PublishedMarch 16, 2018

“The Same Or Substantially The Same Prior Art Or Arguments”

Director Andrei Iancu has been making the rounds since his confirmation.  In a recent interview, he suggested that “[t]here is, for sure, a perception problem in the IP community with the PTAB” and that “when you have a perception problem you have a real problem in the sense that if the IP community loses faith in what you do then it loses faith in the reliability of the system.”

Director Iancu is right.  When you have a perception problem, that can create an actual problem.  But instead of looking to the IP community, which has far more widely varying views than the interview gives credence to, I’d look at the Patent Office to see the real impacts.

Restoring Faith

While Iancu didn’t state it directly, the “loss of faith” is not evenly distributed in the IP community.  Large portions of the community don’t perceive any problems at PTAB. The criticisms of the PTAB have stemmed from non-practicing entities, patent practitioners whose livelihoods are impacted by the $2 billion in legal fees IPR has helped avoid over the past 5 years, and certain large patent holders.  (Some of those patent holders, like Qualcomm, have even gone so far as to fund astroturf campaigns like ‘Save The Inventor’.)  And those criticisms have been growing sharply over the past couple years.

Prosecution-Based Discretionary Denials

The PTAB is invested with a significant amount of discretion in their decisions on institution.  They “may institute” any given petition—the PTAB is actually fully entitled to deny a petition simply because they feel they have enough petitions already.  

But, in particular, they “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.”  (35 U.S.C. § 325(d).)  

In other words, if the prior art in the IPR petition was already presented to the Office, that alone can be a reason to deny a petition.

The easiest way to make criticism stop is by providing some kind of benefit to the critics, of course.  So, if the PTAB is feeling pressure to deny more petitions due to patent holders’ “loss of faith”, we could potentially see a change in the rate at which these sorts of discretionary denials are being made.[1. This doesn’t mean that PTAB Administrative Patent Judges (APJs)  are explicitly deciding to deny petitions to quiet critics. The APJs I’ve met all exhibit nothing but intelligence and integrity in trying to make the correct decision. However, a background of criticism could unconsciously influence the decision process. An unintentional, unconscious impact on discretionary denials is a possible mechanism for an increase in denials.]

To test this theory, I looked at a particular type of 325(d) denial – whether a PTAB panel denies institution because the art or arguments in a petition are the same or substantially the same as art that was in front of the patent examiner during prosecution.

Discretionary Denials Based On 325(d) And Prosecution Art

Starting from the beginning of 2015, I located 65 instances in which petitions or portions of petitions were denied based on art that was in front of the examiner or was substantially the same as art in front of the examiner.  I located 301 instances in which they were not denied on that ground, whether because the art was different or because the PTAB panel felt that the petitioner’s arguments distinguished the way the examiner understood the art. So, very roughly, when the PTAB decides the question, they deny on this basis one time out of six.

But that doesn’t tell us how that discretion has been applied over time.

I read through every institution decision that mentioned 325(d), and classified the ones involving art previously in front of the examiner.  Breaking down these discretionary denials on a quarterly basis, a clear increase over time is apparent. Recently, PTAB panels are using their discretion to deny petitions more frequently.  The question is—why?


The increase could be due to a number of things.  If there’s an increase in the number of petitions filed, we might see an increase in discretionary denials in order to manage docket size.  If there’s an increase in the number of petitions filed that use art that was also present during prosecution, we might see an increase in the raw number of discretionary denials (although not the overall percentage of denials.)

But neither of those appears to be the case.

AIA Institutions/Denials Per Year

The number of institution decisions has been roughly flat in the relevant timespan.  As the PTO’s numbers show, there’ve been about 1000 institutions per year and about 500 denials of institution.

And because I used a percentage of the total number of decisions, the raw number of discretionary denials is normalized.

It’s not due to docket management.  It’s not due to there being more petitions filed with this kind of prior art.  There appears to be a real, sustained increase—particularly over the past year and a half—in the number of discretionary denials based on prosecution art.  The PTAB is denying more petitions where the examiner already saw the prior art in question without any noticeable change in the petitions they’re looking at.

The PTAB Was Intended To Review Art Examiners Already Saw

The post-grant proceedings created by the AIA—post grant review, inter partes review, and covered business method—were designed to allow the Patent Office to correct its own errors when it issues a patent that never should have issued.  Part of this process is allowing interested parties to locate prior art the examiner never located.

But part of the process is allowing parties to correct errors made by the examiner in the art they did find.  Examiners miss things when they search, but they also miss things once they’ve found a reference. That’s exactly why 325(d) says that the PTAB “may take into account” if the prior art was previously at the office.

Not “must take into account” or “can’t institute”, but “may take into account.”  The statute itself recognizes that sometimes examiners misunderstand or misapply art.

Real World Impacts

One IPR my former colleagues worked on comes to mind here.  This is from IPR2014-00188.  The Examiner had reviewed the Kuiri reference during prosecution and allowed the patent to issue anyway.

The problem is that the only difference between the circuit in the Kuiri reference and the circuit the patent described was whether two resistors were drawn vertically or horizontally.  Not the way the resistors were connected and arranged in the circuit. Literally, whether the resistors were drawn going across the page or up and down.

For those of you who aren’t electrical engineers, let me assure you – the way you draw a circuit does not affect its operation, as long as the topology is the same.  The examiner, back when he was looking at the patent, had just missed that he had prior art in front of him that disclosed the identical circuit.

Fortunately, when the PTAB took a look at the prior art, they decided that “independent claim 1 is unpatentable as anticipated by Kuiri.”  They did their job and looked at the art with a fresh eye to make sure the examiner hadn’t missed anything.  And then they realized that, actually, the examiner did miss something.

But what if they hadn’t—if they’d said “the examiner already looked at that reference, so we aren’t going to”?  Maybe that lawsuit would have gone ahead. Maybe Acacia, the well-known NPE that owned the shell company used to bring the suit, would have another 7 years of license fees to look forward to.

Not because they came up with something new.  Because the Board decided not to look at the examiner’s mistake.

Discretion Isn’t For Abuse

Not every 325(d) denial is inappropriate.  Sometimes a petition really is just an attempt to convince the Board to overturn an examiner who got it right.  

But the recent increase in discretionary denials is worth looking at.  When a denial is made based on an in-depth analysis of the arguments presented in prosecution and in the petition, that’s one thing.  But when a denial is based on the Examiner indicating that the reference was considered, with nothing more, that’s not enough.

Josh Landau

Patent Counsel, CCIA

Joshua Landau is the Patent Counsel at the Computer & Communications Industry Association (CCIA), where he represents and advises the association regarding patent issues.  Mr. Landau joined CCIA from WilmerHale in 2017, where he represented clients in patent litigation, counseling, and prosecution, including trials in both district courts and before the PTAB.

Prior to his time at WilmerHale, Mr. Landau was a Legal Fellow on Senator Al Franken’s Judiciary staff, focusing on privacy and technology issues.  Mr. Landau received his J.D. from Georgetown University Law Center and his B.S.E.E. from the University of Michigan.  Before law school, he spent several years as an automotive engineer, during which time he co-invented technology leading to U.S. Patent No. 6,934,140.

Follow @PatentJosh on Twitter.

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