Categories: 103 Date: May 26, 2016 Title: Redline Detection, LLC, v. Star Envirotech, Inc., No. 2015-1047 (Fed. Cir. 2015)
Written By: John KirkpatrickRedline instituted an inter partes review (IPR) to show that claims 9 and 10 of U.S. Patent No. 6,526,808 (the ’808 patent), owned by Star, would have been obvious. Redline did not include expert testimony to support its grounds in its IPR petition. Upon institution of the IPR on two of the twelve grounds proposed in Redline’s petition, Redline submitted a motion for supplemental disclosure including expert testimony pursuant to 37 C.F.R. § 42.123(a), which allows for supplemental information “relevant to a claim for which the trial has been instituted” to be submitted “with-in one month of the date the trial is instituted.” The USPTO PTAB denied Redline’s motion finding that the supplemental information could have been submitted with Redline’s petition and did not comply with the PTAB’s “statutory mandate for economy, integrity, efficient administration, and timely consideration of IPRs.” Redline at *14. The PTAB then rejected the grounds, noting that Redline “did not rely on an expert declaration in support of its position.” Id. at *12. While Redline admitted that it intentionally delayed filing the expert information because submitting information for two grounds is less of a burden than submitting information for twelve grounds, Redline, on appeal, argued that the PTAB must allow the motion as long as the timeliness and relevance requirements of §42.123(a) are met.
Redline first argued that the regulatory history (i.e., comments during rulemaking and the USPTO’s responses to those comments) “presumptively established that the timeliness and relevance requirements of §42.123(a) were sufficient to meet the [PTAB’s] statutory mandate for economy, integrity, efficient administration, and timely consideration of IPRs.” Id. at *14. Noting a deferential abuse of discretion standard towards the PTAB’s interpretation of USPTO regulations, the Federal Circuit (Lourie, WALLACH, Hughes) rejected Redline’s argument, noting that “[t]he plain language of § 42.123(a) does not exclude the application of other general governing regulations” and that requiring admission of the information as long as it was timely and relevant would “cut against this mandate and alter the intended purpose of IPR proceedings.” Id. at *15. The Court further noted that the regulatory history did not establish that timeliness and relevance of the information were sufficient to meet the statutory mandate. Id.
Similarly, noting that § 42.123(a) does not “exclude the application of other PTAB regulations,” the Court rejected Redline’s argument that the plain meaning of the statute prohibits the PTAB from using its discretion. Id. at *18. Rather, “timeliness and relevancy provide additional requirements that must be construed within the overarching context of the PTAB’s regulations.” Id. (footnote removed).
Redline further argues that the PTAB acted arbitrarily and capriciously by citing similar cases in which the PTAB had granted supplemental motions. The Court distinguishes those cases by noting in one instance that the supplemental information was served in response to the patent owner’s objections, that the patent owner already had possession of the information, and that the information did not change the grounds of unpatentability or the evidence initially presented in the petition. Id. at *20. Rather, Redline’s supplemental information “relates to a ground for which the trail was instituted, rather than only to a claim of the patent, for which the trial was instituted.” Id. (emphasis removed). Another case is distinguished because the petitioner had merely supplemented the extensive expert information in its petition with a shorter expert report that the PTAB determined the patent owner would have time to address. Further, the PTAB stated “[a]lthough a party may meet the [37 C.F.R. § 42.123] . . . that does not, itself, guarantee that the motion will be granted,” and § 42.123(a) does not offer “a routine avenue for bolstering deficiencies in a petition raised by a patent owner in a preliminary response” or “a ‘wait-and-see’ opportunity to supplement a petition after initial comments or arguments have been laid out by a patent owner.” Id. at 21 (emphasis removed).Thus, the Court rejected Redline’s arguments that the PTAB improperly applied the definition of a PHOSITA because Redline’s supplemental information was not admitted and the Court’s review “is confined to the ‘four corners’ of that record.” Id. at *26. The Court further rejected Redline’s other obviousness arguments for similar lack of support.