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The Impact of IPRs on Parallel Litigation
Before the District Courts and ITC
Presented by: Andrew Sommer
April 30, 2015
Today’s eLunch Presenter
Andrew R. Sommer
Litigation
Washington, D.C.
asommer@winston.com
5-Minute Primer on Inter Partes Review
What is an IPR?
• One of four types of trial proceedings created by the
America Invents Act of 2011 (“AIA”); first available on
September 16, 2012
• Evidentiary proceedings adjudicated primarily on the
written record
• Proceedings replace inter partes reexamination
• Proceedings require written and oral advocacy skills as
well as technical and litigation skills
• Many procedural pitfalls
4
What is an IPR?
Google Inc. v. Jongerius Panoramic Techs, LLC
IPR2013-00191, Paper 50
(PTAB Feb. 13, 2014)
5
Types of Validity Challenges in IPR
anticipation
§ 102
OR
§ 103
obviousness
AND
patents
OR
printed
pubs
35 U.S.C. § 311(b) – Scope. A petitioner in an inter partes review may request
to cancel as unpatentable 1 or more claims of a patent only on a ground that
could be raised under section 102 or 103 and only on the basis of prior art
consisting of patents or printed publications.
6
IPR Timeline
Office Patent Trial Practice Guide,
77 Fed. Reg. 48,756, 48,757
(Aug. 14, 2012).
7
Key Document: Institution Decision
8
Key Document: Institution Decision
9
Key Document: Final Written Decision
10
Estoppel After IPR
Who?
• Petitioner; or
• real party in interest; or
• privy of the petitioner
What?
• “may not asset either in a civil action arising in whole or in part under section
1338 of title 28 or in a proceeding before the International Trade Commission
under section 337 of the Tariff Act of 1930 that the claim is invalid . . . .”
Scope?
• on any ground raised; or
• on any ground that reasonably could have been raised during the inter partes
review
When?
• After final written decision
See 35 U.S.C. § 315(e)(2).
11
Many IPR Filings
PTAB Trial Filings by Quarter
IPR Petitions Filed
CBM Petitions Filed
459
458
415
350
260
204
190
137
94
79
17
8
Q3 2012
7
Q4 2012
2
Q1 2013
19
20
Q2 2013
Q3 2013
47
43
Q4 2013
Q1 2014
55
32
Q2 2014
Q3 2014
44
43
Q4 2014
Q1 2015
12
PTAB Claim Constructions and District
Court Proceedings
“some deference”
ContentGuard Holdings, Inc. v. Amazon.com, Inc., Case
No. 2:13-cv-1112-JRG, 2015 WL 1289321, at *5-6 (E.D.
Tex. Mar. 20, 2015).
14
PTAB Constructions Getting “Some Deference”
ContentGuard Holdings, Inc. v. Amazon.com, Inc.,
Case No. 2:13-cv-1112-JRG, 2015 WL 1289321, at *4-6, 10
(E.D. Tex. Mar. 20, 2015).
15
PTAB Construction Supports Indefiniteness
Grobler v. Apple Inc.,
Case No. 12-cv-1534-JST, 2014 WL 1867043, at *8
(N.D. Cal. Mar. 6, 2014).
16
But Not Always Getting Deference . . . .
Kroy IP Holdings, LLC v. Autozone, Inc.,
Case No. 2:13-cv-888-WCB
(E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designtion)
17
PTAB Decisions: Intrinsic Evidence?
Fairfield Indus., Inc. v. Wireless Seismic, Inc.,
Civ. A. No. 4:14-CV-2972, 2015 WL 1034275, *5
(S.D. Tex. Mar. 10, 2015)
18
PTAB Decisions: Intrinsic Evidence?
DSS Tech. Mgmt., Inc. v. Taiwan Semiconductor Mfg. Co., Ltd.
Civ. A. No. 2:14-cv-199-RSP, 2015 WL 1737732
(E.D. Tex. Apr. 9, 2015)
19
Patent Owner’s Silence Not Admission
Kroy IP Holdings, LLC v. Autozone, Inc.,
Case No. 2:13-cv-888-WCB
(E.D. Tex. Feb. 10, 2015) (Bryson, C.J. sitting by designtion)
20
PTAB Decisions and Substantive Motions
IPR Denial Leads to SJ of No Invalidity
Jul. 3, 2014
Jul. 12-15, 2013
SJ of No Invalidity
IPR Petitions
Complaint
Institution Decisions
Jan. 9, 2014
* PTAB denied institution on
many challenged claims
Jul. 20, 2012
The Procter & Gamble Corp. v. Team Techs., Inc.
Case No. 1:12-cv-552 (S.D. Ohio)
22
IPR Denial Leads to SJ of No Invalidity
The Procter & Gamble Corp. v. Team Techs., Inc.
Case No. 1:12-cv-552, Dkt. 130, slip op. at 21-24
(S.D. Ohio Jul. 3, 2014)
23
Adverse Judgment in IPR Against Patent Owner
Leads to District Court Estoppel?
“A party may request adverse
judgment against itself at any
time during a proceeding.
Actions construed to be a
request for adverse judgment
include: . . . (2) Cancellation or
disclaimer of a claim such that a
party has no remaining claim in
the trial.”
“A patent applicant or owner is
precluded from taking action
inconsistent with the adverse
judgment . . . .”
37 C.F.R. § 42.73(d)(3).
37 C.F.R. § 42.73(b)(2).
24
Adverse Judgment in IPR Against Patent Owner
Leads to District Court Estoppel?
Dec. 13, 2014
Jul. 3, 2014
IPR Petition
4th Am. Compl.
Feb. 9, 2015
Dismissal Denied
(by third party)
Institution Decision
May 20, 2014
PTAB Adverse Judgment
Complaint
Aug. 19, 2013
Jul. 7, 2014
Choon’s Design, LLC v. Zenacon, LLC
Case No. 2:13-cv-13568, 2015 WL 539441
(E.D. Mich. Feb. 9, 2015)
25
Adverse Judgment in IPR Against Patent Owner
Leads to District Court Estoppel?
Choon’s Design, LLC v. Zenacon, LLC
Case No. 2:13-cv-13568, 2015 WL 539441
(E.D. Mich. Feb. 9, 2015)
26
Adverse Judgment in IPR Against Patent Owner
Leads to District Court Estoppel?
Choon’s Design, LLC v. Zenacon, LLC
Case No. 2:13-cv-13568, 2015 WL 539441
(E.D. Mich. Feb. 9, 2015)
27
Institution of IPR = “Objectively Reasonable”
Invalidity Defense?
No IPR instituted unless “the
petition . . . and any [preliminary]
response . . . shows that there is
a reasonable likelihood that the
petitioner would prevail” on at
least one claim.
35 U.S.C. § 314(a)
The objective recklessness
determination “entails an
objective assessment of potential
defenses . . . [and] can be
expected in almost every case to
entail questions of validity . . . .”
Bard Peripheral Vascular, Inc. v. W.L.
Gore & Associates, Inc., 682 F.3d 1003,
1006 (Fed. Cir. 2012)
Does an instituted IPR provide sufficient evidence for
summary judgment of no willful infringement since it is
decided under the “reasonable liklihood” of prevailing
standard?
28
Institution of IPR ≠ “Objectively Reasonable”
Invalidity Defense
Ultratec, Inc. v. Sorenson Communications, Inc.,
45 F. Supp. 3d 881, 920-23
(W.D. Wisc. 2014).
29
Institution of IPR ≠ “Objectively Reasonable”
Invalidity Defense
Ultratec, Inc. v. Sorenson Communications, Inc.,
45 F. Supp. 3d 881, 920-23
(W.D. Wisc. 2014).
30
Institution of IPR ≠ “Objectively Reasonable”
Invalidity Defense
Ultratec, Inc. v. Sorenson Communications, Inc.,
45 F. Supp. 3d 881, 920-23
(W.D. Wisc. 2014).
31
Admissibility of PTAB Decisions at Trial
Use for Rebutting Willfulness?
Ultratec, Inc. v. Sorenson Communications, Inc.,
Case No. 13-cv-346-bbc, 2014 WL 5023098
(W.D. Wisc. Oct. 8, 2014).
34
Use to Rebut Indirect Infringement?
Personalized Media Communications, LLC v. Zynga, Inc.
Case No. 2:12-cv-68-JRG, 2013 WL 10253110
(E.D. Tex. Oct. 30, 2013).
35
Use to Rebut Presumption of Validity?
Ultratec, Inc. v. Sorenson Communications, Inc.,
Case No. 13-cv-346-bbc, 2014 WL 4955302
(W.D. Wisc. Oct. 1, 2014).
36
Use to Rebut Presumption of Validity?
Ultratec, Inc. v. Sorenson Communications, Inc.,
Case No. 13-cv-346-bbc, 2014 WL 5023098
(W.D. Wisc. Oct. 8, 2014).
37
Can Patent Owner Use a Denial of Trial?
Universal Elecs., Inc. v. Universal Remote Control, Inc.,
Case No. SACV 12-00329 AG
(C.D. Cal. Apr. 21, 2014).
38
IPRs and Litigation Before the ITC
Impact of IPRs in the ITC: Stats
• Complaints Filed Between September 16, 2012 and December
31, 2014:
• Number of Complaints: 84
• Number of Patent Assertions: 283 patents
• Number of IPRs filed: 73
• Average time between filing of complaint and filing of IPR: 6.7 months
• Median time between filing of complaint and filing of IPR: 5 months
• Minimum time between filing of IPR and complaint: -2.0 months
• Maximum time between filing of IPR and complaint: 23 months
40
IPRs and High-Low Settlements in the ITC
In the Matter of Certain Omega-3 Extracts from Marine or Aquatic Biomass and
Products Containing the Same,
337-TA-877
(ITC May 13, 2014).
41
IPR Timing Strategies in the ITC
File Early
File Late
• If filed early enough, could
have a final PTAB decision
before exclusion order issues
• Lower risk of denial of
institution impacting ID
• May obtain usable
admissions
• Institution decision may be
useful at the hearing if
favorable
• Opportunity for creative
resolutions
• Increased settlement
leverage if petitioner receives
favorable ID
• After favorable ID for
petitioner, will have adequate
time to complete IPR pending
commission review and
appeal
• All cards on the table as to
key prior art
42
IPR Timing Strategies in the ITC
File IPR Early
Pros:
1. If filed early enough, could have a
final PTAB decision before
exclusion order issues
2. Usable admissions
3. Institution decision may be useful
at the hearing if favorable
4. Opportunity for creative
resolutions
Cons:
1. Highly unlikely to have a final
decision before ID
2. Institution decision may harm
invalidity defenses
3. Gives Patent Owner additional
leverage if institution denied
File IPR Late
Pros:
1. Lower risk of denial of institution
impacting ID
2. Increased settlement leverage if
petitioner receives favorable ID
3. May have adequate time to
complete IPR pending review and
appeal if ID is favorable
4. All cards on the table as to key
prior art
Cons:
1. Unlikely to be relevant to ID
2. May not be in the record at all
3. No impact if an adverse ID but
extra cost
43
Estoppel Effects and District Court Litigation
35 U.S.C. § 315(e)(1): Estoppel
“The petitioner in an inter partes review of a claim in a
patent under this chapter that results in a final written
decision under section 318 (a), or the real party in interest or
privy of the petitioner, may not request or maintain a
proceeding before the Office with respect to that claim on
any ground that the petitioner raised or reasonably could
have raised during that inter partes review.”
35 U.S.C. § 315(e)(2)
45
Cases of Note On Estoppel Issues
• Synopsys, Inc. v. Mentor Graphics, Case No. 3:12-cv-1500 (D. Oregon)
• IPR challenged claims 1-15 and 20-33
• PTAB instituted trial of claims 1-9, 11, 28, and 29 (43% of challenged claims)
• Final Written Decision issued on February 19, 2014, finding claims 5, 8, and 9
invalid (25% of instituted claims)
• In parallel litigation, patent owner dropped claims except for 1, 24, 26, 27, and 28
• Validity not sent to the jury
• Judgment of $36.4M returned for patent owner
• Nat’l Oilwell Varco, L.P. v. Omron Oilfield & Marine, Inc., No. 1:12-cv-773SS, Dkt. 62 (Dec. 2, 2013)
• Defendant filed petition for IPR
• PTAB denied petition as to all claims
• Court held that “the statutory doctrine of estoppel DOES NOT APPLY to this case”
and noted that the “panel did not think much of the contentions that prior art
invalidated the patent by finding that the petitioner . . . ‘has not demonstrated a
reasonable likelihood of prevailing’ in any of its contentions.”
46
Cases of Note On Estoppel Issues
• ROY-G-BIV Corp. v. ABB, Ltd., 6:11-cv-00622-0624-LED
• IPRs instituted covering all claims
• All claims found patentable in final written decision
• Day final written decision issued, patent owner filed letter brief
requesting summary judgment as to all invalidity defenses, and a
finding of privity for all defendants
• Motion allowed, remained pending at time of settlement
47
ROY-G-BIV v. ABB, Ltd. - Estoppel
48
ROY-G-BIV v. ABB, Ltd. - Estoppel
49
IPRs and Procedural Issues in
the District Courts
Notifying Court of IPR Proceeding
Virginia Innovation Sciences v. Samsung Elecs. Co.,
983 F. Supp. 2d 713, 760
(E.D. Va. 2014).
51
Protective Orders: Prosecution Bars
• Prosecution Bar in N.D. Cal. Model Protective Order Applies to
PTAB Trial Proceedings, Even for Expired Patents
• Software Rights Archive, LLC v. Facebook, Inc., Case No. 5:12-cv-3970RMW-PSG, 2014 WL 116366 (N.D. Cal. Jan. 13, 2014)
52
Protective Orders: Prosecution Bars
• Litigation counsel permitted to participate in IPR, but not claim
amendments
• Paice, LLC v. Hyundai Motors Co., WDQ-12-0499, 2014 WL 4955384 (D.
Md. Sept. 29, 2014)
• Endo Pharms., Inc. v. Actavis Inc., No. 12 Civ. 8985 (TPG), 2014 WL
3950900 (S.D.N.Y. Aug. 13, 2014)
• LifeScan Scotland, Ltd. v. Shasta Techs., LLC, Case No. 11-cv-4494 (N.D.
Cal. Nov. 4, 2013)
• EPL Holdings, LLC v. Apple Inc., No. C-12-4306 JST (JSC), 2013 WL
2181584 (N.D. Cal. May 20, 2013)
• Prolitec Inc. v. Scentair Techs., 945 F. Supp. 2d 1007 (E.D. Wis. May 17,
2013).
53
Protective Orders: Prosecution Bars
• Litigation counsel permitted to participate in IPR without
restriction:
• PPC Broadband, Inc. v. Times Fiber Communications, Inc., C.A. No. 5:13cv-460 (GLS/DEP), 2014 WL 859111 (N.D.N.Y. Mar. 5, 2014).
• Cases prohibiting counsel having access to source code from
participating in IPR:
• Versata Software Inc. v. Callidus Software, Inc., Case No. 12-931-SLR,
2014 WL 1117804 (D. Del. Mar. 12, 2014)
• Inventor Holdings, LLC v. Wal-Mart Stores Inc., Case No. 1:13-cv-96 (GMS),
2014 WL 4370320 (D. Del. Aug. 27, 2014).
54
Protective Order Violations
• Disclosure of confidential information received under district
court protective order during conference call with PTAB results
in monetary sanctions:
• Lunareye, Inc. v. Gordon Howard Associates, Inc., Civ. Action No. 9-13-cv91 (E.D. Tex. Feb. 2, 2013).
• “The law regarding the interplay between proceedings before the PTAB and district
courts is not yet developed. Counsel should therefore have taken care to avail
themselves of procedures to avoid inadvertent disclosure of protected confidential
information such as a motion to seal under 37 C.F.R. § 42.14 or a request that the
protective order be modified.”
• The Court then held that a monetary sanction of $2,500 was appropriate because it
“is the least onerous sanction that is sufficient to remind counsel of this duty, deter
future violations in this suit, and serve as an adequate general deterrent for similar
conduct.”
55
Third Party Discovery
• Discovery into real-party-in interest or privity through third-party
subpoena denied:
• Personal Audio LLC v. Togi Entertainment, Inc., Case No. 14-cv-80025
RS(NC), 2014 WL 1318921 (N.D. Cal. Mar. 31, 2014) – subpoena seeking
information about EFF and its relationship with defendants denied because
whether EFF will be estopped is irrelevant because it is premature.
• Callwave Communications, LLC v. Wavemarket, Inc., No. C 14-80112
JSW(LB), 2015 WL 831539 (N.D. Cal. Feb. 25, 2015) – subpoena seeking
information related to privity between petitioner and defendants in litigation
denied.
56
IPR Strategies for Parallel Litigtion
Strategy Considerations for Parallel
Proceedings
Prior Art
• Best practices for “reasonable” prior art search
Selection of Grounds
• Ensure “best” patents / printed publications are presented in the
first petition
Availability of Other Defenses
• Understand risk; either (1) “all-in” approach; or (2) understand
and develop defenses that cannot be presented in IPR
58
What’s Next?
Thank You.
Andrew R. Sommer
Litigation
Washington, D.C.
asommer@winston.com