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To avoid running afoul of the APA, patent owners must be permitted to respond to “new” grounds of unpatentability

In In re: NuVasive, Inc., the Federal Circuit vacated and remanded the Board’s final written decision in IPR2013-0508 for further proceedings. At issue was the Board’s reliance on a prior art figure that was first raised in petitioner’s reply and which the Board did not permit the patent owner to address in the preceding.

In August 2013, Medtronic filed an IPR petition challenging the patentability of twenty-two claims of a patent owned by NuVasive (U.S. Patent No. 8,187,334) and directed to implants for spinal fusion surgery. In its reply brief, Medtronic argued–for the first time–that a particular figure in one of the prior art references of record disclosed two of the claim requirements of the ’334 patent. The Board agreed with Medtronic and canceled all but one of the challenged claims.

On appeal, NuVasive objected to not receiving adequate notice of NuVasive’s assertion that the figure (FIG. 18 of U.S. Patent No. 5,860,973 to Michelson) rendered the challenged claims obvious. In addition, NuVasive requested and was denied the opportunity to submit a surreply to address this new argument by the Board.

Not only did the Board deny NuVasive’s request to file a surreply, it prevented NuVasive from presenting any arguments about FIG. 18 of Michelson during the oral argument.

PATENT OWNER:  And in the reply, they specifically point to the alleged narrower disclosure in Michelson, and then they show it in the vertebral space here. The key of figure 18 and figure 19 is that it is showing a modular implant that is designed to be inserted in modular fashion, again, to create a wide implant.

PETITIONER: Your Honor, I again object, that is raising a new argument that’s not in his response.

PATENT OWNER: And this was an argument that we brought to the Board’s attention, Your Honor, that they raised in reply, and we’re just addressing the argument because I will not have an opportunity to address this argument when Mr. Schwartz stands up in reply and points this Board to figures 18 and 19.

JUDGE: But you asked for a surreply and we denied that.


JUDGE: So I think you just need to stick with — you can point out what they argue, but you should not be responding to it at this hearing.

Because NuVasive was not given the opportunity to present evidence or arguments regarding the applicability of FIG. 18 of Michelson to the obviousness inquiry, the Federal Circuit found a procedural violation of the APA and remanded the case for further proceedings.

For NuVasive, however, the victory may be more procedural than substantive. Only two dependent claims were remanded for further proceedings because most of the challenged claims were also found invalid in view of FIG. 18 of Michelson in another IPR proceeding, which the Federal Circuit affirmed in the same opinion. In the other proceeding, Medtronic raised the FIG. 18 argument in the original petition and thus there was no procedural violation.


Posted on 11/18/2016 by Deakin T. Lauer

On remand, PTAB says it did consider an exhibit submitted to show the “state of the art”

In a decision on remand issued on August 15, 2016, a PTAB panel again found patentable claims 1-30 of Verinata Health’s U.S. Patent No. 8,318,430, directed to methods for determining the presence or absence of fetal aneuploidy in a fetus. This time, the PTAB specifically addressed the applicability of an exhibit to the state of the art, responding to the Federal Circuit’s concerns about whether it was considered for that purpose.

In October 2014, the PTAB issued a pair of final written decisions confirming the patentability of all claims of the ‘430 patent. On appeal, the Federal Circuit remanded, finding that the PTAB may have erred in its treatment of the exhibit (the Illumina Brochure). The Illumina Brochure was not included in the proposed grounds of unpatentability, nor was it specifically discussed as part of the Petition. Instead, it was submitted with Petitioner Ariosa’s expert declarations as evidence of the state of the art at the time of the alleged invention. For example, Ariosa’s expert stated that:

“It is my opinion that one of ordinary skill in January 2010 would not only be aware of the use of next generation, massively parallel sequencing [e.g., Ex. 1033; Ex. 1036; Ex. 1011; Ex. 1045], but would have been aware of the commercially-available indexing kit available through Illumina, Inc. in 2008 [Ex. 1010] that allowed for sequencing of 96 different samples on a single flow cell.” (Emphasis added.)

In its 2014 decisions, the PTAB rejected Ariosa’s obviousness arguments and questioned why the Illumina Brochure “could not have been presented as part of the asserted ground of unpatentability in the first instance with the Petition.” This language caused the Federal Circuit to remand the case to the PTAB to clarify whether the it meant (1) that the “development of the argument invoking [the Illumina Brochure] was not adequate (legally proper) or (2) that the Illumina Brochure could not be considered as “evidence of the background understanding of skilled artisans … because the brochure had not been identified at the petition stage as one of the pieces of prior
art defining a combination for obviousness” (legally improper). See Ariosa Diagnostics v. Verinata Health, Inc., 805 F.3d 1359 (Fed. Cir. 2015).

After permitting supplemental briefing by both parties on the question of “how [the PTAB] may have overlooked how Petitioner relied upon [the Illumina Brochure] in the record that went up to the [Federal Circuit],” the PTAB issued another decision confirming the patentability of all claims and clarified its reasons for not finding the challenged grounds of unpatentability persuasive, even in view of the Illumina Brochure.

The Illumina Brochure is marked “FOR RESEARCH USE ONLY,” which may explain why it was not used in an asserted ground of unpatentability. If it is not a “printed publication,” it cannot form the basis of a ground of unpatentability in an IPR proceeding. However, the Federal Circuit’s Ariosa opinion confirms that such background information can be useful to establish the state of the art or to show the level of skill in the art. See also Randall Mfg. v. Rea, 733 F.3d 1355 (Fed. Cir. 2013) (“Reversing finding of non-obviousness where court “narrowly focus[ed] on the four prior-art references” and ignored record evidence of “the knowledge and perspective of one of ordinary skill in the art” to explain motivation to combine or modify references”). Given the PTAB’s hesitancy to consider references not asserted as a ground of rejection, when relying on references for background purposes (e.g., state of the art, level of ordinary skill) careful explanation is necessary to establish exactly how the prior art fits into the story of unpatentability.


Posted on 9/2/2016 by Deakin T. Lauer

Obviousness at the PTAB: Use common sense with care.

On August 10, 2016, in Arendi v. Apple et al., the Federal Circuit reversed a final written decision in which the PTAB held that claims were unpatentable as obvious, finding that the PTAB had improperly relied on common sense to fill a gap in the primary prior art reference.

The court acknowledged that, post-KSR, common sense has a role in the obviousness inquiry, but also spelled out “three caveats … in applying ‘common sense’”: (1) common sense typically provides a motivation to combine and does not fill in missing claim limitations; (2) when common sense is used to fill in a missing limitation, it has always involved “unusually simple” limitations in which the technology is “particularly straightforward”; and (3) in any context, common sense “cannot be used as a wholesale substitute for reasoned analysis and evidentiary support.”

In reversing the PTAB’s finding of obviousness, the Federal Circuit emphasized that common sense should not be used as a substitute for missing claim limitations that “play[] a major role in the subject matter claimed.” The court found that substantial evidence did not support the PTAB’s reliance on common sense to fill an “important limitation” in the claims. The court also noted that “[t]he use of common sense does not require a specific hint or suggestion in a particular reference, only a reasoned explanation that avoids conclusory generalizations.”

Notably, the primary prior art reference here did disclose the missing limitation (as discussed at oral argument), but the PTAB refused to consider that part of the reference because it was not cited in the petition. At oral argument, the panel made a clear distinction between evidence relied on by the Board (can be used as a basis to affirm) and evidence merely in the record (not necessarily helpful to an appellee seeking to establish substantial evidence supporting the PTAB’s final written decision).

The takeaway? Whenever possible, petitioners should (1) include prior art that discloses all challenged claim limitations (unless they are “unusually simple”), (2) carefully cite to all relevant portions of the prior art, and (3) only argue common sense when necessary, and usually only as a reason to combine references.


Posted on 08/12/2016 by Andrew M. Mason

Obviousness prior art: From many comes one?

On July 27, 2016, the PTAB issued five written decisions finding all claims of six patents assigned to Jazz Pharmaceuticals Inc. unpatentable. Each of the patents related to tracking and controlling the distribution of sensitive prescription drugs that have the potential to be abused, misused, or diverted.

An interesting aspect of these decisions is the collective treatment of four exhibits that were discussed together at an FDA Advisory Committee Meeting. The meeting involved a review of the safety of Jazz’s narcolepsy drug Xyrem®. Xyrem® contains gamma hydroxyl butyrate (“GHB”), which has been widely reported for its abuses as a “club drug” or “date rape” drug. Thus, part of the FDA review process for Xyrem® involved discussion of how to limit this potential for abuse. The four prior art exhibits, collectively referred to as the “Advisory Committee Art” or “ACA,” were:

  • an Advisory Committee Meeting transcript and presentation slides
  • a preclinical safety review
  • a briefing booklet
  • a video and transcript

Although each was a separate exhibit, the petitioner (in its IPR petitions) and the Board (in its decisions) generally treated the four exhibits as a single disclosure for the obviousness inquiry. The Board appeared to justify this unitary treatment by noting the close relationship of the exhibits:

“We agree with Petitioner’s analysis and determine that a POSA would have had ample motivation to combine the ACA documents, which were prepared at the same time, relate to the same drug product and the same restricted distribution system, were discussed together at the same Xyrem Advisory Committee Meeting, and were made available via file links from a single FDA web page.”

–IPR2015-00546, Final Written Decision (July 27, 2016), p. 40.

Treating closely related exhibits as a single collection for obviousness has its advantages. For example, you may need to only establish a motivation to combine once. Once linked together, all may be fair game within the collective disclosure.

Tread cautiously, however, if the relationship of the exhibits isn’t that close or the exhibits don’t seamlessly merge into a single collection. Establishing motivation to combine multiple references generally may not be sufficient to establish the motivation to combine specific features in those references. And if the collective disclosure of the related references does not specifically address a claimed feature, it may present a counter-argument: if it would have been obvious to add this feature, why wasn’t it done with the product or method discussed in the related references?

IPR decisions: IPR2015-00545 (8,589,182);  IPR2015-00546 (7,765,106); IPR2015-00547 (7,765,107); IPR2015-00548 (7,895,059); IPR2015-00551 and IPR2015-00554 (8,457,988 and 7,668,730)


Posted on 07/29/2016 by Deakin T. Lauer

Put it all in the Petition, and with particularity. PTAB authority is limited to unpatentability theories spelled out with specificity in the petition.

On July 25, 2016, the Federal Circuit reversed a PTAB finding of unpatentability because the decision was based on unpatentability theories never presented by the petitioner and that were not supported by the record. In re: Magnum Oil Tools Int’l, No. 2015-1300 (Fed. Cir. July 25, 2016).

The proceeding began when McClinton Energy Group filed a petition for inter partes review (“IPR”) of U.S. Patent No. 8,079,413, directed to “fracking” technologies and owned by Magnum Oil Tools Int’l. In its IPR petition, McClinton presented alternative combinations of references or grounds to establish unpatentability.  The first combination was based on a first primary reference combined with secondary references and the second combination was based on the same secondary references with a second primary reference. In the second combination, however, “McClinton merely attempted to incorporate its arguments based on [the first primary reference] to its obviousness analysis based on [the second primary reference]” without providing particularized arguments about the applicability of the second primary reference.  IPR 2013-00231, Petition, p. 18 (“The same analysis applies to combinations using [the second primary reference] as a base reference…”).

The Board instituted on the second combination and, in its final written decision, filled in the gaps in the petition by adopting arguments (e.g., motivation to combine) based on the first combination. In doing so, the PTAB also shifted the burden of persuasion to the patentee, asserting that “Magnum does not explain adequately why the same analysis [provided for the first combination] is not applicable [to the second primary reference].”  IPR 2013-00231, Final Written Decision, p. 23.  The Federal Circuit explicitly rejected this burden-shifting approach, stating that the “burden of persuasion is on the petitioner to prove ‘unpatentability by a preponderance of the evidence,’ 35 U.S.C. § 316(e), and that burden never shifts to the patentee.” In re: Magnum, p. 15. The Federal Circuit also noted that the burden of production also does not change in an IPR proceeding, except in the limited circumstances where the patentee is trying to establish conception and reduction to practice to establish a priority date. In re: Magnum, pp. 15-18.

This decision serves as a reminder to petitioners that all proposed grounds of patentability should be supported by specific arguments and evidence.  Shortcuts, such as conclusory statements about alternative references or combinations, can be problematic. This decision also confirms that in IPR proceedings, unlike ex parte appeals, the PTAB has very limited ability to decide issues not presented in the petition.

“Thus, while the PTO has broad authority to establish procedures for revisiting earlier-granted patents in IPRS, 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 the record evidence.” –  In re: Magnum, p. 26.

 Since an IPR Petition is limited to 14,000 words (formerly 60 pages), a Petitioner may not have sufficient space in its Petition to fully explain the arguments of both the first and second combinations as it would have without such word-limit restriction. To get around this, Petitioners sometimes incorporate arguments from a first combination into a second combination rather than fully argue them separately, especially when a Petitioner recognizes a potential weakness in a reference of the first combination and, as a result, includes another reference in a second combination to shore up such potential weakness. In such situations, and especially in light of In re: Magnum, a Petitioner may be better off filing more than one Petition to ensure that each argument for unpatentability is explained with sufficient particularity.


Posted on 07/27/2016 by Deakin T. Lauer