Legal Alert: POP Designates Two Discretionary Denial Decisions Precedential


The Patent Trial and Appeal Board's Precedential Opinion Panel (POP) recently designated two decisions as precedential concerning the Board's discretion to deny petitions for inter partes review (IPR) under 325(d).

The first decision, Advanced Bionics LLC v. MED-EL Elektromedizinische Gerate GmbH, No. IPR2019-01469, concerned a patent owned by MED-EL covering a cochlear implant hearing aid, which Advanced Bionics argued was invalid based on four earlier patent documents. MED-EL argued that the Board should use its discretion to deny institution under 325(d) because prior art relied upon by the petitioner and other substantially similar prior art had already been considered during prosecution.

35 U.S.C. 325(d) states, in pertinent part: "In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the Office." The Board opined that this inquiry comprises two questions:

  1. Whether the same or substantially the same art previously was presented to the Office or whether the same or substantially the same arguments previously were presented to the Office, and
  2. If either condition of the first part of the framework is satisfied, whether the petitioner has demonstrated that the Office erred in a manner material to the patentability of the challenged claims.

If the first part of the framework is satisfied and the petitioner fails to make a showing of material error, the Board may exercise its discretion not to institute IPR. If reasonable minds can disagree regarding the purported treatment of the art or arguments, then it cannot be said that the Office erred in a manner material to patentability. The framework thus reflects a commitment to defer to previous Office evaluations of the evidence unless material error is shown.

When evaluating the first part of the new framework, the Board found in the prosecution history that the examiner had considered some, but not all, of the prior art cited in the petition. As to the unconsidered prior art references, the Board found that they were substantially the same as those considered by the examiner. Turning to the second factor, the Board found that the examiner had not materially erred in failing to consider certain prior art cited in the petition. Specifically, the Board explained that the unconsidered prior art was not asserted by Petitioner Advanced Bionics as curing the deficiencies of the considered prior art. The Board thus exercised its discretion under 325(d) to deny institution of the petition.

The second decision, Oticon Medical AB v. Cochlear, Ltd., No. IPR2019-00975, reached the opposite conclusion. Oticon asserted that Cochlear's patent was invalid based on several earlier patents and patent applications, to which Cochlear responded by arguing that Oticon's petition should be denied under 325(d) because it was based on substantially the same prior art and arguments already considered by the Office during prosecution. Here, the Board applied the following Becton Dickinson factors:

  1. the similarities and material differences between the asserted art and the prior art involved during examination;
  2. the cumulative nature of the asserted art and the prior art evaluated during examination;
  3. the extent to which the asserted art was evaluated during examination, including whether the prior art was the basis for rejection;
  4. the extent of the overlap between the arguments made during examination and the manner in which Petitioner relies on the prior art or Patent Owner distinguishes the prior art
  5. whether Petitioner has pointed out sufficiently how the Examiner erred in its evaluation of the asserted prior art; and
  6. the extent to which additional evidence and facts presented in the Petition warrant reconsideration of the prior art or arguments.

Working its way through the factors, the Board found that the examiner erred by failing to consider prior art that could have led to the application being rejected. As such, the petition presented materially different prior art than the Office had previously considered. The Board thus declined to exercise its discretion to deny the petition under 325(d).

Cochlear argued in the alternative that the Board should deny the petition under 314(a) because, among other things, co-pending district court litigation would likely determine the validity of the challenged claims in a similar timeframe. The Board noted that, under NHK Spring, the advanced state of district court proceedings is a factor that weighs in favor of denying the petition under 314(a). But here, the Board found that Cochlear had not established a similar fact pattern as NHK. Cochlear, for example, did not provide a procedural schedule showing a trial date from the district court. It merely stated that "discovery is well underway." The Board thus declined to exercise its discretion under 314(a), because the patent owner had not provided enough evidence concerning the progress of the underlying litigation.