Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. In Tuesday's briefing I focused on the Patent Trial and Appeal Board, so today I'm going to focus on … the Patent Trial and Appeal Board! How can I not when presented with hard evidence of a shift in practice strategy? I'll explain below. Plus, Fish & Richardson marks a PTAB milestone, and a San Diego federal judge has green-lighted a FRAND/antitrust case, though maybe not the one you're thinking of. As always you can email me your thoughts and follow me on Twitter.

Photo: Diego M. Radzinschi/ALM

Making Amends at the PTAB

It's been a year of change at the Patent Trial and Appeal Board. Under PTO Director Andrei Iancu's leadership, the board has switched claim construction standards and adopted new procedures for creating and designating precedential opinions. The U.S. Supreme Court did its part too, directing that it's all or nothing when the PTAB institutes inter partes review proceedings.

Womble Bond Dickinson partner Brent Babcock says another, less ballyhooed change is already having an impact. New rules on motions to amend claims, plus a cultural shift on the board, are resulting in more patent owners seeking to narrow their patent claims during IPR, rather than submit to a straight up-or-down vote.

The board formalized new rules and announced a pilot program last month. But Babcock ran the numbers via Lex Machina and found that motions to amend have already been on a steady rise, from 47 in 2016 to 100 last year, and are on pace to hit 120 in 2019.

“It turns out there's a nice upward trend,” Babcock says. “I think patent owners are being a little more courageous in filing motions to amend, and counsel are trying to encourage their clients to get something out of the process.”  

This is a very different direction from the PTAB of 2012-15. Although the America Invents Act gives patent owners the right to propose amended claims at least once, the PTAB denied 112 of the first 118 such motions it was presented. Some practitioners called it a fool's errand.

Even after the Federal Circuit shifted the burden of persuasion to petitioners in 2017, many lawyers remained skeptical. “I think a lot of IPR practitioners just gave up,” Babcock said.

A big change came last fall, when Iancu publicly declared that “the current amendment process in AIA proceedings is not working as intended.” The PTO followed up soon after with a pilot program, updated last month, in which patent owners can propose amendments, request non-binding feedback from the board, and then revise them.

Last month the board designated a precedential order laying out rules and procedures, meaning all PTAB panels will be working from the same playbook. PTAB leadership has been letting practitioners know at bench-bar meetings that they really will entertain amendments in appropriate circumstances.

There are still potential downsides to the strategy, Babcock notes. If the patent owner requests feedback and it's negative, whatever settlement leverage the patent owner had will take a hit. The petitioner will get an opportunity to present new prior art and a new expert declaration, which will likely add costs and extend the proceedings. And if the motion is successful and the claims are amended, the patent owner surrenders the right to all past damages for infringement. “There goes a big chunk of money,” Babcock said.

Still, that beats having your patent claims canceled. Those that do make it through IPR will be “gold plated,” he said. And the process is truer to the spirit of the AIA, which isn't only about killing patents but also improving them.

“They're giving the patent owner several bites here to get something that works,” Babcock said. “If more patent owners can walk away with some claims, that makes the board look better in patent owners' eyes.”

Happy 1,000th to Fish & Richardson

While I'm on the subject of the PTAB, congratulations are in order for Fish & Richardson, which marked its 1,000th trial before the board earlier this month. That puts it 137 ahead of its nearest competitor, according to Lex Machina data.

Fish appears frequently on behalf of Apple and Samsung, the two most active petitioners at the PTAB, plus the likes of Huawei, Nvidia and Intuitive Surgical, according to the Lex Machina data. On the patent owner side, recent Fish clients have included United Technologies, Allergan and ResMed.

“We are honored to be the law firm that companies turn to the most to handle their high stakes PTAB disputes,” Dorothy Whelan, co-chair of Fish's post-grant practice group, said in a written statement. The group's other co-chair, Karl Renner, was the most active attorney at the PTAB in 2018.

Sterne, Kessler, Goldstein & Fox, with 863 appearances, and Finnegan, Henderson, Farabow, Garrett & Dunner, with 781, are the next most active firms in the America Invents Act era.

FRAND Fight Clears Early Hurdle

I say FRAND and antitrust. You say Apple v. Qualcomm, right? The big showdown between the smartphone and wireless licensing titans is set to go to trial Monday in the San Diego courtroom of U.S. District Judge Gonzalo Curiel.

But another FRAND/antitrust case is chugging ahead in the same building. U-blox, a developer of cellular modules for connected devices, got off to a bad start in January when U.S. District Judge Cathy Ann Bencivengo refused to enjoin InterDigital Inc. from telling u-blox's customers that it's operating without a license.

But on Wednesday, u-blox regained some momentum as Bencivengo turned away InterDigital's motion to dismiss its antitrust and declaratory judgment claims. She adopted, at least for now, the Third Circuit's reasoning in Broadcom v. Qualcomm that breach of a FRAND commitment can give rise to a Sherman Act claim, despite arguments that the decision is out of step with D.C. Circuit and Supreme Court caselaw.

U-blox sued InterDigital on Jan. 1, the day its license expired. It says InterDigital has been demanding “exorbitant” royalties on its standard-essential 2G, 3G and 4G patents, despite committing to license them on fair, reasonable and non-discriminatory terms.

InterDigital told Bencivengo that the parties had only finished negotiating their previous license in October, and had exchanged just a single letter on a new license. “By 'jumping the gun' and suing without warning, u-blox has not allowed for an adequate record to be developed, and the claim is not ripe,” a Wilson Sonsini Goodrich & Rosati team led by partner David Steuer argued in InterDigital's motion to dismiss.

Plus, InterDigital said, u-blox had merely recited the elements set out in Broadcom, “an out-of-circuit case that is not binding on this court and has been subsequently criticized.”

Bencivengo ruled Wednesday that there's a triable issue as to whether u-blox acted in good faith. “Moreover,” she wrote, “in assessing the breach of contract claim, regardless of whether the parties negotiated in good faith, the court is required to assess whether FRAND rates have been offered.”

In a footnote, she observed that U.S. District Judge Lucy Koh recently followed Broadcom in the Federal Trade Commission's antitrust dispute with Qualcomm. It “remains sufficiently persuasive for purposes of a motion to dismiss,” she concluded.

InterDigital did persuade Bencivengo to dismiss a promissory estoppel claim. But overall this round goes to u-blox and its Sheppard Mullin Richter & Hamptonteam, which is led by partner Steve Korniczky.

Another Kidney Punch in Battle Between Transplant Rivals

Transplant diagnostics firm CareDx declared IP war on rival Natera Inc. last month. Now it's become a multi-front battle, with Brisbane, California-based CareDx bringing new allegations this week over false advertising, trademarks and unfair competition, my ALM colleague Tom McParland reports.

CareDx originally sued San Carlos-based Natera on March 26, accusing it of infringing a patented method of assessing kidney transplant rejection by analyzing fragments of donor DNA in a patient's blood.

The company struck again Monday in Delaware federal court, accusing Natera of false marketing by conducting a less rigorous trial of its Prospera test and then publicly comparing results with CareDx's AlloSure. The campaign is designed to deceive doctors, insurance companies, patients—and, CareDx pointedly adds, investors—into believing that Prospera is superior.

“Natera's manipulation of its test results, combined with its pattern of blatant falsehoods concerning the accuracy and veracity of Prospera as compared to AlloSure, reflects Natera's intent to unlawfully deceive and mislead consumers,” a Weil, Gotshal & Manges team led by partner Ed Reines wrote in the 24-page filing.

Natera said it stands behind its performance claims, which it says are rooted in scientific, peer-reviewed evidence. “Natera's better clinical and analytic performance is documented in studies recently published in Transplantation and the Journal of Clinical Medicine,” the company said in a statement. “We believe our test will become a valuable tool in the management of kidney transplant patients and look forward to serving these patients.”