Getting The Last Word In PTAB Trials

Trials before the Patent Trial and Appeal Board are governed by specific rules that provide limited opportunities to make arguments and present evidence. The last substantive filing that is allowed as a matter of right depends on whether or not a patent owner files a motion to amend,[1] and will generally either be the petitioner’s reply or the patent owner’s reply in support of its motion to amend. Nevertheless, procedures are available after the last reply, whereby the other party can possibly have the last word in a PTAB trial. Examples of these procedures include seeking leave to file a sur-reply, to file observations on cross-examination, to file arguments based on the observations on cross-examination, or to seek a waiver of a rule if a party perceives that rule prevents it from having the due process rights to which it is entitled.

Based on a review of the types of evidence and arguments submitted in “rebuttal” filings, it is difficult to predict in advance which party will have the last word in a PTAB trial. However, the PTAB has interpreted the rules in a manner that affords each party a full and fair opportunity to present its case and to give the proper party the “last word” so the PTAB can have the benefit of the arguments and observations of both parties.

Replies and Supporting Evidence

After institution of an inter partes review trial, a patent owner response is filed, and the petitioner’s next opportunity to submit additional evidence is the petitioner reply, which should be “limited to a true rebuttal role.”[2] If the patent owner files a motion to amend, it will file a reply in support of the motion to amend after the petitioner’s reply and opposition. So, what types of arguments and evidence can a party submit with a reply? Of course, a party can cite admissible cross-examination testimony of the other party’s witnesses to impeach or discredit their testimony. However, the more difficult question is what additional types of “new evidence” can be submitted with the reply?

The board rules indicate that a reply should only be drawn to issues raised in the corresponding opposition or patent owner response.[3] The Trial Practice Guide[4] indicates that:

a reply that raises a new issue or belatedly presents evidence will not be considered and may be returned. The Board will not attempt to sort proper from improper portions of the reply. Examples of indications that a new issue has been raised in a reply include new evidence necessary to make out a prima facie case for the patentability or unpatentability of an original or proposed substitute claim, and new evidence that could have been presented in a prior filing.

Of the examples provided, it is difficult to determine whether evidence “could have been presented in a prior filing.” The Federal Circuit recently observed that a literal interpretation of the Trial Practice Guide’s example of “new evidence that could have been presented in a prior filing” “might cover most responsive evidence.”[5]

Although the board has the power to strike a reply or accompanying evidence, the board appears to be using its considerable discretion to allow the parties the freedom to submit new arguments and evidence to support their positions and respond to the opposing party.[6] The board’s typical practice is to wait until after the oral hearing to decide whether any reply evidence or content was improperly submitted.[7] The board has indicated that it is appropriate to present arguments at the oral hearing that a reply presents improper or new arguments or evidence.[8] Three cases show how the board treats, or should treat, a patent owner reply and accompanying evidence.

In Kyocera Corp. v. Softview LLC, the patent owner was not allowed to file a motion to strike the reply or a sur-reply because the board’s existing policy was not to consider any new issues or new evidence in a reply. [9] The board also specifically noted that the patent owner’s 16-page notice of objections to evidence (Paper No. 30) already extensively addressed the patent owner’s concerns. In addition, during the conference call, the petitioner stated that it would produce its two experts who filed declarations with the petitioner’s reply.

In Belden Inc. v. Berk-Tek LLC, the Federal Circuit affirmed the board’s denial of the patent owner’s motion to exclude.[10] During the underlying proceeding, the board instituted the IPR even though the petition was supported only by arguments and no supporting declaration.[11] In its reply, the petitioner submitted the “Baxter declaration.” The board refused to strike the Baxter declaration and held that Baxter’s testimony was not necessary to establish a prima facie case. The Federal Circuit found no error in the board’s denial of the motion to exclude.[12]

Finally, in Ariosa Diagnostics v. Verinata Health Inc., the Federal Circuit held that it is proper to consider documents filed with the petition and explained further in a reply and a second declaration to “document the knowledge that skilled artisans would bring to bear in reading the prior art identified as producing obviousness.”[13]

The above cases suggest that although a reply or accompanying new evidence can be stricken, if the petitioner truly believes that the new evidence is responsive and is not curing a defective petition, the party should file the new evidence with its reply. If the opposing party believes the reply or evidence was improperly submitted, that party can ask for permission to file a motion to strike. However, the board appears to prefer weighing arguments and evidence as opposed to striking. Although not specifically stated in the above decisions, this reluctance to strike may be due to concerns regarding a party’s due process rights or the board’s stated goal to search for the truth and consider all relevant information.[14] In this regard, the Federal Circuit has indicated that “the PTO has established rules that, while necessarily respecting constitutional and statutory guarantees of procedural fairness, are designed generally to require that the parties make their cases in a very small numbers of filings.”[15]

Post-Reply Cross-Examination of Declarants and Observations on Cross-Examination

In cases where a motion to amend is not filed, the patent owner may feel that it is unfair that the petitioner gets the last word. However, as the Federal Circuit noted, “the regulations provide for two patent-owner filings — one before and one after institution.”[16] Although a patent owner does not have the right to file a substantive paper after the petitioner reply, a party may cross-examine any declarant that has submitted testimony and may request permission to file observations on that cross-examination.[17] These procedural safeguards allow the patent owner sufficient due process rights to respond to the petitioner’s evidence and arguments.

Sur-Reply, Waiver of the Rules and Preserving a Party’s Rights

The Federal Circuit noted, “the Board’s rules and practices establish standards bearing similarities to those often applied in district-court litigation.”[18] The board’s rules and practices give a party numerous ways to prove its case and be heard. For example, the board allows the filing of sur-replies upon a proper showing.[19] In addition, a party can ask for a waiver of a rule if it perceives that rule prevents it from having the due process rights to which it is entitled.[20]

Unless a party pursues the available procedural options available to “have the last word” and can show that the board abused its discretion in denying such options, it may be difficult on appeal to show a denial of due process. For example, in considering the evidentiary and procedural issues raised by the patent owner, the Federal Circuit noted, “Belden did not seek to file a Surreply, to file additional observations on its cross-examination, to make arguments in those observations, or to have the Board waive any other regulations that it believed prevented it from adequately responding to Mr. Baxter’s declaration.”[21]

Oral Hearing

In addition to the last “written last word,” parties to an IPR might believe that there is an advantage by having the last word at the oral hearing. However, new case law, new evidence and new arguments cannot be presented at the oral hearing.[22] Since no new evidence or arguments can be presented at the oral hearing, the attorney that has the last word at the oral hearing does not really gain any advantage by being last on her feet.

Conclusion

While the answer to the question: “Who gets that last word in a PTAB trial?” differs from case to case, one party will always have the last word. The PTAB will make a decision after balancing the main objectives of PTAB trials, which includes ensuring just, speedy and inexpensive resolution of every proceeding.[23]

[1] While numerous motions to amend have been filed, very few motions to amend have been granted. Motions to Amend were granted in Inter Partes Reviews as follows: REG Synthetic Fuels LLC v. Neste Oil OYJ, IPR2014-00192, Paper No. 48 (PTAB June 5, 2015); Toyota Motor Corp. v. American Vehicular Sciences LLC, IPR2013-00417, Paper No. 78 (PTAB Jan. 7, 2015); Riverbed Technology, Inc. v. Silver Peak Systems, Inc., IPR2013-00403, Paper No. 33 (Dec. 30, 2014) (granted-in-part); Riverbed Technology, Inc. v. Silver Peak Systems, Inc., IPR2013-00402, Paper No. 35 (PTAB Dec. 30, 2014) (granted-in-part); International Flavors & Fragrances Inc. v. The United States of America, IPR2013-00124, Paper No. 12 (PTAB May 20, 2014) (granted-in-part).

[2] Ariosa Diagnostics v. Verinata Health, Inc., Appeal Nos. 2015-1215, 2015-1226, p. 15 (Fed. Cir. Nov. 16, 2015).

[3] See 37 C.F.R. § 42.23.

[4] See Trial Practice Guide, 77 Fed. Reg. 48756, 48767 (Aug. 14, 2012).

[5] Id., pp 22-23, n.4.

[6] See, e.g., Adobe Systems Inc. v. Afluo, LLC, IPR2014-00153, Paper No. 18, IPR2014-00154, Paper No. 21 (PTAB Sept. 18, 2014) (“as long as the Reply is in response to arguments raised in the Patent Owner’s response, then it is within the proper scope of a Reply”).

[7] See Neste Oil OYJ v. REG Synthetic Fuels, LLC, IPR2013-00578, Paper No. 33 (PTAB Sept. 25, 2014); see also Cyanotech Corporation v. The Board of Trustees of the University of Illinois, IPR2013-00401, IPR2013-00404, Paper No. 44 (PTAB June 6, 2014).

[8] See Adobe Systems Inc., IPR2014-00153, Paper No. 18, IPR2014-00154, Paper No. 21.

[9] Kyocera Corp. v. Softview LLC, IPR2013-00004, Paper No. 32 (Oct. 8, 2013) (joined with Motorola Mobility LLC v. Softview LLC, IPR-000257).

[10] Belden Inc. v. Berk-Tek LLC, Appeal Nos. 2014-1575, -1576, at p. 29 (Fed. Cir. November 5, 2015).

[11] Id. at pp. 8-9.

[12] Id. at pp 22-23, n.4.

[13] Ariosa Diagnostics v. Verinata Health, Inc., Appeal Nos. 2015-1215, 2015-1226, at pp. 11-12 (Fed. Cir. Nov. 16, 2015).

[14] Edmund Optics, Inc. v. Semrock, Inc., IPR2014-00599, Paper No. 44, at 4 (P.T.A.B. May 5, 2015) (a trial is, first and foremost, a search for the truth) (citing Nix v. Whiteside, 475 U.S. 157, 166 (1986); TechSearch LLC v. Intel Corp., 286 F.3d 1360, 1378 (Fed. Cir. 2002)).

[15] Ariosa Diagnostics v. Verinata Health, Inc., Appeal No. 2015-1215, 2015-1226, p. 15 (Fed. Cir. Nov. 16, 2015).

[16] See Belden, Appeal Nos. 2014-1575, -1576, at 26 (Fed. Cir. November 5, 2015) (citing 37 C.F.R. §§ 42.107(a), 42.120(a)).

[17] Id. at 26-27 (citing 37 C.F.R. § 42.51(b)(2)(i), Trial Practice Guide, 77 Fed. Reg. at 48767-68).

[18] See Belden, Appeal Nos. 2014-1575, -1576, at 28 (Fed. Cir. November 5, 2015).

[19] See Belden, Appeal Nos. 2014-1575, -1576, at 27 (Fed. Cir. November 5, 2015) (citing representative cases).

[20] See id. (citing 37 C.F.R. § 42.5(b)).

[21] See Belden, Appeal Nos. 2014-1575, -1576, at 29 (Fed. Cir. November 5, 2015).

[22] See Level 3 Communications, LLC v. AIP Acquisition LLC, IPR2013-00296, Paper 42, at 9-10 (PTAB Oct. 8, 2014).

[23] See 37 C.F.R. § 42.1(b).