) weighed in favor of denial because the Examiner considered the identical prior art cited in the petition, the challenged claims were twice rejected in view of the petition’s cited prior art during examination, and the petition’s reasoning was substantially the same as the Examiner’s.

As to factor (e), the PTAB was not persuaded by the petitioner’s argument that the Examiner erred in the consideration of the spacing of structures in the claimed footwear because “[w] hether a skilled artisan would have known how to implement a modification does not address the question of whether the modification would have been obvious in the first place.”  As such, that proposed rationale did not explain why a skilled artisan would have made the petition’s proposed modification.  Similarly, concerning factor (f), the PTAB determined the petitioner’s expert testimony favored denying institution because the arguments lacked “sufficient evidentiary support and conflicts with the prosecution history of record” and, thus, did not warrant reconsideration of the same prior art and arguments considered by the Examiner.  The PTAB, therefore, denied institution under § 325(d).

Conclusion

Patent owners have a powerful institution-denial tool per 35 U.S.C. § 325(d).  Patent owners should carefully compare the petition’s prior art arguments to those used in prior proceedings, such as prosecution and reexaminations.  If the petition uses prior art previously considered by the Office, the patent owner may be able to craft a persuasive argument for the PTAB to deny institution.  Even if some or all of the prior art is new, if that art is being used in substantially the same manner as before, the patent owner may still be able to craft a persuasive argument.

Petitioners, on the other hand, should use new prior art and arguments where possible, and ensure that the prior art is not simply cumulative to what the Office has seen before.  Where that is not possible and a petitioner needs to include prior art previously considered, the petition should include a strong statement as to how the Examiner erred before.