Director Review: PTAB Must Articulate Bases for Section 325(d) Denial

By Ashvi Patel and Josh Nightingale –

Director Vidal recently vacated the Patent Trial and Appeal Board’s (PTAB) decision to deny institution of three petitions for inter partes review (IPR), citing insufficient explanation for denial under 35 U.S.C. §325(d).  Specifically, Director Vidal held that the PTAB’s institution decision did not adequately address Petitioner’s contention that there were material differences between the arguments made in its Petition and those considered during examination of the disputed patents.

35 U.S.C. §325(d) states that the PTAB may deny institution of an IPR if the same or substantially the same prior art or arguments were previously presented to the Office. The precedential case Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH provides a two prong framework to determine if denial under this basis is appropriate:  (1) whether the same or substantially the same art previously was presented to the Office or whether the same or substantially the same arguments previously were presented to the Office; and (2) if either condition of [the] first part of the framework is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of challenged claims. IPR2019-01469, Paper 6 at 8 (PTAB Feb. 13, 2020) (precedential).

In this case, the central issue of the Director Review was whether the PTAB adequately analyzed the first prong of the Advanced Bionics framework.  In denying each petition, the PTAB found that substantially the same art and arguments had been previously presented to the Office.  Petitioner requested Director Review, contending that the PTAB had failed to address the material differences between the Petition’s art and arguments and those previously presented to the Office.  Particularly, Petitioner alleged that the PTAB “abused its discretion by relying on claim limitations covered by the references, rather than the references themselves.”

As the basis for her decision, Director Vidal relied on a previous Director Review decision, where she held that prior art references are not substantially the same when there are differences between them that are material to the Office’s prior consideration of the art.  See Wolfspeed, Inc. v. Trs. of Purdue Univ., IPR2022-00761, Paper 13 at 7–8 (Mar. 30, 2023).  Because the Petitioner had identified material differences between the references presented in the petitions and those considered during prosecution, Director Vidal found that the panel needed to (i) reject Petitioner’s characterization of the differences, or (ii) make a finding that the differences are immaterial to patentability.  Further, Director Vidal criticized the panel for centering its denial around high-level similarities that lacked detailed reasoning.  Accordingly, the Director vacated the panel’s decisions denying IPR and instructed the panel to reassess whether §325(d) denial was appropriate under this guidance.

Takeaway: The PTAB must articulate why it agrees or disagrees with a Petitioner’s position on material differences between previously considered prior art and PTAB-submitted prior art.  Petitioners should make sure that these arguments are in the record, either in the Petition or any granted Petitioner Reply.