PTAB Goes “Deeper,” Offering Further Guidance On Its Post-SAS Practice
04/16/2019On April 5, 2019, the Patent Trial and Appeal Board (“PTAB”) at the United States Patent and Trademark Office designated as “Informative” two prior decisions relating to the PTAB’s discretion about whether to institute inter partes review (“IPR”) proceedings for trial. In each, the PTAB exercised its discretion to deny institution of an IPR proceeding, even though the Petitioner demonstrated a reasonable likelihood of prevailing on some claims.
35 U.S.C. § 314(a) provides that an IPR may not be instituted unless the petition “shows there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition.” The PTAB’s decision whether to institute an IPR is discretionary and not appealable. See 35 U.S.C. § 314(d); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2140 (2016) (finding that the PTAB’s “decision to deny a petition is a matter committed to the Patent Office’s discretion,” and noting there is “no mandate to institute review” under Section 314(a)). However, in April 2018, the Supreme Court held that if the PTAB institutes an IPR proceeding, it must decide the patentability of all of the claims the petitioner has challenged, regardless of whether the original petition demonstrated a reasonable probability of success on just one claim or more than one. SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018).
In response to SAS, the PTAB issued guidance in the form of a “Q&A” about how it would deal with the SAS decision, given the potential additional burden that decision could place on PTAB resources. In that Q&A, the PTAB indicated that it would evaluate each petition individually, and determine whether the petition should be denied in the interests of efficient administration, without setting a fixed threshold for the number of claims likely to succeed or the number of grounds presented.
In the first “Informative” decision, Chevron Oronite Co., LLC v. Infineum USA L.P., IPR Case No. 2018-00923 (PTAB Nov. 7, 2018), the challenged patent was directed to “lubricating oil compositions” that include at least one “calcium detergent” with a particular calcium percentage (among other things). The petitioner asserted that claims 1-20 of the challenged patent were unpatentable as obvious over a combination of references. In its institution decision, the PTAB ruled that petitioner had demonstrated a reasonable likelihood of prevailing with respect to claims 3 and 4, but not with respect to the other 18 claims. Even though petitioner had met its burden on two claims, the PTAB exercised its discretion to decline to institute the IPR, citing its prior “Q&A” guidance and reasoning, “[o]n this record, instituting a trial with respect to all twenty claims based on evidence and arguments directed to dependent claims 3 and 4 is not an efficient use of the Board’s time and resources.”
The PTAB reached a similar conclusion in the second “Informative” decision, Deeper, UAB v. Vexilar, Inc., IPR Case 2018-01310 (PTAB Jan. 24, 2019), which we have written on previously, see Shearman & Sterling LLP, Patent Trial and Appeal Board Exercises Discretion To Deny Institution Of An IPR Based On Insufficient Use Of Resources Where Petitioner Had Shown A Reasonable Likelihood of Prevailing On Only A Small Fraction of Challenged Claims And Grounds, February 5, 2019, https://www.lit-ip.shearman.com/Patent-Trial-And-Appeal-Board-Exercises-Discretion. In that case petitioner Deeper, UAB filed a petition challenging 23 claims on a total of four grounds. The PTAB determined that petitioner had demonstrated a reasonable likelihood of prevailing on just one ground for two of the 23 challenged claims. The PTAB declined to institute, again concluding that this would not be an “efficient use of the Board’s time and resources.”
While these decisions are technically not binding precedent on future panels (and are not subject to appellate review), the PTAB is historically very selective in which decisions it designates as “Informative.” This new designation signals that future PTAB panels will likely follow a similar path in declining to institute where most of the petitioner’s challenges lack merit. Future decisions are needed to determine where the PTAB will draw the line in deciding whether or not to institute.