Preserving The PTAB Trial Record

An objection operates to preserve errors in admitting evidence. At the PTAB, the manner and timing of making evidentiary objections is governed by agency rule rather than the Federal Rules of Evidence (FRE). 37 C.F.R. § 42.64. An Offer of Proof, on the other hand, preserves errors in excluding evidence. But, to date, Offers of Proof have not been a recognized mechanism of PTAB trials — not formally anyway. This is despite the fact that there is no agency rule on point to displace FRE 103, and the FRE apply to PTAB trials. 37 C.F.R.§ 42.64.

That is not to say that PTAB litigants are unable to otherwise preserve the record when evidence is denied entry, or that the need to preserve such is anywhere near as pronounced as compared to the district court. Only that PTAB litigants may have to work a little harder to preserve such issues for appeal.

As emphasized this week by the Federal Circuit in Ultratec, Inc., v. CaptionCall, LLC, (here) where a PTAB litigant is unable to include relevant evidence with its briefing, and must seek authorization from the Board to submit such as supplemental information, preserving such issues for appeal may take some additional effort.

In Ultratec, Patent Owner sought entry of district court trial testimony of the petitioner’s witness, arguing that the trial testimony was inconsistent with the testimony offered to the PTAB. The Board conducted a call to consider this request two weeks prior to the final hearing, where presumably, these alleged inconsistencies were discussed. The Board did not appear to consider the subject testimony apart from the phone discussion with the parties. Ultimately, Patent Owner’s request to submit the conflicting testimony was denied, and at the conclusion of the call, the Board indicated an Order would follow. When the trial concluded, without the Order memorializing the evidentiary denial, Patent Owner requested rehearing on the matter. When the rehearing failed, Patent Owner appealed.

On appeal, the Federal Circuit found that the Board had abused its discretion by failing to enter inconsistent trial testimony into the record, and had further failed to create an adequate record explaining the basis of its denial.

In particular, the Court explained:

In district court litigation, a party dissatisfied with a ruling excluding evidence is allowed to make an offer of proof to preserve error. Fed. R. Evid. 103. Parties in IPRs are not given similar protections.

The only reason there is any written record of the dispute is because Ultratec raised the issue in a motion for rehearing. The Board addressed the issue in its order denying rehearing, but it did not explain why it denied the request for authorization. The Board noted that a conference call occurred, but it never stated what was discussed on the call. Nor did the Board address the substance of [the inconsistent testimony]. . . . If the APA requires the Board to explain a denial of a motion then it likewise requires the Board to explain the denial of a request to make a motion. To the extent the Board views the two-step process it created to file motions as insulating it from its APA obligations, this is incorrect.

As to the argument that it was Patent Owner’s obligation to create the record by having a court reporter on the call, the Court explained:

CaptionCall and the PTO argue Ultratec bore the responsibility to memorialize the conference call if it desired a written record. There are, however, no statutes, regulations, statements in the Patent Trial Practice Guide, nor even notes on the PTO’s website informing parties that they have the right to hire a stenographer to transcribe conference calls. We find no burden on the patentee to memorialize agency action or reasoning. It is the agency that has the obligation to fulfill its APA duty to provide a “satisfactory explanation for its action.

In an administrative trial based on patents and printed publications, disputes over supplemental information (as was the case here) are not commonplace. That said, procedural disputes, requests for sur-reply briefing, requests for additional discovery, etc are often settled via teleconference with the Board. In such cases, it is wise to have the call transcribed as there may be no other way to preserve such issues; especially where Board orders are issued telephonically.

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