Limitations Absent from a Notice of Allowability May be Material

by | Oct 10, 2023 | 325(d) issues, PTAB News, Trial Institution

By Daniel Sloan and Matt Johnson –

On August 24, 2023, USPTO Director Kathi Vidal vacated a PTAB decision denying institution of inter partes review in Keysight Technologies, Inc. v. Centripetal Networks, Inc. and remanded the case for further proceedings.  IPR2022-01421, Paper 14 (Aug. 24, 2023).  The Petition for institution concerns Patent No. 10,681,009 B2 (“the ’009 patent”), directed towards “Rule Swapping in a Packet Network.”

Keysight Technologies, Inc. (“Petitioner”) petitioned for institution of inter partes review of claims 1-30 of the ’009 patent, arguing the claims were invalid for obviousness.  Id. at 2.  Centripetal Networks, Inc. (“Respondent”) argued that the PTAB should exercise its discretion to deny the petition because the same references and arguments cited by Petitioner were previously considered by the Office and Petitioner did not show that the Office erred in a manner material to the patentability of the challenged claims.  Id. at 2.

On March 22, 2023, the PTAB denied institution of review under 35 U.S.C. § 325(d), agreeing with Respondent and finding “Petitioner did not plead material error” and “arguments in the Petition were the same or substantially the same as those found in the Final Written Decision (“FWD”) on the ’148 patent.  Id. at 4; id. Paper 9 at 10 (Apr. 21, 2023).  Petitioner requested rehearing and review by the Precedential Opinion Panel.  Id.  Director Vidal ordered sua sponte review on July 20, 2023 under the Interim process for Director Review, sections 8, 10, and 22.  Id. at 2; id., Paper 12 (July, 12, 2023).  Accordingly, the Precedential Opinion Panel dismissed Petitioner’s requests.  Id.

35 U.S.C. § 325(d) gives the Director and the PTAB discretion to deny a petition to institute review, “tak[ing] into account whether, and reject[ing] the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office.”  A two-step framework guides this discretion.  Advanced Bionics, LLC v. MED-EL Elektromedizinische Geräte GmbH, IPR2019-01469, Paper 6 (PTAB Feb. 13, 2020).  First, the Board asks whether the same or substantially the same prior art or arguments previously were presented to the Office.  Id.  If either condition of step one is satisfied, the PTAB asks whether petitioner demonstrated that the Office erred in a manner material to the patentability of the challenged claims.  Id.  The Advanced Bionics framework reflects a strong deference to Examiner determinations “unless material error is shown.” Keysight Technologies, IPR2022-01421, Paper 14 at 5.  Here, the Director agreed with the PTAB’s application of the first part of Advanced Bionics’ test but disagreed with its application of the second.  Id. at 5-7.

During prosecution of the ’009 patent, Respondent filed an IDS identifying an FWD on U.S. Patent No. 9,674,148 (“the ’148 patent”). Respondent also filed a terminal disclaimer listing, inter alia, the ’148 patent.  Id. at 3.  The Examiner issued a Corrected Notice of Allowability providing that the prior art failed to teach the combination of elements as recited in the ’009 patent.  Id. at 3-4.  The Examiner’s statement of reasons for allowance was directed to limitations appearing in both the challenged claims of the ’148 and ’009 patents. Id. at 7.

In support of its obviousness arguments, Petitioner relied on Cisco Systems, Inc. v. Centripetal Networks, Inc., finding the ’148 patent invalid under the same references it cited against the ’009 patent.  See IPR2018-01454, aff’d, Centripetal Networks, Inc. v. Cisco Sys., Inc., No. 2020-1768, 2021 WL 1889754 (Fed. Cir. May 11, 2021).  The Director found here that, under step two of Advanced Bionics, Petitioner’s cited evidence showed “a substantial overlap in the subject matter described in the ’009 patent” and the prior art cited in Petitioner’s obviousness contentions.  Relevant to her determination, in the judicially affirmed ’148 Final Written Decision, the PTAB found the claims of the ’148 patent unpatentable over the same prior art references asserted here.  See IPR2018-01454.  Id. at 7.

The Director acknowledged there are “some differences between the language of the challenged claims here and the challenged claims of the ’148 patent,” and that Respondent stated claims in the ’009 patent were drafted simultaneously with the ’148 patent IPR to recite limitations outside the claims of the ’148 patent.  Id. at 6.  Even so, the Director noted that the Examiner’s statement of reasons for allowance were directed to limitations appearing in both the challenged claims of the ’009 patent and the challenged claims of the ’148 patent.  Id. at 5-7.  But the Examiner’s statements for reasons for allowance did not refer to the additional limitations found only in the ’009 patent.  Because of the overlap between the two patents, the Director found that the Office erred by overlooking the significance of ’148 as pertaining to the patentability of the ’009 patent.  Thus, the Director concluded that the Examiner here erred in a manner material to the patentability of the challenged claims in the ’009 patent by “misapprehending or overlooking” determinations by the PTAB in the ’148 FWD.  Id. at 7.

The Director explained that her decision was not an ultimate decision on the merits.  Id. at 8.  Instead, the Director limited her holding to finding that the significant overlap between the references in the ’148 FWD and this case “militat[ed] against exercising [her]§ 325(d) discretion to deny institution.”  Id.  And the absence of a clear explanation from the Examiner as to why the ’148 FWD did not impact the ’009 patent’s eligibility also influenced the Director’s decision.  Id.  The Director remanded with instructions to evaluate the merits of the Petition to determine if Petitioner would succeed under the reasonable likelihood of success standard of 35 U.S.C. § 314(a).

Takeaway:

Patent Applicants should take note of concurrent PTAB proceedings relating to patents they already own.  When a Patent Owner anticipates that a Notice of Allowability may soon issue for their patent, the Owner should communicate with the Examiner about any additional limitations recited in the claims of the patent the Owner is prosecuting. And the absence of an explanation showing why another relevant decision does not apply to the application an Examiner is reviewing may later be the basis of a determination that an Examiner erred in a manner material to the patentability of the claimed invention.

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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.