CAFC, Judge Moore Deals Massive Blow to IPR Credibility

Judge Kimberly Moore

Judge Kimberly Moore (writing for a unanimous panel) did not mince words in her complete and total takedown of the PTAB panel’s actions


Patrick Anderson Image by: Patrick Anderson | August 28, 2017

The USPTO absorbed several hits in the past week. First, admissions of the director’s manipulation of Patent Trial and Appeal Board (PTAB) panel members surfaced. Second, this blog broke news of, at best, a very convenient glitch attempting to scrub decisions from its database. Now it seems that the PTAB actively concealed evidence unfavorable to its ruling and conspired to attempt to deprive a patent owner of a PTAB’s meaningful adverse decision.

First, by way of background, CaptionCall infringed eight patents owned by Ultratec, resulting in huge economic losses to the patent owner. A Madison, Wisconsin jury confirmed this, found all of the patents valid and awarded Ultratec more than $40M in damages. However, as intellectual trespassers are wont to do, CaptionCall filed petitions for Inter Partes Review (IPR) against all eight patents, relying on the same expert witness that testified during the jury trial.

CaptionCall’s expert made statements in the Wisconsin trial that conflicted with the written declarations he provided for the IPRs. Ultratec attempted to have these statements introduced into the record, as they bear directly on the expert’s credibility. Naturally, Ultratec expected the PTAB to gladly consider these statements because “no reasonable fact finder would refuse to consider evidence of inconsistent sworn testimony.” Alas, the PTAB is not a reasonable fact finder; rather than consider the evidence, they literally erased Ultratec’s request from the record. Ultratec, following USPTO procedure, then requested authorization to file a motion to supplement the IPR record with the expert’s inconsistent sworn testimony. This, too, the PTAB summarily denied without so much as an explanation.

Forced to appeal to the Court of Appeals of the Federal Circuit (CAFC), Judge Kimberly Moore (writing for a unanimous panel) did not mince words in her complete and total takedown of the PTAB panel’s actions and the USPTO’s procedure.

Her decision outlines three fundamental flaws.

First, “the Board denied a request to admit evidence without ever seeing the evidence it was denying.”

Second, the procedures adopted by the PTAB “allowed it to make significant evidentiary decisions without providing an explanation.”

Third, by refusing to keep a record “explaining why it denied Ultratec’s request,” the PTAB “impede[s] meaningful appellate review.” To avoid any confusion whatsoever, the CAFC held “that when the [PTAB] makes a substantive evidentiary ruling, it is required to explain its decision.”

By requiring the patent owner to first ask for permission to file a motion to supplement the IPR record with additional information, the PTO attempts to evade legal obligations that require federal agencies to create a public record of their decisions. And that’s not hyperbole. The PTO literally argued that “we denied Patent Owner’s request for authorization to submit evidence and, as such, no order denying its motion was necessary.” This attempt at an end-run around the rules of administrative procedure left it’s primary ball-carrier, the PTAB, exposed in the offensive backfield. The PTO’s sloppy maneuver failed to trick Judge Moore, the alert and attentive linebacker of the CAFC, as she made solid contact, laying out the PTAB with a significant loss of yardage credibility. In the words of Judge Moore, “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.”

After being properly admonished, the CAFC vacated the PTAB’s decisions finding the patents invalid and ordered it to admit and consider the expert’s trial testimony, its impact on the patents at issue and his credibility as a whole. In other words, the PTAB has been ordered to do its job and issue a fair and impartial decision in view of all relevant facts.

While trespassers and apologists happily pound their own chests upon deploying the PTAB against property owners, these illicit tactics and obvious cover-ups undermine the very credibility of the decisions reached and ought to have everyone questioning the PTAB’s actual mission and objectivity.

Dear Oil States…

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