February 9, 2017

USPTO Standards of Review for Inter Partes Review Proceedings

The Administrative Procedures Act (APA) applies to Patent Trial & Appeal Board (PTAB) proceedings, and the Court of Appeals for the Federal Circuit (CAFC) is using the APA to check the PTABā€™s tendency to invalidate claims.

PTAB proceedings ā€” unlike district court litigation ā€” take place in front of an administrative agency tribunal, where they are governed by the APA. Ā In In re NuVasive, 841 F.3d 966 (Fed. Cir. 2016) (NuVasive I) an inter PartesĀ Review (IPR) challenger argued obviousness of NuVasiveā€™s claims covering certain spinal implants over US 2002/0165550 in view of US 5,860,973. The petition did not specifically mention Figure 18 in ‘973. NuVasive responded by arguing that its claimed implant was long and narrow, while the cited art taught long and wide implants. Ā The challenger countered this argument by noting that Figure 18 in ‘973 shows a long and narrow implant. Ā The CAFC vacated the PTABā€™s conclusion of obviousness. Ā The APA (5 U.S.C. Ā§ 706) requires that a reviewing court ā€œset aside agency actionā€¦ not in accordance with law [or]ā€¦ without observance of procedure required by law.ā€ Ā The CAFC concluded that NuVasive was deprived of due process of law because the challenger had waited until after NuVasiveā€™s last opportunity to speak before the challenger raised the issue of ‘973 Figure 18. Ā NuVasive I shows that if an essential (even if only small) part of the challengerā€™s argument is presented for the ļ¬rst time after the patenteeā€™s response, then a PTAB decision relying upon the late-submitted material can be reversed on APA grounds.

When the same challenger attacked a different NuVasive patent in In re NuVasive, No. 15-1670 (Fed. Cir. Dec. 7, 2016) (NuVasive II), the challenger argued that the person of ordinary skill would obtain ā€œadditional informationā€ by combining two references to arrive at the claimed invention. Ā The challenger did not, however, explain what that ā€œadditional informationā€ was. Ā The PTAB did not offer its own explanation for why a person of ordinary skill would combine the cited references, but merely relied on the conclusory explanation from the challengerā€™s expert. Ā The CAFC concluded that this PTAB decision was ā€œunsupported by substantial evidenceā€ and must be set aside under the APA. Ā The CAFC remanded the case for additional PTAB findings and explanations regarding whether a person of ordinary skill would be motivated to combine the two references.

Takeaway: NuVasive I & II demonstrate that the CAFC is applying the APA strictly to IPR proceedings. If you are defending a patent, make sure to insist that the APA is rigorously applied to all steps of the proceeding.

Citation: In re NuVasive, 841 F.3d 966 (Fed. Cir. 2016) (NuVasive I) and In re NuVasive, No. 15-1670 (Fed. Cir. Dec. 7, 2016) (NuVasive II)