To Institute or Not To Institute – That is the Question: Recent PTAB Precedential Decisions on § 325 Denials

By Tammy J. Dunn

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The Patent Trial and Appeal Board recently designated two decisions as precedential and a third as informative on the issue of when the Board will and will not exercise its discretion to reject America Invents Act post-grant proceedings petitions that rely upon invalidity arguments similar to those used during the original patent prosecution.  Accordingly, precisely how the Board will exercise its discretion under 35 U.S.C. § 325(d) to deny institution in proceedings where a petition presents “the same or substantially the same prior art or arguments” as were previously presented to the USPTO during patent prosecution has been clarified.

In March, the Patent Trial and Appeal Board (“the Board”) designated two decisions as precedential and a third one as informative[I] on the issue of when the Board will exercise its discretion to reject America Invents Act (“AIA”) post-grant proceedings petitions that present and rely upon invalidity arguments similar to those used during original USPTO patent prosecution.

The Board has discretion under the AIA, 35 U.S.C. § 325(d), to deny institution of an Inter Partes Review (“IPR”) in proceedings where a petition presents “the same or substantially the same prior art or arguments” as were previously presented to the USPTO during patent prosecution.  In recent years, discretionary § 325(d) denials have increased in frequency.  However, until more recently, explicit guidance on when the Board will and will not exercise this discretion has been somewhat limited, and sometimes contradictory.

In Advanced Bionics LLC v. MED-EL Elktromedizinische Gerate GmbH,[1] one of two opinions designated precedential in March 2020, the Board established a two-step framework to determine whether to exercise its discretion under § 325(d) to deny IPR institution.  In cases where the patent owner is arguing for discretionary denial under § 325(d), the Board will first evaluate whether the same or substantially the same prior art or arguments were previously presented by the PTO examiner during patent prosecution, as the statute requires.  An affirmative answer to this first question, however, does not end the Board’s analysis.  If it is determined that the petitioner is presenting and relying upon previously presented prior art or arguments, then the Board will evaluate whether the petitioner has demonstrated that the USPTO erred “in a manner material to the patentability of challenged claims” when it granted the challenged claims of the patent.

According to the Board, the “

etitioner must demonstrate that the examiner erred in the evaluation of the prior art, for example, by showing that the examiner misapprehended or overlooked specific teachings in the relevant prior art such that the error by the office was material to the patentability of the challenged claims.”

Put simply, the petitioner must show that the USPTO was wrong to issue the challenged claims of the patent.  This “requirement” should come as no surprise, nor should it create any real hardship for petitioners, as every petitioner has always asserted that the USPTO made a mistake when the challenged patent was originally granted.  Whether the two-step analysis adds anything of substance, or changes the outcome, is fairly debatable.

The Board in Advanced Bionics ultimately denied institution of an IPR under § 325(d) because the petitioner failed to satisfy the second requirement, that is, did not show that the USPTO mistakenly granted the challenged claims.

The second opinion the Board designated precedential last month that involved a § 325(d) denial was in Oticon Medical AB v. Cochlear Ltd.[2]  The patent owner in Oticon Medical argued the Board should exercise its discretion under § 325(d) and deny institution of an IPR because one of the prior art references cited in the petition was substantially the same as another reference considered during prosecution.  The Board disagreed in this case, however, finding that the asserted prior art and the previously considered prior art described inventions with different structures and purposes.

In addition to the designating the above opinions precedential, the Board also designated an opinion regarding § 325(d) denials as informative, Puma North America Inc. v. Nike Inc.[3]  In the Puma North America case, the Board denied institution because the same prior art presented and relied upon in the petition for IPR was actually considered by the USPTO examiner during original prosecution of the challenged claims of the patent.  According to the Board, the petitioner failed to articulate how or why the USPTO examiner erred, and therefore failed to demonstrate that the office was wrong to issue the patent.

With these cases, the PTAB has again confirmed exactly what a petitioner must include in its petition in order to overcome a § 325(d) argument:  (1) explanation and evidentiary support for how the prior art and arguments presented in the IPR petition are not the same or substantially the same as the prior art and arguments presented in the prosecution of the patent; and (2) a showing that the UPSTO was wrong to issue the challenged patent claims.  This, however, is not really new news.  For years petitioners anticipating a potential § 325(d) argument have been including these kinds of arguments, where appropriate, and these are hardly the first decisions that have been designated precedential on this subject.  For example, Becton, Dickinson & Co. v. B. Braun Melsungen AG[4], a portion of which was designated precedential last year, set forth six non-exclusive factors the Board evaluates in determining whether to exercise its discretion under § 325(d).  Petitioners following the Board’s authority in Becton, Dickinson should already have been including in their petitions discussions relating to how prior art in the petition differs from that presented during prosecution and how the examiner, in the petitioner’s view, erred in granting the challenged patent claims.  Likewise, patent owners challenging petitions under § 325(d) should already have known to attack a petition for failing to properly address these requirements.  Nevertheless, to the extent any doubt remained that a petitioner using overlapping prior art in a petition needs to make specific arguments as to why the petition should not be denied under § 325(d), that doubt has now been resolved.

[1] IPR2019001469, Paper 6 (P.T.A.B. Feb. 13, 2020) (designated:  March 24, 2020).

[2] IPR2019-00975, Paper 15 (P.T.A.B. Oct. 16, 2019) (designated precedential:  March 24, 2020).

[3] IPR2019-01042, Paper 10 (P.T.A.B. Oct. 31, 2019) (designated informative:  March 24, 2020).

[4] IPR2017-01586, Paper 8 (P.T.A.B. Dec. 15, 207) (designated precedential: Aug. 2, 2019).

[I][I] As discussed in Osha Liang’s January 2019 article “The PTAB’s New ‘Precedential Opinion Panel’” available here, “precedential” opinions constitute binding authority that must be adhered to by the Board in all future PTAB cases, while “informative” decisions provide guidance, but are not binding and need not be followed in every case.