By Evan Jones* and Josh Nightingale

On November 18, 2021, the Commissioner for Patents and acting Director of the USPTO, Andrew Hirshfeld, issued the second order granting a Petition for Director Review since the interim Director Review process was implemented by the USPTO. The order was issued in IPR2018-00733, where petitioner Proppant Express LLC (“PropX”) challenged U.S. Patent No. 9,440,785 (“the ’785 patent”), owned by Oren Technologies, LLC. The ’785 patent relates to proppant storage containers for fracking and a method for providing fracking proppant at a well site via transportation and storage of the containers.

Prior to the order granting the Director Review petition, PropX challenged a related patent  owned by Oren, U.S. Patent No. 9,403,626 (“the ’626 patent”). See Proppant Express Invests, LLC v. Oren Techs, LLC, IPR2017-01918. In a Final Written Decision issued on February 14, 2019, the PTAB found that the challenged claims of the ’626 patent were unpatentable as obvious. See Proppant Express Invests, LLC v. Oren Techs, LLC, IPR2018-00733. The PTAB based its finding on an analysis of Graham objective indicia, as Oren had presented evidence of commercial success and industry praise of a claimed product. Then, on September 12, 2019, the PTAB found that claims in the ’785 patent were also unpatentable as obvious, performing a similar evidentiary analysis as it used for the ’626 patent.

Oren appealed the PTAB’s invalidation of the ’626 patent to the United States Court of Appeals for the Federal Circuit, arguing in part that the PTAB erroneously discounted evidence of commercial success and industry praise. See Oren Techs., LLC v. Proppant Express Invs. LLC, No. 2019-1778, 2021 WL 3120819 (Fed. Cir. July 23, 2021). On July 23, 2021, the Federal Circuit vacated and remanded the PTAB’s Final Written Decision. Id. at 6. The panel agreed with Oren that the PTAB should have considered that Oren’s commercialized storage container — in addition to other features of the system — is an “important contributor to commercial success and praise of the system.” Id.

The Federal Circuit’s decision regarding the ’626 patent set the stage for Oren’s Petition for Director Review. In its Petition for Director Review, Oren alleged that the evidence used to support nonobviousness in the ’785 patent—as well as the PTAB’s evidentiary analysis of that evidence—were substantially similar to the analysis applied in the PTAB’s original decision regarding the ’626 patent, which the Federal Circuit had deemed error. Thus, the Federal Circuit’s logic for vacating the PTAB’s invalidation of the ’626 patent would inevitably apply to the decision invalidating the ’785 patent. Oren argued that Director Review was a remedy for the inconsistency between the PTAB’s finding of obviousness for the ’785 patent and the Federal Circuit’s ruling vacating the finding of obviousness for the ’626 patent.

Commissioner Hirshfeld agreed. In the order granting the Petition for Director Review, he stated that the analysis in the ’785 patent IPR was similar enough to the analysis that the Federal Circuit had previously vacated. In doing so, he ordered the case remanded to the PTAB to address Oren’s evidence of commercial success and industry praise of its container product.

* Evan is a member of the New Lawyer Group in Jones Day’s Boston Office

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Josh Nightingale represents leading domestic and international technology companies in high-stakes patent litigation. His litigation matters before U.S. district courts, the USPTO's Patent Trial and Appeal Board (PTAB), and the Federal Circuit have involved a variety of technologies across numerous industries, including semiconductors, electrical circuits, computer software, LED lighting, vacuum hoses, and telecommunications.