Discretionary Denials Gain Momentum at the Patent Trial and Appeal Board

Written by: Benjamin E. Leace & Christopher H. Blaszkowski

On May 7, 2019, Patent Trial and Appeal Board (PTAB) designated multiple decisions as precedential and informative.  Each of the newly designated decisions described below relate to the PTAB’s inherent authority under 35 U.S.C. § 325(d) and 35 U.S.C. § 314(a) to deny institution even where the Petitioner might have met the burden to institute an inter partes review (i.e., a reasonable likelihood of prevailing with respect to one or more challenged claims).  These decisions provide additional strategic considerations for Patent Owners on the receiving end of IPR petitions who are seeking to prevent institution in the first instance.

In the precedential decision of NHK Spring Co., LTD. v. Intri-Plex, Inc. Case IPR2018-00752 (PTAB Sept. 12, 2018) (Paper 8), the Petitioner argued that the challenged claims were both anticipated and obvious over the prior art—art that was cited and applied during prosecution.

The Patent Owner argued that the Board should exercise its discretion to deny institution under § 325(d) because “the Petition restyles arguments made by the Examiner and overcome by [Patent Owner] during prosecution…and that are being asserted by Petition in the District Court Case.”  The Patent Owner further argued that the Board should also deny institution under § 314(a) because, given the advanced stage of the parallel District Court litigation, an IPR would be an inefficient use of the Board’s resources.  The Board agreed with the Patent Owner, exercising its discretion to deny institution under both §§ 314(a) and 325(b).

The Board first reiterated that institution of an IPR is discretionary.  To determine whether to exercise its discretion under § 325(d), the Board weighs several non-exclusive factors:

(a) the similarities and material differences between the asserted art and the prior art involved during examination;

(b) the cumulative nature of the asserted art and the prior art evaluated during examination;

(c) the extent to which the asserted art was evaluated during examination, including whether the prior art was the basis for rejection;

(d) the extent of the overlap between the arguments made during examination and the manner in which Petitioner relies on the prior art or Patent Owner distinguishes the prior art;

(e) whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation of the asserted prior art; and

(f) the extent to which additional evidence and facts presented in the Petition warrant reconsideration of prior art or arguments.

The Board found that the Petitioner’s arguments “substantially overlap the Examiner’s findings during examination.”  The Petitioner’s expert declaration was not sufficient to persuade the Board to reconsider the references and the arguments, because the declaration is substantially similar to the Petition (which overlaps the Examiner’s findings) and the declaration failed to support the testimony with objective evidence.

The Board additionally agreed with the Patent Owner’s second argument under § 314(a)—that an IPR would “ultimately be inefficient,” given the status of the District Court litigation.  Citing to the Scheduling Order, the District Court trial was scheduled for March 25, 2019 (before the PTAB would conclude the IPR).  The inefficiency would be compounded by (a) the imminent expiration of the ‘841 Patent, meaning that the claim construction standard between the Court (which already construed the claims) and the PTAB would be the same, and (b) that the same art and arguments were asserted by the Petitioner in the District Court litigation.

In the information decision of Chevron Oronite Company LLC v. Infineum USA L.P., Case IPR2018-00923 (PTAB November 7, 2018) (Paper 9), Chevron argued that the twenty challenged claims—directed to a lubricating oil composition—were rendered obvious over the combined disclosures of three references.  The PTAB concluded that Chevron had demonstrated a reasonable likelihood of prevailing in its challenge with respect to two of the challenged twenty claims.

But the PTAB did not institute inter partes review, concluding it would be an inefficient use of Board resources under 35 U.S.C. 314(a).  Instead, the Board noted that it had discretion to decline institution where the Petitioner had only demonstrated its burden with respect to a small fraction of the claims.  The PTAB cited SAS Institute Inc. v. Iancu, which stated “First of all, the PTO is permitted, but never compelled to instate an IPR proceeding.”  The PTAB further acknowledged its own guidance following SAS, which specifically notes that the Board may consider the number of claims and grounds that meet the reasonably likely standard when deciding whether to institute an IPR under 35 U.S.C. 314(a).

A similar result followed in Deeper, UAB v. Vexilar, Inc., Case IPR2018-01310 (PTAB Jan. 24, 2019) (Paper 7) (an informative decision in which the PTAB declined institution “under § 314(a) where the Petitioner demonstrates a reasonable likelihood of prevailing only as to two claims out of 23 claims challenged and only as to one of four asserted grounds of patentability.”)


This is useful guidance for Patent Owners who are filing (or considering whether to file) an optional Patent Owner’s Preliminary Response.  These precedential and informative decisions highlight the merits of identifying as many discretionary factors as possible in seeking denial of institution.  To Patent Owners, these decisions represent a welcome escape valve from the strict “all or nothing” institution requirements of SAS Institute Inc. v. Iancu and its progeny, which held that the PTAB must institute on all grounds/claims or none.

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