PTAB Surprises Some by Using Its Standard Operating Procedures to Assert Control of Its Case Law
(as published in Bloomberg BNA's Patent, Trademark & Copyright Journal)
Reproduced with permission from BNA’s Patent, Trademark & Copyright Journal, 89 PTCJ 1557, 04/03/2015. Copyright _ 2015 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com
One of the goals of the America Invents Act (AIA) was to decrease patent litigation by shifting much responsibility for resolving patent validity disputes to the Patent Trial and Appeal Board. In the two and a half years under the AIA, over 2,750 petitions have been filed for such post-grant proceedings before the Board, including Inter Partes Review (IPR), Post-Grant Review (PGR), and Covered Business Method (CBM) patent proceedings, with IPRs representing the vast majority. Given the high success rate for petitioners in IPR filings so far, the number of filings should continue to rise.
While it is well-known among patent practitioners that AIA post-grant proceedings are governed by statute,1
it is less well-known that the Board’s Standard Operating Procedures (SOPs), previously applied to contested cases, are also applicable to AIA post-grant proceedings. Significantly, those SOPs clearly define which Board opinions are precedential. With the Board issuing a vast body of nonprecedential opinions in IPRs, and having introduced and emphasized a confusingly different set of ‘‘Representative Orders, Decisions, and Notices,’’3
practitioners need to be aware that very few Board opinions are actually precedential. This is especially true now that the Board is asserting control of its case law by repeatedly citing the SOPs and increasingly noting when it is rejecting arguments at least in part because they rely upon nonprecedential Board opinions.
Standard Operating Procedures
The Board’s website4
contains a Resources link to a page that contains policies, procedures, rules, guides, tools and manuals which are associated with proceedings before the Board.5
The very first such resource listed on that page is the SOPs.6
SOP 1 relates to the assignment of judges to panels.7
SOP 2 relates to the publication of Board opinions and their designation as precedential for the Patent and Trademark Office, as well as their designation as one of several categories of nonprecedential opinions, including informative, representative, and routine opinions.8
Under SOP 2, the designation of a Board opinion as precedential
must receive approval from the Chief Administrative Patent Judge (CAPJ), the Director and the majority of judges on the Board.9
Precedential opinions are labeled ‘‘Precedential’’ on the cover page of the opinion, are listed on the Board’s website, and serve as ‘‘binding authority in subsequent matters involving similar facts or issues.’’10
In selecting opinions to designate as precedential, ‘‘particular emphasis will be placed on opinions resolving conflicts or addressing novel questions.’’11
An involved party or member of the public can request that an opinion be made precedential by sending a request and supporting reasons to the CAPJ within 60 days of issuance of the opinion.12
By contrast, an opinion designated as informative
by the CAPJ does not represent binding authority on the PTO.13
Reasons for designating an opinion as informative include: ‘‘[p]roviding Board norms on recurring issues,’’ ‘‘[p]roviding guidance on issues of first impression,’’ and ‘‘[p]roviding guidance on Board rules and practices.’’14
Informative opinions are labeled ‘‘Informative’’ on the cover page of the opinion and are posted on the Board’s website.15
Similarly, an opinion designated as representative
by the CAPJ does not represent binding authority on the PTO.16
A reason to designate an opinion as representative is to ‘‘provide a representative sample of outcomes on a matter’’ and ‘‘bring such opinions to the attention of the public.’’17
Representative opinions are posted on the Board’s website.18
Impact of SOP 2 on AIA Post-Grant Proceedings
In what came as a surprise to those inexperienced with trying contested cases before the Board, the Board has applied its SOP 2 to AIA post-grant cases, designating one opinion as precedential and multiple others as informative. The AIA post-grant opinion designated as ‘‘precedential’’ was SecureBuy v. CardinalCommerce
in which SecureBuy had its petition for review of a patent owned by CardinalCommerce denied on the ground that it had already filed a civil action challenging the validity of at least one of the claims it was asking the Board to review. While the opinion was released on April 25, 2014, it was not designated as precedential until July 31, 2014.
As an example of how the procedures work under SOP 2, the designation of this post-AIA Board opinion as precedential offers little guidance. There is no indication in the Patent Review Processing System (PRPS), which is the Board’s electronic docket system, whether a party, a member of the public, or an Administrative Patent Judge (APJ) first nominated this opinion for consideration as precedential. Indeed, there is no indication in PRPS that the opinion was even designated precedential. The last entry regarding the opinion not to institute is the entry of that decision on April 25, 2014. It is only by clicking the link to precedential opinions on the Board’s Decisions page20
that the opinion appears with a stamp on its first page indicating that it has been designated as precedential under SOP 2.
The Board’s designation of this opinion as precedential under SOP 2 was apparently a surprise to many as it received a fair amount of coverage in the press. Even after the Board designated the SecureBuy
opinion as precedential, a party argued that SecureBuy
was nonetheless not controlling because it was improperly decided—an argument the Board readily rejected.21
This express reliance on SOP 2 and issuance of a rare precedential Board decision can be seen as the culmination of the Board’s frustration with practitioners placing undue reliance upon nonprecedential Board decisions in IPRs. As the Board’s list of precedential decisions shows, and as practitioners before the Board in contested matters have long complained, there are shockingly few precedential Board opinions—only 26, all but three of which concern ex parte appeals.22
Thus, practitioners not experienced in practicing before the Board seem to have taken to relying upon nonprecedential Board opinions as if they were binding precedent, and various panels of the Board have been commenting more frequently that those opinions are not binding upon them.23
Since the Board has reminded the bar about the SOPs, these comments dismissing nonprecedential Board opinions at least in part on that ground have only increased.24
This increasing emphasis on the Board’s precedent in its opinions has also occurred in its other public statements.
The Board Is Now Emphasizing the SOPs
Although the Board had consistently made reference to the SOPs in its presentations, those references had generally been buried at the end and included with general information about the Board. In contrast, the Board had spent much time directing practitioners, especially those not familiar with practice before the Board, to the Representative Orders, Decisions, and Notices it began posting and updating soon after deciding the first several issues in IPRs (and a few CBMs). Thus, some practitioners were surprised to learn that there was a whole different system of categorization of Board opinions and their precedential effect for post-grant proceedings.
The Board has since taken steps outside its opinion writing to make the bar more aware of SOP 2, to update its practices to align with SOP 2, and to update SOP 2 in light of its post-grant practices. For example, the Board announced on Sept. 29, 2014 that it had designated under SOP 2 multiple IPR decisions as informative. Seven of those decisions related to the Board’s denial of institution of an IPR under 35 U.S.C. § 325(d) on the grounds that substantially the same arguments and/or prior art had been presented previously to the PTO. A further IPR decision designated as informative provides guidance on the requirements for a motion to amend. Revealingly, this decision was originally included as one of the Board’s Representative Orders, Decisions, and Notices, but the Board subsequently designated it as an informative opinion.25
Several other IPR decisions designated as informative relate to motions for additional discovery and orders related to foreign language depositions and extraterritorial depositions.
Moreover, the Sept. 22, 2014 revision of SOP 2 introduced a new category of nonprecedential opinions, called Representative opinions, discussed above. This revision of SOP 2 aligns the SOP with the Board’s practice of the last two-plus years of posting such Representative Orders, Decisions, and Notices.
What Should Practitioners Do?
With the Board having reemphasized that only a very few of its opinions are binding upon it, and having synced its post-AIA emphasis on the Representative Orders, Decisions, and Notices with its long-standing SOPs governing precedential and informative opinions, how should a practitioner treat a nonprecedential Board opinion? Unlike the U.S. Court of Appeals for the Federal Circuit, there are no specific requirements for citing such opinions, and there is no need to identify the opinion as nonprecedential.
Of course, since only one Board IPR opinion is precedential, the Board will assume a case is not precedential unless told otherwise. Those nonprecedential cases can still have much persuasive authority. SOP 2 says the informative
opinions provide ‘‘norms on recurring issues’’ and ‘‘guidance on issues of first impression’’ and ‘‘Board rules and practices.’’ Those cases which the Board has chosen to designate as being informative for providing such norms and guidance will certainly have great persuasive value and should be relied upon heavily.
opinions ‘‘provide a representative sample of outcomes on a matter’’ and ‘‘bring such opinions to the attention of the public.’’ While these opinions do not seem to be as authoritative as informative
opinions, practitioners should feel comfortable that representative opinions will also have strong persuasive value. They were still chosen by the Board to be provided to the public as representative of what might happen in similar circumstances. Indeed, one panel seemed to equate precedential and informative decisions as binding opinions for later panels.26
The more confusing issue is what to do about the much larger body of routine
Board opinions. The Board is increasingly making clear that its panels might take a different position than an earlier panel did in such a routine opinion. However, those opinions can still have great persuasive value.27
Practitioners need to be aware that a routine opinion of one three-APJ panel will only have this persuasive value to another three-APJ panel. Those who have long practiced before the Board have been aware of this limitation of the Board’s case law; almost all of it is simply persuasive and cannot be relied upon as precedent. Essentially, the only binding precedent is the precedent of the PTO’s reviewing courts (the Federal Circuit and ultimately the U.S. Supreme Court). Of course, those courts seldom decide cases on Board issues, especially for the new post-grant proceedings, so Board decisions need to be cited, but always with the understanding that the panel might not agree. This often requires a little more explanation of the basis for the previous panel’s decision, why it was correct, and why it should apply in the present case.
With the explosive hiring of APJs, these concerns may become even greater. There are several times more APJs handling AIA trials than there are judges in the largest federal district courts. While all APJs are part of the same tribunal, nonprecedential opinions of their colleagues may have even less value for them than they would for district court judges.
The recent application of SOPs to AIA post-grant proceedings was unexpected by practitioners inexperienced with trying cases before the Board, especially since the SOPs have not been the topic of extensive discussion since implementation of the AIA. Practitioners need to be aware that almost all Board decisions are nonprecedential and, thus, only have persuasive value for a given panel.
The Board’s recent designation of opinions as precedential or informative under SOP 2 provides helpful insight into how it will handle commonly occurring issues in AIA post-grant proceedings, beyond the previous Representative Orders, Decisions, and Notices. It also provides optimism that the Board will use this tool to control the development of the case law before the many panels handling post-grant matters.
35 U.S.C. Chapter 31—Inter Partes Review; Chapter 32—Post-Grant Review; and AIA § 18—Transitional program for covered business method patents
37 C.F.R. Part 42—Trial Practice Before the Patent Trial and Appeal Board; Office Patent Trial Practice Guide, 77 Fed. Reg. 48756 (Aug. 14, 2012).
SOP 1 (rev. 13): Assignment of judges to merits panels, motions panels, and expanded panels (12 Feb. 2009).
SOP 2 (rev. 9): Publication of opinions and designation of opinions as precedential, informative, representative, and routine (22 Sept. 2014).
at p. 2.
at p. 3.
at p. 2.
at p. 3.
at p. 4.
19 SecureBuy, LLC v. CardinalCommerce Corp.
, CBM2014-00035 (P.T.A.B. Apr. 25, 2014) (Paper 12) (precedential).
21 GTNX, Inc. v. Intra Inc.
, CBM2014-00072, -00073, -00074, -00075, Paper 16 (Oct. 31, 2014). Paper 20, 20, 21, 20 (Dec. 10, 2014) (‘‘As a precedential opinion, under agency authority (SOP 2), SecureBuy
controls the outcome of this matter based on the facts presented.’’); see also Conopco, Inc. v. Procter & Gamble Co.
, IPR2014-00506, Paper 22 at 2-3 (P.T.A.B. August 26, 2014) (rejecting argument that SOP 1 does not apply to post-AIA procedures).
The Board’s list of precedential opinions is often considered incomplete. For example, on February 3, 2015, a panel characterized Woosley v. Heeres
, Int. No. 104,079, Paper 29, 1999 WL 33219503 (B.P.A.I. April 5, 1999), as a precedential opinion, see Chan v. Yang
, Int. No. 105,982, Paper 87, 2015 WL 471289 (P.T.A.B. Feb. 3, 2015), but that opinion does not appear on the Board’s list of precedential opinions. One explanation for this difference is that the Board does not seem to have included precedent of its Trial Section in its list of precedential opinions, even though those opinions were made precedential under previous versions of SOP 2, and section III.F of SOP 2 says that an ‘‘opinion designated as precedential under a previous version of this SOP remains precedential unless overcome by subsequent binding authority.’’
23 E.g., Microsoft Corp. v. Proxyconn, Inc.
, IPR2012-00026, Paper 28 at 4. (P.T.A.B. Feb. 25, 2013) (‘‘Petitioner’s reliance on [an ex parte
Board decision] is likewise misplaced. This 2-1 decision is non-precedential and thus not binding on this panel. See PTAB Standard Operating Procedure (SOP) 2 (Rev. 7).’’); Veeam Software Corp. v. Symantec Corp.
, IPR2013-00141 2013 WL 8595500 * 10 n.2 (P.T.A.B. Aug. 7, 2013) (‘‘Petitioner relies on [a] non-precedential Board decision [which would not support Petitioner’s argument], even if it were binding on this panel.’’).
24 E.g., Fidelity National Info. Services, Inc. v. Datatreasury Corp.
, IPR2014-00489, -00490 IPR2014-00491 2014 WL 5840661 *2 (P.T.A.B. Oct. 9, 2014) (‘‘We would not be compelled to reach the same result because those cases are not precedential.’’); Valeo North Am., Inc. v Magna Elecs., Inc.
, IPR2014-01203 2015 WL 410625 *5 (P.T.A.B. Jan. 28, 2015) (‘‘Also, the case cited is not precedential and does not set forth a ‘‘requirement’’ . . . . Contrary to what Patent Owner’s argument implies, there is no per se rule . . . .’’); VMware, Inc. v. Good Technology Software, Inc.
, IPR2014-01324 2015 WL 782022 *2 (P.T.A.B. Feb. 20, 2015) (‘‘Petitioner cites to several non-precedential decisions of the Board in inter partes review proceedings, but does not identify any language in the statute or any other persuasive rationale to support [its] argument . . ..’’).
25 Idle Free Sys., Inc. v. Bergstrom, Inc.
, IPR2012-00027, 2013 WL 5947697 *1 (P.T.A.B. June 11, 2013) (informative).
26 See SAP America Inc. v. Clouding IP, LLC
, IPR2014-00299 2014 WL 3945919 *1, *2 (P.T.A.B. July 31, 2014) (‘‘While not precedential or informative, Blackberry Corp.
is nonetheless persuasive authority.’’ ‘‘The assertion is unpersuasive because the Decision to Institute in Oracle Corp.
is not a precedential or informative decision, and thus is not binding.’’).
27 See VMWare
, 2015 WL 782022 *2 (‘‘Further, although the decision is not binding precedent, in Synopsys, Inc. v. Mentor Graphics Corp.
, IPR2012-00042, slip op. at 16 (Feb. 22, 2013) (Paper 16) [cited by petitioner], the panel indicated that the relevant dates for § 315(b) include the filing date of the petition, not just the date of service of the complaint alleging infringement of the challenged patent.’’).