By David Linden, Dave Maiorana, Thane Bonnett,* and Pranita Dhungana –
On October 1, 2025, USPTO Director John Squires issued his first Director Review decision, terminating in whole IPR2024-00465 (“IPR465”) based on unreliable and inconsistent expert testimony. In IPR465, Interactive Communications International, Inc. (“Interactive”) challenged U.S. Patent No. 11,488,451 (“the ’451 Patent”), assigned to Blackhawk Network Inc. (“Blackhawk”). The PTAB determined that all challenged claims of the ’451 Patent were unpatentable as obvious based on the combination of U.S. Patent No. 7,627,497 to Szrek et al. (“Szrek”) and U.S. Patent Application Publication No. 2013/0041768 to Llach (“Llach”). The PTAB’s finding of a reason to combine Szrek and Llach was based on testimony from Interactive’s expert. The PTAB did not reach a decision on other unpatentability grounds based on U.S. Patent No. 9,405,984 to Irwin et al. (“Irwin”), which also relied on testimony of the expert. Blackhawk filed a request for Director Review of the Final Written Decision, arguing that the decision should be reversed due to contradictory testimony of the petitioner’s expert.
Specifically, Blackhawk asserted that the expert proffered contradictory and internally inconsistent opinions on how an ordinarily skilled artisan would modify the lottery processing system disclosed in Szrek to include the transaction computer disclosed in Llach. For example, Blackhawk emphasized that the expert initially rejected an exhibit as not representing his declaration’s proposed modification, and later claimed that it did represent his proposal. Interactive conceded that the expert’s testimony was “not the model of clarity,” but maintained that his testimony was not inconsistent and instead “concern[ed] different, alternative configurations.”
The Director agreed with Blackhawk that the PTAB abused its discretion by improperly crediting the expert’s testimony that had “multiple material contradictions and that the Board found lacked credibility in at least some respects.” Because the PTAB rested its decision on the expert’s testimony regarding a reason to combine Szrek and Llach, Director reversed the Board’s finding of unpatentability on the Szrek-based grounds. The Director further opined that it would be inappropriate for the PTAB to rely on the expert’s testimony for the undecided Irwin-based grounds and terminated the proceeding in whole. The Director cited N.L.R.B. v. Pittsburgh S.S. Co., 337 U.S. 656, 659 (1949) for its proposition that “in the determination of litigated facts, the testimony of one who has been found unreliable as to one issue may properly be accorded little weight as to the next.” The Director’s decision did not address whether the Board could have found obviousness by relying only on the Petition and the prior art references without the expert’s testimony.
The October 1 order reversed the Board’s final written decision. The order further stated, “This decision does not constitute a final written decision under 35 U.S.C. § 318(a).” The Director issued a revised order on October 9, which superseded the original order and changed the word “reversed” to the word “vacated.” The revised order retained language stating that it does not constitute a final written decision under 35 U.S.C. § 318. This classification of the decision arguably prevents appeal by the petitioner.
Takeaway
Parties should ensure testimony in support of their arguments is consistent and reliable. Contradictory or inconsistent testimony may be accorded little or no weight and can weaken arguments.
* Thane is a member of the New Lawyer Group in Jones Day’s Pittsburgh Office.
David Maiorana
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