Director Review Spotlight: Applicant Admitted Prior Art

Over the past two years, Director Vidal has issued two Director Review decisions related to the proper use of Applicant Admitted Prior Art (AAPA) in Patent Trial and Appeal Board (PTAB) proceedings. In both cases, Director Vidal endorsed the use of AAPA. Here, we provide an overview of each case.

MED-EL Elektromedizinische Geräte Ges.m.b.H. v. Advanced Bionics AG, IPR2020-01016 & IPR2021-00044 (PTAB August 22, 2022)

In IPR2020-01016 and IPR2021-00044, MED-EL Elektromedizinische Geräte Ges.m.b.H. (“MED-EL”) challenged claims 1-24 of a patent owned by Advanced Bionics AG. In its grounds, MED-EL relied on AAPA in combination with prior art patent publications. The Board applied the 2020 AAPA Guidance setting forth the USPTO’s interpretation of 35 U.S.C. § 311(b) and determined that MED-EL improperly relied on AAPA as the basis of the ground to challenge the claims.

On June 1, 2022, the Director initiated Director review sua sponte in view of Qualcomm Inc. v. Apple Inc., 24 F.4th 1367 (Fed. Cir. 2022). In response to the Qualcomm decision, the Director issued new AAPA guidance (“the 2022 AAPA Guidance”) that superseded the 2020 AAPA Guidance upon which the Board relied in its decision. The 2022 AAPA Guidance stated that, if an inter partes review petition relies on admissions in combination with reliance on one or more prior art patents or printed publications, those admissions do not form “the basis” of the ground and must be considered by the Board in its patentability analysis. Since MED-EL relied on AAPA in combination with prior art patent publications, AAPA did not form the basis of MED-EL’s grounds and must be considered by the Board in its patentability analysis. The Director thus vacated the determination in the final written decision that the petition improperly relied on AAPA.

SolarEdge Technologies Ltd. v. SMA Solar Technology AG, IPR2020-00021 (PTAB June 8, 2023)

In IPR2020-00021, SolarEdge Technologies (“SolarEdge”) filed a petition challenging claims in a patent owned by SMA Solar Technology AG (“SMA”). In the final written decision, the Board found that SolarEdge had not shown that the challenged claims are unpatentable because the petition improperly relied on AAPA as the basis for its challenges. Applying the 2020 AAPA Guidance and the holding of Qualcomm Inc. v. Apple Inc., 24 F.4th 1367 (Fed. Cir. 2022), the Board found that the petition improperly used AAPA as the basis for its unpatentability argument because the AAPA formed the “foundation” or “starting point” of the unpatentability argument, and that the petitioner failed to establish that the AAPA was “well-known” or “conventional” as required by the 2020 AAPA Guidance.

SolarEdge then filed a rehearing request, arguing that the Board erred in finding that AAPA formed the “basis” of its grounds and that, since the patent owner had not made the argument that the AAPA system was not “well-known” prior to the oral hearing, the Board should not have considered that argument. The Board reversed its holding and found that the petition’s use of AAPA in combination with prior art patents was not improper since the AAPA was merely used to provide the missing limitations. The Board also agreed that the patent owner forfeited the ability to argue, and that the Board should not have addressed, the “well-known” argument.

Subsequently, SMA filed a request for rehearing and a request for Precedential Opinion Panel (POP) review, arguing that the 2020 AAPA Guidance misinterpreted and misapplied the holding of Qualcomm and constituted improper substantive rulemaking and that the rehearing decision’s reversal of its finding that the AAPA was not an admission was arbitrary and capricious.

The Director dismissed the POP request and granted sua sponte Director Review of the Board’s rehearing decision. The Director reaffirmed the Board’s decision in holding that the petitioner’s obviousness ground based on AAPA in combination with prior art patents was not improper, stating that AAPA may not form the “basis” of the ground for challenge as in 35 U.S.C. §311(b). The Director disagreed with the Board’s holding that the patent owner forfeited the “well-known” argument and argued that the Board could sua sponte raise the issue. Finally, the Director addressed the “well-known” argument by finding that the arguments and evidence the Board relied upon in its final written decision were sufficient to support a determination that the AAPA was “known” in the art. The AAPA was described as “prior-art” in the specification of the challenged patent and was thus an admission regarding what was “known” in the art.