In Harmonic, Inc. v. AVID Technology, Inc., a Federal Circuit panel affirmed the PTAB’s decision in IPR2013-00252 and ratified certain aspects of the Board’s handling of redundant grounds of unpatentability.  In PTAB trials, such as IPRs, petitioners can present one or more grounds of unpatentability for each claim of a patent being challenged.  In the Institution Decision, the Board gives an initial thumbs up or thumbs down to each presented ground, where a trial is instituted for each ground that the Board finds the petitioner has a reasonable likelihood of prevailing on.  When a petitioner presents more than one ground for a single claim, the Board, in an effort to manage its workload, often exercises its authority under 37 C.F.R. § 42.108(a) to institute trial on less than all of the grounds presented.  The Board elects to not hear certain grounds, regardless of their merit, based on a rationale that those grounds are “redundant” to grounds on which the PTAB elected to institute trial.  This has been a regular practice of the Board since its founding in the fall of 2012.  See Liberty Mutual v. Progressive, CBM2012-00003, Order (Redundant Grounds), (P.T.A.B., Oct. 25, 2012).

Such was the case in IPR2013-00252, where Harmonic, Inc. challenged the patentability of claims 1-20 of AVID Technology’s U.S. Patent No. 5,495,291.  The ‘291 patent describes “a system for decompressing consecutive streams of compressed video data to provide a continuous, uninterrupted decompressed video data output stream.”  In its Petition for review, Harmonic presented seven different grounds of unpatentability for claims 1-20.  The Board instituted trial for review of claims 1-16 based on a subset of those grounds, declining to hear four of the presented grounds because they were “redundant” of the instituted grounds.  In the Final Written Decision, the Board found that Harmonic had not made a sufficient case for the unpatentability of claims 11-16.  Harmonic appealed the merits of that Board decision as well as the Board’s refusal to go back and consider the possibility that any of the four, non-instituted “redundant” grounds were sufficient to find claims 11-16 unpatentable.  The Patent Office intervened to defend its redundancy procedures.

The Federal Circuit panel affirmed the Board’s decision on the merits of the instituted grounds.  With regard to the redundant grounds, the panel found that PTAB redundancy decisions were part of Institution Decisions and were, thus, not appealable.  The Federal Circuit reviewed its prior decisions on the appealability of Institution Decisions (i.e., St. Jude, Cuozzo, Versata, Achates, and Synopsys), noting that except where an Institution Decision appeal was directed to the Board’s “ultimate authority to deem a patent unpatentable” (i.e., the Versata appeal of the Board’s CBM standing decision), Institution Decisions are almost always unappealable based on 35 U.S.C. § 314(d).  The Court found that the PTAB’s redundancy practice did not raise a Versata issue, stating that “[t]he Board’s decision to institute on one prior art ground or another does not raise fundamental questions about the scope of its authority to deem patents unpatentable; it is simply the Board’s exercise of its institution authority in a given case.  Section 314(d) prohibits our review of such a decision.”

The Harmonic decision is another in a series of wins for the Patent Office when defending PTAB procedures at the Federal Circuit (e.g., Proxyconn, Cuozzo – BRI standard; Cuozzo, St. Jude – appealability of institution decisions; Synopsys – whether all claims must be addressed in Final Written Decision).  The Federal Circuit has given the Patent Office a long leash in developing policies and procedures for administering its new trials, and that trend will likely continue.  While the Federal Circuit will scrutinize the Board’s substantive decisions, unless the Board is acting well out of line with the statutes of the American Invents Act, the Board’s rules and procedures will likely remain undisturbed by the Court.

PTAB Decision: Harmonic v. Avid

By: Matt Johnson (Jones Day Bio)

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