IP News

Indeed, the Federal Circuit held that the Board cannot “merely rely” on the petitioner's identification of the real parties in interest. Neither can the Board place the burden on the patent holder to identify all real parties in interest. Instead, the Board must follow a “flexible” procedure that allows for the weighing of evidence, but keeps the burden of persuasion on the petitioner. Still, that procedure must begin with the “patent owner … produc[ing] some evidence that tends to show that a particular third party should be named as a real party in interest.” Id. at 11-12 (emphasis in original). While the court did not clarify the “quantum of support” needed to meet that threshold, it did note that, on one hand, “[a] mere assertion that a third party is an unnamed real party in interest, without any support …, is insufficient,” and that, on the other hand, Worlds did “more than enough” (by pointing, in particular, to the development agreement's language and the fact that Bungie initiated IPR shortly after the Destiny games were added to the district court litigation) to put the “issue into dispute” below Id. at 12 n. 8. Therefore, the court remanded the case to the Board for a full evaluation of the real-party-in-interest matter, with an appropriate weighing of evidence, and deference to the court's recent rulings on that issue (including in Applications in Internet Time, LLC v. RPX Corp., 897 F.3d 1336 (Fed. 2018) and Wi-Fi One, LLC v. Broadcom Corp., 887 F.3d 1329 (Fed. Cir. 2018), both of which provided guidance on Section 315(b) determinations).

Federal Circuit: Framework for 'Overlapping Cases' Applies in IPR

On September 17, the Federal Circuit issued another opinion discussing burden shifts during IPR, and held, for the first time, that the general framework for “overlapping range cases” also applies in IPR. See, E.I. DuPont de Nemours & Co. v. Synvina C.V., No. 2017-1977 (Fed. Cir. Sept. 17, 2018), slip. op. DuPont involved a challenge to Synvina's '921 patent, which described a method of creating an increasingly valuable form of dicarboxylic acid (specifically, FDCA). DuPont instituted IPR, claiming the various claims of the '921 patent were obvious, as they mostly involved adjustments to the “temperature, pressure, catalyst, and solvent” of prior art. The Board held that the instituted claims were not un-patentable as obvious. In doing so, the Board “rejected DuPont's contention that a burden-shifting framework applied,” and found that, even though the prior art “disclosed [a method] under reaction conditions that overlapped with those claimed in the '921 patent,” none of the references “expressly taught a process” in the precise range of the '921 patent. Slip Op. at 9-10.

On appeal, the Federal Circuit (after rejecting Synvina's argument that DuPont lacked standing), ruled that the Board erred in its analysis, and reversed the Board's conclusion. According to Judge Lourie, the Board misapplied (or ignored) a set of “old” legal principles, which had routinely been applied in district court litigation (if not IPR), and stood for the proposition that, “where the general conditions of a claim are disclosed in the prior art, it is not inventive to discover the optimum or workable ranges by routine experimentation”; “it is to be expected that a change in temperature, or in concentration, or in both, would be an unpatentable modification.” Id. at 15-16 (quotations omitted). Thus, where the “ranges of a claimed composition overlap the ranges disclosed in the prior art,” that “overlap creates a presumption of obviousness,” id. at 16 — a presumption that the patentee must overcome through the evidence of “teaching away, unexpected results, or other pertinent evidence of nonobviousness.” Id. at 17, 20.

The Board failed to follow that procedure, and then came to the wrong result. It incorrectly required DuPont “to prove that the disclosures in the prior art 'necessarily required' the variable to be within the claimed range, or that the variables 'predictably affected FDCA yields.'” Id. at 22. That placed an inappropriate burden on DuPont; under the correct approach, all Dupont had to do was “show that it was recognized in the prior art, either expressly or implicitly, that the claimed oxidation reaction was affected by reaction temperature and PO₂.” Id. On review of the evidence submitted at IPR, the court held that DuPont had done exactly that, and thus concluded that temperature and PO₂ were result-effective variables (i.e., the prior art recognized them as potential variables which would affect the method's results), which made the challenged claims in the '921 patent obvious. See, id. at 16, 22-23. The Board was simply wrong to say there “was essentially no disclosure of the relationship between” temperature, PO_2, and the claimed oxidation reaction.” See, id. There was, in fact, such a disclosure — and neither Synvina, nor the prior patent holder, did enough to rebut the resulting presumption in any sufficient way. Id. at 26. They did not, for example, establish unexpected results or show how the patent changed the method to a “commercial scale” process. Id. at 28. Ultimately, the court reversed the Board, and held that the challenged claims were obvious from the prior art and unpatentable.

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Howard J. Shire is Editor-in-Chief of this newsletter and a Partner in the New York office of Pepper Hamilton, LLC. He can be reached at [email protected]. Adam B. Fischer is an associate at Pepper Hamilton in the Pittsburgh, PA office. He can be reached at [email protected].