Federal Circuit Allows Reconsideration of Non-Instituted Ground in IPR

“The PTAB did not exceed its statutory authority by addressing a non-instituted ground on reconsideration; in fact, it would have violated the statutory scheme for the PTAB not to consider the previously non-instituted ground.”

Judge Kara Stoll

The Federal Circuit on January 9 affirmed a Patent Trial and Appeal Board (PTAB) decision finding AC Technologies, S.A.’s U.S. Patent No. 7,904,680 (the ’680 patent) unpatentable in an inter partes review (IPR) initiated by Amazon.com (Amazon) and Blizzard Entertainment, Inc. (Blizzard). See AC Techs., S.A. v. Amazon.com, Inc., No. 2018-1433 (Fed. Cir. Jan. 9, 2018) (Before Moore, Schall, and Stoll, J.) (Opinion for the court, Stoll, J.).

The claims at issue related to data access and management, namely, storing copies of data across a network to improve data integrity and reduce network lag. Amazon and Blizzard challenged the ’680 patent based on a single prior art reference. They presented three grounds in their petition, all centered on the construction of the term “computer unit.”

The first ground for invalidity argued that a single prior art reference rendered the ’680 patent obvious when “computer unit” was construed narrowly (Ground 1). The second and third grounds were based on a broader construction of “computer unit,” and argued that the same single prior art reference anticipated (Ground 2) and also rendered the claims obvious (Ground 3) the challenged claims. In its institution decision, the PTAB adopted the broad construction of “computer unit” and instituted review on Ground 1 and Ground 2 but found that Ground 3 was mooted by the other grounds. The PTAB ultimately instituted review on whether all claims of the challenged patent were obvious over the prior art and whether some claims were anticipated.

In its final written decision, the PTAB concluded that the prior art did not render any claims obvious under the narrow construction of “computer unit,” but found all but three claims anticipated by the prior art under the broader construction of “computer unit.” The PTAB’s final decision did not discuss whether the remaining three claims would have been obvious as argued by Amazon and Blizzard in Ground 3 under the broad construction of “computer unit.” Amazon moved for reconsideration, and the PTAB reconsidered in light of Ground 3, which had previously not been an instituted ground. The PTAB found that under Ground 3, the remaining three patent claims were invalid, and AC Technologies appealed.

On appeal, AC Technologies argued that the PTAB erred when it invalidated claims based on Ground 3, which was not an instituted ground in the PTAB’s institution decision, because it: (1) exceeded its statutory authority and (2) denied AC Technologies of due process. The Federal Circuit disagreed, affirming the PTAB’s decision. The Court noted that the decision to institute an IPR is a “binary choice,” in that you either institute review or you do not. See SAS Inst. Inc. v. Iancu, 138 S. Ct. 1348, 1355 (2018). If review is instituted, then Federal Circuit precedent requires the PTAB to address all grounds of unpatentability raised by the petitioner. See, e.g., Adidas AG v. Nike, Inc., 894 F.3d 1256, 1258 (Fed. Cir. 2018). Therefore, AC Technologies’ argument that the PTAB exceeded its statutory authority by addressing non-instituted Ground 3 was incorrect; in fact, it would have violated the statutory scheme for the PTAB not to consider Ground 3.

With respect to due process, the Court noted that due process dictates “that parties before the PTAB must receive adequate notice of the issues the PTAB will decide as well as an opportunity to be heard on those issues.” After the PTAB decided to consider Ground 3, AC Technologies was allowed to take discovery and submit additional briefing. Further, AC Technologies could have, but did not, request a hearing specific to Ground 3. Therefore, there was no violation of due process.

The Federal Circuit ultimately affirmed the PTAB’s findings of anticipation and obviousness of the ’680 patent.


Image Source: Gene Quinn © 2018
Judge Kara Stoll speaking at the AIPLA Annual Meeting, October 2018

The Author

Robert Schaffer

Robert Schaffer is an intellectual property partner at Troutman Sanders. Bob applies more than 30 years of experience to IP counseling and litigation. His work includes patent procurement, strategic planning and transactional advice, due diligence investigations, district court patent cases, and Federal Circuit appeals. He regularly handles complex and high-profile domestic and international patent portfolios, intellectual property agreements and licensing, IP evaluations for collaborations, mergers, and acquisitions. In disputed court cases Bob’s work includes representing and counseling client in ANDA litigations, complex patent infringement cases and appeals, and multidistrict and international cases. In disputed Patent Office matters his work includes representing and counseling clients in interferences, reexaminations, reissues, post-grant proceedings, and in European Oppositions. For more information and to contact Bob please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Joseph Robinson has over 20 years of experience in all aspects of intellectual property law. He focuses his practice in the pharmaceutical, life sciences, biotechnology, and medical device fields. His practice encompasses litigation, including Hatch-Waxman litigation; licensing; counseling; due diligence; and patent and trademark prosecution. He has served as litigation counsel in a variety of patent and trademark disputes in many different jurisdictions, and has also served as appellate counsel before the Court of Appeals for the Federal Circuit. Joe also focuses on complex inter partes matters before the U.S Patent and Trademark Office, inventorship disputes, reexaminations and reissues. His experience includes numerous interferences, a particular advantage in new U.S. Patent and Trademark Office post-grant proceedings. He also counsels on patent–related U.S. Food and Drug Administration issues, including citizen petitions, Orange Book listing, and trademark issues. For more information and to contact Joe please visit his profile page at the Troutman Sanders website.

Robert Schaffer

Dustin Weeks is a Partner in the intellectual property practice group at Troutman Sanders. His practice spans all areas of intellectual property law, including patent prosecution, patent litigation (including Hatch-Waxman litigation), and client counseling. He represents clients ranging from start-ups and solo inventors to Fortune 500 companies. Dustin works closely with his clients to learn their business objectives so that he can tailor strategies to procure, protect, and enforce their intellectual property. Dustin specializes in post-grant proceedings (e.g. Inter Partes Reviews) before the Patent Trial and Appeal Board (PTAB) where he has extensive experience representing both patent owners and petitioners across a wide range of technologies, including wireless networking, pharmaceuticals, MEMs devices, medical devices, and electro-mechanical consumer devices. Dustin's broad experience in patent prosecution, counseling, and patent litigation uniquely positions him to navigate the blended practice of post-grant proceedings.

For more information or to contact Dustin, please visit his Firm Profile Page.

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There are currently 1 Comment comments.

  1. Night Writer January 26, 2019 10:59 am

    So, one of the judges selected by Google ruled against the patent owner. What a surprise. The only solution is to disband the CAFC and reform it with qualified candidates. There is no way Stoll would have ever survived a real vetting process. I interacted with her a bit before she was a judge. Everyone considered her to have character flaws to say the least. No way would she have survived a real vetting process.