March 2016

PTAB Continues to Evolve the Section 325(d)-fense

5 min

In two separate decisions in the past month, the PTAB denied institution of an IPR Petition based on 35 U.S.C. § 325(d). That statute provides (emphasis added):

(d) Multiple Proceedings.—

Notwithstanding sections 135(a), 251, and 252, and chapter 30, during the pendency of any post-grant review under this chapter, if another proceeding or matter involving the patent is before the Office, the Director may determine the manner in which the post-grant review or other proceeding or matter may proceed, including providing for the stay, transfer, consolidation, or termination of any such matter or proceeding. In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.

The permissive language in the last sentence gives PTAB panels discretion to deny petitions on the basis that the grounds for challenging patentability were previously before the Office. Notably, this provision does not require complete overlap, as it can be used in situations where the art or arguments are "substantially the same." And the repetitive issues did not need to be presented to the PTAB in order to qualify; instead, Section 325(d) can be used when the art or issues were previously considered by the Patent Office in any stage of proceeding, including initial examination, reissue, reexamination, or an earlier post-grant challenge.

In both Funai Elec. Co., Ltd. v. Gold Charm Ltd., No. IPR2015-01491 (P.T.A.B. Feb. 18, 2016) and Arista Networks, Inc. v. Cisco Sys., Inc., No. IPR2015-01710 (P.T.A.B. Feb. 16, 2016), the PTAB invoked Section 325(d) in denying institution of an IPR Petition. In Funai, the Board denied a request for rehearing of a denial of institution where the same art was considered on the same claims during original prosecution. Order at 3. In Arista Networks, the Petitioner filed an earlier IPR against the same challenged patent (as well as a number of other IPRs on related patents) that was not instituted because the Board found that the primary reference cited lacked at least one element in every claim. Order at 2. In this subsequent IPR, Petitioner "essentially seeks to replace" the primary reference with another reference to overcome the deficiency. Id. at 7. The PTAB explained that the Patent Owner had already "been forced to address a similar ground with similar arguments in two separate Petitions…. Allowing similar, serial challenges to the same patent, by the same petitioner, risks harassment of patent owners and frustration of Congress's intent in enacting the Leahy-Smith America Invents Act." Id. at 10. The Board also pointed out that the Petitioner had not stated that the newly cited references were not known or available at the time that it filed its earlier Petition. Id. at 11. Thus the Board found it was appropriate to exercise its discretion under Section 325(d) and deny institution of the petition. Id.

These two cases go against the usual trend with respect to Section 325(d) Board decisions. That is, although the statute is cited in nearly every Preliminary Patent Owner Response where the grounds include art that was previously before the Patent Office, these arguments rarely have been successful. More often than not, the PTAB does not invoke its discretion under Section 325(d) to deny institution based on this procedural escape path. Rather, the PTAB considers even repetitive grounds on the merits.

For instance, just in the last month, the Board issued at least four other decisions where the PTAB refused to deny institution on the basis that the petition was duplicative of arguments already considered by the Office under Section 325(d). In three of those cases, the arguments were not completely overlapping, but rather, the petition went to different claims, relied on art that was different from what was considered previously by the Office, or was presented by a party that was different from that of an earlier reexamination. In one case, however, the PTAB rejected the Patent Owner's argument under Section 325(d) despite the fact that the IPR Petition presented precisely the same grounds for rejection, and was brought by the same party (among others) as an earlier IPR Petition. In that instance, the Petitioner filed a second IPR Petition that was substantively identical to an earlier petition, in order to add two additional real parties in interest. The PTAB found that the fact that the Petitioner wanted to avoid any potential issue of naming less than all real parties in interest by refiling a new Petition was sufficient to differentiate the case from other cases where the Board denied Petitions under Section 325(d).

Because a Petitioner is not entitled to a reply before the PTAB makes its institution decisions, these recent decisions, as well as many others before it, suggest that a Petitioner is best served by being upfront with the Board about any overlap with previous issues considered by the Patent Office in its Petition. The Petitioner should explain why the grounds for unpatentability are not overlapping with earlier issues considered, focusing on any differences in the art, evidence, or arguments presented in the Petition from what was previously considered by the Patent Office. The Board has also been more likely to apply Section 325(d) where the Petitioner was itself the party that made the earlier arguments. Thus, it is also important to point out whether the Petitioner was not involved in the earlier consideration of the issues, and even the lack of an adversary if the issue was considered during original prosecution of the patent. If the Petitioner is taking a second bite at the apple, the Arista decision suggests that the Petitioner may be more successful if it can show that it did not know of the prior art that it presents in the later-filed Petition.