PTAB Expands Discretionary Denial Authority under 35 USC § 325(d)

What Do We Know?

1. On March 24, 2020, the Patent Trial and Appeal Board (“PTAB”) designated a pair of precedential decisions (and one informative decision) that expand PTAB’s discretionary denial authority under 35 U.S.C. § 325(d). Section 325(d) provides that “[i]n determining whether to institute . . . the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.”

2. In Advanced Bionics, LLC v. Med-El Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (PTAB Feb. 6, 2020) (precedential), PTAB denied institution under Section 325(d) and set forth a two-part test for analyzing Section 325(d) discretionary denial requests:

a) whether the petition presents to the Office the same or substantially the same art or arguments previously presented to the Office; and,

b) if either condition is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to patentability of the challenged claims.

3. The Advanced Bionics panel explained that material error by the Examiner may include misapprehending or overlooking specific teachings of the relevant prior art or an error of law, such as misconstruing a claim term, which impacts patentability of the challenged claims.

4. In Oticon Medical AB v. Cochlear Limited, IPR2019-00975, Paper 15 (Oct. 16, 2019) (precedential), PTAB instituted review and declined patent owner’s request for discretionary denial under Section 325(d). The Oticon panel analyzed the Becton Dickinson factors (IPR 2017-01586, Paper 8 (precedential)), using a two-part test similar to that used in Advancced Bionics. PTAB determined that the petition did not present substantially the same art or arguments previously presented during examination and that the Examiner erred in not considering the teachings of a material reference raised in the petition.

5. The Oticon panel also declined to exercise discretion under 35 U.S.C. § 314(a), distinguishing NHK Spring Co. v. IntriPlex Techs., Inc., IPR2018-00752, Paper 8 (precedential), because no trial date had been set in the parallel district court case and the IPR would not duplicate district court consideration of patent validity.

Observations and Practice Tips:

1. Advanced Bionics puts the onus on petitioners to include a Section 325(d) analysis of a challenged patent’s prosecution history, even if the petition relies on prior art references that were not considered by the Examiner.

2. Advanced Bionics determined that, although only one of four references on which petitioner relied had been considered by the Examiner, petitioner relied on the three non-considered references “in the same manner” as the Examiner had relied on the fourth reference during prosecution. This satisfied the “substantially the same art” prong of § 325(d), such that the Board did not even consider whether petitioner raised substantially the same arguments considered by the Examiner.

3. Advanced Bionics presents a substantial hurdle that a petitioner must clear to show Office error if either the prior art or arguments in a petition are deemed cumulative of those presented in any earlier Office proceeding. Specifically, a petitioner must demonstrate that “the error by the Office was material to the patentability of the challenged claims.” Advanced Bionics at 21. Close calls will be decided in favor of patent owners:

“If reasonable minds can disagree regarding the purported treatment of the art or arguments, it cannot be said that the Office erred in a manner material to patentability. At bottom, this framework reflects a commitment to defer to previous Office evaluations of the evidence of record unless material error is shown.” Advanced Bionics at 9 (emphasis added).

4. Advanced Bionics’ precedential deference to previous Office evaluations places a thumb on the scale in favor of discretionary denial under 35 U.S.C. § 325(d).

5. Oticon reflects a classic case of petitioner raising new, non-cumulative prior art that actually frames the Examiner’s error in failing to consider a highly material reference. Although Oticon bookends the designation of Advanced Bionics as a precedential decision, the big news is the Advanced Bionics analytical framework and deference to previous Office examination of the challenged claims.