Cumulative Art Rejections v. Estoppel: Balancing Competing Interests In IPR Petitions
Inter Partes Review, or IPR, is one of the new procedures implemented through the Leahy-Smith America Invents Act that challenges a patent’s validity at the Patent Trial and Appeals Board (PTAB) of the United States Patent and Trademark Office. IPR offers patent challengers a relatively fast and cost-effective method of invalidating a patent. While the use of IPRs has already proven to be very popular amongst patent challengers and is a promising development in the field,1 uncertainty remains regarding the treatment and implications of cumulative art rejections by the PTAB.
Estoppel Concerns: Motivation to Raise Too Many Arguments
In a petition for IPR, the petitioner may raise grounds for finding the challenged patent invalid under 35 U.S.C. §§ 102 or 103, using only patents or printed publications.2 Like inter partes reexamination, an IPR petitioner is subject to estoppel in later proceedings.3 If a final written decision is issued for an IPR, a petitioner may not request before the PTO or assert in a civil action in district court or the ITC that the claim is invalid “on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”4 While the estoppel provision encourages an IPR petition to present as many references and grounds as possible, there are disadvantages with submitting too many prior art references and arguments. Such an approach increases the likelihood that a petition will lose credibility by appearing weak, reduces the available space for discussion of the stronger references,5 and creates the possibility that the PTAB will primarily focus on prior art that is weaker. If an IPR petition seeks invalidity on multiple grounds, the PTAB has the discretion to institute trial on all grounds, deny trial, or institute trial on only some of the grounds presented.6 The PTAB has granted institution of trial in almost 90% of petitions, but on only about 33% of the grounds proposed in the petitions.7 Many of the denied grounds were deemed cumulative over the granted grounds.8 A denial of a ground is not appealable; a petitioner’s only recourse is a request for rehearing.9
Approaching Cumulative Rejections
The questions surrounding cumulative art rejections raise strategic issues that require a careful case-by-case approach. When the PTAB determines that some of the grounds will be rejected as cumulative, it may ask the petitioner to identify one or more grounds on which the petitioner would like to proceed. This forces a petitioner to state the ground it believes to be stronger. Alternatively, the PTAB may select the grounds that it considers to be the strongest.10 In certain situations, a petitioner may want to specify in the petition which of the grounds should be considered the “strongest” for a particular claim limitation in order to minimize the possibility that the PTAB focuses primarily on weaker grounds. However, the potential downside to this approach would be the tacit admission that the other presented grounds are weaker. A similar issue may arise when the PTAB accepts one or more grounds for IPR using a different claim construction than that advanced by the petitioner and denies all other grounds as cumulative. The petitioner is then stuck arguing grounds which may have been weakened by the PTAB’s claim construction.
Another approach to consider is whether to place the grounds in the petition in order from strongest to weakest, without an overt admission as to the comparative strength of each ground. While this avoids the downside of admitting weak art, it may telegraph to the PTAB what the petitioner believes is weaker art for a particular claim or claim element.
PTAB Cumulative Rejections Based on Grounds, Not Just Art
A recent PTAB decision provides insight concerning the PTAB’s view of balance between estoppel and cumulative grounds in an IPR petition in Amkor Technology, Inc. v. Tessera, Inc.11
The Petitioner, Amkor, had submitted several grounds for unpatentability, including grounds based on a “Nakano” reference. The Board decided to institute inter partes review on other grounds but did not grant review based on Nakano, determining that although Amkor argued “the specific grounds for unpatentability are non-cumulative because each illustrates slightly different methods of encapsulating a device, and each teaches the limitations of various claims,” Amkor had not explained “why differences between a set of prior art references are relevant (e.g., why reference A is a stronger reference with respect to claim element X than reference B), the fact that references disclose slightly different things does not demonstrate that asserted grounds are not cumulative to each other.”12 Amkor submitted a Request for Rehearing, arguing that the decision was not “just” to Amkor due to estoppel on the Nakano grounds,13 especially as Amkor had “expressly identified non-cumulative teachings in the prior art and why those teaching are non-cumulative as applied to particular limitations.”14
In response to the Request for Rehearing, the PTAB first determined that the Nakano grounds were cumulative, not the teaching of the Nakano reference itself.15 The PTAB did not offer any guidance on whether the Nakano grounds were now estopped. Instead, the PTAB determined that “[g]iven the competing demands for speedy and inexpensive resolution and providing dispositive determinations of the patentability of claims, we are not persuaded that any injustice has been done to Amkor in instituting on the specified grounds.”16
The takeaways from Amkor are that the PTAB will also look at the particular grounds, and not just the particular art, in making cumulative art rejections. The Amkor decision incentivizes petitioners to identify at the outset the strongest grounds and references in the petitioner’s favor, and lay out in detail why these grounds are not cumulative and why they should all be considered even in light of the PTAB’s mandate for a speedy and inexpensive resolution. Such an approach would likely require additional space to address these issues. A petitioner should consider preparing additional petitions as back-up in case the PTAB rejects some or all grounds raised in the first petition and should prepare the initial IPR petition quickly once any statutory period for filing the petition begins so that sufficient time is available to file any back-up petitions after rejection of any invalidity grounds.17
The uncertainty surrounding cumulative art rejections for IPRs creates numerous situation-specific issues that must be carefully considered by practitioners to understand and minimize any risks undertaken in filing an IPR petition. First, a petitioner must decide how many grounds or arguments to present in the petition, which has a strict page limit.18 Raising too many grounds in a single petition may also dilute the arguments and increase the risk that PTAB will find some of those presented grounds to be cumulative. The petitioner must also decide whether to order the proffered grounds from strongest to weakest without making any admissions to which grounds the petitioner considers the best, versus other approaches such as expressly stating what is considered to be the best ground or argument in the petition and explaining the differences in the art. The decision to petition for IPR should be made as quickly as possible following an event that could start the clock on the period for IPR, e.g. being served with a complaint alleging infringement, so that sufficient time is available to react to rejection of any invalidity grounds raised in the petition.19 A careful situation-specific analysis of how to balance estoppel and cumulative rejection concerns will be crucial to any parties considering an IPR petition.
1Since IPRs began in September 2012, the number of IPR petitions filed has been rising steadily. There were a total of 766 IPR petitions filed through December 31, 2013, with an average of 20 petitions being filed each week in the last three months of the year. See AIA Statistics, available here.
237 C.F.R. § 42.104(b)(2).
335 U.S.C. § 315(e).
5The page limit for a petition for Inter Partes Review is 60 pages. 37 C.F.R. § 42.24(a)(i).
6In response to criticism for denial of some grounds as cumulative or redundant, the PTAB has pointed to the mandate in 37 C.F.R. § 42.1(b) to procure “the just, speedy, and inexpensive resolution of every proceeding.” See, e.g., Schrader-Bridgeport Int’l, Inc. v. Continental Automotive Sys., Inc., Case IPR 2013-00014, Paper 15, Decision on Request for Rehearing at 2 (April 10, 2013).
7221 out of 246 decisions in the first year of IPR. See IPR-PGR Report vol. 4, http://ipr-pgr.com/wp-content/uploads/2014/01/IPR-PGR-Report-Vol.-4.pdf (last visited March 7, 2014). During the first year of IPR, the PTAB granted trial for only about 33 percent of the grounds proposed. See Doody, Patrick, “Post-Grant Proceedings: The Year Behind and the Year Ahead,”, available here (last visited March 7, 2014).
8The PTAB uses the terms “cumulative” and “redundant” fairly interchangeably when discussing this type of denial of a ground. See, e.g., IPR 2013-00014, Decision on Institution of Inter Partes Review at 19 (March 13, 2013). Cumulative art may be determined if they are a subset or superset of another ground; e.g. if a ground using references A, B, and C is granted, a ground using references A and C may be found cumulative. Conversely, if a ground using references A and B is granted, a ground using references A, B, and C may also be found cumulative.
935 U.S.C. § 314(d); 37 C.F.R. § 42.71. The estoppel effect on art deemed “cumulative” by the PTAB remains unclear. One open issue is under what circumstances § 315(e) estoppel applies. A petitioner may argue that the denial of a ground occurs at the decision on institution of IPR, and thus is not a “final written decision” within the meaning of the statute. A patent owner may argue that estoppel should apply to cumulative grounds because those grounds have not met the threshold showing of “a reasonable likelihood” that the petitioner would prevail.
10See, e.g., Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., Case CBM2012-00003, Paper 7, Order (Redundant Grounds) at 6-7 (October 25, 2012).
11Case IPR2013-00242, Patent 6,046,076.
12Id., Paper 37, Decision on Institution at 33 (October 11, 2013).
13Amkor was time-barred under 35 U.S.C. § 315(b) and 37 C.F.R. § 42.101 from submitting a new IPR petition against the same patent.
14Id., Paper 45, Request for Reconsideration at 7 (October 25, 2013).
15Id., Paper 82, Decision on Request for Rehearing at 3 (January 10, 2014).
16Id., at 4.
17A petitioner may not hold certain denied grounds in abeyance, as “such a serial procedure would introduce unnecessary, significant delays and inefficiencies.” EMC Corp. v. PersonalWeb Technologies LLC, Case IPR2013-00083, Paper 29, Decision on Request for Rehearing at 4 (June 5, 2013).
18While a petitioner can move to exceed the page limit, this type of motion only had a 22% success rate through the end of 2013. See IPR-PGR Report vol. 4.
1935 U.S.C. § 315(b); 37 C.F.R. § 42.101.