Federal Circuit Rules on Burden to Establish Patentability of Amended Claims

Authored by Brian S. Mudge and Dragan Plavsic

In a recent decision, the Federal Circuit confirmed that the burden of proof shifts from petitioner to patent owner to establish patentability of substitute claims proposed in AIA post-grant proceedings. The case, Nike, Inc. v. Adidas AG, No. 2014-1719 (Feb. 11, 2016), involved an appeal of a PTAB decision denying Nike’s motion to amend claims in an IPR. In reviewing the burden of proof for claim amendments, the Federal Circuit agreed that the burden is on the patent owner to demonstrate that the substitute claims are patentable not only over the prior art already of record but also over prior art known to the patent owner. Moreover, the Federal Circuit ruled that the patent owner may satisfy its burden as to prior art not of record by meeting its duty of candor and good faith in addressing additional prior art known to the patent owner, if any.

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Federal Circuit Approves PTAB Trial Approach

Authored by Brian S. Mudge

In a split decision, the Federal Circuit has approved the PTAB’s practice of deciding to institute AIA trials on a claim-by-claim basis. The case, Synopsys, Inc. v. Mentor Graphics Corp., No. 2014-1516 (Feb. 10, 2016), involved an appeal of a PTAB final decision that did not address all claims that were initially challenged in the IPR petition. Rejecting the petitioner’s argument that the PTAB’s final decision must address each claim challenged in an IPR petition, the Federal Circuit held that the PTAB had discretion to institute inter partes review on less than all claims initially presented in the petition. The Federal Circuit also ruled that the PTAB’s determination on the issue of a potential time bar could not be appealed, and that the PTAB properly handled the patent owner’s motion to amend.

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Supreme Court to Hear Review of AIA Trial

Authored by Brian S. Mudge

In a high profile case that has been watched closely by the patent community, the Supreme Court decided on January 15 to hear its first review of a PTAB trial under the AIA. The case, Cuozzo Speed Techs, LLC v. Lee, involves the first IPR petition filed with the PTAB, and the first appellate decision on an AIA trial by the Federal Circuit. Cuozzo Speed involves two key issues which have been hotly debated since the PTAB began hearing IPRs and other post-grant proceedings under the AIA, and which sparked a lengthy dissent at the Federal Circuit: (1) whether the “broadest reasonable interpretation” (BRI) is the proper standard for construing the claims of the patent under review, and (2) whether the Board’s decision to institute trial is unreviewable on appeal.

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Financier’s Short-and-Petition Strategy: An Update

Authored by Maria Luisa Palmese and Eric Paul Greenwald

We write to update our April 29th post regarding the stock price of pharma companies targeted by Kyle Bass’ Coalition for Affordable Drugs LLC’s (“CFAD”) inter partes review (IPR) petitions. According to Bass, the generation of returns for his hedge fund investors through short selling the stock of his IPR targets is the primary driver of his IPR petition strategy. Now that several of his petitions have been ruled on, let’s see how his “big short” strategy has played out. As of today, half of the fourteen petitions mentioned in our first post have been granted (i.e., the PTAB has instituted an IPR), and the other half have been denied. Of the seven successful petitions, four were against Celgene Corp. and three against Shire PLC. No IPR proceedings have yet been concluded.

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Board Continues Development of Estoppel Caselaw

Authored by Brian S. Mudge

In three recent opinions, the Board has again ruled on the effect of statutory provisions governing estoppel under 35 U.S.C. §315(e)(1) and 35 U.S.C. §325(e)(1) following a final written decision. As shown by these decisions, the Board may, but is not required to, terminate a later proceeding after a final decision that triggers estoppel. These decisions also demonstrate that estoppel may be applied to bar not only prior art challenges, but also challenges under 35 U.S.C. §101 or §112.

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