District Court Charts Middle Ground In Prosecution Bar

by | Jul 15, 2024 | District Court, PTAB News

By Nick Marasco,* Matt Modderman, Matt Johnson –

The U.S. District Court for the District of Delaware recently issued a protective order settling a dispute over the scope of a proposed prosecution bar. Aerin Medical Inc. v. Neurent Medical Inc., No. 23-756, Dkt. Nos. 66, 68 (D. Del. May 7, 2024). The parties agreed on a bar prohibiting, for a two-year period, those who accessed the opposing party’s highly confidential information from participating in patent prosecution related to the relevant subject matter, i.e., nasal treatment technologies. Dkt. No. 65 at 1. In addition, the parties “agree[d] that the prosecution bar should not prevent persons from participating in an IPR by, for example, arguing the patentability of original claims or working on papers and motions in the IPR.” Dkt. No. 64 at 1. But the parties disputed whether “individuals subject to the prosecution bar may not participate in obtaining new claims in IPRs via arguing motions to amend.” Dkt. No. 65 at 1.

The plaintiffs argued that covered persons should be permitted to argue motions to amend, so long as they did not “participate, advise, or assist” in drafting or amending those claims. Dkt. No. 64 at 5. In their view, defendants’ proposal was contradictory. Id. at 3–4. It permitted attorneys covered by the bar to argue in proceedings that present a greater risk of inadvertent disclosure, like IPRs involving the patentability of original claims, while barring them from proceedings that could only narrow claims like motions to amend in IPRs. Id. Further, the plaintiffs claimed that the additional prohibition would require them to hire separate counsel to argue any motions to amend in the eight ongoing IPRs, increasing cost, duplicating efforts, and depriving plaintiffs of their choice of counsel. Id. at 4.

The defendants, on the other hand, requested “a bright-line provision that individuals subject to the prosecution bar may not participate in obtaining new claims in IPRs via arguing motions to amend.” Dkt. No. 65 at 1. The defendants claimed that the plaintiffs’ proposal would be difficult to enforce. Id. The defendants alleged that if the plaintiffs’ proposal was adopted, it would be difficult for even the most cautious attorney to avoid misusing confidential information in participating in a motion to amend. Id. at 3. Whereas the defendants’ “proposed bright-line rule relieves an attorney—and th[e] Court—from having to determine when work on some aspects of a motion to amend crosses the line to advising on or assisting in the amendment of claims.” Id. at 2.

Ultimately, the court adopted the defendants’ proposal, crediting their enforcement concerns and noting that the plaintiffs failed to establish how their proposed bar would mitigate the risk of strategic narrowing—using the opposing parties’ confidential information advantageously to avoid prior art while still capturing their product. Dkt. No. 66. “Plaintiffs do not offer examples or otherwise explain how litigation counsel could draft a motion to amend the patent claims and argue the patentability of the amended claims in IPR proceedings without any involvement in or communication with prosecution counsel about the amended claims.” Id. The court found that defendants’ language was consistent with the balanced approach taken in British Telecomms. PLC. v. IAC/InterActiveCorp, 330 F.R.D. 387 (D. Del. 2019) where the order permitted attorneys to participate in post-grant proceedings, except for the procedures presenting the greatest risk of misusing confidential information—drafting or amending claims. Id.

The Aerin Medical decision appears to have found a middle ground in the application of a prosecution bar to post-grant proceedings. In other cases, district courts have completely prohibited attorneys who have accessed confidential information from participation in post-grant proceedings. For example, in buySAFE, Inc. v. Google, Inc., the Eastern District of Virginia considered the defendant’s proposed prosecution bar—prohibiting attorneys who had accessed confidential material from participating in post-grant review proceedings. No. 3:13cv781–HEH, 2014 WL 2468553, at *1 (E.D. Va. Jun. 2, 2014). The plaintiff argued that, as a small company, the proposed bar would unfairly impose financial cost on them in the form of having to obtain additional counsel. Id. at *2. Yet the court concluded that the defendant had established that their proposal was reasonable given concerns over strategic narrowing and because the confidential material included the defendant’s source code, described as the “crown jewels” of the company. Id. at *2–3.

At the opposite end of the spectrum, other district courts have been reluctant to impose any restrictions on participation in post-grant proceedings. In Toshiba Samsung Storage Tech. Korea Corp. v. LG Electronics, Inc., the court highlighted that the potentially barred attorneys had “played substantial roles” in past litigation for plaintiff, as well as “the instant case.”  No. 15–691–LPS–CJB, 2016 WL 447794, at *2 (D. Del. Feb. 4, 2016). The court also found it “particularly significant” the attorneys had “already been representing” the plaintiff “in the IPR proceedings for approximately 6 months.” Id. In the court’s view, to impose such a restriction at that point would cause a substantial burden on the plaintiff in that it “ would be required to jettison in the IPR proceedings the very lawyers who have already shepherded it through a substantial portion of that matter.” Id.

Similarly refusing to extend a prosecution bar to post-grant proceedings, the Eastern District of Texas in Mirror Worlds, LLC v. Apple, Inc. deemphasized the risk of strategic narrowing, and noted that such a strategy would be short-sighted in that it would capture certain products at the expense of others. No. 6:08-CV-88, 2009 WL 2461808, at* 2 (E.D. Tex. Aug. 11, 2009). In addition, the court raised concerns over encouraging parties to file post-grant proceedings for the purpose of forcing their opponents to defend patents across separate forums with two separate teams of litigators. Id.

Takeaway: Decisions to extend prosecution bars to cover post-grant proceedings generally fall into three categories: (1) complete prohibitions, (2) some restrictions, and (3) full participation. In determining a prosecution bar’s scope, courts will balance the risk of inadvertent disclosure or competitive use of confidential information against the potential harm caused by denying a party its counsel of choice. In Aerin, the court determined strategic narrowing was a considerable threat given the number of ongoing post-grant proceedings, but that a prosecution bar that prevented participation in any IPR motions to amend appropriately balanced that risk.

* Nick is a Summer Associate in Jones Day’s Cleveland Office.

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Matthew Johnson

Partner at Jones Day
Matt Johnson is one of the Firm's primary contacts on practice before the PTAB. Currently co-chairing the Firm's PTAB subpractice and involved in proceedings at the Board since the first day of their availability in September 2012, Matt regularly represents clients as both petitioners and patent owners at the Board. He further works as an advocate for clients in appeals from Board proceedings at the Federal Circuit.