2019 Patent Trial and Appeal Board Key Practice Updates: A Year in Review

Article co-written by Yuri Levin-Schwartz, Ph.D., a law clerk at MBHB.

2019 has been an active year for procedural changes in the Patent Trial and Appeal Board (“PTAB”). These changes include not only the PTAB’s issuance of a Trial Practice Guide July 2019 Update, but also a number of clarifications/interpretations of procedures that the PTAB adopted in 2018 that have modified PTAB practice going forward. We explore a few key updates below.

The Ongoing Importance of Claim Construction

In late 2018, the PTAB did away with the broadest reasonable interpretation standard and finally adopted the litigation claim construction standard from Phillips v. AWH Corp.[1] In spite of the industry attention that this received, there is reason for skepticism as to whether this is really a meaningful distinction. Although some decisions have clearly turned on which standard applies, some have suggested the change is likely to have little effect on validity determinations.[2] Either way, the PTAB’s application of the Phillips standard is clear evidence of its efforts to promote greater predictability and uniformity of its opinions with U.S. courts.

As yet more evidence of the PTAB’s efforts to promote uniformity with the courts, the PTAB’s Trial Practice Guide July 2019 Update reiterated the importance of submitting evidence regarding this standard and constructions under this standard by other courts. [3] For example, the PTAB noted: “Parties should submit a prior claim construction determination by a federal court or the ITC in an AIA proceeding as soon as that determination becomes available.”[4] The PTAB also made clear that such a submission is mandatory if the decision is “relevant information that is inconsistent with a position advanced by the party during the proceeding.”[5] Procedurally, parties seeking to disclose claim construction determinations to the PTAB should preferably do so with the filing of a substantive paper (e.g., the petition or patent owner preliminary response/response, depending on the availability of the evidence). However, if that is not possible, parties may also include them in a submission of supplemental information, with the Board’s permission.

Provisional Claim Amendment Pilot Program Continues to Show Promise

Also in 2018, the PTAB made its Western Digital decision precedential, which addressed many important differences between amending claims in PTAB proceedings vs. other venues (e.g., the contingent nature of amendments, patent owner does not bear the burden of persuasion, “reasonable number” of substitute claims per challenged claim is presumed one-to-one, etc.). In March of this year, in order to strengthen the motion to amend practice and provide direction to Patent Owners, the PTAB launched the Pilot Program for Motion to Amend Practice. Through this Pilot Program, a Patent Owner may: (1) receive preliminary guidance from the PTAB regarding the motion to amend; (2) file a revised motion to amend after receiving (a) petitioner’s opposition to its original motion and/or (b) the Board’s preliminary guidance; or (3) pursue amendment under previous practice (at least for the time being).[6]

The effect this program has had on motion to amend practice this year has been dramatic, nearly tripling the grant rate of motions to amend. Specifically, as of March 31, 2018, in 4233 completed trials, motions to amend were filed only 305 times (approximately 7% of all IPRs). Of those motions, only 7 were granted in full, and only 18 were granted in part. Thus, up until that time, these 25 cases represented less than an 8% grant rate for cases where motions to amend were filed. Since the launch of the Pilot Program, however, 17 out of 76 (22.4%) have been granted. In light of comments from the USPTO concerning the importance of amendment practice in PTAB proceedings,[7] and the launch the Pilot Program itself, perhaps this dramatic increase is not too surprising. However, it is certainly encouraging for patent owners should they find themselves facing challenges in the PTAB.

The Continuing Impact of SAS

In April of 2018, the Supreme Court struck down the longstanding practice of issuing institution decisions on a ground-by-ground basis in SAS Institute, Inc. v. Iancu.[8] Thus, prior to SAS, if a petition was instituted, not all grounds raised in the petition would necessarily become part of the instituted IPR, nor were those non-instituted grounds reviewable on appeal,[9] nor did they create estoppel for non-instituted grounds.[10]

Now, post-SAS, there is no partial institution—instead, the PTAB must institute on all challenged claims or none. So, why does this matter? Ironically, under the previous practice, when the PTAB dismissed a challenger’s weakest grounds as not reasonably likely to establish that the claims are invalid, the challenger was free to re-assert that invalidity ground in litigation; only claims and grounds that the PTAB actually considered in a Final Written Decision were subject to AIA estoppel. Now, however, if the PTAB institutes an IPR, the PTAB must consider and decide all claim challenges/grounds in the final written decision, and, thus, estoppel applies to all claims and grounds that the challenger raised (or reasonably could have raised) in its petition. Thus, challengers face a much greater risk as to all challenges they make based on published prior art in post-grant proceedings.

One interesting question, however, is how does this change affect the Patent Owner’s strategy in these proceedings? Knowing now that institution decisions must be an all-or-nothing determination post-SAS, there may be reasons why a Patent Owner may want to have all published prior art challenges resolved in an IPR rather than in litigation. As such, there may be situations where a Patent Owner may prefer not to file a preliminary response at all, and allow the PTAB to decide if the proceeding should be instituted on its own, and preserve its arguments for the Patent Owner response.

In deciding to implement any strategy, however, the institution rate trends must be taken into account. Specifically, since SAS, institution rates are at a historical low, while pre-institution settlement is at an all-time high:[11]


Thus, preliminary responses are certainly recommended in the vast majority of situations, especially if focused on key issues (e.g., procedural arguments, key claim construction arguments, and attacking alleged prior art).

The Impact of Arthrex

Although not a PTAB update, per se, perhaps the single biggest decision impacting recent PTAB decisions came in the Federal Circuit’s opinion in Arthrex, Inc. v. Smith & Nephew, Inc., in which the Federal Circuit held that an Appointments Clause defect exists in the statutes governing the constitutionality of empaneled APJs at the PTAB.[12] The Federal Circuit also held in Arthrex that such a constitutional defect may be cured by vacating decisions by such APJs and remanding them for new hearings before a new panel of constitutionally-appointed APJs.[13] How the Federal Circuit has actually applied the Arthrex decision to other pending challenges, however, is less concrete.

For example, some Federal Circuit panels have held that the proper course under Arthrex is to vacate and remand these PTAB decisions,[14] sometimes even without oral argument.[15]

Other panels, however, have been less convinced and/or quick to hold Arthrex binding. For example, some panels have denied the relief outright, noting that if not raised in opening briefing, Arthrex challenges are forfeited.[16] Others have asked for additional briefing on the issue.[17] Still others, even when granting Arthrex relief, have differences of opinion on what that relief would actually entail.[18]

In light of this uncertainty since Arthrex, what’s next? We, like most, will be watching how the Federal Circuit responds to the inevitable request for rehearing en banc. [19]

[1] 415 F.3d 1303 (Fed. Cir. 2005) (en banc).

[2] Compare, e.g., PPC Broadband, Inc. v. Corning Optical Commc’ns RF, LLC, 815 F.3d 734 (Fed. Cir. 2016) with Straight Path IP Grp., Inc. v. Sipnet EU S.R.O., 806 F.3d 1356 (Fed. Cir. 2015).

[3] Trial Practice Guide Update (July 2019), available at https://www.uspto.gov/sites/default/files/documents/trial-practice-guide-update3.pdf.

[4] Id. at 16 (emphasis added).

[5] Id. (citing 37 C.F.R. § 42.51(b)) (emphasis added).

[6] See New Pilot Program Concerning Motions to Amend, USPTO, https://www.uspto.gov/patents-application-process/patent-trial-and-appeal-board/new-pilot-program-concerning-motions (last updated Mar. 14, 2019).

[7] Kelly G. Hyndman, USPTO Director Iancu Announces New Day, AIPPI, E-News Articles (Nov. 16, 2018), https://aippi.org/no-show/uspto-director-iancu-announces-new-day/ (stating “[i]t is not in the interest of the patent system as a whole to invalidate a patent entirely if it actually describes patentable subject matter, and appropriately-scoped claims can be drafted.”).

[8] 138 S. Ct. 1348 (2018).

[9] 35 U.S.C. § 319.

[10] See, e.g., Shaw Indus. Grp., Inc. v. Automated Creel Sys., Inc., 817 F.3d 1293, 1300 (Fed. Cir. 2016); HP Inc. v. MPHJ Tech. Inv., LLC, 817 F.3d 1339, 1347-48 (Fed. Cir. 2016).

[11] See USPTO, Trial Statistics IPR, PGR, CBM, Patent Trial and Appeal Board (June 2019), at 6 and 8, available at https://www.uspto.gov/sites/default/files/documents/Trial_Statistics_2019-06-30.pdf.

[12] 941 F.3d 1320, 1335, 1339-40 (Fed. Cir. 2019) (“APJs are principal officers under Title 35 as currently constituted,” and “[a]s such, they must be appointed by the President and confirmed by the Senate; because they are not, the current structure of the Board violates the Appointments Clause.”).

[13] Id. at 1340.

[14] See, e.g., Bedgear, LLC v. Fredman Bros. Furniture Co., 783 F. App’x 1029 (Fed. Cir. 2019).

[15] See Image Processing Techs. LLC, v. Samsung Elecs.Co., 2018-2156 (Fed. Cir. Dec. 5, 2019) (cancelling oral argument and vacating and remanding the IPR decisions based on the briefs, alone).

[16] See, e.g., Customedia Techs., LLC v. Dish Network Corp., 941 F.3d 1173, 1174 (Fed. Cir. 2019); but see Sanofi-Aventis Deutschland GMBH v. Mylan Pharm. Inc., No. 2019-1368, 2019 WL 6130471, at *12 (Fed. Cir. Nov. 19, 2019) (Newman, J., dissenting) (“It is well established that when the law changes while a case is on appeal, the changed law applies. . . . Thus, Sanofi is entitled to the same benefit of the Arthrex decision as are the Arthrex parties. The foundation of a nation ruled by law is that the same rules, as well as the same law, will be applied in the same way to parties in pending litigation.”).

[17] Polaris Innovations Ltd. v. Kingston Tech. Co., Inc., 18-1768 (Fed. Cir. Nov. 8, 2019).

[18] See Bedgear, LLC, 783 F. App’x at 1032 (Judges Dyk and Newman indicated in their concurrence that there is no need for the remedy of remand and new hearing, and instead “the past opinions rendered by the PTAB should be reviewed on the merits, not vacated for a new hearing before a different panel.”).

[19] The deadline for the U.S. Government and/or the appellee in Arthrex to seek rehearing en banc is December 16, 2019. See Fed. R. App. P. 35(c), 40(a)(1). The mandate in Arthrex will issue no earlier than December 23, 2019. Fed. R. App. P. 41(b). The U.S. Government has indicated it intends to file a rehearing request. See VirnetX Inc. v. Cisco Sys., Inc., No. 19-1671, Dkt. 25, at 2-3 (Fed. Cir. Nov. 13, 2019); Steuben Foods, Inc. v. Nestle USA, Inc., No. 20-1082, Dkt. 15, at 2-3 (Fed. Cir. Nov. 13, 2019).