Welcome to Skilled in the Art. I’m Law.com IP reporter Scott Graham. Today I’ve got a look at the Patent Trial and Appeal Board’s and Federal Circuit’s fast response to the Supreme Court’s SAS Institute decision, along with a couple of gray areas still being fleshed out. Also, AbbVie‘s patent battle with Boehringer Ingelheim just got really interesting, and Cisco Systems is trying to put an exclamation point on Oracle v. Google. Lend me an ear and email me your feedback. Or follow me on Twitter.
➤➤ Would you like to receive Skilled in the Art as an email? Sign up here.
Picking Up the Pieces of SAS
When the Supreme Court issued its SAS Institute opinion on PTAB procedures, it might as well have come with a big bag of jigsaw puzzle pieces. The PTAB and the Federal Circuit have been busy ever since piecing together a roadmap for how IPRs are going to work both going forward and for cases already downstream.
On Thursday the Federal Circuit snapped a big piece into place with its ruling in PGS Geophysical v. Iancu. The upshot is that cases already decided by the PTAB but not yet final on appeal won’t have to get sent back to the PTAB for a do-over—at least, not if neither party is demanding one.
The PTAB, meanwhile, has been moving with alacrity to re-do institution decisions, schedule new hearings, and take supplemental briefing and evidence. The agency even issued a handy FAQ to explain how the pieces fit together, though it looks as if the last few are being jammed into place.
Quick recap: IPR petitions often challenge dozens of patent claims across multiple different grounds. In about 40 percent of its decisions instituting proceedings, the PTAB has slimmed those petitions down to a subset of claims and/or grounds. But the America Invents Act says that if the board institutes IPR proceedings, it “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner.” A 5-4 Supreme Court majority ruled in SAS that that means no partial institutions.
One of the questions the Supreme Court left unanswered: What happens to pending appeals from PTAB judgments that now turn out to have been incomplete?
Federal Circuit Judge Richard Taranto answered the question Thursday. “We have jurisdiction to address the merits of the board’s final written decisions,” he wrote in PGS Geophysical. “We need not, and will not, sua sponte revive the ‘non-instituted’ claims and grounds.”
That leaves open the question of what happens if a party asks for remand. But for all the patent owner briefs to the Federal Circuit last year preserving rights to an Oil States challenge, I don’t recall many—or a single one—from a petitioner preserving an SAS challenge. That doesn’t mean someone won’t try, though.
Meanwhile, the PTAB has been unequivocal in its guidance. “PTAB will institute on all challenges raised in the petition or not institute at all (i.e., it will be a binary decision),” the board states in its FAQs. “There will be no partial institution based on claims. There will be no partial institution of grounds.”
But … it’s complicated. For example, the board has cited AIA Section 325(d) in some partial institutions. That provision says the board may reject a request if the same prior art has already been presented to the office.
According to the FAQ, such claims or grounds will now be added back into pending IPR proceedings and addressed in the final written decision, even though 325(d) seems to specifically refer to the decision to institute.
The FAQ also indicates that the board will re-instate claims that were excluded under the AIA’s estoppel provision. But “even though such claims are technically in the proceeding, the panel will decide such claims in favor of the patent owner.”
All of this is keeping PTAB practitioners like Baker Botts partner Eliot Williams on their toes. “The way the board is interpreting SAS now, they can’t deny grounds at the institution stage” while moving forward with others, he said. “Instead they’re going to apply the estoppel provision at the final written decision.”
Are AbbVie’s Humira Hands Unclean?
Remember in April when the Federal Circuit upheld Gilead Sciences’ unclean hands defense against a $200 million patent infringement verdict? Despite the spectacularly bad facts surrounding Merck & Co.’s conduct, the appellate court was very cautious about affirming the little-used defense.
Now Boehringer Ingelheim has leveraged that decision for discovery into its theory that AbbVie has built an anticompetitive “patent thicket” around its $18 billion-a-year anti-inflammatory medication Humira.
My ALM colleague Tom McParland reports that U.S. Magistrate Judge Richard Lloret OK’d Boehringer’s request for production on Monday. Boehringer is represented by Paul Hastings and Saul Ewing Arnstein & Lehr.
Responding to AbbVie’s infringement suit, Boehringer alleges a “global effort to improperly delay competition” against Humira through the pursuit of “overlapping and non-inventive patents for the purpose of developing a ‘patent thicket.’”
The Gilead Sciences decision makes clear that unclean hands can rest on business or litigation misconduct, without a formal showing of fraud, Lloret wrote in his discovery order. While the Federal Circuit did warn of “the potential for misuse” of the unclean hands doctrine, that concern is better addressed in a summary judgment motion, Lloret concluded.
Who Got the Work?
IP holding company Dominion Harbor made a splash last year by acquiring a portfolio of some 4,000 patents from Intellectual Ventures that were originally developed by the Eastman Kodak Co. A few months ago Dominion Harbor, via subsidiary Monument Peak Ventures, filed its first U.S. lawsuits asserting the patents (hat tip: RPX Corp.). One of them targets Shenzhen-based SZ DJI Technology, the world’s largest manufacturer of recreational drones. The case has set Feinberg Day Alberti Lim & Belloli on a Section 101 collision course with Morrison & Foerster in the L.A. courtroom of U.S. District Judge Gary Klausner.
➤ The dispute: Monument Peak is asserting five patents. Four of them relate to recognizing, locating and tracking shapes in digital images. “While scores of digital imaging companies have paid to license the Kodak patent portfolio owned by MPV, the DJI defendants have refused to do so without justification,” the complaint states. DJI has responded with a motion to invalidate the four patents, contending that they’re “directed to image processing by acquiring, analyzing, or displaying information—precisely the type of abstract ideas that the Federal Circuit has found unpatentable.”
➤ The attorneys: As a veteran player in Intellectual Ventures litigation campaigns, Feinberg Day is on familiar turf. Name partners Elizabeth Day, David Alberti, Sal Lim and Marc Belloli are on the case. MoFo partner Bryan Wilson is taking the lead for DJI, along with partner Hector Gallegos and associates Lily Li and Jackie Cheng. Guy Ruttenberg of Ruttenberg IP Law also represents DJI.
Cisco Wants to Build on Oracle v. Google
I don’t think Cisco Systems is going to catch that same lightning in a bottle in its copyright appeal against Arista Networks. As I reported Wednesday, Cisco put Oracle v. Google front and center in its bid to throw out a jury verdict that excused Arista’s copyright infringement under the scenes-a-faire doctrine.
Arista’s theory of the case is “a backdoor attempt to overrule Oracle v. Google,” Quinn Emanuel Urquhart & Sullivan partner Kathleen Sullivan told the Federal Circuit.
Judge Timothy Dyk dominated questioning throughout the hour-long argument. He didn’t sound like he was buying.
Velcro Video: The Sequel
Velcro Cos. is back with another video aimed at deterring improper use of its trademark. This time actors depicting Velcro’s in-house lawyers sing some of the YouTube comments that were dropped on its original viral video.
Some of them aren’t complimentary. But the company’s legal department is willing to take the heat in service of educating consumers about trademark misuse, my ALM colleague Caroline Spiezio reports.
“The point of the video is, you may not have liked the message, but you heard it and you responded to it and that’s what’s important to us,” said Alexandra DeNeve, Velcro’s senior counsel for trademarks.
That’s all from Skilled in the Art this week. I’ll see you all again on Tuesday.