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PTAB Needs Only 2 Days to Issue SAS Guidance

Remember, way back on Tuesday, when the Supreme Court issued its game-changing Patent Trial and Appeal Board decision, SAS Institute v. Iancu? At the time I thought, wow, it'll be interesting to see how this plays out in the weeks and months ahead.

It's already playing out. The Patent Trial and Appeal Board issued guidance Thursday on how it will handle inter partes review proceedings that began under rules that have now been declared out of bounds.

“It's moving quickly,” said Finnegan, Henderson, Farabow, Garrett & Dunner partner Erika Arner. The PTAB Bar Association president reports that her colleagues have already started receiving directives in pending inter partes reviews.

Quick recap: IPR petitioners often challenge numerous patent claims on multiple grounds. Sometimes the PTAB institutes proceedings on all challenged claims. Other times it picks a subset of the claims and the grounds for review. Justice Neil Gorsuch wrote for a 5-4 court that the America Invents Act forbids that practice—if the PTAB institutes proceedings on any challenged claim, it must review all of them. And, he seemed to hint, it should review on each asserted ground of unpatentability, too.

PTAB practitioners are still digesting what that means going forward. But for cases already pending, the PTAB announced Thursday that panels “may” issue supplemental institution orders addressing “all challenges raised in the petition.” Additional time, briefing, discovery, and/or oral argument will be permitted as appropriate. And the board may exercise its good-cause option to extend the statutory one-year deadline for deciding cases if necessary.

Baker Botts partner Eliot Williams homed in on the phrase “all challenges.” That no doubt means all claims, but it's not clear if it also includes all grounds—probably because the Supreme Court left the question open, he said. “My interpretation is that they'll institute on all grounds for new cases. For pending cases it's left to the panel's discretion,” Williams said.

Arner's read is that the board will institute proceedings on all claims and all grounds. But in final written decisions it might only address as many grounds as necessary to reach findings of invalidity. “There's a little wiggle room there,” she said.

PTAB Chief Judge David Ruschke has scheduled a public “Chat With the Chief” webinar Monday to discuss the guidance.

Retroactivity Appeal Filing Comes Within a Day

Hey, do you think it's about time we had a constitutional challenge to inter partes review? Sure, the Supreme Court just rejected one in Oil States. But Justice Clarence Thomas' opinion explicitly noted that petitioner Oil States Energy Services ”does not challenge the retroactive application of inter partes review, even though that procedure was not in place when its patent issued.”

Was that just a throwaway line to corral an extra vote or two, or does the Supreme Court really think that IPRs are a no-go for patents issued before 2011?

Fortunately, you and I don't have to answer that question. The Federal Circuit does. And it took exactly one day for a patent owner to raise it.

ChanBond LLC served notice Wednesday that it plans to raise “the PTAB's retroactive application of inter partes review to the '822 Patent, which was issued prior to the Leahy-Smith America Invents Act.” Mishcon de Reya partner Robert Whitman represents ChanBond in its appeal of a PTAB decision in favor of Cisco Systems Inc.

The action isn't at just the Federal Circuit. An astute reader noted that at least one cert petition pending before the Supreme Court is raising the retroactivity issue. But Supreme Court review is discretionary. I'm betting they'll let the Federal Circuit take the first crack at sorting this out.

More Oil States/SAS Comment

I begin each of these dispatches by asking you to email me your thoughts and ideas about goings-on in the IP world. Many of you—and I really mean many—took me up on it following the Oil States and SAS decisions. Here are a few more comments.

➤ Innovation Alliance's Brian Pomper: ”The focus on the outcome of [Oil States] has been a distraction from the important work of reforming the IPR process to make it more fair for patent holders. We appreciate Director Iancu's commitment to addressing problems in IPR and look forward to working with him and other stakeholders to get that done.”

➤ Trade association PhRMA: ”This decision points toward reforms to IPR, something stakeholders have raised time and again to the Patent and Trademark Office (PTO) and members of Congress.”

➤ Ben Pleune, Alston & Bird: “The Federal Circuit is already overwhelmedwith appeals from the PTAB. … The practical outcome of the Supreme Court's decision in SAS is that this workload will only increase, as the PTAB can no longer dispose of a subset of challenged claims at the institution phase.”

➤ Ronald Abramson, Lewis Baach Kaufmann Middlemiss: ”The wild card in both of these decisions appears to have been Justice Gorsuch. His dissent from the [7-2] decision in Oil States reflects a rigid application of private property concepts, which purports to rest on ancient English decisions and the writings of Alexander Hamilton. His 5-4 majority decision in SAS is a wooden and misguided application of statutory language. It is literalism run amok.”

Who's Arguing?

Next week is a calendar week at the Federal Circuit. In Tuesday's briefing I highlighted a few cases I'll have an eye on. Here are a couple more:

➤ SSL Services v. Cisco Systems is the kind of IPR that drives patent owners batty. SSL's 6,158,011 patent on a multi-tiered VPN survived three reexaminations and was found valid in district court litigation against a different party, with that judgment affirmed by the Federal Circuit in 2014. Still, Cisco persuaded the PTAB to invalidate all seven claims of the '011 in an IPR last year based largely on the same prior art that was before the district court. Cisco argues there's no inconsistency because the PTAB applies a lower evidentiary standard than in district court. Fisch Sigler partner John Battaglia will argue for SSL that the board relied on “hindsight and conjecture” in finding the patent obvious. Haynes and Boone partner Theodore Foster will argue for Cisco that substantial evidence supports the PTAB's judgment.

➤ Large Audience Display Systems v. Tennman Productions. U.S. District Judge Manuel Real of Los Angeles declared an non-practicing entity's patent case against Justin Timberlake and Britney Spears exceptional in 2015 and awarded $733,000 in attorneys fees. The Federal Circuit sent the case back, saying Real relied on some inappropriate criteria and that the defense billings appeared to be inflated. Judge Real being Judge Real, he stuck with the exceptional case finding and awarded $4,000 more. Dwayne Goetzel of Meyertons Hood Kivlin Kowert & Goetzel will argue for reversal this time around, while Pryor Cashman partner Andrew Longsam will again defend the judgment.

The Case of the $200 Million Unclean Hands

In an ordinary week, the Federal Circuit's precedential ruling in a $200 million case involving the doctrine of unclean hands would be considered big news. I had a quick writeup here about Fish & Richardson's appellate win for Gilead Sciences. Dennis Crouch had a scholarly critique here.

Gaming Out Star Wars

My ALM colleague Ross Todd reports that Lucasfilm is striking back against the maker of an online card game app that uses the name Sabacc. That infringes the company's Star Wars trademark rights, Lucasfilm's attorneys at Shapiro Arato argue.

Ren Ventures, the company behind Sabacc, tried to dismiss the case on the ground that any harm is imaginary. “It is impossible to offer fictional goods and services in commerce because they do not exist,” is how their attorneys put it.

No dice, said U.S. District Judge Richard Seeborg. “The crux of Lucasfilm's claims is that defendants use the 'Sabacc' mark with the intention that consumers associate their unlicensed product with the 'Star Wars' franchise and its licensed products,” he explained.

That's all from Skilled in the Art for this week. In the meantime, may the force be continually with you in the stream of commerce.