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Venue in Hatch-Waxman Cases Limited to District Where ANDA Is Submitted

by | Nov 11, 2020 |

The US Court of Appeals for the Federal Circuit found that in cases brought under the Hatch-Waxman Act, for purposes of determining venue, infringement occurs only in districts where actions related to the submission of an abbreviated new drug application (ANDA) occur, and not in all locations where future distribution of the generic products specified in the ANDA is contemplated. Valeant Pharmaceuticals North American LLC v. Mylan Pharmaceuticals Inc., Case No. 19-2402 (Fed. Cir. Nov. 5, 2020) (O’Malley, J.).

Valeant holds a new drug application for the brand name drug Jublia®, which is used to treat toenail fungal infections. In 2018, Mylan Pharmaceuticals Inc. (MPI) executed an ANDA seeking approval to market a generic version of Jublia®. MPI sent the ANDA from its West Virginia corporate office to the US Food and Drug Administration, located in White Oak, Maryland. The ANDA included a Paragraph IV certification that the Orange-Book-listed patents for Jublia® were invalid, unenforceable or would not be infringed by the ANDA product. After the ANDA was filed, Valeant filed suit in the District of New Jersey against MPI, Mylan Inc. and Mylan Laboratories Ltd. (MLL) pursuant to the Hatch-Waxman Act, alleging infringement of the Orange-Book-listed patents. Valeant also filed an essentially identical lawsuit in the Northern District of West Virginia against the same three defendants. MPI is a West Virginia corporation with a principal place of business in Morgantown, West Virginia. Mylan Inc. is a Pennsylvania corporation with a principal place of business in Canonsburg, Pennsylvania. MLL is an Indian corporation with a principal place of business in Hyderabad, India.

The Mylan entities moved to dismiss the New Jersey litigation, arguing that venue was improper under 28 USC § 1400(b) because none of the Mylan defendants reside or have a regular and established place of business in New Jersey, and the only alleged act of infringement (submission of the ANDA) did not occur in New Jersey. In response, Valeant argued that it was unduly narrow to limit “act of infringement” to the act of submitting the ANDA, and that the court should consider the Mylan entities’ planned future acts, which included acts of infringement in New Jersey. The district court granted the Mylan entities’ motion based on improper venue, finding that the ANDA was submitted from West Virginia and thus venue was proper there. Valeant appealed.

The two issues presented on appeal were the proper venue in Hatch-Waxman cases after TC Heartland v. Kraft Foods, and the proper venue for patent cases brought against foreign entities. Starting with the first issue, the Federal Circuit explained that determining whether venue is proper under § 1400(b) in a district other than the state in which a defendant is incorporated requires determining where the defendant committed acts of infringement. Under the Hatch-Waxman Act, it is an act of infringement to submit an ANDA for a drug claimed in a patent if the purpose of the submission is to obtain approval to engage in commercial activities related to the drug before [...]

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Sticky Situation? Circumstantial Evidence Can Support Intent to Confuse in Trade Dress Claims

by | Nov 4, 2020 |

The US Court of Appeals for the 11th Circuit reversed a district court’s grant of summary judgment for the defendant on trade dress infringement and trade dress dilution claims, finding that evidence relating to the likelihood of confusion was not viewed in the light most favorable to the plaintiff. However, the Court affirmed the grant of summary judgment for the defendant on the plaintiff’s false advertising claims because the allegedly deceptive advertising was not material to consumer purchasing decisions. J-B Weld Co., LLC v. Gorilla Glue Co., Case No. 18-14975 (11th Cir. Oct. 20, 2020) (Tjoflat, J.) (Carnes, J., concurring).

J-B Weld and Gorilla Glue are competitors specializing in heavy-duty adhesive products. Gorilla Glue introduced an adhesive under the brand name GorillaWeld that mimicked the packaging of a J-B Weld product. Gorilla Glue advertised GorillaWeld as a steel bond epoxy based on the strength of the bond and its similarity to an epoxy-group polymer, even though the product was not a chemical epoxy and did not contain any steel. J-B Weld sued, alleging trade dress infringement based on the Lanham Act and Georgia law, trade dress dilution based on Georgia law, and false advertising under the Lanham Act. The district court granted Gorilla Glue summary judgment on all claims, finding no trade dress infringement or dilution based on insufficient evidence of likelihood of confusion, and no false advertising because the evidence did not demonstrate that Gorilla Glue’s steel bond epoxy claim was material to consumer purchasing decisions. J-B Weld appealed, arguing that the district court did not properly view the evidence in the light most favorable to J-B Weld.

The 11th Circuit reversed on the trade dress infringement and dilution claims and affirmed on the false advertising claim. On the trade dress infringement claims, the 11th Circuit found that the district court did not view the evidence in the light most favorable to J-B Weld in analyzing the likelihood of confusion between the respective trade dress of J-B Weld and GorillaWeld, as required in the context of summary judgment. The 11th Circuit found that the district court did not properly credit evidence relevant to the similarity of the designs, Gorilla Glue’s intent and instances of actual confusion. For example, despite multiple similarities between the J-B Weld and GorillaWeld packages (including a V-shape tube arrangement and the use, emphasis and location of certain text), the district court found that the presence of the Gorilla Glue logo, brand name and color scheme negated a finding of similarity. The 11th Circuit deemed this finding error in the context of summary judgment. The Court also determined that communications from Gorilla Glue’s packaging design team that repeatedly referenced J-B Weld’s packaging and expressed a desire to use similar elements (including a communication in which a Gorilla Glue employee referred to the GorillaWeld design as a “knock off”) were improperly ascribed to innocuous motives based on self-serving testimony from a Gorilla Glue employee. As the Court explained, summary judgment required drawing all inferences in the light [...]

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Too Good to Be True? Federal Circuit Demands Evidence of Reliance on Favorable Ruling, Stipulation

by | Nov 4, 2020 |

The US Court of Appeals for the Federal Circuit held that notwithstanding a stipulation on claim construction, a party may still induce infringement absent proof that it actually relied on the stipulation, and that mere inaction, absent an affirmative act to encourage infringement, cannot be the basis for a claim of inducement. The Federal Circuit also affirmed the district court’s reduction of the jury’s damages award to $0 despite a finding of direct infringement because the plaintiff failed to prove damages. TecSec, Inc. v. Adobe Inc., Case Nos. 19-2192, -2258 (Fed. Cir. Oct. 23, 2020) (Taranto, J.).

TecSec owns several patents on systems and methods for multi-level security for network-distributed files. TecSec sued Adobe (among other defendants) in this now-10-year-old-case, which the Federal Circuit has considered several times. As relevant here, the district court entered a claim construction in 2011 that led to a stipulation of non-infringement, and the Federal Circuit reversed that claim construction in 2013. On remand, the district court barred TecSec from introducing evidence of inducement in the 2011–2013 period on the grounds that it was reasonable for Adobe to have relied on the district court’s ruling and the stipulation. On the new claim construction, Adobe stipulated to one act of direct infringement. Adobe also moved for summary judgment of patent ineligibility, which the district court denied, stating that its rationale supported judgment for TecSec that the patents claimed eligible subject matter. At trial, the jury found that the claims were valid and that Adobe directly infringed but did not induce infringement. The jury awarded TecSec $1.75 million in damages. On Adobe’s post-trial motion, the district court reduced the damages award to $0 because TecSec had not proved inducement and had proved no damages associated with the single act of direct infringement. Both parties appealed.

Inducement

The Federal Circuit reversed the district court’s decision on Adobe’s motion in limine barring inducement evidence for the 2011–2013 period. The district court’s primary rationale for granting the motion had been the reasonableness of Adobe’s reliance on the claim construction order and stipulation of non-infringement. However, the Federal Circuit reasoned that the intent prong of inducement is a subjective inquiry, and that inducement could still be found upon a showing that Adobe subjectively believed that the claim construction order was wrong and would subsequently be reversed.

Jury Instructions

The Federal Circuit next addressed two challenges by TecSec to jury instructions. The first instruction was predicated on three facts: (i) that Adobe had admitted that a certain sequence of steps constituted direct infringement, (ii) that Adobe had performed the steps on at least one occasion, and (iii) that “the parties agree that the one time for which Adobe had admitted infringement . . . occurred before TecSec filed its lawsuit.” The Court found that this instruction was factually accurate and therefore not erroneous. The second instruction explained that inducement required “an affirmative act to encourage infringement,” and that “[e]vidence of mere inaction, or a failure to stop or prevent infringement, does not [...]

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No Stay, But Please Fix

by | Nov 4, 2020 |

The US Court of Appeals for the Federal Circuit denied a motion to stay issuance of a mandate while a petition for certiorari regarding patentability under § 101 was pending before the Supreme Court of the United States, finding no irreparable harm if it did not do so. American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, Case No. 18-1763 D.I. 139 (Fed. Cir. Oct. 23, 2020) (Dyk, J.) (Moore, J., concurring). In her concurrence, Judge Moore encouraged the Supreme Court to grant certiorari in order to clarify the scope of § 101.

This decision was the fourth opinion issued by the Federal Circuit in this case. In the Court’s first opinion, a divided panel affirmed that method claims for a mechanical invention were invalid under 35 USC § 101. American Axle & Manufacturing I. The patent owner, American Axle, filed a petition for rehearing and a petition for rehearing en banc. American Axle & Manufacturing II. Several amicus briefs were filed, including one by former Federal Circuit Chief Judge Paul R. Michel. In view of these petitions and amicus briefs, the original panel modified and re-issued its opinion to affirm that certain claims were invalid and to reverse its holding that one claim was invalid. Subsequently, the full Federal Circuit denied the petition for a rehearing en banc, polling 6–6 and demonstrating the Court’s division on the application and scope of § 101.

American Axle filed a petition for certiorari at the Supreme Court and sought a stay from the Federal Circuit of the issuance of the mandate. The Federal Circuit denied a stay, citing Rule 41 of the Federal Rules of Appellate Procedure, which “provides that a motion for stay of the mandate ‘must show that the petition would present a substantial question and that there is good cause for a stay.’” Fed. R. App. P. 41(d)(1). The Court explained that a three-prong test determines whether a stay in a patent case is appropriate under this rule. The applicant must show (1) a reasonable probability that four justices will grant certiorari, (2) a fair prospect that the Supreme Court will reverse judgment, and (3) a likelihood that irreparable harm will result if the stay is denied.

Relying exclusively on irreparable harm, the Federal Circuit denied a stay. With respect to the invalid patent claims, the Court explained that a stay was not warranted because no further action was required by the district court. The Court dismissed American Axle’s argument that it would have to recall its mandate if reversed by the Supreme Court, explaining that this occurrence is common for every case that is reversed. With respect to the valid patent claim, the Court explained that the burden of litigation and litigation expenses is insufficient to show irreparable harm. Thus, the Court dismissed American Axle’s motion to stay the mandate.

Judge Moore filed a concurring opinion asking the Supreme Court to grant certiorari. Moore explained that the Supreme Court often grants cases where there is a [...]

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First-to-File Rule Must Be Followed Unless Compelling Circumstances Justify Exception

by | Nov 4, 2020 |

Vacating and remanding a district court’s decision not to transfer a case, the US Court of Appeals for the Federal Circuit granted a petition for a writ of mandamus because the district court did not consider whether the first-to-file rule favored keeping the case in the second-filed court. In re: Nitro, Case No. 20-142 (Fed. Cir. Oct. 28, 2020) (Reyna, J.).

In 2018, Cameron International filed a suit against Nitro in the Southern District of Texas alleging that Nitro’s fracturing-fluid delivery systems infringed three of Cameron’s patents. In February 2020, Cameron filed a second suit against Nitro in the Western District of Texas, alleging that the same accused products infringed two of Cameron’s other related patents. Relying on the first-to-file rule, which generally dictates that the court in which an action is first filed is the appropriate court to determine whether subsequently filed cases involving substantially similar issues should proceed, Nitro moved the Western District of Texas to decline jurisdiction or transfer the action to the Southern District of Texas.

The district court rejected the application of the first-to-file rule, but not because the two cases lacked substantial overlap. Instead, the district court relied on US Court of Appeals for the Fifth Circuit precedent stating that even where there is such overlap, the court still must determine whether there are “sufficiently ‘compelling circumstances’ to avoid the rule’s application.” The district court determined that it was appropriate to use a balance of the traditional transfer factors to make that determination, concluding that when a balance of transfer factors “does not weigh in favor of transfer[,] . . . compelling circumstances exist in order to avoid application of the first-to-file rule.” Applying this standard, the district court denied Nitro’s motion. The district court found that although two of the factors (relative ease of access to sources of proof, and local interest in having localized interests decided at home) favored transfer, the administrative difficulties flowing from court congestion, co-pending suits against another defendant involving the same patents, and the district court’s ability to more quickly schedule a trial weighed against transfer. Nitro filed for mandamus.

Proceeding from the district court’s premise that transfer pursuant to the first-to-file rule would be proper absent the existence of compelling circumstances, and that a balance of the transfer factors can support such an exception, the Federal Circuit explained that consideration of Nitro’s petition turned on the correctness of the district court’s application of those factors. The Court explained that the district court had it backwards by concluding that the first-to-file rule is only applicable when the balance of factors favors the first-filed court. Instead, the proper inquiry is that unless the balance of transfer factors favors keeping the case in the second-filed court, there are no compelling circumstances to keep the case in the second-filed court.

The Federal Circuit found that the district court did not resolve the critical issue of whether a balance of the factors favored the second-filed court. The Federal Circuit explained that although [...]

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Trademark Cancellation Is Appropriate Sanction for Misconduct

by | Nov 4, 2020 |

In upholding a grocery store chain’s standing to petition for cancellation of a US trademark registration, the US Court of Appeals for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (TTAB’s) express authority to impose cancellation of a trademark by default judgment as a sanction in a TTAB proceeding. Corcamore, LLC v. SFM, LLC, Case No. 19-1526 (Fed. Cir. Oct. 27, 2020) (Reyna, J.).

SFM owns US federal trademark registrations for the mark SPROUTS for use in connection with its retail grocery store services. SFM filed a petition to cancel Corcamore’s US trademark registration for the mark SPROUT for use in connection with vending machine services, alleging a likelihood of consumer confusion with SFM’s prior trademark rights. The TTAB denied Corcamore’s motion to dismiss the cancellation petition for lack of standing. Relying on Empresa Cubana del Tabaco v. General Cigar Co., the TTAB confirmed SFM’s standing based on its “real interest” in the cancellation petition and a “reasonable belief of damage” caused by the continued registration of Corcamore’s SPROUT trademark.

Following the TTAB’s denial of its motion to dismiss, Corcamore undertook a series willful, bad-faith procedural maneuvers that resulted in two separate sanctions. When Corcamore’s further procedural misconduct violated both sanctions orders, the TTAB entered default judgment cancelling Corcamore’s SPROUT trademark registration. Corcamore appealed.

On appeal, Corcamore alleged that the TTAB (1) erred in applying Empresa Cubana rather than the Supreme Court of the United States’ Lexmark v. Static Control framework in affirming SFM’s standing, and (2) abused its discretion in granting default judgment as a sanction. On the issue of standing, the Federal Circuit rejected the TTAB’s “unduly narrow” conclusion that the Supreme Court’s Lexmark framework was inapplicable, since Lexmark related to a claim of false advertising under § 1125(a) of the Lanham Act, while Empresa Cubana addressed the right to bring a cancellation proceeding under § 1064. The Federal Circuit concluded that Lexmark applied to § 1064 and § 1125(a) because both are statutory causes of action. Nevertheless, the Court found no meaningful substantive difference between the analytical frameworks for standing expressed in Lexmark and Empresa Cubana, and found that the Lexmark “zone-of-interests” proximate cause analysis and the “real interest” and “reasonable belief of damage” requirements under Empresa Cubana similarly provided a right to bring a cause of action. As such, the Court ultimately agreed with the TTAB’s conclusion that SFM’s pleaded allegations of a likelihood of consumer confusion based on a similarity of the parties’ SPROUTS and SPROUT trademarks, and their respective goods and services, were sufficient to demonstrate a reasonable belief of damage under Empresa Cubana and thus supported the right to challenge Corcamore’s registered trademark via cancellation.

With regard to the TTAB’s grant of default judgment, Corcamore did not challenge the TTAB’s express authority to grant default judgment as a sanction under 37 CFR § 2.120(h) and Fed. R. Civ. P. 37(b)(2). Instead, Corcamore argued that the TTAB had no factual or legal basis to enter default judgment in the first [...]

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Size Matters in Obviousness Analysis

by | Oct 29, 2020 |

The US Court of Appeals for the Federal Circuit affirmed in part and reversed in part two Patent Trial and Appeal Board (Board) decisions, finding that the Board erred in its construction of certain claim terms relating to an artificial heart valve that does not require removal of the damaged native heart valve. St. Jude Medical, LLC v. Snyders Heart Valve LLC, Case Nos. 19-2108, -2109, -2140 (Fed. Cir. Oct. 15, 2020) (Taranto, J.).

St. Jude filed two petitions for inter partes review (IPR) of a patent for an artificial heart valve and a system for inserting the valve. Both petitions were instituted by the Board and resulted in final written decisions. In the first decision, the Board found that St. Jude failed to establish unpatentability of the challenged claims, rejecting St. Jude’s contention that all challenged claims were anticipated by and obvious over the Leonhardt prior art reference. In the second decision, the Board found that certain claims were anticipated by the Bessler prior art reference, but rejected St. Jude’s contentions as to all other claims. St. Jude appealed, arguing that the Board erred in the first decision by erroneously construing the term “band” and erred in the second decision by finding that St. Jude failed to prove that a skilled artisan would have made a particular combination of Bessler and the Johnson prior art. Snyders cross-appealed in the second decision as to the claims the Board found were anticipated by Bessler.

The Federal Circuit affirmed the Board’s conclusions in the first decision, finding that not only was the Board’s construction of the term “band” proper, but that it was actually broader than St. Jude’s proposed construction—and that St. Jude expressly accepted the Board’s construction. The Board construed the heart valve band to mean “a structure generally in the shape of a closed strip or ring” (replacing St. Jude’s “circular” with “closed”). In the prior art, Leonhardt discloses a graft material which extends the length of the entire structure. The Federal Circuit agreed with the Board’s finding that Leonhardt’s graft material was “like a sleeve” as opposed to “a closed strip or ring.” St. Jude argued that an ordinary skilled artisan’s understanding of the term “band” does not include a length restriction, that a Leonhardt’s material was just a long band, and that the Board effectively changed its construction of the term. The Federal Circuit, however, was not persuaded by St. Jude’s unlimited-length definition of “band,” instead turning to dictionary definitions that included terms like “thin” and “narrow,” and looking to the patent specification that did not explicitly disclaim any length restrictions. The Court ultimately rejected St. Jude’s arguments, finding that St. Jude should have proposed a claim construction that precluded any limitations on length if it wished to argue such. The Federal Circuit affirmed the Board’s findings as to first decision.

The Federal Circuit next addressed Snyder’s cross-appeal. Snyder disputed the board’s construction of the “size[] and shape[]” of a frame that the patent requires must be inserted [...]

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A Clear Need: To Allege Misappropriation, Identify Trade Secret

by | Oct 29, 2020 |

The US Court of Appeals for the Ninth Circuit reversed a district court’s grant of summary judgment, finding that the plaintiff had sufficiently pled trade secret misappropriation by identifying its trade secrets and how they were protected with sufficient particularity. InteliClear, LLC v. ETC Global Holdings, Inc., Case No. 19-55862 (9th Cir. Oct. 15, 2020) (Gould, J.).

In 2004, InteliClear began development on a comprehensive electronic system for managing stock brokerage firm accounting, securities clearance and securities settlement services using a Structured Query Language relational database designed to handle millions of trades each business day. It named the program the “InteliClear System.”

In 2008, ETC’s predecessor signed a software license agreement with InteliClear and obtained a license for the InteliClear System. The license agreement acknowledged that all information InteliClear provided was confidential, proprietary and copyrighted, and ETC agreed to maintain that information in confidence “during and after” the terms of the agreement.

In 2017, InteliClear sent ETC a notice terminating the license agreement. ETC committed to remove the InteliClear database from its systems by February 26, 2018. On March 5, 2018, ETC certified that the InteliClear System had been removed from all ETC servers and that all copies had been destroyed. But, before the license agreement ended, ETC had already begun building its own securities clearance software. Around the same time that InteliClear terminated the license agreement, ETC launched its own electronic trading system. InteliClear immediately contacted ETC about its suspicion that ETC had improperly used the InteliClear System to build its own system, and, after months of negotiations, ETC agreed to allow a computer forensics company to compare the two systems and investigate. The forensics company found an abundance of evidence that the elements of each system were identical.

InteliClear sued ETC for trade secret misappropriation under federal and state law and for unfair competition. The district court dismissed the claim for unfair competition, reasoning that it was preempted by the California Uniform Trade Secrets Act. One day into discovery, and before any discovery had been requested or provided, ETC moved for summary judgment, asserting that InteliClear failed to identify its trade secrets with sufficient particularity and that InteliClear did not show that the InteliClear System was a trade secret or that ETC had access to InteliClear’s source code. The district court granted ETC’s motion and denied InteliClear’s motion to defer ruling until after completion of discovery under Rule 56(d). InteliClear appealed.

The Ninth Circuit analyzed the federal and state trade secret misappropriation claims together because the elements were substantially similar. The Court noted that to succeed on a claim for misappropriation, a plaintiff must prove (1) that the plaintiff possessed trade secrets, (2) that the defendant misappropriated the trade secrets, and (3) that the misappropriation caused or threatened damage to the plaintiff. To prove the first element, “a plaintiff must identify the trade secrets and carry the burden of showing they exist.” The Court pointed out that it is important to identify trade secrets with sufficient particularity because [...]

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Cookie Trade Dress Infringement Case Crumbles in Face of Functionality Challenge

by | Oct 29, 2020 |

The US Court of Appeals for the Third Circuit found that trade dress protection did not extend to the design of a chocolate-dipped, stick-shaped cookie, because the product configuration was useful. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l America Corp., Case No. 19-3010 (3d Cir. Oct. 8, 2020) (Bibas, J.).

Ezaki Glico is a Japanese confectionary company that makes and sells the snack food Pocky, which is a thin, stick-shaped cookie with one side dipped in chocolate (or a flavored cream) and the other uncoated. Pocky cookies have been sold in the United States for more than 40 years, during which time Ezaki Glico obtained two trade dress registrations for the Pocky design and a patent for a “Stick Shaped Snack and Method for Producing the Same.”

In 2015, Ezaki Glico sued its competitor, Lotte, alleging that Lotte’s similarly designed cookie, Pepero, infringed the Pocky trade dress. The district court granted Lotte’s motion for summary judgment, finding the Pocky product configuration functional and therefore not protected by trade dress. Ezaki Glico appealed.

Ezaki Glico argued that the Pocky trade dress is not functional because it is not essential to its design. The Third Circuit disagreed, stating “that test is too narrow.” The Court explained that functionality applies to features that are useful, even if they are not necessarily essential. The Court enumerated four indicators of functionality:

  • Evidence that the feature or design makes the relevant product work better
  • Examples of marketing materials touting the usefulness of the feature or design
  • Existence of a utility patent
  • Availability of other designs.

The Third Circuit found that most of these factors supported the finding of functionality. First, the design makes the product work better because “[e]very feature of Pocky’s registration relates to the practical functions of holding, eating, sharing, or packing the snack.” Ezaki Glico’s advertisements also promoted the functional features of Pocky’s design: they featured phrases such as “convenient design,” “the no mess handle of the Pocky Stick,” and “easier for multi-tasking without getting chocolate on your hand.” Likewise, the Court was unpersuaded by Ezaki Glico’s evidence of alternative designs, finding that “[e]very aspect of Pocky is useful. The nine other designs do not make it less so.”

The existence of the utility patent, however, was not a supporting factor in the functionality analysis. The Third Circuit explained that “the patent’s innovation is a better method for making the snack’s stick shape. The method is useful for making the shape whether or not the shape itself is useful for anything.” Although the district court improperly considered this factor in its analysis, the Third Circuit noted that the misstep was “immaterial” given that the district court ultimately reached the correct conclusion.

Practice Note: It is not necessary for a design feature to be essential for it to be considered functional. Trade dress may be considered functional—and therefore not protectable via trademark law—if it is merely useful to the design.



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PTO Seeks Comments on Proposed Rulemaking for Denying Patent Reviews

by | Oct 29, 2020 | ,

The US Patent and Trademark Office (PTO) requested public comments on considerations for instituting trials under the Leahy-Smith America Invents Act (AIA). Comments are due by November 19, 2020.

Patent practitioners have grown accustomed to reviewing the PTO Patent Trial and Appeal Board (Board) administrative guide, precedential or informative opinions, and other published filings and decisions to discern best practices for filing petitions for and defending against inter partes review, post-grant review, covered business method and derivation proceedings before the Board. For example, the latest Board Consolidated Trial Practice Guide (Nov. 2019) (CTPG) is available here. The PTO is considering codifying or modifying its current policies and practices through formal rulemaking and wishes to gather public comments on its current approach and other approaches suggested by stakeholders.

PTO policies and Board decisions such as General Plastic, Valve Corp. I, Valve Corp. II, NHK Spring and Fintiv set forth factors for analyzing whether to institute an AIA proceeding (and particularly a follow-on or serial petition) or issue a discretionary denial due to the timeline for parallel district court proceedings. Many of these policies and cases are also discussed in the CTPG. The PTO already has received input from stakeholders on these policies that expand on the PTO director’s discretionary authority to institute an AIA trial. Most stakeholder comments suggested that the case-specific analysis outlined in precedential opinions and the CTPG achieves the appropriate balance and reduces gamesmanship—for example, by ensuring that AIA proceedings do not create excessive costs and uncertainty for the patent owner or the system, while allowing meritorious challenges to patents to be heard. However, some stakeholders have proposed that the PTO adopt brightline rules, regardless of the case-specific circumstances, to:

  • Use its discretion to preclude claims from being subject to more than one AIA proceeding
  • Permit more than one AIA proceeding only if the follow-on petitioner is unrelated to the prior petitioner
  • Place no limits on the number of petitions that can be filed or the number of AIA trials that can be instituted against the claims of a patent, so long as the petition complies with statutory timing requirements and the institution threshold of showing that at least one claim of the patent is unpatentable
  • Preclude institution of an AIA trial against challenged claims if the patent owner opposes institution and a related district court or US International Trade Commission (ITC) action (in which any of the challenged claims are or have been asserted against the petitioner, the petitioner’s real-party-in-interest or a privy of the petitioner) is unlikely to be stayed
  • Eliminate any consideration of the status of any district court or ITC actions involving the challenged patent, so long as the petition complies with statutory timing requirements and the institution threshold.

These contrasting views prompted the PTO to issue a request for comments on the factors that should be considered as part of a balanced assessment of the relevant circumstances when exercising its discretion to institute an AIA trial. The PTO [...]

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