Trial Before the Trial –

Recent USPTO Rule Changes

in 2021
 Panelists

Dan Fishman David Seastrunk

Senior Attorney, Senior Patent Counsel,
Yee & Associates, P.C. Unified Patents

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 Introduction

• USPTO rule changes – what’s changed?

– December 9, 2020 Final Rule
– December 21, 2020 Final Rule
– January 6, 2021 Indefiniteness Memo
• Effects of the rule changes – do they matter?

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December 9, 2020 Final Rule

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 December 9, 2020 Final Rule

• Rules related to institution and sur-replies

• Three changes:
– (1) Codifying SAS
– (2) Conforming briefing requirements for sur-replies
– (3) Eliminating the presumption in favor of the petitioner for genuine
issues of material fact created by patent owner’s testimonial evidence
at institution
• Applies to all IPRs/PGRs filed after January 8, 2021

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 (1) Codifying SAS

• Review will be instituted on all claims/grounds, or

otherwise denied
• 37 C.F.R. § 42.108
– (a) When instituting inter partes review, the Board will authorize the
review to proceed on all of the challenged claims and on all
grounds of unpatentability asserted for each claim.
– (b) At any time prior to a decision on institution of inter partes review,
the Board may deny all grounds for unpatentability for all of the
challenged claims. Denial of all grounds is a Board decision not to
institute inter partes review.
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 (1) Codifying SAS – Comments

• Majority of commenters in favor of the changes

• Comments:
– The SAS decision did not squarely address partial institution; the
proposed change is too rigid (Comment 2)
– Bad grounds should not raise a presumption against institution where a
petition also has good grounds (Comment 3)

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 (2) Sur-Replies and Briefing Requirements

• Provides for automatic sur-replies

• 37 C.F.R. § 42.23
– (a): sur-replies to principal briefs are permitted
– (b): petitioners may address issues discussed in the institution decision
in reply briefs; no new evidence other than deposition transcripts
• USPTO response to Comment 9: “[A] sur-reply may not be accompanied by new
evidence other than transcripts of the crossexamination testimony of any reply
witness. Sur-replies are permitted only to respond to arguments made in reply
briefs, comment on reply declaration testimony, or point to cross-examination
testimony. A sur-reply also may address the institution decision if necessary to
respond to the petitioner’s reply. This sur-reply practice essentially replaces the
previous practice of filing observations on cross-examination testimony.”

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 (2) Sur-Replies and Briefing Requirements

• 37 C.F.R. § 42.24
– (c): clarifying word counts and page limits
• (1) Replies to patent owner responses : 5,600 words.
• (2) Replies to oppositions: 5 pages.
• (3) Replies to oppositions to motions to amend: 12 pages.
• (4) Sur-replies to replies to patent owner responses to petitions: 5,600 words.

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 (2) Briefing Requirements – Comments

• Majority of commenters in favor of the changes

• Comments:
– Addressing institution decisions should not be allowed (Comment 6)
– The rules should not allow for re-litigation of the institution decision
(Comment 6)
– Unfairness in word count / page limits; Patent Owner can now file a
POPR (14,000 words) + POR (14,000) + sur-reply (5,600), compared
to Petitioner’s filing of a Petition (14,000) + reply (5,600)
(Comment 12)

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 (3) Eliminating the Presumption

• 37 C.F.R. § 42.108(c)
– (c) Inter partes review shall not be instituted for a ground of unpatentability unless the
Board decides that the information presented in the petition supporting the ground
would demonstrates that there is a reasonable likelihood that at least one of the claims
challenged in the petition is unpatentable. The Board's decision will take into account a
patent owner preliminary response where such a response is filed, including any
testimonial evidence, but a genuine issue of material fact created by such testimonial
evidence will be viewed in the light most favorable to the petitioner solely for
purposes of deciding whether to institute an inter partes review. A petitioner may
seek leave to file a reply to the preliminary response in accordance with §§ 42.23 and
42.24(c). Any such request must make a showing of good cause.

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 (3) Eliminating the Presumption – Comments

• Mixed responses to the rule change

• USPTO’s high-level response to comments (Comment 13)
– Confusion existed as to how the Board weighs evidence in a patent owner’s
preliminary response
– Some confusion was resolved in Hulu (i.e., for printed publications), but
questions still remained as to testimonial evidence
– Rule change is meant to clarify that no presumption applies, “regardless of the
existence or nature of a factual dispute . . . and regardless of the type of
evidence, testimonial or otherwise”

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 (3) Eliminating the Presumption – Comments

• Leads to a “trial within a trial” pre-institution (Comment 17)

– Could give rise to almost “universal requests” for pre-institution discovery and
briefing; greater costs and burden on all parties
– Endorses resolution of disputes of fact based on an incomplete record
• USPTO response
– No additional briefing or discovery (e.g., depositions) is contemplated during
the institution phase
– The Board will weigh the evidence of record, including declaration evidence,
based on the supporting evidence provided

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 (3) Eliminating the Presumption – Comments

• Gamesmanship and fairness (Comment 14)

– Patent owner’s ability to submit one-sided and potentially unchallenged
evidence without cross-examination
– Denials of institution cannot be appealed
– Possibility of even more discretionary denials
• USPTO response
– The Board is adequately able to weigh the evidence and fairly resolve
factual disputes
– Pre-institution discovery (briefing and cross examination) “may be granted,”
but “as a general matter,” the USPTO believes the costs to all parties
outweigh the benefits 14
 (3) Eliminating the Presumption – Comments

• Unfairness as to patent owner’s ability to withdraw

testimony used in the preliminary response (Comment 16)
– Could lead to a patent owner introducing less supportable testimony and
arguments pre-institution
• USPTO response
– No unfairness because both parties can withdraw their reliance on evidence
after institution

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 (3) Eliminating the Presumption – Comments

• The rule does not make clear how pre-institution testimony

will be evaluated (Comment 21)
• USPTO response
– The final rule provides no presumption as to disputed issues of material fact
– Hulu provides guidance (e.g., in the context of a printed publication) that is
applicable
– Additional guidance may be provided in future precedential/informative
Board decisions

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 (3) Eliminating the Presumption – Comments

• Violation of due process by allowing for a decision not to

institute based on unchallenged testimonial evidence
(Comment 22)
• The new rule is inconsistent with the 2016 rule establishing
the presumption (Comment 23)
• Change should not be retroactive (Comment 24)
• Rulemaking fails to comply with APA (Comment 25)

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December 21, 2020 Final Rule

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 Clarifying Burden of Persuasion in MTA

• Background:
– Aqua Prods., Inc. v. Matal, 872 F.3d 1290 (Fed. Cir. 2017)
– Western Digital Corp v. SPEX Techs., Inc., IPR2018-00082 (informative,
providing guidance on burdens of persuasion in MTAs)
– USPTO RFC on MTA practice and procedures (Oct. 29, 2018)
• Majority of commenters in favor of rulemaking in view of Western Digital
– Lectrosonics Inc. v. Zaxcom Inc., IPR2018-01129, -01130
(precedential)

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Dec. 21Final Rule – Clarifying Burdens of Persuasion in MTA

• 37 C.F.R. § 42.121
– Patent owner bears the burden of persuasion to show that a motion to
amend complies with certain statutory and regulatory requirements.
– Petitioner bears the burden of persuasion to show that any proposed
substitute claims are unpatentable.

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Dec. 21Final Rule – Clarifying Burdens of Persuasion in MTA

• Patent Owner Burdens:

– Proposes reasonable number of substitute claims,
– Responds to a ground of unpatentability involved in the trial,
– Does not enlarge the scope of the claims,
– Does not introduce new matter, and
– Sets forth written description support in the originally (or earlier) filed
disclosure for each claim added or amended

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Dec. 21Final Rule – Clarifying Burdens of Persuasion in MTA

• Petitioner Burdens:
– In opposing, showing by a preponderance of the evidence that the
proposed substitute claims are unpatentable

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Dec. 21Final Rule – Clarifying Burdens of Persuasion in MTA

• 37 C.F.R. § 42.121
– In cases in which a party does not meet its burden, the Board may, in the
interests of justice, exercise its discretion to grant or deny a motion to amend
only for reasons supported by readily identifiable and persuasive evidence
of record. In doing so, the Board may make of record only readily
identifiable and persuasive evidence in a related proceeding before the
Office or evidence that a district court can judicially notice.
– Where the Board exercises its discretion under this paragraph, the parties will
have an opportunity to respond.

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Dec. 21Final Rule – Clarifying Burdens of Persuasion in MTA

• Board’s discretion anticipated only in “rare circumstances”

and “in the interests of justice”
– See Hunting Titan (IPR2018-00600) (PTAB July 6, 2020)
– The Board will only use evidence that is so “readily identifiable and
persuasive” that it would be unjust to rule otherwise
– The Board will not conduct its own search or supplement the record
that does not already exist
– Will be used where the adversarial process has “failed”

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January 6, 2021 Indefiniteness Memo

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 Jan. 6, 2021 Indefiniteness Memo

• Aligns the Board’s practice with Nautilus

– A claim is indefinite if, read in light of the specification delineating the patent,
and the prosecution history, it fails to inform, with reasonable certainty, those
skilled in the art about the scope of the invention. Nautilus, 572 U.S. 898, 901
(2014).
• Previously followed In re Packard
– A “claim is indefinite when it contains words or phrases whose meaning is
unclear.” In re Packard, 751 F.3d 1307, 1310-14 (Fed. Cir. 2014).

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 Jan. 6, 2021 Indefiniteness Memo

• Memo only applies to AIA trials

• In re Packard will remain for examination, appeals from
examination, reexamination, and reissue applications
• The USPTO noted confusion surrounding whether Nautilus or
Packard applied, with parties and the Board continuing to
make arguments under either (or both) approaches

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 Links

• Dec. 9, 2020 Final Rule

– https://www.uspto.gov/sites/default/files/documents/85FR79120.
pdf
• Dec. 21, 2020 Final Rule
– https://www.uspto.gov/sites/default/files/documents/FinalRuleMT
ABurdens.pdf
• Jan. 6, 2021 Indefiniteness Memo
– https://www.uspto.gov/sites/default/files/documents/Indefinitenes
sMemo.pdf
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 THANK YOU
Please Contact Questions?
David Seastrunk
david@unifiedpatents.com