o 6
`
`Having trouble reading this email? View it in your browser.
`
`MARCH 2017
`
`a
`
`IPRiQ
`ENHANCING YOUR IPR low
`
`SHOCK
`
`PR: The "R" is for "Review" (More Than _
`
`,,
`.
`.
`Reexamlnatlon )
`
`SHARE WITH TWITTER | LINKEDIN
`
`s u B s c R I B E
`
`_ I
`
`,,
`
`Regarding an IPR (Inter Partes Review) as less of a patent-
`reexamination process and more of a petition-review proceeding
`will make for stronger petitions requesting review and crisper
`responses opposing institution. Either way, appreciating the
`difference will increase your IPRiQ.
`
`If you have questions aboutthis ale“)
`please contact:
`
`The burden to show patentability
`never shifts to the patent owner in an
`IPR.
`
`‘ ¥
`
`Jesse Camacho
`
`816-559-2173
`Unlike the initial examination of a patent application, the burden
`to show patentability never shifts to the patent owner in an IPR. mm
`In Magnum Oil Tools Int’l, the Federal Circuit confirmed this
`when it overturned the Patent Trial and Appeal Board’s
`obviousness finding because the Board improperly shifted the
`
`burden from the petitioner to the patent owner to show that the
`
`challenged patent was obvious.[i]
`
`

`

`Procedural burden shifting is a standard part of the initial
`
`evaluation (“prosecution”) of a patent application. When the
`Patent Office carries its burden to show that the claimed invention
`
`is obvious, the burden to rebut that showing shifts to the
`applicant.[ii] Logically, the Patent Office must ensure that the
`application satisfies all necessary statutory requirements before
`granting a patent. Consistently, Magnum confirmed that “a
`
`burden-shifting framework makes sense in the prosecution
`context, where the primafacie case furnishes a procedural tool of
`patent examination, allocating the burdens of going forward as
`between examiner and applicant.”[iii]
`
`But not so in an IPR. The Federal Circuit soundly confirmed that
`neither the burden of persuasion nor the burden of production
`
`shifts during inter partes review: “In an inter partes review, the
`burden of persuasion is on the petitioner to prove” unpatentability
`by a preponderance of the evidence, “and that burden never shifts
`to the patentee.”[iv] The Court rejected the Patent Office’s
`argument that the burden of production (of going forward with
`evidence) shifts to the patent owner as soon as—and because—the
`Board institutes an IPR: “We thus disagree with the PTO’s
`
`position that the burden of production shifts to the patentee upon
`the Board's conclusion in an institution decision that there is a
`
`reasonable likelihood that the petitioner would prevail.”[v]
`
`Why not?
`
`The Federal Circuit explained that “the Supreme Court has never
`
`imposed nor even contemplated a formal burden-shifting
`framework in the patent litigation context” and where “the only
`question presented is whether due consideration of the four
`Graham factors renders a claim or claims obvious,” no burden
`
`shifts from the patent challenger to the patentee.[vi]
`
`The Court cited the adjudicatory nature of an inter partes review
`
`to support its holding that burden shifting was inapplicable: the
`“burden-shifting framework does not apply in the adj udicatory
`context of an IPR.”[vii] Interestingly, a similar argument did not
`get as much traction at the Supreme Court in Cuozzo.[viii]
`
`There, Cuozzo expressly argued that the purpose of inter partes
`review was “to modify the previous reexamination procedures and
`
`to replace them with a ‘trial, adjudicatory in
`nature.”’[ix] Although the context for the Supreme Court
`declining to embrace that position related to a different issue
`(settling the proper claim-construction standard in an IPR), it did
`nevertheless state: “The problem with Cuozzo’s argument,
`however, is that, in other significant respects, inter partes review
`2
`
`

`

`is less like a judicial proceeding and more like a specialized agency
`
`proceeding” and “the purpose of the proceeding is not quite the
`same as the purpose of district court litigation.”[x]
`
`Thus, at least the Supreme Court is not convinced that Congress
`meant inter partes review proceedings to have a different basic
`purpose from the earlier inter partes reexamination
`procedure. Even so, the Federal Circuit’s second key takeaway
`
`will shape the prudent practitioner’s petition.
`
`The Board may review only
`arguments in the petition (and cannot
`set forth its own).
`
`Prior to Magnum, the Patent Office presumed that the Board
`
`could make an obviousness argument on behalf of a petitioner if
`the argument “could have been included in a properly-drafted
`petition.”[xi] That is incorrect. It “is the petitioner that bears the
`
`burden of proof in IPRs[.]”[xii]
`
`Yes, the IPR process is designed to be an efficient way to challenge
`patents, but “it is still a system that is predicated on a petition
`
`followed by a trial in which the petitioner bears the burden of
`proof.”[xiii] Thus, the Court found no support for the PTO’s
`position that the Board was free to adopt arguments on behalf of a
`petitioner that could have been, but were not, raised by the
`petitioner during an IPR. “Instead, the Board must base its
`decision on arguments that were advanced by a party, and to
`
`which the opposing party was given a chance to respond.”[xiv]
`
`In IPRs, the petitioner must demonstrate obviousness. The PTO
`does have broad authority to establish procedures for revisiting
`earlier-granted patents in IPRs, but “that authority is not so broad
`that it allows the PTO to raise, address, and decide unpatentability
`theories never presented by the petitioner and not supported by
`record evidence.”[xv]
`
`Because the Patent Office may not properly consider any
`arguments or evidence outside of the petition, the petition must
`stand on its own.
`
`Conclusions
`
`Before July 2016, practitioners may have thought that patent
`
`owners might have to prove nonobviousness at some point during
`an IPR, or that the Board could rely on arguments outside of the
`
`petition.[xvi] That is not so.
`
`

`

`Wise IPR petitioners will:
`
`-
`
`Prepare petitions that independently include sufficient
`argument and evidence for the Board to find challenged
`claims invalid.
`
`- Appreciate that at all times, it is their burden to show
`unpatentability.
`0 Avoid relying on cross-citing arguments that should be
`independently made.
`Ensure that they themselves set forth a primafacie case of
`anticipation 0r obviousness in the petition.
`
`-
`
`[i] In re Magnum Oil Tools Int’l, Ltd, 829 F.3d 1364,2016 U.S.
`
`App. LEXIS 13461 (Fed. Cir. 2016).
`
`[ii] In re Jung, 637 F.3d 1356, 1365 (Fed. Cir. 2011).
`
`[iii] Magnum Oil Tools, 2016 US. App. LEXIS 13461 at *15-16
`
`(internal quotations and citations omitted).
`
`[iv] Id. at *15 (quotation omitted).
`
`[v] Id. at *18 (internal quotation and citation omitted).
`
`[vi] Id. at *15-16 (internal citations omitted).
`
`[vii] Id. at *16.
`
`[viii] Cuozzo Speed Techs, LLC v. Lee, 136 S. Ct. 2131, 2143 (US.
`2016).
`
`[ix] Id. at 2143.
`
`[x] Id. at 2144.
`
`[xi] Magnum Oil Tools, 2016 US. App. LEXIS 13461 at *29.
`
`[xii] Id. (emphasis added).
`
`[xiii] Id. at *30.
`
`[xiv] Id. (emphasis added).
`
`[xv] Id. at *31.
`
`[xvi] Or other proper portions of the record, such as, potentially,
`
`the patent owner’s preliminary response, opposition, etc.
`
`

`

`SHB.COM
`
`