2022 Post-Grant Annual Report

2022 was a milestone year for the Patent Trial and Appeal Board. In April, Kathi Vidal began her tenure as Director of the United States Patent and Trademark Office with an early focus on promoting increased efficiency at the PTAB. September marked the 10-year anniversary of the implementation of the America Invents Act, which established post-grant practice as we know it today. After an initial period of uncertainty among practitioners, the PTAB has grown to become the busiest forum for patent disputes in the country in the decade since it was launched, with post-grant as a distinct practice continuing to mature alongside it.

Fish & Richardson’s 2022 Post-Grant Report takes a deep dive into the cases, trends, and statistics that shaped post-grant practice throughout the year and postulates how they may affect practitioners going forward.

When it comes to post-grant practice, Fish’s history and presence are unmatched: We have handled more cases at the PTAB than any other firm, our attorneys routinely craft new law at the Federal Circuit, and we host the most innovative educational programs. For more information, please contact Practice Group Leader Karl Renner.

For even more 2022 post-grant updates, please see our “Post-Grant 2022 Year in Review” webinar here.

A Busy Year for Director Review

Following the Supreme Court’s June 2021 decision in United States v. Arthrex, Inc.¹, the USPTO issued interim guidance on its implementation of the Director review process. Under the interim process,² the Director may conduct a review of any issue of law or fact raised by a Board decision. Director review is de novo and thus gives no deference to the underlying decision.

After a slow start in 2021, Director reviews ramped up in 2022 under Director Vidal. At this time last year, we reported that Commissioner Hirshfeld had granted Director review just twice. By comparison, in 2022, Director Vidal granted Director review ten times, all but one initiated sua sponte by the Director.

Below, except for OpenSky Industries, LLC v. VLSI Technology, LLC and Patent Quality Assurance, LLC v. VLSI Technology LLC, which warrant an independent article in this Report, we briefly summarize the 2022 Director Vidal review decisions.

Applicant admitted prior art: MED-EL Elektromedizinische Geräte Ges.m.b.H. v. Advanced Bionics AG³

On June 1, 2022, Director Vidal sua sponte ordered Director review to clarify office guidance on the treatment of applicant admitted prior art in view of recent Federal Circuit precedent. The petition at issue relied on AAPA in combination with a patent application to allege obviousness of the challenged claims. In its final written decision, the Board applied Director Iancu’s prior AAPA guidance and concluded that MED-EL’s petition failed to set forth a valid obviousness ground.

The Board concluded that AAPA impermissibly formed the “foundation or starting point” of the obviousness ground, and therefore was the “basis” of the ground, contrary to § 311(b). On August 22 2022, Director Vidal vacated and remanded the final written decision, instructing the Board to issue a new decision consistent with the updated AAPA guidance and her determination that the petition did not improperly rely on AAPA.

Validity of multiple dependent claims: Nested Bean, Inc. v. Big Being Pty Ltd⁴

In a final written decision dated January 24, 2022, the Board determined:

1. Independent claim 1 was not shown to be unpatentable;
2. Independent claim 2 was shown to be unpatentable; and
3. Claims 3-16, which are multiply dependent on claims 1 or 2, were deemed to be unpatentable “if either version of these claims (the version depending from claim 1 or the version depending [from] claim 2) is described by the prior art.”

On June 17, 2022, Director Vidal granted the patent owner’s request for Director review.

At issue is whether a multiple dependent claim is rendered wholly unpatentable when less than all versions of the claim are demonstrated unpatentable and, if not, how the Board should treat such a claim following a partial showing of invalidity.

In briefing called for by the Director, the patent owner argued that a multiple dependent claim should be treated as a “bundle” of dependent claims and that the Board must determine the validity of each one separately.

The petitioner argued that a claim cannot be partially invalid, and that a finding of unpatentability as to any version of the claim is sufficient to render the claim wholly unpatentable.

Interference estoppel: Zynga, Inc. v. IGT⁵

On August 22, 2022, Director Vidal sua sponte initiated Director review to affirm the result of a Board institution decision that “waived interference estoppel under 37 C.F.R. § 41.127(a)(1).” The Director determined that interference estoppel did not apply against the petitioner in inter partes review because Title 37, Chapter I, Subchapter A, Part 42 of the Code of Federal Regulations, which governs all “trial and preliminary proceedings before the Board,” does not incorporate Part 41, which governs appeals and interferences. Having determined that interference estoppel was not applicable, the Director affirmance found moot the question of whether the Board properly waived the estoppel under 37 C.F.R. 42.5(b) (“The Board may waive or suspend a requirement of parts 1, 41, and 42 and may place conditions on the waiver or suspension.”).

Serial petitions: Code200, UAB v. Bright Data, Ltd.⁶

On August 23, 2022, Director Vidal sua sponte initiated Director review of a Board decision discretionarily denying institution of a serial petition, where the earlier-filed petition was discretionarily denied under Fintiv. Director Vidal found that because the first petition was not evaluated on the merits, the General Plastic factors governing serial petitions should “only weigh in favor of discretionary denial when there are ‘road-mapping’ concerns[.]”

As the Board had found no evidence of road-mapping, Director Vidal determined that “the Patent Owner’s concerns of fairness are outweighed by the benefits to the patent system of improving patent quality by reviewing the merits of the challenges raised in the petitions, which have not been addressed to date.”

Thus, Director Vidal vacated the decision denying institution and remanded to the Board.

Post-denial Fintiv stipulations: NXP USA, Inc. v. Impinj, Inc.⁷

In a sua sponte Director review decision dated September 7, 2022, Director Vidal affirmed a Board rehearing decision to discretionarily deny institution based on the Fintiv factors. Specifically, the Director held that “the Board correctly determined that a stipulation, offered by a petitioner for the first time after a decision denying institution, is not a proper basis for granting rehearing of the decision on institution.” In the Director’s view, “[p]ermitting a petitioner to wait and see if the Board denies institution under Fintiv, and then offer such a stipulation for the first time on rehearing, frustrates these goals and would open the door to gamesmanship.”

Requests for adverse judgment: Apple Inc. v. Zipit Wireless, Inc.⁸

On December 21, 2022, Director Vidal acted sua sponte via Director review to vacate an adverse judgment entered by the Board against Patent Owner Zipit Wireless, Inc. Zipit chose not to file patent owner response briefs in four out of six instituted IPRs. The two cases in which Zipit submitted responses proceeded to oral hearing. At the hearing, the Board asked counsel for Zipit whether it was “not contesting if a final written decision or adverse judgment was entered with respect to those [other four] IPRs”—those where Zipit did not have a patent owner response on file. Zipit’s counsel responded, “Correct, Your Honor. If the Board determines that they have met their burden of proof with respect to those claims Zipit hasn’t filed any opposition.” The Board interpreted this response as a request for adverse judgment in the four IPRs without a response, but Director Vidal disagreed. In the Director’s view, Zipit’s “non-opposition was contingent on the Board determining that Petitioner met its burden of proving by a preponderance of the evidence that the challenged claims are unpatentable.” Accordingly, the Director vacated the advance judgment and remanded the proceedings “back to the panel to either issue a show cause order clarifying whether Patent Owner is indeed abandoning the contest or to issue a final written decision addressing the patentability of the challenged claims.”

Other issues

Boehringer Ingelheim Animal Health USA Inc. v. Kansas State University Research Foundation⁹

The Board denied institution of Boehringer’s post-grant review petition after finding, under § 35 U.S.C. § 325(d), that the examiner considered substantially similar written description arguments with no indication in the petition of a material error. On August 12, 2022, Director Vidal sua sponte initiated Director review of the Board’s institution decision.

AviaGames, Inc. v. Skillz Platform, Inc.¹⁰

The Board discretionarily denied institution based on the Fintiv factors, where a District Court had already invalidated the challenged claims under 35 U.S.C. § 101 as directed to patent-ineligible subject matter. On August 26, 2022, Director Vidal sua sponte initiated Director review of the Board’s institution decision.

Updated Guidance on Discretionary Denials Under Fintiv

The PTAB’s use of its discretion to deny institution based on the status of parallel proceedings in other venues has been a hot-button topic in post-grant practice in recent years. Given that AIA proceedings were established as more efficient and streamlined tools for challenging patents than District Court litigation, AIA proceedings involving patents that are the subject of parallel litigation may often increase litigation costs rather than lower them. The Board in the past has exercised its discretion to deny institution in many such cases.

In Apple, Inc. v. Fintiv, Inc., IPR2020-00019 Paper 11 (PTAB Mar. 20, 2020) (designated precedential May 5, 2020), the Board identified six non-exclusive factors to consider when determining whether to institute an AIA proceeding when there are parallel District Court proceedings concerning the same patent:

1. Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
2. proximity of the court's trial date to the Board's projected statutory deadline for a final written decision;
3. investment in the parallel proceeding by the court and the parties;
4. overlap between issues raised in the petition and in the parallel proceeding;
5. whether the petitioner and the defendant in the parallel proceeding are the same party; and
6. other circumstances that impact the Board's exercise of discretion, including the merits.

The number of discretionary denials based on 35 U.S.C. §§ 314 and 325 increased dramatically after Fintiv was designated precedential. Using data collected from the PTAB Open Data Portal, there were a total of 135 decisions denying institution citing either § 314 or § 325 in the 24 months leading up to Fintiv. In the 24 months after Fintiv, there were 414 such denials.

Responding to public concerns about potential overreliance on Fintiv, Director Vidal issued interim guidance in June 2022 clarifying the Board’s application of the Fintiv factors.

The interim guidance precludes the Board from exercising its discretion to deny institution based on Fintiv where:

• The petition presents compelling merits: Fintiv factor 6 directs the Board to consider the merits of the petitioner’s evidence of unpatentability. Where such evidence is merely sufficient to meet the statutory threshold, the Board may exercise its discretion to deny institution based on other Fintiv factors. However, where the Board determines that the information presents a compelling unpatentability challenge, it should not discretionarily deny institution under Fintiv.
• The parallel proceedings are in the International Trade Commission: The Fintiv factors focus on the interplay between IPR and District Court proceedings. This is evident in Fintiv factors 1, 2, and 3, which use the word “court” to refer to parallel proceedings. The ITC is not a District Court, nor does it have the authority to invalidate patents. As such, the Board should not discretionarily deny institution under Fintiv based on parallel ITC proceedings.
• The petitioner commits to a Sotera-style stipulation: Fintiv factor 4 directs the Board to consider the overlap between issues raised in the IPR petition and the parallel proceeding. When a petitioner stipulates not to pursue in a parallel proceeding the same grounds or any grounds that reasonably could have been raised in the petition (known as a Sotera stipulation), the stipulation mitigates potentially conflicting opinions or duplicative efforts between the Board and the District Court. Accordingly, the Board should not discretionarily deny institution based on Fintiv where a petitioner makes a Sotera-style stipulation.
• The median time-to-trial in the district indicates that trial will not occur before the statutory deadline for a final written decision: Fintiv factor 2 directs the Board to consider the proximity of the District Court trial date to the Board's projected statutory deadline to issue a final written decision. When applying this factor, the Board traditionally has taken the District Court’s trial schedule at face value despite strong evidence that such estimates are unreliable. The interim guidance now permits the Board to consider evidence regarding the most recent statistics on median time-to-trial in the district rather than the District Court’s estimated trial date. The Board may also consider additional factors such as the number of cases before the judge in the parallel litigation and the speed and availability of other case dispositions.

With less than a year having elapsed since the interim guidance issued, it is too early to draw conclusions about its long-term impacts. However, early data suggest that it may be having its intended effect. Since Director Vidal’s guidance issued in June 2022, only a handful of post-grant challenges have been denied under the Fintiv framework.

Updated Guidance on Applicant Admitted Prior Art

Under 35 U.S.C.A. § 311(b), an IPR petitioner may request to cancel a patent claim “only on the basis of prior art consisting of patents or printed publications.” Section 311(b) does not specifically address the use of so-called “applicant-admitted prior art” — i.e., admissions about the prior art found within a challenged patent itself.

In February 2022, the Federal Circuit issued a decision in Qualcomm Inc. v. Apple Inc., concluding that “‘patents or printed publications’ that form the ‘basis’ of a ground for inter partes review must themselves be prior art to the challenged patent.” 24 F.4th 1367 (Fed. Cir. 2022). Then, in June 2022, Director Vidal issued new guidance expanding the ability of petitioners to rely on AAPA. The guidance eliminated the requirement that a prior art patent or printed publication, rather than AAPA, must form the “foundation or starting point” of an IPR ground. The guidance instead directed Board panels not to preclude the use of AAPA when used in combination with patents or printed publications based on the number of claim limitations the AAPA supplies or the order in which the petition presents the obvious combination.

Pursuant to the guidance, petitioners can generally rely on AAPA in an obviousness ground if it is used in combination with a patent or printed publication, and regardless of whether one supplies more claim limitations than the other. Consistent with these new guidelines, in MED-EL Elektromedizinische Gerate v. Advanced Bionics AG (IPR2020-01016, 2021-00044), Director Vidal sua sponte ordered director review and vacated a final written decision that rejected the use of AAPA in an obviousness ground because the AAPA formed the “foundation or starting point” of the ground.

For more information, please see our article “2022 Ushers in New Developments in the Patent Review Process.”

Director Vidal Issues Sanctions for Abuse of IPR Process

In OpenSky Industries, LLC v. VLSI Technology, LLC (IPR2021-01064) and Intel Corporation v. VLSI Technology, LLC (IPR2022-00366), Director Vidal sanctioned OpenSky Industries, LLC, but allowed Intel to continue as a joined petitioner.

By way of background, on March 2, 2021, a West Texas jury found Intel Corporation’s chips infringed U.S. Patent No. 7,725,759 (the ’759 patent) under the doctrine of equivalents, awarding its owner, VLSI Technology, LLC, $675 million. That judgement is on appeal. Meanwhile, the USPTO spent a substantial part of 2022 grappling with the propriety of various post-grant challenges to the ’759 patent, and whether the patent should have been issued in the first place.

Intel filed two petitions against the ’759 Patent—one in October 2019 and another in February 2020. These two petitions challenged non-overlapping sets of claims, though the claims found to be infringed by the West Texas jury were spread across both petitions. Each of these petitions were denied under the PTAB’s Fintiv doctrine. The PTAB panel that decided each assumed a trial date in late 2020. Though the trial date was delayed about three months after institution was denied, the trial ultimately took place two months before the earliest final written decision was due.

About a year later and three months after the West Texas jury verdict, an entity called OpenSky Industries, LLC, filed IPR petitions against various VLSI patents, including the ’759 patent. OpenSky’s petition against the ’759 patent combined the grounds asserted in Intel’s two earlier petitions. This petition asserted grounds against all of the claims found infringed by the West Texas jury, as well as a few others. In its preliminary response, VLSI focused on this being a late, opportunistic, and cumulative challenge to the ’759 patent. VLSI noted that Intel had chosen not to pursue its IPR grounds before the jury on the eve of trial, though it could have done so. VLSI also noted that OpenSky had not retained its own experts, but had instead “refiled Intel’s expert declarations, without even updating the cover pages.” Indeed, shortly after OpenSky’s filing, another entity, Patent Quality Assurance, LLC, filed petitions against a number of the same VLSI patents and claimed to have “exclusively” retained Intel’s experts, such that only it (and not OpenSky) would be able to produce the experts for deposition. Both PQA and VLSI argued that without access to Intel’s experts, OpenSky’s petitions were based on hearsay.

The PTAB panel dismissed VLSI’s arguments and instituted OpenSky’s petition on December 23, 2021. Though it admonished OpenSky for failing to secure its experts prior to filing, the PTAB panel found that there was insufficient evidence to show that Intel’s experts would not testify on behalf of OpenSky. The decision turned, in part, on PQA amending its assertions about its “exclusive” retention of at least one of Intel’s experts. Ultimately, the PTAB panel found that the grounds in OpenSky’s petition had not previously been considered by the Office (since the Intel IPRs were denied under Fintiv and the merits were not addressed) or the District Court (where the jury considered invalidity on a distinct ground) and found the grounds to satisfy the institution threshold of § 314(a). Further, the PTAB panel found that the Board’s General Plastic precedent was inapplicable, because OpenSky had not changed Intel’s grounds, and therefore not gained any advantage from the subsequent filings.

Within days of the Board’s institution of OpenSky’s petition, Intel filed its own copycat petition and motion for joinder to OpenSky’s IPR. Shortly thereafter, VLSI filed a request for rehearing of the institution decision and a request for Precedential Opinion Panel review. In its request, VLSI argued that, by “focusing solely on the non-exhaustive factors described in prior decisions such as General Plastic and Fintiv, the panel failed to weigh the overarching interests of fairness to the parties and the integrity of the patent system.” In effect, VLSI asserted that the Board should deny institution of petitions filed after successful jury verdicts based on the same patent, especially where those petitions were copycats of petitions earlier filed by the defendant.

On June 7, 2022, Director Vidal ordered a Director review of the institution decision. Director Vidal’s order initially “discern[ed] no error in the Board’s decision to institute review of a meritorious Petition where the challenged patent was previously litigated in district court and was the subject of previous inter partes review proceedings, which were not instituted based on Fintiv.” However, wary of OpenSky’s objectives in filing its petitions and the character and purpose of OpenSky’s communications with Intel and VLSI after filing, the Director’s order also asked two questions related to “issues of first impression”:

1. What actions the Director, and by delegation the Board, should take when faced with evidence of an abuse of process or conduct that otherwise thwarts, as opposed to advances, the goals of the Office and/or the AIA; and
2. How the Director, and by delegation the Board, should assess conduct to determine if it constitutes an abuse of process, or if it thwarts, as opposed to advances, the goals of the Office and/or the AIA, and what conduct should be considered as such.

To answer these overarching questions, Director Vidal ordered briefing regarding various interrogatories and extensive document discovery related to OpenSky’s formation and funding, OpenSky’s purpose in filing the IPRs, OpenSky’s communications with other parties related to the filing and potential settlement or termination of the IPRs, and communications with the retention of Intel’s experts. Since its inception the PTAB has generally limited discovery in IPRs and often declines discovery requests for more than specific documents or questions that are shown to be in the interests of justice. Director Vidal’s interrogatories and mandatory discovery requests therefore represent one of the broadest discovery inquires in the PTAB’s 10-year history. OpenSky objected to these discovery requests and refused to provide further documents, particularly related to its formation and funding.

Director Vidal issued her decision on the Director review on October 4, 2022, and it addressed two main issues: (1) sanctions for OpenSky’s refusal to comply with the discovery requests and its conduct in filing the IPR petitions; and (2) whether the IPR should continue forward with Intel as the petitioner.

Due to its failure to comply, the Director’s review decision determined that “…the proper sanction is to hold disputed facts as established against OpenSky.” Accounting for these adverse inferences and the record as it existed in the proceeding, the Director determined that “OpenSky’s subsequent conduct made clear that OpenSky was using the IPR process to extract payment from either Intel or VLSI without meaningfully pursuing unpatentability grounds.” “OpenSky sought monetary payment from Intel in return for success in the IPR,” and when Intel refused to pay, OpenSky negotiated settlement payments with VLSI.

The Director’s review decision notes that “it is not per se improper for a person not charged with infringement to file an IPR petition, the posture of a petitioner, in conjunction with other surrounding circumstances, could raise legitimate questions about whether the petition is reasonably designed to advance the beneficial aims of the AIA or this Office and whether, in addition, the filing amounts to an abuse of process.” However, given the facts present with respect to OpenSky’s case, the Director determined that “the sole reason OpenSky filed the Petition was for the improper purpose of extracting money from either or both Intel and VLSI” and that doing so “is an abuse of process warranting sanctions.”

The Director review decision notes a number of factors that may be relevant in future cases considering abuse of process, including the petitioner’s interest in the proceeding, whether there has been a recent trial verdict awarding significant damages, the proximity of petitioner’s formation to the jury award, petitioner seeking compensation from both parties to the jury award, failure to meaningfully pursue the merits of the case, and filing a copycat petition. While the Director noted that each of these factors alone may not be determinative, the decision found that these factors may give rise to questions about a petitioner’s true motivations, potentially giving rise to the use of similarly broad inquires and discovery against future petitioners accused of abuse of process. Indeed, the Director review decision makes clear that termination of the entire IPR may be appropriate “in future proceedings reflecting an abuse of process.”

Yet, when faced with the question of whether to terminate this IPR, the Director ultimately determined that such an outcome would not be appropriate. The Director review decision highlights the balancing of two primary interests: (1) the harm of allowing invalid patents to remain in force, and (2) the incentives of providing inventors reliable patent rights in exchange for the public disclosure of their inventions. The Director review decision sought to balance these interests by asking the original PTAB panel assigned this case to determine whether “the unpatentability merits were compelling as of the time of institution and on the record as it existed at that time.” This “compelling-merits standard” is consistent with the one articulated in the Director’s June 2022 Fintiv memorandum, which the decision notes “is a higher standard than the reasonable likelihood required for the institution of an IPR under 35 U.S.C. § 314(a)” and is met where “it is highly likely that the petitioner would prevail with respect to at least one challenged claim.”

On October 14, 2022, the original PTAB panel found that OpenSky’s IPR petition against the ’759 patent satisfied the compelling-merits standard. Only three days later, “feel[ing] duty-bound to conduct an independent Director review of the compelling merits determination based on the unusual and complex nature of this case,” the Director authorized the parties to provide briefs regarding whether the original IPR petition satisfied the compelling-merits standard. In supporting the application of the compelling-merits standard, the Director’s order of another review reasoned that, “[w]hile it is incumbent on the USPTO to maintain and affirm the patents it issues in order to incentivize and promote innovation and investment in the same, and while the Office has solicited public input and is working on updating policy on the same, I am aware of no compelling public policy that would suggest that that USPTO should look the other way when presented with highly questionable patents the AIA was meant to address.” The Director’s broadly worded defense of the compelling-merits standard indicates that petitioners may benefit from pressing for its application in any case where discretionary denial is being considered, not just with respect to Fintiv.

VLSI filed two requests for rehearing, a first against the Director review decision and a second against the PTAB panel’s remand decision. In the first, VLSI argued that the “sanctions” issued by the Director to demote OpenSky and potentially award fees “promise no relief, and treat VLSI differently from other patent owners,” who will have similar petitions denied before a barred party like Intel can be joined. In the second request for reconsideration, VLSI argued that the original institution decision evidenced that the compelling-merits standard was not met and that there were numerous legal and factual reasons that the proceeding should be dismissed.

The Director dismissed both of these requests in separate decisions, finding first that the original petition presented compelling merits, and later finding that the “sanctions” ordered were the appropriate balance of interests in this highly unusual case. In dismissing VLSI’s request for reconsideration of the sanctions decision, the Director admonished “VLSI and its counsel for supporting their arguments with misleading statements of law and fact in contravention of their obligations under 37 C.F.R. § 11.303,” and ordered VLSI to “show cause as to why it should not be ordered to pay Intel the reasonable attorney fees they incurred responding to VLSI’s Rehearing Request.” In doing so, the Director “want[ed] to make clear to the parties and the public that we will hold attorneys and parties accountable for the ethical obligations they owe to the Board.”

The entire VLSI saga has been a winding one and has certainly produced a number of very interesting orders. Throughout, the Director sought to balance protection of patent owners from an abuse of AIA trials with a strong and broad defense of AIA trials generally. The decisions open the door to future arguments by both petitioners and patent owners related to issues such as the standing of parties to request PTAB review of a patent, the breadth of discovery into the same, the proper approach to discretionary denial, and the duty of counsel to conduct themselves appropriately before the PTAB.

The Year in Biopharma at the PTAB

In calendar year 2022, there were a total of 86 post-grant petitions filed involving biopharma patents, which we define as those having issued in USPTO Technology Center 1600. These petitions accounted for about 6% of all petitions filed in 2022. Post-grant filings in the biopharma space are down about 14% from 2021, putting the number of petitions roughly in line with 2020. The majority of petitions filed in 2022 were IPR petitions, at 74, compared to only 12 PGR petitions. Of the cases that reached an institution decision in 2022, 75% were instituted – roughly in line with the 77% instituted in 2021.¹¹

The most active petitioners in 2022 were Guardant Health, Inc., Mylan Pharmaceuticals, Inc., and TwinStrand Biosciences, Inc. The most challenged patent owners were Sydnexis, Inc., and Guardant Health, Inc. (tie); Bausch Health Ireland, Ltd., the University of Washington, and Regeneron Pharmaceuticals, Inc. (tie); and Teva Pharmaceuticals International, GmbH. Some of the most-challenged biopharma patents in 2022 were related to methods for reducing errors in DNA sequencing. TwinStrand Biosciences and its exclusive licensor, the University of Washington, sued Guardant Health, Inc. in the District of Delaware in August 2021. Subsequently Guardant Health and TwinStrand filed cross-IPRs challenging each other's respective patents in a total of fourteen separate challenges. As of publication, two had been instituted, both on behalf of challenger Guardant Health. Three challenges remain outstanding, and none yet have reached a final written decision.¹²

Activity in the biologics and biosimilars space at the PTAB in 2022 was roughly in line with 2021, with 15 IPR petitions and two PGR petitions filed. While this is a slight decline from the 18 IPR petitions in 2021, it is still significantly busier than the recent low of only two IPR petitions in 2020. Regeneron’s patents related to aflibercept, marketed under the trade names Eylea® and Zaltrap®, saw the most activity before the PTAB over the last year. Mylan filed five IPR petitions against five different Regeneron patents over the course of 2021 and 2022. After the PTAB instituted two of the challenges in November 2021, Celltrion and Apotex filed substantially similar petitions and joined the instituted IPRs. In November 2022, the PTAB issued final written decisions finding both patents invalid. Regeneron has since appealed these decisions to the Federal Circuit. Meanwhile, Two of Mylan’s other petitions were instituted in January 2023, with an institution decision expected on the last outstanding petition in April. Apotex has also challenged an additional Regeneron patent, with an institution decision expected in March.

For more information about post-grant developments in biologics and biosimilars, please see our Biosimilars 2022 Year in Review.

The PTAB Pro Bono Program Launches

In March 2022, the USPTO launched a PTAB Pro Bono program in collaboration with the PTAB Bar Association. The PTAB Pro Bono Program was soon thereafter announced to over 100 practitioners at the PTAB Bar Association’s annual meeting. The PTAB Pro Bono Program offers free legal assistance for inventors and patent owners who may not be able to afford legal representation when appearing before the PTAB.

The program is administered by the PTAB Bar Association, who developed the website for both accepting inventor, patent owner, and volunteer applications and for administrating the subsequent representation.

To be eligible for the PTAB Pro Bono Program, an inventor or patent owner must meet certain financial thresholds and other criteria. The PTAB Bar Association reviews submitted applications, and if the applicant satisfies the eligibility requirements, the PTAB Bar Association will match the applicant with a volunteer attorney.

The program relies on volunteer attorneys who are willing to provide free legal assistance to the applicant. To date, the program has received applications from more than 40 volunteer attorneys.

The program began accepting applications for inventors and patent owners on June 1, 2022. The program is currently limited to ex parte PTAB proceedings, such as appeals from application prosecution. However, the USPTO hopes to expand the PTAB Pro Bono Program to include IPR and PGR proceedings.

Post-Grant at the Federal Circuit

Litigation trends at the U.S. Court of Appeals for the Federal Circuit in 2022 looked remarkably similar to prior years. In FY 2022, the court heard just over 1,400 cases, compared to just under 1,600 in FY 2021 and about 1,500 in FY 2020¹³. Cases from the USPTO once again dominated, making up 37% of the court’s caseload. Patent cases from U.S. District Courts made up another 21% of the court’s cases, bringing the total percentage of patent cases to 58% of the court’s caseload¹⁴. The court also continued to side with the PTAB in the vast majority of PTAB appeals, affirming the Board in 75% of appeals, while reversing in only 11%.¹⁵

This year, the Federal Circuit issued notable cases touching on standing, estoppel, and obviousness, among other issues.

Below are the key highlights and takeaways from these cases.

Standing

While any “person” who is not the patent owner has standing to bring an IPR, Article III of the Constitution limits judicial review to cases in which there is a live “case or controversy.” That means that a losing petitioner has to be able to show an “injury-in-fact” – i.e., a concrete and immediate risk of harm. Two Federal Circuit decisions over the past year addressed the issue of injury-in-fact and further clarified what that test requires.

Apple, Inc. v. Qualcomm, Inc.

In Apple, Inc. v. Qualcomm, Inc., 17 F.4th 1131 (Fed Cir. Nov. 10, 2021), Apple petitioned for IPR on several Qualcomm patents and tried to appeal the Board’s decision when the Board found some of the challenged claims not unpatentable. While the PTAB proceedings were ongoing, the parties entered into a license agreement that resulted in the dismissal of Qualcomm’s underlying infringement suit against Apple. Qualcomm thus argued that at the time the Board issued its decision, Apple no longer had standing to appeal.

The Federal Circuit agreed with Qualcomm and found that it was bound by stare decisis to dismiss the appeal. The court reasoned that this appeal was no different from a previous appeal involving patents subject to the same license agreement as the patents in the current appeal, where the court found that Apple lacked standing. Further, the court found that, as in the previous appeal, Apple’s supporting declarations on injury and likelihood of being sued were not specific or detailed enough to show a concrete and imminent threat of harm. Finally, the court said the only new argument Apple raised in the current appeal – namely, that Qualcomm might sue if Apple stopped paying the agreed-upon ongoing royalty – was too speculative to carry Apple’s burden, so it dismissed the appeal.

Intel Corp. v. Qualcomm, Inc.

In a related case, Intel Corp. v. Qualcomm, Inc., 21 F.4th 784 (Fed. Cir. Dec. 28, 2021), the court reached the opposite conclusion of Apple v. Qualcomm. Here, Intel and Apple petitioned for IPR on one of Qualcomm’s patents. After the Board found several claims not unpatentable, Intel went to appeal, while Qualcomm argued for dismissal based on lack of Article III standing.

The court found that Intel did have standing to appeal. It noted that, in an infringement case brought by Qualcomm against Apple, Qualcomm mapped its claims to Intel’s part, which was sufficient to show a likelihood of suit against Intel. The court further said it did not matter that Intel was not a party to that infringement suit, because Intel “need not face a specific threat of infringement” – it was enough that Intel was engaging in activity that gave rise to a possible infringement suit because it was still making the part that Qualcomm mapped to its claims. Finally, the court found that the fact that Qualcomm and Apple ultimately settled the infringement suit did not affect Intel’s standing to appeal because Intel was not a party to that settlement.

Takeaways

The key takeaway from the two standing cases is that practitioners should analyze standing from the very start of an appeal, and even before, if possible. For petitioners at the PTAB, it is important to think early on about what might happen if you lose and advise your clients appropriately. It is very possible that your journey may end at the PTAB if you are not currently being sued for infringement or if there is not a very clear path for your activity to lead to an infringement suit.

These cases also demonstrate the importance of declarations that support an appellant/petitioner’s alleged harms. Make declarations as specific and detailed as possible. You have to explain what activities your client has been engaged in that might give rise to a suit and explain the nature of the relationship between your client and the opposing party so the court can conclude that a lawsuit is imminent. For patent owners, look carefully at what petitioners’ declarations omit and try to use those holes to show a lack of concrete and imminent injury.

Estoppel

Another prominent topic in the Federal Circuit’s appeal docket is estoppel related to PTAB proceedings. Last year, the Federal Circuit decided notable cases touching on two types of estoppel: estoppel into litigation and estoppel among different IPRs.

Estoppel into litigation

In CalTech v. Broadcom, 25 F.4th 976 (Fed. Cir. Feb. 4, 2022), the court overruled Shaw Indus. Group, Inc. v. Automated Creel Systems, Inc., 817 F.3d 1293 (Fed. Cir. 2016), because of SAS Institute Inc. v. Iancu, 138 S. Ct. 1348 (2018). Shaw held that a party will not be estopped under 35 U.S.C. § 315(e) for claims on which the Board denied institution because those are not grounds that the petitioner could have raised during the IPR. But in SAS, the Supreme Court abolished partial institution, which had the effect of expanding estoppel to every ground the petitioner raised or could have raised in the petition. The court in this case thus recognized the change SAS made on estoppel, and held, “[E]stoppel [into litigation] applies not just to claims and grounds asserted in the petition and instituted for consideration by the Board, but to all grounds not stated in the petition but which reasonably could have been asserted against the claims included in the petition.”

IPR-to-IPR estoppel

In Intuitive Surgical v. Ethicon, 25 F.4th 1035 (Fed. Cir. Feb. 11, 2022), petitioner Intuitive Surgical filed three IPRs at the PTAB on the same day. On January 13, 2020, the Board decided two of the IPRs. A little over a week later, Ethicon moved to terminate Intuitive Surgical as a party to the third petition, arguing that Intuitive Surgical was estopped from proceeding with that IPR under 35 U.S.C. § 315(e) in light of the January 13 decisions on the companion IPRs. The Board agreed with Ethicon and found Intuitive Surgical was estopped from maintaining the third IPR after the final written decisions in the other two IPRs.

On appeal, Intuitive Surgical argued that estoppel existed only because the Board created the situation that led to it; had the Board acted on all three petitions on the same day, as it does in almost all cases, there would have been no estoppel. The Federal Circuit nonetheless affirmed the Board’s estoppel finding, reasoning that Intuitive Surgical could have raised the grounds in the third petition in either of the first two petitions, so estoppel applied.

Takeaways

Practitioners should discuss potential estoppels with clients in advance of filing an IPR to ensure that they understand the risks. When filing multiple petitions, consider case sequencing and the options available to affect sequencing, such as stays and delays, as these can affect whether estoppel will apply. In the case of estoppel from litigation into IPR, there are several ways to speed up and slow down the proceedings as needed, but keep in mind that your opponent can do the same. When facing estoppel from IPR into litigation, consider how your “real art” in District Court differs from your “paper art” presented to the PTAB. Where there is overlap between the art you raised in IPR and the art you raise in court, identify how the real art differs from the paper art so that you can argue that it is not the same ground you could have raised in the IPR (e.g., argue that the machine that was sold more clearly disclosed the claim limitations than the prior art patent).

Obviousness

Finally, the court issued several decisions that turned on obviousness issues; below, we summarize a few cases touching on various prongs of the obviousness test.

Motivation to combine

Intel Corp. v. Qualcomm, Inc., 21 F.4th 784 (Fed. Cir. Dec. 28, 2021), discussed above in the standing section, also presented an obviousness issue by way of substitute claims that Qualcomm added during PTAB proceedings. The substitute claims related to radio frequency communication systems where the added limitations involved the use of switches on the transistors for these devices. Intel argued that a skilled artisan would have been motivated to combine references that rendered the claims obvious because doing so would improve energy efficiency. The Board found Intel’s energy efficiency theory to be too generic to satisfy the test for motivation to combine.

The Federal Circuit disagreed and reversed, holding that motivations with broad applicability are not necessarily insufficient; the question is whether the evidence and testimony supporting the broadly applicable motivation is too conclusory. The court found that the testimony from Intel’s expert was sufficiently detailed to show why a skilled artisan would have been motivated by energy efficiency concerns to combine the prior the art and arrive at the claimed invention. It also helped Intel’s arguments that one of the references expressly flagged power consumption as a consideration, thereby forming, in the reference itself, a basis for the “generic” motivation.

Another motivation to combine case, Fleming v. Cirrus Design Corp., 28 F.4th 1214 (Fed. Cir. Mar. 10, 2022), concerned ballistic parachute systems. The claims at issue discussed autopilot-capable aircraft that used these systems. The claims recited specific flight maneuvers (e.g., increase pitch, reduce roll, change altitude) that the autopilot system should take when it received a request to deploy the parachute system.

Cirrus petitioned for IPR using two prior art references. It was undisputed that neither reference fully disclosed employing the claimed flight maneuvers in the event the parachute system was deployed. The court nonetheless affirmed a finding of obviousness, finding that the combination of references together disclosed the flight maneuvers. It noted that a skilled artisan is also a “person of ordinary creativity,” so it was enough that the prior art suggested taking certain safety measures when this request to deploy came up, even if they were not the exact ones claimed, because a skilled artisan with ordinary creativity would understand the combination to disclose the similar, claimed maneuvers.

Reasonable expectation of success

In Eli Lilly & Co. v. Teva Pharmaceuticals International GmbH, 8 F.4th 1331 (Fed. Cir. Aug. 16, 2021), the claims addressed methods of treating vasomotor systems, including migraines, with antibodies that inhibit certain proteins. The Board had found the claims non-obvious because the petitioner had not shown that an artisan reasonably would have expected success in administering those antibodies to treat migraines based on the references. On appeal, Lilly argued that the Board applied the wrong standard because it focused on the lack of clinical data in the references. The court rejected Lilly’s argument, finding that the Board did not require anticipation-level clinical data from the prior art, but instead simply and properly required proof that a skilled artisan would have expected some effect on the migraine symptoms sought to be resolved by the invention.

Objective indicia of success

In Auris Health, Inc. v. Intuitive Surgical Operations, Inc., 32 F.4th 1154 (Fed Cir. Apr. 29, 2022), the claims addressed a robotic surgery system that used an exoskeleton controller, worn by a physician, to manipulate a pair of robotic arms that each held a surgical instrument. At the PTAB, the patent owner convinced the Board that physicians are skeptical of using robots in surgery, and thus a skilled artisan would not have made the modifications necessary to reach the claimed invention. The court disagreed, noting that general skepticism about robots is not enough; the patent owner would have had to show some specific skepticism aimed at the invention. The court also noted that such skepticism arguments are usually made in the context of objective indicia, not to show lack of motivation, and even in the objective indicia setting, the skepticism needs to be tied to the specific claims. The court thus vacated the non-obviousness finding and remanded to the Board.

Takeaways

For practitioners, a key takeaway from these cases is not to get stuck in formulaic approaches to obviousness – rather, be practical and persuasive. When crafting motivation to combine arguments, find ways to make obviousness arguments specific to the teachings in the art rather than using generalized “make it better” explanations. Also, it is important to not only explain the benefit that would lead to the motivation, but to explain that a skilled artisan at the time would have known of such benefit. As a patentee, study the entire prior art reference for all if it teaches to identify any contradictory teachings that underlie the claimed motivation.

For even more insights into post-grant appeals at the Federal Circuit in 2022, please see our Post-Grant for Practitioners: Post-Grant Appeals webinar.

¹ 141 S. Ct. 1970 (2021).

² https://www.uspto.gov/patents/patent-trial-and-appeal-board/interim-process-director-review

³ IPR2020-01016 & IPR2021-00044.

⁴ IPR2020-01234.

⁵ IPR2022-00199.

⁶ IPR2022-00861 & IPR2022-00862.

⁷ IPR2021-01556.

⁸ IPR2021-01124, IPR2021-01125, IPR2021-01126 & IPR2021-01129.

⁹ PGR2022-00021.

¹⁰ IPR2022-00530.

¹¹ Source: Lex Machina as of January 24, 2023.

¹² Source: Lex Machina as of January 27, 2023.

¹³ Data from HistoricalCaseloadGraph_83-22.pdf (uscourts.gov) as of September 30, 2022.

¹⁴ Data from HistoricalCaseldbyOrigin-FY22.pdf (uscourts.gov) as of September 30, 2022. A small number of the agency appeals involve trademarks.

¹⁵ Data from LegalMetric, date range January 2013-July 2022