PTAB / Federal Circuit / Obviousness

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

Published July 27, 2016

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