Earlier this month the Federal Circuit reversed the Patent Trial and Appeal Board in an inter partes review decision for just the second time ever. Belden Inc. v. Berk-Tek LLC, Case No. 2014-1575 (Fed. Cir. Nov. 5, 2015). The court found that the PTAB did not invalidate enough claims of the challenged patent, resulting in yet another win for an IPR petitioner at the appellate level.
Practitioners before the PTAB have been watching closely as the appeals filed in America Invents Act (AIA) proceedings work their way through the Federal Circuit. A study conducted by Duane Morris attorneys last month found that the court has received more than 360 appeals of PTAB decisions in inter partes reviews and covered business method reviews. Thus far, the Federal Circuit has issued approximately 33 decisions, with just one prior reversal of the PTAB.1 Parties challenging patent validity in AIA proceedings therefore have an exceptional track record: successfully invalidating at least one challenged claim in 86% of Final Written Decisions at the PTAB2 and then a greater than 90% winning percentage at the Federal Circuit.
In Belden, petitioner Berk-Tek challenged all six claims of U.S. Patent No. 6,074,503 which is directed to methods for making a communications cable. Berk-Tek used seven prior art references in various anticipation and obviousness grounds of rejection, and the PTAB instituted the petition on many of those grounds.
For dependent claims 5 and 6, which are the main subject of the reversal at the Federal Circuit, the review was instituted based on an obviousness combination of a Japanese Patent with a Canadian Patent. Patent owner Belden responded to the institution by challenging, inter alia, the motivation to combine those references. In its final written decision the PTAB invalidated claims 1-4 but affirmed patentability of claims 5 and 6, agreeing with Belden that one of skill in the art would not have combined the Japanese Patent with the Canadian Patent to arrive at the claimed invention.
On appeal, the Federal Circuit noted that the sole dispute over patentability of claims 5 and 6 was whether there was a motivation to combine the Japanese and Canadian references; it was undisputed that should those references be combined, the claims would be rendered obvious. Belden at 17. The court also noted that the PTAB itself had found sufficient motivation to combine the references when issuing its institution decision. Id. at 18. A full review of the substantive teachings of the Japanese Patent and the Canadian Patent then leads the court to conclude that “the record is one-sided” on the issue of motivation to combine, and that the PTAB’s finding that there was no motivation to combine constituted legal error. Id. at 17, 20.
1 A full breakdown of those 33 cases shows: 29 affirmances of PTAB decisions (23 of those affirmances are under Rule 36), 1 reversal-in-part and affirmance-in-part, 1 dismissal, and now 2 reversals. The only prior reversal came in Microsoft Corporation v. Proxyconn, Inc., which reversed a PTAB claim construction. Case No. 2014-1542, -1543 (Fed. Cir. Jun. 16, 2015).
2 The USPTO’s published statistics show that 499 of 575 Final Written Decisions have invalidated at least one challenged claim. See Slide 9 at http://www.uspto.gov/sites/default/files/documents/2015-09-30%20PTAB.pdf. Although many petitioners fail to reach a final written decision, those that do have an 86% success rate.
Belden Inc. v. Berk-Tek LLC, Case No. 2014-1575 (Fed. Cir. Nov. 5, 2015).
IPR2013-00057: Paper 1 (Petition), Paper 4 (Revised Petition), Paper 11 (Institution Decision), Paper 46 (Final Written Decision).