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THIS FORM IS AVAILABLE FOR DOWNLOAD ON OUR WEBSITE: WWW.INNSOFCOURT.ORG

Our program explained the basics of IPRs to the audience (what they were intended to do, and whatsome of their features are), and we presented 3 skits that highlighted many of the issues that entities/people face when deciding whether to file an IPR, including timing and content limitations, practicalissues associated with certain proofs, and how oral hearings are conducted. The first skit mocked adiscussion between a partner and an associate following an IPR discussion with a client who had beensued for patent infringement; the second skit mocked an attorney-client discussion prior to an expertdeposition, and then a portion of the expert deposition itself; and the third skit mocked a final oralhearing. In between skits, we discussed rules and regulations governing IPRs, and polled the audienceabout IPR statistics and humorous questions appropriate for a Halloween presentation.

IPRs - Tricks, Treats, and Lessons Learned

October 30, 2014 2014-15

The Austin Intellectual Property American Inn of Court 13214

AUSTIN TEXAS

Darla Thomas 512.527.5514

[email protected]

12

TX 1.25

Projector

Program Submission Form

Agenda of Program:List the segments and scenes of the demonstration and the approximate time each step took; i.e., “Introduction by judge (10 minutes).”

Item Time

Program_Submission_Form.indd [Rev. 10/2012]

Roles:List the exact roles used in the demonstration and indicate their membership category; i.e., Pupil, Associate, Barrister or Master of the Bench.

Role Membership Category

Program Awards: Please complete this section only if the program is being submitted for consideration in the Program Awards.

Describe how your program fits the Program Awards Criteria:

Relevance: How did the program promote or incorporate elements of our mission? (Fostering Excellence in Professionalism, Ethics, Civility, and Legal Skills)

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Entertaining: How was the program captivating or fun?

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Creative and Innovative: How did the program present legal issues in a new way?

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Educational: How was the program interesting and challenging to all members?

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Easily Replicated: Can the program be replicated easily by another Inn? Yes No This program is: Original Replicated

Questions:Please contact Christina Hartle at (703) 684-3590 ext 105 or by e-mail at [email protected].

Please include ALL program materials. The committee will not evaluate incomplete program submissions.

See supplemental sheet

See supplemental sheet

It promoted legal skills by highlighting issues relevant to IPR filings and explained what clients consider and should consider in making decisions.

There were many jokes, and there only two or three times spans longer than 5 minutes that did not involve a joke of some kind.

Self-depreciating humor was a hallmark of all the performances.

It involved anonymous audience feedback throughout.

- 1 -

Roles

Role Membership Category

Sheila Kadura – program introduction and played the part of the patent owner’s expert

Associate

Mark Garrett – explained IPRs, introduced third skit + asked audience questions, and wrapped up + asked audience question

Barrister

Rob King – introduced first skit, and explained issues in first skit after first skit was completed + asked audience questions

Master of the Bench

Kevin Meek – played the part of the petitioner’s old lawyer in first and second skits

Master of the Bench

Bailey Morgan – played the part of the petitioner’s young lawyer in the first skit

Pupil

Andrew Broadaway – introduced second skit + asked audience questions, and explained issues in second skit after second skit was completed + asked audience questions

Associate

Chad Anson – played the part of the patent owner’s lawyer in the second skit, defending the patent owner’s expert

Barrister

Susan Hightower – played the part of a PTAB judge (APJ) in the second and third skits

Master of the Bench

Heather Flanagan – played the part of the petitioner (client) representative in the second skit

Pupil

David Weaver – played the part of petitioner’s replacement older lawyer in the third skit

Master of the Bench

Juliet Dirba – played the part of the patent owner’s lawyer in the third skit

Associate

Paula Heyman – played the part of another PTAB judge (APJ) in the third skit

Barrister

- 2 -

Agenda of Program

Item Time

Program introduction and factual setup 3 minutes

IPR basics explanation 6 minutes

Introduction of first skit 2 minutes

First skit 5 minutes

Explanation of issues in first skit and audience questions

10 minutes

Introduction of second skit and audience questions

6 minutes

Second skit 8 minutes

Explanation of issues in second skit and audience questions

7 minutes

Introduction of third skit and audience questions

6 minutes

Third skit 10 minutes

Explanation of issues in third skit and audience question

5 minutes

Team 1 Script for October 30.docx - 1 -

SCRIPT – PUPILAGE TEAM 1 (30 OCTOBER 2014)

Sheila Kadura:

[Cover Slide]

Tonight, we’re going to cover the topic of inter partes review, or IPR for short.

[transition to Overview Slide]

We will begin with some high-level details about IPRs, and then we’ll move into our scary-good skits that will highlight some of the pitfalls and challenges facing IPR practitioners and their clients.

We’ve sprinkled in some questions to test your knowledge along the way (and not just your IPR knowledge), so, if you’d like to participate, go to the following site—pollev.com/pteam1—which will allow you to submit responses and we’ll get to see what the crowd thinks in real-time.

[transition to Slide 3 – Trendy v. Creative]

To set the stage, our mock IPR tonight is between Trendy Trashbags and Creative Refuse Collection.

[transition to Slide 4 – Creative’s Patent]

Creative owns a patent that covers several stuffed trashbags attached together to resemble a person.

Trendy came out with a competing, somewhat-similar trashbag product … [pause for slide change]

[transition to Slide 5 – Trendy’s Product]

… and Creative sued for infringement.

Trendy made the decision to challenge Creative’s patent via an IPR.

Now, I’ll turn it over to Mark Garrett to take us through some IPR basics.

[transition to Slide 6 – “What is inter partes review?”

Mark Garrett (slide text is italicized):

IPRs were introduced by the America Invents Act as a successor to the recently-departed Inter-Partes Reexam process

“IPRs provide an opportunity to challenge the validity of an issued patent outside of district court litigation, subject to certain limitations:


Challenge may only be based upon prior art patents and/or printed publications”

[Other types of prior art like public uses and offers for sale are not considered. Patentable subject matter challenges under Section 101 also are not appropriate for an IPR.]

Decided by administrative patent judges from the new Patent Trial and Appeal Board

[The APJs are more technical judges that focus only on patent law.]

Rigid timing requirements must be observed”

[Timing considerations: for “first-to-file” patents, must wait more than 9 months after patent issues; for all patents, the IPR must be within 1 year of service of a patent lawsuit (if any); and must be before or on the same day as the filing of a declaratory judgment action for invalidity (if any)]

“Intended to be quicker, more efficient and less expensive for post-grant challenges”

[Initial determination of specific grounds within 6 mos from date of filing, with a final decision within 12 months after institution]

“Petitioner has BOP to show at least one claim is unpatentable under preponderance [of the evidence] standard”

[vs the higher “clear and convincing evidence” standard applied in civil actions]

[Also, a presumption of validity does not apply in IPRs]

Claim construction standard is “broadest reasonable interpretation”

[usually will result in a broader construction than in district court, where prosecution history can be taken into account]

“Estoppel attaches to instituted claims, which bars reliance on prior art that challenger ‘raised or reasonably could have raised”

[Instituted claims are those upon which the APJ has chosen to go forward in the IPR]

[Anecdotally, most claims should be easier to invalidate in IPR. But, at what cost?]

Mark (continuing): OK, before we get into the skits, let’s look at how ubiquitous (or not) IPRs have become.

[transition to Slide 7 (reminder about URL)]

First, remember: the address to visit is pollev.com/pteam1

[transition to Slide 8 (first stats question)]


As of October 2, how many IPR petitions have been filed since they became available?

[read the answers off the screen]

[transition to Slide 9 (the answer and interesting fact)]

The correct answer is C.

To put this in perspective, in fiscal years 2011 and 2012, 1,546 ex parte reexams were filed, which was at the height of their popularity over a 31-year period. In contrast, over 1,800 IPRs were filed in the first two full fiscal years of their existence.

And now, Rob King will introduce skit 1.

Skit 1

Rob King:

[transition to Slide 10 – Intro about Skit 1]

[Rob discusses skit intro slide]

[unplug source – screen goes dark]

Kevin: Well, I think that went very well. And Bailey, Sorry for having to shut you down in there but I’ve been representing

my client Trendy for a long time and they really need to hear the advice from our firm coming from me, the senior partner.

Now what was it that you were trying to interject?

Bailey: Well, Mr. Meek, there are a couple of points I think we need to consider. You know the IPR you just convinced them to file?

Kevin:

Yes. Very clever idea. Very clever. Bailey:

You do realize that it will pretty much completely cut off all of our validity case in the trial court, right? Kevin:

But only as to art that we put into the petition. We can do some more searching, find some other stuff.


Bailey:

No sir, we will be estopped from raising any art that we brought or could have brought to the PTO’s attention. The only thing we might be able to hold back on is prior public use or prior sale art. But we don’t have any of that. So, we will pretty much have no validity case left if the IPR is instituted. Kevin:

Crud. Well, we better do some more searching then. Find everything we can. Bailey:

Good idea, a month ago. You do realize that we only have three days to get this on file. We are now only three days from the one year anniversary of service of the district court litigation. Kevin:

What?!? What the hell are you talking about? I know somebody told me that there is a way to get around that. There is a way to challenge a patent that isn’t subject to the one year deadline!! Bailey:

Only if you intend to argue that Creative’s patent on a human-like, pumpkin trash bag figure relates to a financial product or service. That would allow us to pursue a CBM (or Covered Business Method review), which doesn’t have the one year deadline. But an IPR has to be filed within one year, no exceptions. I really don’t like our chances trying to characterize trash bags as a financial product. So we’ve got three days. Kevin:

Crap. You better get to work.

Bailey: Ya think so?! Unfortunately, that’s not all…

Kevin: What? What else?

Bailey:

You know the part when you presented the going forward budget that I prepared for you? Kevin:

Yep. You did a great job on that. Bailey:


You only presented half of it, the IPR part. You forgot to show them the litigation part. You are short a couple of million dollars. Kevin:

Bailey, Bailey, Bailey. I didn’t forget. When we get the IPR going, the litigation will stop. We won’t be spending those dollars. Bailey:

How is the litigation going to stop? You think we will get a stay granted? Kevin:

Yeah. Sure. A stay. Exactly what I was thinking.

Bailey: Hope so, but it’s going to be tough. Do you remember that hearing you did last

month? That was the Trendy Markman. We are in the Eastern District of Texas. They aren’t crazy about stays and the court has a lot of time already invested in the case which gives the judge an easy reason to deny the stay. Kevin:

What do you suggest we do? Bailey:

“We”? I don’t know about “we” but I am going to go write an IPR petition in three days, thanks very much and “you” are going to call your long standing client and get us back our litigation budget.

Rob King:

Alright, Kevin and Bailey covered a lot of IPR issues there.

[plug in source and transition to Slide 11 – Estoppel]

Estoppel was an important one. With CBMs—which can only be used to challenge patents directed to financial products or services, as opposed to IPRs, which are not subject to such a limitation—estoppel is limited to the issues raised. With IPRs, however, estoppel is much broader.

[transition to Slide 12 – IPR Estoppel – Statute and Rule]

[Rob discusses estoppel statute and rule slide]

[transition to Slide 13 – IPR – Filing Deadline]

[Rob discusses IPR filing deadline slide]


Stays is another of the issues Kevin and Bailey discussed, and one that can be very impactful. Let’s look at how frequently they have been granted.

[transition to Slide 14 (second stats question)]

During the first two years of IPRs, how frequently have stay motions in co-pending litigation been granted?


[transition to Slide 15 (answer)]

The correct answer is B. It’s worth noting that, even when the stay motion is opposed, the grant rate is still high: 63%.

[transition to Slide 16 - Factors for IPR Stay]

[Rob discusses stay factor slide]

[transition to Slide 17 - Strategies to Increase Likelihood of IPR Stay]

[Rob discusses strategies for stay slide]

And now, to lighten things up, let’s try some WICKED HARD IPR TRIVIA!

[transition to Slide 18 (IPR trivia question)]

The question: A patent is in ex parte reexam and in a lawsuit. The lawsuit is more than one year old. The reexam certificate comes out and it includes a new claim that the plaintiff successfully adds to the designation of claims in the lawsuit. Can the defendant IPR the new claim?

The answers:

A. Probably yes. Because the new claim was not in existence until one year after the lawsuit was filed, it is eligible for IPR. Any claims present at date the suit was filed and not included in an IPR are no longer eligible.

B. Probably yes. The one year window in which an IPR can filed applies on a claim by claim basis, so the year period begins for this claim on the date the reexam was issued.

C. Probably no. Because the claim arose from reexam proceedings it is never eligible for IPR, even if it were to have been announced within a year of the lawsuit.

D. Probably no. The statue says “patent” not “claim” and mentions that a reissue might give you a new timeline but does not mention a reexam.

[transition to Slide 19 (answer to IPR trivia question)]

The answer, as far as we know, is D. [Rob to provide any explanation necessary]


Now, let’s really buckle down and get into the nitty gritty while the evening is young.

[transition to Slide 20 – first horror question]

In the 1992 movie Bram Stoker’s Dracula, in what year does the scene involving Vlad the Impaler supposedly take place?


[transition to Slide 21 – answer to first horror question]

1215 was the year the Magna Carta was originally drafted. The answer, of course, is A.

I’ll now turn it over to Andrew Broadaway, who will set up skit 2.

Skit 2

Andrew Broadaway:

By now, Trendy has filed its IPR petition and the Board instituted a trial, meaning the Board found that Trendy had shown a reasonable likelihood it would prevail in proving that at least one of the challenged claims of Creative’s patent is invalid. In our example, Creative waived its preliminary response – it did not think Trendy had carried its burden.

Before we get into skit 2, let’s look at how frequently patent owners are fighting back at the outset and filing preliminary responses.

[transition to Slide 22 (third stats question)]

As of October 2, how frequently have patent owners filed preliminary responses to IPR petitions?



The correct answer is A.

Now, despite this pushback from patent owners, the rate of IPR institutions is still very high. It’s been 78% for the first two years of IPRs, and, even when a preliminary response is filed, the institution rate is still 75%.

[transition to Slide 24 (fourth stats question)]

But what has it been when no preliminary response is filed? [As you read the answers off the screen, you can introduce answer D. as, “And, for those of you who zoned about a minute and a half ago, D. 68%.”]



The correct answer is C. The petition is very likely to be granted even if you file a preliminary response, but you’re facing really scary grant odds if you forego the preliminary response.

It’s not all doom and gloom, however. During those first two years, claims challenged in an IPR petition have had a 41% survival rate, meaning the Board chose not to institute on them or, if the Board did institute, they were confirmed as patentable in a final written decision.

Before we move on, let’s test your knowledge of more critical matters:

[transition to Slide 26 (TX Chainsaw Massacre question)]

Which metropolitan area was the primary filming location of the original Texas Chainsaw Massacre?


[transition to Slide 27 (answer to TX Chainsaw Massacre question)]

Some websites describe the primary location as Round Rock, but the address is on Quick Hill Road, which – although near Round Rock – is in Austin. To handle this potential ambiguity, we used “metropolitan area” rather than “city.”

Runnymede, as most of you clearly know, is the village where the original 1215 Magna Carta was negotiated.


Ok, on with the show. In this scene, Trendy is deposing Creative’s expert. Kevin is still representing Trendy. Chad Anson is representing Creative and defending the expert, played by Sheila Kadura. Heather Flanagan is the Trendy client representative. Susan Hightower is one of the APJs at the Board assigned to this IPR trial.

[Chad and Sheila are seated and pretending that Chad is going over some last minute preparation quietly with Sheila.

Heather and Kevin are standing near the table, preparing to go into the ‘room’ where Sheila and Chad are sitting. Kevin is holding a notepad, which will serve as a prop during the skit for Sheila to reference as disclosing a ‘head person’ doodle.]

Heather (to Kevin): I’ve got to tell you, Kevin, it’s pretty remarkable we’ve gotten this far.

Kevin: What do you mean? It’s only 5 blocks from our downtown office. I took a pedi-cab.

Heather: Not the literal distance … [ugh] … I mean the substantive stage of this case!

Kevin: Right – the substantive stage of this case.


Heather: Here we are, having managed to get our petition instituted after that 3-day fire drill you put us through, and we squeaked out an institution decision.

Kevin: I don’t know about any squeakiness. I think we put forward an overwhelming petition.

Heather: Overwhelmingly confusing, maybe. I had to stop reading after the second paragraph. In any event, I’m glad we’re now getting the chance to depose their expert so we can poke some holes in Creative’s position.

Kevin: Right … about that … I’m shooting for more hole plugging than poking.

Heather: Wonderful. I’m almost afraid to ask, but what are you talking about?

[transition to Slide 28 (shows claim 1)]

Kevin: Creative’s patent claims require a decorative figure comprising various plastic bags and closure means, one of which needs to correspond to the figure’s torso. Now, we did a tremendous job finding prior art on plastic bags and twisty ties.

Heather: [sarcastically] I’m sure that must have been a challenge.

Kevin: [sincerely] Exactly. Anyway, in our rush to put together the best petition possible, we struggled just a tiny bit to come up with the perfect “torso.”

Heather: Struggled? To find a torso reference? Really?

Kevin: I know, I know. We were as shocked as you clearly are. The plan to overcome this obstacle is to get Creative’s expert to admit that while our primary reference—

[transition to Slide 29 (shows Wazowski)]

—Mike Wazowski (picture shown on screen), may not disclose a torso per se, it certainly suggests one, what with the placement of Mike’s arms and legs and all.

Heather: Why on earth would we need to get that from their expert?

Kevin: Well, again, due to the struggle, we didn’t exactly make that allegation in our petition.

Heather: So what ARE we relying to meet the torso limitation in Creative’s patent?

[transition to Slide 30 (shows Creative’s patent image w/ arrow)]

Kevin: You mean that part next to the red arrow, right?

Heather: Yes, that part.

Kevin: We said the Wazowski reference discloses a torso.


Heather [incredulously/sarcastically]: Where?

[transition to Slide 31 (shows Wazowski)]

Kevin: Right there, in that part around Mike’s mouth …

Heather (moaning and mumbling, “remind me why I hired you again?”)

Kevin: Yeah, yeah, a little dicey, I know … that’s why we need their expert to plug this little hole for us. I’ll admit the Board could ultimately view it as a bit of a stretch to call the mouth area a torso, but I think it’s a slam dunk that a torso is suggested by the vertical separation in between Mike’s arms and legs. [Smiling fondly as he remembers his childhood, and thinking outloud: “That’s exactly how I used to draw torsos when I was a kid.”]

Heather [deadpan/serious]: Kevin, you’re thinking outloud again, and I’ve seen your doodles … that’s how you still draw them.

Kevin: I do the best I can with what I have.

Heather: Don’t I know it. Just don’t screw this up.

Kevin: Ok, will do. Or will not do – awww, you confused me.

[Kevin sits down and prepares to begin.]


Kevin [to Sheila]: Ms. Kadura, I see from your declaration, that you disagree with my client’s contention that the Wazowski reference discloses a torso.

Sheila: That’s correct. It does not.

Kevin: What qualifies you to offer such an opinion.

Sheila: I don’t need any qualification to know that the Wazowski reference is simply a head with arms and legs sticking out of it. Just look at it.

[show Slide 31 (Wazowski)]

Kevin: I object, non-responsive. Your honor, please instruct this witness to answer my question.

Chad: Who are you talking to, counselor?

Kevin: Is that an improper speaking objection I’m hearing, Mr. Anson?


Chad: No, that was you doing the objecting. My statement was more of a ‘why are you such a remarkably bad lawyer/how did you manage to get this far?’-kind of rhetorical interjection.

Sheila: Excuse me, to keep things moving, I’d like to supplement my prior answer.

Kevin: Ha! What was my question again?

Sheila: What qualifies me to opine that there is no disclosure of a torso in the Wazowski reference – remember?

Kevin: Of course, what a great question.

Chad: Wow.

Sheila: In any event, beyond being conscious, I am qualified to render the opinion you asked me about because I have been a sketch artist for Marvell studios for 17 years, the last 13 of which I have spent moonlighting as a tutor for struggling sketch artists, teaching them how to make the sometimes challenging transition between drawing head people –

Kevin [interrupting]: excuse me – did you say “head” people?

Sheila: Yes, head people. Like what’s shown in the Wazowski reference … and, judging from the doodles in the margin of your notes, apparently like how you draw them (pointing to his notepad). As I was saying, I tutor struggling sketch artists on how to transition between drawing head people and drawing people. with. torsos. [Smiling] You should take my class, Mr. Meek. I can help you.

Kevin: [smiling, genuinely] I would love to, [getting serious again] but wouldn’t you agree with me, Ms. Kadura, that a torso is suggested by the Wazowski reference.

Sheila [raised eyebrows, doubtful look]: ‘Suggested?’ How?

Kevin (getting up to go to the screen and gesticulating at the Wazowski image): By the clear vertical separation between the arms and the legs.

Chad: I object and instruct the witness not to answer. Counsel, I’m calling the Board. We need them to address whether you can proceed with this line of questioning.

Kevin: What? Why?

[Sheila leaves the table, and Susan sits down and places her soup can phone on the table.]

Chad: Because none of the grounds on which the Board instituted this IPR included any allegation that the Wazowski reference suggests a torso. Trendy’s sole contention has been that the Wazowski reference explicitly discloses a torso.


Kevin: C’mon – are you kidding me? It’s all the same – disclose … suggest. Our grounds were still all based on obviousness.

Chad: That may be, but with respect to a given claim limitation, disclose and suggest are not the same.

Kevin: [speaking quickly] Yes they are.

Chad: No, Mr. Meek, they are not. And despite that your doodling ability suggests otherwise, your recent brush with lucidity two statements ago suggests that even you know the difference.

[Chad grabs one end of the soup can phone, pretends to dial the Board, and then puts it open end facing up on the table so that both he and Kevin can talk into it.]

[Susan picks up]:

Susan: PTAB, Judge Justice speaking.

Chad: Judge Justice, this is counsel for Trendy and Creative, and we have a live discovery dispute to address with you.

Susan: Let’s hear it.

Chad: Trendy’s counsel has questioned our expert about whether a certain claim limitation is suggested by a reference. However, in support of the grounds on which the Board instituted this IPR trial, Trendy has argued only that this claim limitation is disclosed by the reference in question.

Susan: Is this the Wazowski reference, and the torso issue?

Chad [smiling]: Yes, it is, Judge Justice.

Susan: Oh, I knew we should have killed that petition.

Kevin: I’m sorry … what, your honor?

Susan: Oh – was that outloud?

Kevin: Yes, your honor.

Susan: My mistake. What I meant was: Counsel for Trendy, has Creative’s counsel accurately explained what’s happened.

Kevin: Well, truth be told, your honor, there was some derogatory talk of my doodling ability, which really hurt.

Susan: I’m sure it did. Mr. Meek, do you know the difference between whether a limitation is disclosed and whether it is suggested?


Kevin: Yes, but those should be treated as one inter-mingled discoverable topic, your honor.

Susan: We disagree, counsel. The Board rules that such questions are precluded.

[Everyone exits to their seats, except Kevin, who meets with Heather in the same spot as earlier.]

Heather: Well, how did it go?

Kevin: Great! Except the Board precluded me from that hole-plugging exercise we talked about. So, that part of it was not ideal.

Heather: (disbelief/exasperation/head shaking)

Kevin: Oh, but on the bright side, I think I know where I can go to improve my doodling skills.

Heather: Good, because you’re fired!

Andrew: Tough stuff. Ok, who was correct here?

[transition to Slide 32 – Who Was Correct?]

Should Trendy have been permitted to discover whether Creative’s expert believed the Wazowski reference disclosed a torso, or was Judge Justice correct that Trendy was limited to questions that stayed within the bounds of Trendy’s allegations?

With the voting about finished, it appears that most of you are [correct/wrong].

[transition to Slide 33: the answer (PTAB)].

The answer is the PTAB was correct.

This comes from IPR2013-00424, paper 33. In that order, the Board granted a patent owner’s phoned-in request to preclude the Petitioner from asking the patent owner’s expert whether a claimed feature was rendered obvious by a reference, when, in its petition, the Petitioner had only alleged that the claimed feature was disclosed by the reference.

It’s time for another serious question before we move on:

[transition to Slide 34 – Weapon NOT used in Halloween?]

In the original 1978 movie Halloween, which of the following is NOT used as a weapon?


[transition to Slide 35 – answer]

That’s right – D. A rolled up copy of the Magna Carta.


And now, I’ll turn it over to Mark Garrett, who will set up skit 3.

Skit 3

Mark Garrett: We’re closing in on the finale – the oral hearing. David Weaver has taken over for Kevin, Susan Hightower is reprising her role as Judge Justice, and Paula Heyman is stepping in as Judge Predictable. Juliet Dirba is counsel for Creative.

Before we get to our last skit, it is important to note that the Board is considering some changes to the trial process that includes IPRs and CBMs. The USPTO published 17 questions in June of this year for public comment, and that comment period, which was extended, just ended a few weeks ago. Almost forty sets of comments rolled in, including comments from groups like AIPLA and IPO as well as from industry, and it seems pretty clear that certain things are going to change.

[transition to slide 36 – Which Was NOT a Question?]

Which of the following was NOT one of the 17 questions issued for public comment?


[transition to slide 37 – the answer]

The correct answer is D. While comments were submitted about the Board’s practice of allowing certain trials to continue despite settlement, that issue didn’t prompt its own question. With respect to some of the actual questions published for public comment, three of which are on the screen, we’re seeing some consensus building over the concern that the broadest reasonable interpretation claim construction standard should not be applied in circumstances where there is no practical possibility of amending any claims; and—not unexpectedly—the 15-page limit on a motion to amend (in which the patent owner must establish patentability over the closest known art, not just the art cited by the petitioner) is considered a little too tight.

Alright, I don’t want to end on a hard one.

[transition to Slide 38 – Gremlins question]

The movie Gremlins features a small, furry creature known as a Mogwai. "Mogwai" means "monster" or "demon" in what language?


[transition to Slide 39 – answer to Gremlins question]

The correct answer is B. The Magna Carta was written in Latin (answer D).

Let’s get rolling with our final skit. As we listen in, we’ll get some sense of the extent to which this proceeding parallels an actual trial.


Susan: Bailiff, lock the doors. If you missed your chance to use the bathroom, too bad. Counsel, please announce yourselves, starting with Petitioner.

David: David Weaver, counsel for Petitioner, Trendy Trashbags, your honor.

Juliet: Juliet Dirba, counsel for Patent Owner, Creative Refuse Collection, your honor.

Susan: Thank you, counsel. Mr. Weaver, you may begin.

David: Thank you, your honor.

[gesturing boisterously] Ladies and gentlemen of the jury –

Paula: [interrupting] – Mr. Weaver, to whom are you speaking? There’s no jury here.

David: Oh(!), right, your honor, I apologize. Old habits die hard, as they say. [Clearing throat and beginning again] Your honor, this is an obviousness case, plain and simple. Under the pre-America Invents Act version of Section 103 of Title 35 –

Paula: [interrupting] -- Mr. Weaver, does your client lose if the Wazowski reference does not disclose a torso?

David: Certainly not, your Honor.

Susan: And why not?

David: Because as long as our combination suggests a torso, we win!

Paula: Yes, your combination. Let’s look at that.

[transition to slide 40 – showing proposed combination]

David: Here it is, your Honor. Nice and simple.

Paula: It certainly is. Well, I see a stuffed trashbag – no torso there. I also see a twist tie, also torso-less.

David: I won’t fight you on those conclusions, your Honor.

Paula: Good to know, I think. And then we have the Wazowski reference.

David: And we clearly have his torso.

Susan: Clear to whom? You’ve offered no expert testimony or other evidence showing that someone of ordinary skill in the art would understand there to be a torso in there somewhere, and Patent Owner has expert testimony to the contrary.

David: Yes, but Creative’s expert did not testify that a torso is not suggested by Wazowski.


Juliet: Your Honor, if I may.

Susan: Please.

Juliet: The reason we have no rebuttal evidence on this issue is that Trendy failed to raise it in the first instance. Aside from being ridiculous, the argument that the Wazowski reference suggests a torso is new and should not be permitted.

David: Ridiculous, huh? Well, what do you think of this?

[transition to slide 41 – showing someone wearing Wazowski costume]

Juliet: I think you just made my point for me.

Paula: [to Susan] Have we seen this before?

David: No, your Honor, this little jewel is brand-new! We just put it together!

Paula: Mr. Weaver, I realize you’re new to this type of proceeding, and that you seem to bring – how can I put this – a fresh perspective to our procedures, but all demonstratives had to be exchanged with the other side 5 business days ago and cannot introduce new arguments or evidence. This demonstrative simply does not pass muster.

David: But you Honor, Ms. Dirba clearly opened the door to this demonstrative [turning to Juliet]—which clearly suggests a torso—with her derogatory and erroneous ‘ridiculous’ comment. [gesturing at the screen] Plainly, Mr. Meek—who was kind enough to waive his normal modeling fee—has a torso. I don’t know what could BE more suggestive of the disputed limitation.

Juliet: Your Honor, setting aside the absence of logic in Mr. Weaver’s contention that our derogation of the substance of a position that Trendy failed to raise at the appropriate time could somehow cure that failure, we have no problem with this demonstrative.

David: You don’t?

Juliet: No, we don’t. And we are willing to address Trendy’s belated “suggestion” argument.

David: You are?

Juliet: We are. There’s no suggestion of a torso here. While this gentleman wearing the Wazowski suit obviously has a torso, the relevant aspect of this demonstrative is the costume itself, and it remains as non-suggestive of a torso as the original Wazowski reference. That’s what makes Wazowski such a compelling character! Despite his physical shortcomings as a monster—which are otherwise largely attributable to his lack of a trunk—he’s able to scare the crap out of kids through hard work and perseverance. No one of ordinary skill in the art would view Mr. Meek parading around in his treasured


Wazowski costume as a torso suggestion, any more than we would openly criticize Mr. Meek’s now-famous head-people doodles …

[transition to slide 42 – doodle]

… as he continues under our expert’s tutelage to making the transition to age-appropriate margin art.

David: Ms. Dirba’s compelling arguments aside, your Honor, [walking to the screen and pausing for effect as transition to slide 42 occurs, again showing someone wearing Wazowski costume] … how can you ignore the spacing and the arrangement of the appendages and whatnot?

Paula: Mr. Weaver, consistent with our rules, we are inclined not only to strike this demonstrative, but also to exclude any arguments about the torso limitation that go beyond Trendy’s bare contention that it is explicitly disclosed. However, considering Ms. Dirba’s indication that Creative is not objecting to this demonstrative, coupled with her willingness to address Trendy’s belated “suggested-but-not-disclosed” argument, and also considering that we really, really don’t want to get reversed by the Federal Circuit for interpreting our own rules too strictly, we will consider them. But don’t hold your breath. Counsel, this concludes the argument.

Mark Garrett:

In some superficial ways, that was an accurate depiction of a final hearing. They really will lock you in for a 2 ½-hour session with no breaks and no coming and going. However, while the forgiving panel made for absolutely outstanding theatre, in real-life, things would be a little different.

[transition to slide 43 – Don’t be Tricked]

Don’t assume (for a minute) that the Board is going to allow you to present new arguments or evidence (not the least of which would be a new demonstrative) at the final oral hearing. That is contrary to the guidance in the Board’s trial practice guide and to decisions the Board has issued addressing objections to demonstratives. In the decision listed on the slide, the Board addressed the Petitioner’s objection to some of the Patent Owner’s demonstratives as containing modified versions of one of the figures in the patent, and wound up excluding the objectionable demonstratives as well as 5 others to which the Petitioner did not object. So, don’t be fooled.

[Only if we ran dramatically shorter than we expected: We’ve got time for one or two questions, but only if they are easy.]

On that haunting note, thanks to all our performers. This concludes Pupilage Team 1’s presentation.

Austin IP Inn of CourtsPupilage Team 1 Presentation

October 30, 2014

IPRs – Tricks, Treats, and Lessons Learned

Overview

• IPR Defined• Scary Skits• To provide feedback, go to: pollev.com/pteam1

Trendy Trashbagsvs.

Creative Refuse Collection

Creative’sPatent

Trendy’sProduct

What is inter partes review?• IPRs provide an opportunity to challenge validity of issued patents

outside of district court litigation, subject to certain limitations:– Challenge only based upon prior art patents and/or printed publications– Decided by administrative law judges from new Patent Trial and Appeal Board– Rigid timing requirements must be observed

• Intended to be quicker, more efficient and less expensive for post-grant challenges

• Petitioner has BOP to show at least one claim is unpatentable under preponderance standard

• Claim construction standard is “broadest reasonable interpretation”

• Estoppel attaches to instituted claims, which bars reliance on prior art that challenger ‘raised or reasonably could have raised’

RIPInter

PartesReexam

REMEMBER: pollev.com/pteam1

As of October 2, how many IPR petitions have been filed since they became available?

A. 1,478B. 1,565C. 1,852D. 2,013

• 1,546 ex parte reexams filed in FYs 2011 and 2012 – peak of 31-year popularity

Skit 1

Let’s participate as a staff observer in the offices of Trendy’s law firm. We inadvertently overhear a conversation between a senior partner (aka ODP) and a bright new associate (aka SNA). As you listen, think about:• Estoppel implications• The timing of when to file the IPR• The likelihood that Trendy will be able to obtain a

stay of the Dist. Ct. case

Estoppel • Important distinction to be noted between IPRs

and Covered Business Method Reviews (CBMs)

CBM—Only estopped from later litigating issues actually raised before the PTAB that resulted in a final written decision (America Invents Act of 2011, Pub. L. 112-29, Sec. 18, 125 Stat. 329 (2011))

IPR—Much broader estoppel as outlined in Title 35

IPR Estoppel – Statute and Rule 35 U.S.C. 315(e) - Estoppel • (1) Proceedings before the Office.--The petitioner in an inter partes review of a

claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not request or maintain a proceeding before the Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during that inter partes review.

• Paragraph (2) uses the same language and addresses civil actions under section 1338 of title 28 and proceedings before the International Trade Commission.

37 C.F.R. 42.73(d) - Estoppel• (1) Petitioner other than in derivation proceeding. A petitioner, or the real party

in interest or privy of the petitioner, is estopped in the Office from requesting or maintaining a proceeding with respect to a claim for which it has obtained a final written decision on patentability in an inter partes review, post-grant review, or a covered business method patent review, on any ground that the petitioner raised or reasonably could have raised during the trial, except that estoppel shall not apply to a petitioner, or to the real party in interest or privy of the petitioner who has settled under 35 U.S.C. 317 or 327.

IPR – Filing Deadline

35 U.S.C. § 315(b)An IPR must be filed within one year from the

date of service of the district court litigation.– Note: this requirement does not apply to CBM

review

During the first two years of IPRs, how frequently have stay motions in co-pending litigation been granted?

A. 92%B. 73%C. 64%D. 52%

• Only 63% when the stay motion is contested* * Source: Harness Dickey IPR-PGR Report, Oct. 23, 2014 (http://ipr-pgr.com/about-post-grant-review/)

IPR – Factors for Staying Litigation

• Three-factor Test*– The stage of litigation – Whether a stay will simplify and streamline the issues

that may be presented in subsequent litigation – Whether a stay would cause undue prejudice or a

clear tactical disadvantage to the non-moving party

• VirtualAgility v. Salesforce.com, slip op. 2014-1232 (Fed. Cir. 2014) – The Fed. Cir. in a split panel decision reverses the district court and issues a stay in a CBM

*Semiconductor Energy Lab. Co. v. Chimei Innolux Corp., 2012 WL 7170593, at *1 (C.D. Cal. Dec. 19, 2012)

IPR - Strategies to Increase Likelihood of Stay of Litigation

• Do not wait until the IPR has been instituted by the PTAB to file the motion to stay

• Seek IPR for all patents and claims • Show that the patentee is not a direct

competitor • Reassess any pending defenses and

counterclaims

Wicked (Hard) IPR Trivia Question: A patent is in ex parte reexam and in a lawsuit. The lawsuit is more than one year old. The reexam certificate comes out and it includes a new claim that the plaintiff successfully adds to the designation of claims in the lawsuit. Can the defendant IPR the new claim?Answers:

A. Probably yes. Because the new claim was not in existence until one year after the lawsuit was filed, it is eligible for IPR. Any claims present at the date the suit was filed and not included in an IPR are no longer eligible.

B. Probably yes. The one year window in which an IPR can be filed applies on a claim by claim basis, so the year period begins for this claim on the date the reexam was issued.

C. Probably no. Because the claim arose from reexam proceedings it is never eligible for IPR, even if it were to have been announced within a year of the lawsuit.

D. Probably no. The statue says “patent” not “claim” and mentions that a reissue might give you a new timeline but does not mention a reexam.

In the 1992 movie Bram Stoker's Dracula, in what year does the scene involving Vlad the Impaler supposedly take place?

A. 1462B. 1897C. 1992D. 1215

• 1215 was the year that the Magna Carta was originally drafted

As of October 2, how frequently have patent owners filed preliminary responses to IPR petitions?

A. 80%B. 72%C. 65%D. 58%

• 78% of petitions have been put into trial during the first two years of IPR, including 75% of opposed petitions*

* Source: Harness Dickey IPR-PGR Report, Oct. 23, 2014 (http://ipr-pgr.com/about-post-grant-review/)

In the first two years of IPRs, how frequently has the Board instituted a trial when the patent owner did not file a preliminary response?

A. 100%B. 93%C. 89%D. 68%

• 41% of challenged claims have survived, no institution or confirmed as patentable in a final written decision*

*Source: Harness Dickey IPR-PGR Report, Oct. 23, 2014 (http://ipr-pgr.com/about-post-grant-review/)

Which metropolitan area was the primary filming location of the original Texas Chainsaw Massacre?

A. AustinB. Ft. WorthC. San AngeloD. Runnymede

• Runnymede is the village where the original 1215 Magna Carta was negotiated

[Image of Mike Wazowski character from Disney Pixar’s Monsters University]

Who was correct?• Trendy• PTABSee IPR2013-00424, paper 33 (May 9, 2014).

In the original 1978 movie Halloween, which of the following is NOT used as a weapon?

A. A knitting needle.B. A knife.C. A gun.D. A rolled up copy of the Magna Carta.

Which of the following was NOT one of the 17 questions issued for public comment?

A. Under what circumstances, if any, should the BRI claim construction standard not be applied to a claim in an unexpired patent?

B. What changes, if any, should be made to the motion to amend practice?

C. Should new testimonial evidence be permitted in a preliminary response?

D. Should a trial be terminated following a settlement, regardless of the timing of the settlement?

The movie Gremlins features a small, furry creature known as a Mogwai. "Mogwai" means "monster" or "demon" in what language?

A. SpanishB. CantoneseC. SwahiliD. Latin

• The Magna Carta was written in Latin.

[Image of Mike Wazowskicharacter from Disney Pixar’s Monsters University]

[Image of person in Mike Wazowski character costumer (from Disney Pixar’s Monsters University)]

Don’t Be Tricked

• The real Board will likely not be so forgiving. See IPR2013-00357, paper 24 (July 22, 2014);Patent Trial Practice Guide, 77 Fed. Reg. 48756, 48768 (Aug. 14, 2012).