PTAB’s Factual Findings Were Sufficient, Standard Was Improper

Intelligent Bio-Systems, Inc. v. Illumina Cambridge, Ltd., (Fed. Cir. May 9, 2016) (Before O’Malley, Wallach, and Hughes, J.) (Opinion for the court, O’Malley, J.). Click Here for a copy of the opinion. 

Illumina owns a patent directed to a method of labeling nucleotides in a DNA strand. The labels are used in a “sequencing by synthesis” (SBS) method. This process is used to identify a DNA sequence by synthesizing a single strand, using nucleotides that are complementary to a sample strand. The SBS method adds complementary nucleotides to form the double-helix structure of DNA. IBS filed a petition to the PTAB requesting inter partes review of certain patent claims.  

The Board determined that two prior art references described a labeling process and sequencing of a nucleic acid molecule, but neither of the references disclosed a protecting group that comprised an azido group, which was a feature of the Illumina patent. The Board found that claim 1 encompassed the use of any protecting group attached to one of two oxygen atoms of a sugar moiety, where the protecting group can be modified or removed to expose an OH group. The Board agreed with Illumina’s argument that an ordinary artisan would not have considered it obvious to use the azidomethyl protecting group taught by one reference with the processes taught by another reference. The Board relied on IBS’s failure to demonstrate a motivation to combine the references, and that a person of ordinary skill would not have had a reasonable expectation of success.  

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The Board also refused to consider IBS’s reply brief and expert declaration because it held that IBS’s reply was improper under two provisions of 37 C.F.R., (37 C.F.R. § 42.23(b) and 37 C.F.R. § 42.6(a)(3)) requiring that reply be only in response to arguments raised by the patent owner and that arguments not be incorporated by reference from other documents. The Board contended that IBS introduced a new argument in its reply brief and improperly incorporated by reference arguments from the expert declaration into the brief. The Board thus found that IBS failed to satisfy its burden of demonstrating obviousness by a preponderance of evidence. IBS appealed. 

The Court noted that decisions related to compliance with the Board’s procedures are reviewed for abuse of discretion. As far as the “reasonable expectation of success” requirement, the Court noted that the Board improperly looked to whether one would reasonably expect the references to operate as those references intended once combined. The Court held that this was the incorrect standard, and instead one must have the motivation to combine with the expectation of achieving what is claimed in the patent-at-issue. The Court held, however, that while the Board conflated the reasonable expectation of success standard and motivation to combine, it nonetheless made sufficient factual findings to support its judgment that the claims at issue were not invalid.  

The Court also concluded that the reply brief and accompanying declaration exceeded the scope of the reply under 37 C.F.R. § 42.23(b) and the Board did not abuse its discretion in excluding these documents. Thus, the Court held it did not need to resolve whether the reply brief complied with 37 C.F.R. § 42.6(a)(3), which states that “arguments must not be incorporated by reference from one document into another.” For the reasons indicated above, the Court affirmed the Board’s decision.

Lindsay Henner, Parker Hancock, and Puja Dave also contributed to this summary.

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