An Argument for Mandatory Production of Limited Secondary Consideration Evidence by Petitioners in Inter Partes Reviews

By Kristin Doyle
September 13, 2020

“It seems manifestly unjust that a petitioner can publicly condemn a patent as obvious, yet not be forced to disclose evidence documenting that, behind closed doors, the petitioner behaved in a manner (i.e., copied/applauded the patented technology) that suggests a contrary belief.”

https://depositphotos.com/3586074/stock-photo-evidence.htmlThe Federal Circuit has repeatedly confirmed that secondary consideration evidence is an integral part of an obviousness analysis (indeed, it “may be the most pertinent, probative, and revealing evidence available to the decision maker in reaching a conclusion on the obviousness/nonobviousness issue”) and thus has mandated consideration of such evidence in assessing obviousness (Mintz v. Dietz & Watson, Inc.). The United States Patent and Trademark Office (USPTO) similarly requires consideration of secondary consideration evidence (MPEP 2145 (9th ed. Rev. 10.2019, June. 2020). This requirement makes sense.

Obviousness is Tricky

Rarely (if ever) does an invention not leverage technology that came before it. Rather, most inventions represent improvements over technology already in existence. Because of this, many patent claims can be made to appear obvious in hindsight by culling together a hodge-podge of prior art references. This is the case even for patents covering subject matter that, in practice, may have revolutionized an industry.

Yet patent examiners assessing patentability of an invention typically do not have “real world” insight into an industry so as to understand the impact of an invention on that industry. Secondary consideration evidence, such as evidence of long-felt need, failure of others, unexpected results, commercial success, industry praise, and copying, provides a patent applicant with a means by which to impart this insight to an examiner. The argument goes that, although the invention may appear to have been obvious based on the paper record, the state of the industry and its reaction to the invention demonstrate that it actually was not obvious. In this way, a theoretical obviousness case can be combated using real world evidence.

Secondary consideration evidence also comes into play in litigation to combat patent invalidity challenges. The Federal Circuit in Mintz held that secondary considerations “help inoculate the obviousness analysis against hindsight” and consideration of them is required because they “provide objective evidence of how the patented device is viewed in the marketplace, by those directly interested in the product.” As the Federal Circuit aptly noted, “[o]bviousness requires a court to walk a tightrope blindfolded (to avoid hindsight)—an enterprise best pursued with the safety net of objective evidence.”

While defendants in litigation will often argue that an asserted patent is obvious based on a collection of prior art references, discovery typically ensures that defendants will be made to produce non-privileged secondary consideration evidence that may be directly contrary to the defendants’ obviousness case and that may be used by the patent owner to undermine the invalidity challenge.

Secondary Consideration Evidence at the PTAB

Since the America Invents Act (AIA) of 2011, invalidity challenges are more likely to be found in an inter partes review (IPR) proceeding than in a district court. As a general rule, IPRs have afforded patent challengers a more cost-effective and expeditious avenue by which to challenge the validity of a patent. As a result, the fate of many patents now plays out on the PTAB stage instead of in a district court.

Among its many benefits to a patent challenger, IPRs have also effectively provided petitioners (i.e., patent challengers) with a shield against disclosure of evidence that might directly undermine their obviousness arguments – evidence that they typically would have been forced to disclose in district court litigation.

The PTAB discovery rules provide for “limited discovery” in IPR proceedings. Such “limited discovery” includes (1) routine discovery and (2) additional discovery.  “Routine discovery” is generally discovery that must occur as a matter of course. “Additional discovery” is discovery that must be requested and will be ordered at the discretion of the PTAB if “in the interests of justice.”

Included under “routine discovery” is the requirement that “a party must serve relevant information that is inconsistent with a position advanced by the party during the [IPR] proceeding.” If a petitioner argues invalidity based on obviousness, an argument can be made that secondary consideration evidence in its possession may be characterized as “inconsistent” with its obviousness case. If so, a reasonable reading of the PTAB discovery rules would require the disclosure of such evidence as “routine discovery.”  This is particularly the case given that the Federal Circuit has mandated that such evidence be considered in assessing obvious and the fact that the petitioner would generally be required to produce such information in a district court litigation anyway.

Yet, given the stated goals of economy and efficiency in IPRs, it is unsurprising that the PTAB has not taken the position that “routine discovery” broadly encompasses secondary consideration evidence. Indeed, and to be fair, the majority of secondary consideration evidence is equally as accessible to the patent owner as it is to the petitioner. Moreover, exactly what qualifies as secondary consideration evidence and whether it is truly “inconsistent” with a proffered obviousness argument is certainly open for debate. But this is not the case in a few instances, such as with petitioner’s non-privileged internal documents that evidence the petitioner’s copying of the patented technology and/or praise within the petitioner’s organization of it. This type of evidence – if it exists – is fairly characterized as inconsistent with a petitioner’s obviousness position, and thus its production should be mandated by the “routine discovery” rules.

It is noteworthy that the PTAB has also not been particularly generous in granting requests for such information under the “additional discovery” rules, placing the burden on the patent owner to demonstrate to the satisfaction of the PTAB board that five separate factors (the Garmin factors) weigh in favor of the discovery and thus the discovery is “in the interests of justice.” However, resort to the more stringent “additional discovery” rules should not be necessary – rather, the “routine discovery” rules arguably mandate disclosure of this type of information if the petitioner is arguing invalidity based on obviousness.

A One-Sided Story

It seems manifestly unjust that a petitioner can publicly condemn a patent as obvious, yet not be forced to disclose evidence documenting that, behind closed doors, the petitioner behaved in a manner (i.e., copied/applauded the patented technology) that suggests a contrary belief. Yet, currently, an IPR petitioner is able to avail itself of all of the benefits of IPR proceedings and do so with the peace of mind that it is effectively free from any obligation to produce a category of evidence known only to it – evidence of copying or praise of the patented technology – that might directly cut against its obviousness case. In this way, petitioners are empowered to present a one-sided invalidity story free of “the safety net of objective evidence” so critical in combating hindsight. No wonder petitioners love IPRs.

 

Image Source: Deposit Photos
Author: filmfoto
Image ID: 3586074 

The Author

Kristin Doyle

Kristin Doyle serves as the co-team leader of Kilpatrick Townsend's Mechanical & Medical Device Patent Team. She also serves on the firm's Post-Grant Proceedings Team and has managed a number of inter partes review proceedings.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 8 Comments comments. Join the discussion.

  1. Pro Say September 13, 2020 5:55 pm

    Thanks Kristin — excellent analysis and proposal.

    Sadly for American innovation, adjudicatory bodies often give the secondary considerations no more than lip service.

    The PTAB included.

  2. MaxDrei September 14, 2020 5:35 am

    Looking in from outside, this all seems quite weird. The way to squeeze out impermissible hindsight is to use a TSM approach. Resort to “secondary considerations” multiplies the likelihood of impermissible hindsight influencing the result. However, judges lacking capability to understand the subject matter of a patent dispute feel more comfortable relying upon the evidence of “secondary considerations” to deliver justice than struggling to write a credible obviousness decision using a TSM approach. Hence their plaintive reminders that “if we are to decide this case fairly, what we need is plenty of evidence of secondary considerations”.

    The consequences are dire. Debating obviousness in an inter partes case is grotesquely slow and expensive. So much so that courts now use 35 USC 101 routinely, precisely to short circuit out of the horror that is the obviousness dispute. Two wrongs don’t make a right.

  3. Vincent Capuano September 14, 2020 8:03 am

    A mandatory commercial success disclosure requirement would have to come with a corresponding estoppel provision for the patent owner.

  4. Daniel Hanson September 14, 2020 9:27 am

    In Return Mail, Inc. v. United States Postal Service, 139 S.Ct. 1853 (2019), Justice Sotomayor had this to say about inter partes review, in comparison to ex parte reexamination: “By contrast, the AIA post-issuance review proceedings are adversarial, adjudicatory proceedings between the ‘person’ who petitioned for review and the patent owner: There is briefing, a hearing, discovery, and the presentation of evidence, and the losing party has appeal rights. *** Thus, there are good reasons Congress might have authorized the Government to initiate a hands-off ex parte reexamination but not to become a party to a full-blown adversarial proceeding before the Patent Office and any subsequent appeal.”

    If one party to such a proceeding is not entitled as a matter of right to discover evidence in the hands of an adversary, and such evidence is clearly relevant, then perhaps Justice Sotomayor should have called it a “partially blown” adversarial proceeding.

  5. TFCFM September 14, 2020 9:46 am

    KD: “an IPR petitioner is able to avail itself of all of the benefits of IPR proceedings and do so with the peace of mind that it is effectively free from any obligation to produce a category of evidence known only to it – evidence of copying or praise of the patented technology – that might directly cut against its obviousness case.

    The rule regarding ordinary discovery that Ms. Doyle herself cites:

    KD: “Included under ‘routine discovery’ is the requirement that ‘a party must serve relevant information that is inconsistent with a position advanced by the party during the [IPR] proceeding.’

    A petitioner CANNOT decline to produce known evidence that is inconsistent with its position on obviousness (not without potentially triggering an ancillary suit and/or bar discipline). Trying to interpret Ms. Doyle’s comments in light of this obligation, she seems to be advocating for a broadening of the obligation upon petitioners — that they be required to disclose any evidence which ???even the cleverest (or most-hand-waving-ish) patentee’s representative might choose to try to color as “evidence of secondary considerations” under some unknown theory of non-obviousness??? .

    That would appear to impose a mind-reading requirement on practitioners far more onerous than in any other contested proceeding (and practically both unworkable and unenforceable to boot).

    It’s pretty simple: If a petitioner has evidence inconsistent with an assertion of obviousness, the evidence must be turned over. Even though it’s possible that reasonable minds might genuinely differ as to precisely where “inconsistent” starts and stops, it’s not the rule that’s the problem in such instances, it’s the interpretation.

  6. Eileen McDermott September 14, 2020 10:10 am

    Vincent – Please note that authors have no ability to delete comments. Your comment simply wasn’t approved automatically so had to be manually. And now it has been.

  7. Josh Malone September 14, 2020 11:47 am

    We had to get such evidence from a parallel proceeding in a real court (which respects due process). Then we were able to file the evidence in the PTAB to rebut the obviousness challenge.

    The petitioner had emails stating:

    “This is only the first proto so assume this will have 37 filler rods and balloons like theirs and work exactly like the original ‘Bunch of Balloons'”; and

    “Here is our version below where we would just paint the cap and change out the balloons using the bands removed from their product, new BLUE balloons we loaded on, and a painted cap…”

    The emails were accompanied by photos where they had cannibalized my product that they surreptitiously got by “backing” my Kickstarter campaign.

    Other evidence included the tens of millions of dollars they made off of their infringing copy.

    The PTAB does not permit discovery of such evidence. That is a main reason they have an 84% invalidation rate. Inventors are not given due process at the PTAB.

    https://www.joshtheballoonguy.org/wp-content/uploads/2020/09/14976055-Declaration.pdf

  8. mike September 17, 2020 1:17 am

    @Josh
    So in other words, you had to engage in district court litigation to overcome the shortcomings of the AIA’s PTAB, which was touted as a faster and cheaper alternative to what? …District court litigation. Wow.

    Congress, thank you so much for ruining the patent system with the AIA.

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