In re Packard Inextricably Linked to Patent Examination Practices?

Back in 2014, the Federal Circuit determined the standard for a USPTO indefiniteness analysis in In re Packard (here). This standard was more deferential to the agency as compared to the district court's "reasonable certainty" standard later enunciated in Nautilus v, Biosig Instruments Inc. When Packard issued, I questioned whether that standard could be argued to apply to post-grant proceedings. This was because the Court's determination in Packard was deeply rooted in patent examination practices.

More recently, the Patent Trial & Appeal Board (PTAB) has adopted Packard in some of its decisions analyzing claims under 35 U.S.C. § 112 (e.g., PGR20015-00018, Telebrands Corp. v. Tinnus Enterprises LLC). But, decisions of the Federal Circuit since Packard, have made clear that grounds of unpatentability in AIA trial proceedings are not akin to rejections in patent examination. As explained by the court in In re Magnum Oil Tools Int’l, Ltd. the prima facie procedural mechanisms of patent examination do not comport with proper AIA trial practices.

Will the CAFC pull the rug out from under the PTAB's application of Packard in AIA trails?

As a reminder, Packard distinguished between the 112(b) standards used in pre-issuance vs post-issuance disputes, the concurring opinion explained it this way:

[A]s a legal matter the USPTO does not have to deal with the presumption of validity the statutes grant to post-issuance patents—sometimes said to hinder [a more liberal test] by courts. Furthermore, unlike courts which have a full prosecution record to consider, the prosecution record before the USPTO is in development and not fixed during examination, and the USPTO does not rely on it for interpreting claims.

The fact that this court has not yet seen fit to apply the same interpretive policy option to post-issuance cases as the USPTO wishes to apply to pre-issuance cases is no reason why the USPTO, given its unique and central role in the patenting process, should not be able to apply it in dealing with pre-issuance patent applications.

Clearly, the presumption of validity is likewise absent from AIA trial proceedings. Nevertheless the majority relied heavily of the back and forth between patent examiners and applicants, explaining:

Congress also provided for examination to be an interactive process, which it commonly is. One or more rejections or objections by an examiner based on identified problems are followed by one or more responses from the applicant that address the identified problems, whether by revising claims or by furnishing information and explanation that shows why the initially perceived problems are not problems after all. The examination system regularly involves substantive interaction with applicants, relying on their distinctive incentives and abilities to enhance understanding and to help the USPTO ensure compliance with statutory standards. . . .

We earlier approved a procedural mechanism for the USPTO to use in doing this, which we refer to as the “prima facie case.” . . . The USPTO thus meets its obligation to explain adequately the shortcomings it perceives so that the applicant is properly notified and able to respond. Once the applicant is so notified, the burden shifts to the applicant to rebut the prima facie case with evidence and/or argument.

The “prima facie case” determination is a purely procedural device that operates at the examiner level to clarify how the interaction process proceeds. . . .The same approach to making the examination process work is an appropriate one for addressing the question of indefiniteness. We have elsewhere noted that indefiniteness rejections by the USPTO arise in a different posture from that of indefiniteness challenges to an issued patent. It makes good sense, for definiteness and clarity as for other validity requirements, for the USPTO initially to reject claims based on a well-founded prima facie case of lack of clarity (in its several forms) based on the perspective of one of ordinary skill in the art in view of the entire written description and developing prosecution history. Then, if the applicant does not adequately respond to that prima facie case, to confirm that rejection on the substantive basis of having failed to meet the requirements of § 112(b).

(Emphasis added, internal quotes/citations omitted)

Contrast Packard's pre-issuance rationale to the discussion of AIA trial practices in Magnum Oil:

In an inter partes review, the burden of persuasion is on the petitioner to prove ‘unpatentability by a preponderance of the evidence,’ 35 U.S.C. § 316(e), and that burden never shifts to the patentee. Indeed, the Supreme Court has never imposed nor even contemplated a formal burden shifting framework in the patent litigation context. We have noted that “a burden-shifting framework makes sense in the prosecution context, where “[t]he prima facie case furnishes a ‘procedural tool of patent examination, allocating the burdens of going forward as between examiner and applicant. As the PTO concedes, however, that burden-shifting framework does not apply in the adjudicatory context of an IPR.

Yesterday, the Federal circuit once again explored the differences between patent examination and AIA trials in the context of procedural mechanisms. In re Depomed (here). The concurrence emphasized in footnote 4 (in discussing the applicability of burden shifting) that:

To be sure, IPR proceedings are not identical to district court litigation. See Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131, 2143–44 (2016). But as we explained in Cyclobenzaprine and later in Magnum Oil, the similarities most salient to an obviousness analysis discourage burden-shifting.

Given the Court's distaste for differing standards between the PTAB and district court, and also given that Packard is the Court's own design, it is my expectation that the Federal Circuit will ultimately re-calibrate PTAB practices to follow Nautilus in AIA trial proceedings.

Scott A. McKeown is an author of the Patents Post Grant.