Contributors: Akin Gump Strauss Hauer & Feld LLP
Inventor Declaration Excluded by PTAB Because Examination in Foreign Proceeding No Substitute for Cross-Examination by IPR Counsel
by Thomas W. Landers IV & Rubén H. Muñoz
Patent Trial and Appeal Board, Patent Litigation, Inter Partes Review
Apr. 11, 2022
In two related inter partes review proceedings, the Patent Trial and Appeal Board granted a petitioner’s motion to exclude the declaration of an inventor because the patent owner failed to make him available for cross-examination in the IPR. In making its decision, the PTAB determined that an “examination” of the inventor in Korea—by the petitioner’s separate litigation counsel—was not a suitable replacement for cross-examination by its IPR counsel.
The petitioner challenged two patents related to streaming media content. The patents each name Jin Young Lee and Truong Cong Thang as the sole inventors. After the PTAB instituted review on both patents, the patent owner filed motions to amend. In opposition, the petitioner asserted a new prior art reference under Pre-AIA § 102(a). The asserted reference named six authors, two of whom were Mr. Lee and Mr. Thang.
In reply, the patent owner submitted a declaration of Mr. Lee, which supported the argument that the asserted reference was “authored by the same inventive entity” as the challenged patents and thus was not prior art under § 102(a). The patent owner was unable to produce Mr. Lee for cross-examination in the IPR, however. Apparently, Mr. Lee “understood that . . . he would be questioned about [his declaration only] during his upcoming examination in Korea” as part of the parallel district court proceedings—an examination in which only a Korean judge and the petitioner’s separate Korean counsel could ask questions. In place of producing Mr. Lee for cross-examination in the IPR, the patent owner offered to allow the petitioner to submit transcripts from the Korean examination. The petitioner rejected the offer and moved to exclude Mr. Lee’s declaration.
In its motions to exclude, the petitioner argued that failing to make Mr. Lee available for cross-examination violated the PTAB’s discovery rules, that Mr. Lee’s declaration was inadmissible hearsay, and that submitting a transcript of the Korean examination—in place of cross-examination by its IPR counsel—would prejudice the petitioner. In response, the patent owner argued that the Korean examination qualified as a “cross-examination” in the IPR proceedings and, alternatively, that a hearsay exception applied under FRE 804(b)(1) because the petitioner’s Korean counsel had “an opportunity and similar motive to develop” Mr. Lee’s declaration testimony in Korea.
The PTAB agreed with the petitioner and excluded Mr. Lee’s declaration. As the PTAB explained, “the rules governing routine discovery” allow the PTAB “to consider Mr. Lee’s testimony in his Declaration” only if the patent owner “make[s] Mr. Lee available for cross-examination by Petitioner”—which it failed to do. See 37 C.F.R. §§ 42.51–42.53. The Korean examination did not satisfy
the PTAB’s rules because depositions “outside the United States may only be taken upon agreement of the parties or as the Board specifically directs”—neither of which occurred. Id. § 42.53(b)(3). The patent owner also failed to “initiate a conference with the Board at least five business days before” the examination, as required for depositions involving an interpreter. Id. § 42.53(e). Finally, the Board explained that Mr. Lee’s “understanding” that he would only be examined in Korea was not “an extraordinary circumstance” that could justify his unavailability.
The PTAB also excluded Mr. Lee’s declaration as inadmissible hearsay under FRE 801 and 802 because it included out-of-court statements offered for their truth. An exception under FRE 804(b)(1) did not apply because the petitioner did not have “an opportunity . . . to develop” Mr. Lee’s testimony by cross-examination. The PTAB rejected the patent owner’s argument that the Korean examination was an “opportunity” for cross-examination because the petitioner’s IPR counsel could not participate in the examination. Additionally, no evidence showed that the examination followed the procedures for foreign-language depositions set forth in Ariosa Diagnostics v. ISIS Innovation Ltd., IPR2012-00022, Paper 55 (PTAB Aug. 7, 2013) (informative).
Finally, the PTAB explained that excluding the declaration was an appropriate remedy because allowing it to remain in the record would prejudice the petitioner. Namely, “[t]he admissibility [of] the Lee Declaration [wa]s no tangential matter––it [went] to the heart of whether [a key reference] constitute[d] prior art.” Indeed, it was “the only (remaining) piece of evidence in the record that addresse[d] the inventive entity” of the reference. Thus, denying the motion to exclude would have “significantly impact[ed] Petitioner’s ability to address a dispositive issue.”
Practice Tip: Practitioners should proceed with caution when relying on declarants in PTAB proceedings, particularly when the declarants reside in foreign countries. Practitioners should ensure that their declarants are willing and able to sit for a deposition in the IPR proceedings—even if they have been or will be deposed on related subject matter in related proceedings. Moreover, for depositions in foreign countries, practitioners should ensure that they confer with opposing counsel, or get authorization from the PTAB, in a timely manner pursuant to 37 C.F.R. § 42.53(b)(3). Finally, for foreign-language depositions, practitioners must be sure to follow the rules and guidelines set forth in 37 C.F.R. § 42.53(e) and Ariosa Diagnostics.
Vudu, Inc. v. IdeaHub, Inc., IPR2020-01688, Paper 47, IPR2020-01689, Paper 48 (PTAB Mar. 16, 2022).
ALJ Finds Polycrystalline Diamond Compact Claims Patent Ineligible Because They Recite Conventional Structure Combined with Abstract Results
by C. Brandon Rash & Daniel L. Moffett
Abstract Ideas, 35 U.S.C. § 101, Patent Infringement
Apr. 26, 2022
Administrative Law Judge (ALJ) Cameron Elliot recently found no violation of Section 337 in part because the claims recite patent-ineligible subject matter under 35 U.S.C. § 101. The patents are directed to polycrystalline diamond compacts (PDCs) used in drill bits for high-abrasion applications, such as earth-boring. The ALJ found that the claims recite conventional structural features combined with patent-ineligible performance measures and side effects.
Complainant US Synthetic filed a complaint against numerous respondents for importing products that infringe U.S. Patent Nos. 8,616,306, 10,507,565 and 10,508,502. The claims-at-issue recite a PDC comprising particular structural features, including diamond grains of a maximum size and a catalyst including cobalt. The claims further recite that the PDC exhibit certain properties—e.g., coercivity, electrical conductivity, G-ratio, thermal stability, permeability and/or lateral dimension—each within a claimed range.
The ALJ analyzed eligibility using the Supreme Court’s two-step Alice framework. In step one, the court determines whether the claims are “directed to” a patent-ineligible concept, such as an abstract idea. Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 217 (2014). If they are, the court proceeds to step two and considers “the elements of each claim both individually and ‘as an ordered combination’ to determine whether the additional elements ‘transform the nature of the claim’ into a patent-eligible application.” Id.
Addressing step one, the ALJ found that the claims recite compositions of matter not found in nature, including structural features (e.g., grain size and the presence of a catalyst) that are not problematic under Alice. But the ALJ found that the claims also recite performance measures (e.g., G-Ratio and thermal stability) and side effects (e.g., electrical and magnetic parameters) that are problematic. According to the ALJ, the structural features were well-known and conventional, while the performance measures and side effects were abstract goals, resulting in the claim reading on any and all means of achieving the claimed goals.
The ALJ found the claims were analogous those in Certain Light-Emitting Diode Products, Fixtures, and Components Thereof, Inv. No,. 337-TA-1213 (Aug. 17, 2021) (Initial Determination), aff’d in pertinent part, Comm’n Op. (Jan. 14, 2022). In Light-Emitting Diodes, the claims covered a lighting device comprising a solid state light emitter with a “wall plug efficiency of at least 85 lumens per watt.” Those claims encompassed ineligible subject matter because they were directed to an abstract goal of efficiency, however achieved.
Complainant argued that the claims were not directed to a law of nature and cited cases for the proposition that an invention can be claimed by reciting its properties. The ALJ, however, found that the claims are problematic, not because they recite a law of nature or properties, but because the claimed properties are a result or effect, and thus abstract. The ALJ distinguished patent-eligible properties that are design parameters, such as electrical insulation properties, needed to improve performance of the claimed apparatus. The ALJ decided that is not the context here because the claimed properties are not desirable features as such; they are just a result of other desirable features.
Addressing step two, the ALJ found that the claims do not recite any limitations that would transform the nature of the claims into a patent-eligible application. According to the ALJ, the claims recite structural limitations that are generic to all PDCs, and fail to recite structures or any other inventive feature to achieve the objectionable claim limitations (G-Ratio, thermal stability, electrical and magnetic parameters). The ALJ discussed a “mismatch” between the specification, which may teach a skilled artisan how to make the PDC having the recited characteristics, and the claims, which recite an abstract idea
instead of the particular structures or methods of manufacturing discussed in the specification.
Practice Tip: Patent owners should avoid claiming the advance over the prior art using limitations that are simply results or effects, i.e., in purely functional terms that encompass an abstract idea. Instead, Patent Owners should describe and claim structures in the claimed system and how the claimed characteristics improve the system’s performance, showing that such claim elements are technologically innovative and not generic. In the PDC field, patent owners should describe and claim innovative design choices or manufacturing variables in particular applications, and avoid relying only on performance measures or side effects that are indirect measures of the effectiveness of such design choices and manufacturing variables.
Certain Polycrystalline Diamond Compacts and Articles Containing Same, Inv. No. 337-TA-1236 (Mar. 3, 2022) (Initial Determination).
Comments are closed.