Overview
35 U.S.C. § 325(d) provides that “[i]n determining whether to institute or order a proceeding . . 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.” 37 C.F.R. § 42.4(a) delegates this discretion to the board. Thus, 325(d) often presents a separate and threshold hurdle that a petitioner must confront when seeking institution of trial for a given patent. For the responding patent owner, 325(d) provides an opportunity to convince the board that the petitioner’s arguments (and art) are simply a rehash of what was reviewed and considered by the US Patent and Trademark Office.
Analysis under 325(d) breaks down into two prongs. One, was the art at-issue presented to and previously considered by the patent office? Two, was modifying references in the manner suggested by the petitioner presented to and previously considered by the patent office?[1] From this framework, strategies for both patent owners and petitioners evolve.
The first part of this inquiry, whether a given reference was “presented to” the office during prosecution, is fairly straightforward. Review of the intrinsic record and, most notably, the information disclosure statement should resolve the issue.[2] The crucial inquiry then, is whether the art was previously considered by the office.
For patent owners, relying solely on a reference’s inclusion on the information disclosure statement to support denial under 325(d) carries risk. When a reference is simply cited on the information disclosure statement, but is not shown to have been considered in any detail, denial of institution under 325(d) is uncommon.[3]
Patent owners fare better under 325(d) when they can demonstrate substantive consideration of a reference, even it if means relying on a related reference or consideration of claims not necessarily at issue in the inter partes review. For example, in Ziegmann, the petitioner’s primary reference was Ziegmann. During prosecution, the examiner had used the US Patent Application Publication of Ziegmann (“Ziegmann ’503”) to reject a claim during prosecution. However, even though Ziegmann had only been cited on the information disclosure statement, given that the Ziegmann ’503 reference had been expressly considered by the examiner, the board denied the petition under 325(d) stating that “based on the totality of evidence, we find that Ziegmann itself, and certainly the substance of Ziegmann, was considered by the Office.”[4]
In Agrinomix, the petitioner sought to invalidate two independent claims based on a primary reference, Nöthen. In response, the patent owner argued that Nöthen had been presented to and previously considered by the office. The board agreed, noting that Nöthen was discussed in the patent’s specification, cited in the information disclosure statement, and relied on in an office action to reject certain limitations of dependent claims.[5] Of relevance is that while Nöthen was previously relied upon to reject dependent claims (whereas independent claims were at issue before the board), the board was unmoved by the distinction and noted that “although the Examiner may only have relied upon Nöthen to address the limitation of a dependent claim, that fact does not obviate that Nöthen was before the Examiner and that the Examiner relied upon it in rejecting certain claims during prosecution.”[6]
From a patent owner’s perspective, a key takeaway is that more is needed than simply pointing to the information disclosure statement to establish that a reference was “considered” by the office. Citing explicit discussion, analysis, reliance on the art, or closely related art in the prosecution history can be essential to establishing that the office considered it — even if the office considered the art in relation to other claims not at issue.
From the petitioner’s perspective, Fox Factory presents the juxtaposition between art considered, and art merely cited. There, one ground of unpatentability rested on Hattan and Martin, another rested on Hattan and JP-Shimano. In its preliminary response, patent owner argued that Martin was presented to and considered by the examiner.[7] The board agreed that the examiner considered Martin at length during prosecution, and noted that the petitioner did not allege that the examiner misapprehended or overlooked anything in Martin. On this basis, the board rejected the ground relying on Martin and Hattan under 325(d).[8] As for the JP-Shimano reference, while it, like Martin, had been cited in the information disclosure statement, the board determined that “there [was] no evidence that the Examiner considered JP-Shimano at any length during the original prosecution.”[9] And while the board acknowledged that JP-Shimano had been offered for the same teachings as the Martin reference (though it further acknowledged that the JP-Shimano had some advantages over the Martin reference), it instituted IPR on the JP-Shimano ground.[10]
Thus, for petitioners, protecting against 325(d) starts with the selection of art. Art never before the office is, of course, best, and likely avoids the issue altogether. That said, most practitioners understand that they often don’t have the luxury of relying entirely “new” art. So when using art that was cited in the information disclosure statement or substantively discussed by the examiner, a detailed assessment is in order. Was the art simply identified in the information disclosure statement, or was the art discussed, analyzed, or relied upon by the examiner (even if for claims not at issue in the petition)? If the latter, do you need to find new art that fills any void identified by the examiner during examination? Objectively assessing your art, and thoroughly reviewing its place in the prosecution history usually points toward the appropriate strategy.
The second prong of the 325(d) inquiry is often the most contested issue and asks whether the petitioner is merely seeking to modify and combine references in the same manner that was previously presented to the office. While the first prong of the 325(d) analysis is mostly objective in nature (i.e., was the reference cited in the information disclosure statement and/or specifically discussed or relied upon in the prosecution history?), the second prong is more subjective, as how the references are modified and combined provides ample room for argument from both patent owners and petitioners.
Patent owners have been successful in showing that the office previously considered modifying references in the manner raised by the petitioner in an IPR — even when the petitioner submitted different references in the IPR. In Ziegmann, the petitioner submitted references that were not in front of the examiner and argued that these “new” references taught a limitation — a shaped-end trigger — that was not present in the prior art before the examiner. Even though the petitioner had submitted references different from those the examiner previously considered, the board determined that these references were substantially similar. Accordingly, the question of whether it would have been obvious to modify the primary reference to include the shaped-end trigger had been presented to and considered by the examiner.[11] Thus, the board executed its discretion and denied institution of trial.
In Cultec, the petitioner argued that a reference, Ellis, disclosed a plurality of “discontinuous grooves” in a stormwater management system. The board compared Ellis with another reference, Brochu (submitted as a third-party submission during prosecution), that disclosed “discontinuous slots.” After determining that the disclosure for the “grooves” of Ellis and “slots” of Brochu was substantially the same, the Board denied institution under 325(d).[12]
The upshot for patent owners making an argument based on 325(d) is this: Identify with specificity where the art and arguments presented in the petition were considered during prosecution. Explain how the office examination was substantive. Draw specific parallels between the disclosures in the petition art and the prosecution art because cases like Ziegmann and Cultec tell us that the board will closely review references and not assume that a “new” reference necessarily provides a new disclosure.
For petitioners, the second prong of the 325(d) analysis might provide the best opportunity to argue against invocation of 325(d). The importance of the selection of art was highlighted earlier, and it is important here as well. Indeed, primary references that were in front of the examiner — even relied upon by the examiner — are not a petition’s death knell under 325(d) if additional art and evidence is submitted — and is substantively different than any art before the examiner. Praxair demonstrates this. There, even though the board found that two primary references were cited during prosecution, and one was actually relied upon by the office (presumably meeting the “presented to and previously considered” prong of the inquiry), institution was proper because the proposed grounds of invalidity also included additional references not before the examiner. On this basis, the board granted institution after finding that the patent owner failed to show that substantially the same arguments and substantially the same combination of references had been before the examiner.[13]
Petitioners have also used expert testimony to successfully argue against the discretionary use of 325(d). In Apotex, the patent owner argued that the petitioner’s reliance on two prior art references, Kovarik and Thomson, should be rejected under 325(d) because Applicants overcame a rejection based on Kovarik and Virley (a reference allegedly interchangeable with Thomson,) during prosecution.[14] The petitioner admitted that Kovarik was substantively discussed, but submitted expert testimony opining that “several assertions made by Applicants’ attorneys during prosecution to overcome the rejection [were] incorrect.”[15] Based on the record before the board, the board found Apotex’s argument persuasive and declined to deny institution under 325(d).[16] Likewise, in Actavis the board found that an expert declaration in support of the petition was not duplicative of evidence previously submitted to the office.[17] Finally, in the Praxair case noted above, the board also indicated that an expert declaration was relevant to its determination of whether applying 325(d) was appropriate. While expert declarations opining on combinability, motivation to combine, etc., are commonplace additions to petitions, consideration should be given to using the declaration to address 325(d) (i.e., highlight the differences in references or evidence).
What was said about patent owner strategies can also be turned and used by petitioners. When the examiner identifies a missing limitation in the prior art, they have provided opportunity. Specifically explain why the petition reference provides a more robust disclosure than anything that was before the office. Explain how prior art that was previously before the office is now being presented in a different light. Explain how the petition is relying on the prior art reference to identify a different claim limitation than that which it was used for during prosecution. Finally, don’t forget your expert!
The application of 325(d) in IPRs gives rise to strategic considerations for both petitioners and patent owners. For patent owners, 325(d) provides a procedural-based free shot — a nonmerit-based opportunity to argue why trial should be denied. If the argument is there, it should always be considered. For petitioners, the application of 325(d) has drastic consequences. Indeed, it provides the basis for outright denial of a request for inter partes review and well thought out invalidity argument can fall by the wayside. However, the patent owner can only attack the art that was submitted. Thus, when selecting art, the petitioner is always well-advised to consider 325(d) as part of the selection process.
The scope and intent of this article is not to provide specific guidance, but only to highlight the importance of 325(d) and submit a few considerations for petitioners and patent owners.
Kelly J. Eberspecher is a partner in the Chicago office of Steptoe & Johnson LLP. Katherine D. Cappaert is an associate in the firm's Washington, DC, office.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] See, e.g., Unified Patents Inc. v. John L. Berman, IPR2016-01571, Paper 10 at 9-16 (PTAB Dec. 14, 2016).
[2] See, e.g., Ziegmann, N.P.Z., Inc. v. Carlis G. Stephens, IPR2015-01860, Paper 11 at 7, 9 (PTAB Feb. 24, 2016) (noting that the references were cited in an IDS when determining whether to deny institution under 325(d)); Praxair Distribution, Inc. v. Ino Therapeutics, LLC, IPR2015-00893, paper 14 at 8 (PTAB Sept. 22, 2015) (same).
[3] See, e.g., Digital Check Corp. d/b/a ST Imaging v. E-Imagedata Corp., IPR2017-00178, Paper 6 at 12-13 (PTAB April 25, 2017) (acknowledging that a prior art reference was cited in an IDS, but granting institution because there was no indication that the claims were rejected based on those references or that the Examiner substantively discussed those references during prosecution); Fox Factory, Inc. v. SRAM, LLC, IPR2016-01876, Paper 8 at 7-9 (PTAB April 3, 2017) (denying institution under 325(d) for grounds based on prior art references that were substantively addressed during prosecution, but refusing to deny institution based on 325(d) for grounds based on a prior art reference that was simply cited in an IDS and not considered at any length); Praxair Distribution, Inc., IPR2015-00893, Paper 14 at 8 (granting institution even though the references were previously cited in an IDS because Patent Owner failed to identify with specificity where the references were considered).
[4] Id., see also Unified Patents Inc. v. John L. Berman, IPR2016-01571, Paper 10 at 11 (PTAB Dec. 14, 2016) (finding that even though the claims at issue were never rejected over the prior art reference, the reference was applied in an office action and amendments to the claims at issue occurred immediately following that office action).
[5] Agrinomix, LLC v. Mitchell Ellis Products, Inc., IPR2017-00525, Paper 6 at 11 (PTAB June 14, 2017).
[6] Id.
[7] Fox Factory, IPR2016-01876, Paper 5 at 23-24.
[8] Fox Factory, IPR2016-01876, Paper 8 at 7-8.
[9] Cite.
[10] Id. at 8-9.
[11] Ziegmann, IPR2015-01860, Paper 11 at 10.
[12] Cultec, Inc. v. Stormtech LLC, IPR2017-00777, Paper 7 at 12 (PTAB Aug. 22, 2017)
[13] Id. at 10.
[14] Apotex Inc. v. Novartis AG, IPR2017-00854, Paper 11 at 13 (PTAB Sept. 22, 2015)
[15] Id.
[16] Id. at 12-13.
[17] Actavis LLC v. Abraxis Bioscience LLC, IPR2017-01103, Paper 7 at 8 (PTAB Oct. 10, 2017)
