Strategic Use of PTAB’s 325(d) Discretion

The AIA provides PTAB panels a significant amount of discretion in managing their docket, from joinder provisions to the ability to stay or consolidate related, concurrent proceedings in other areas of the Office.  35 U.S.C. § 325(d) provides the Board discretion in making trial institution decisions, where “[i]n determining whether to institute… the [Board] may take into account whether … the same or substantially the same prior art or arguments previously were presented to the Office.”

The Board can use § 325(d) to deny all or some grounds for a particular claim or an entire patent being challenged.  The former was the case in Tuesday’s Institution Decision in Volkswagen Group of America, Inc. v. Joao Control & Monitoring Systems, LLC, IPR2015-01612.  In that case, petitioner Volkswagen challenged 13 claims of Joao’s U.S. Patent No. 7,397,363 on various §§ 102, 103 grounds.  For 7 of those claims, Volkswagen presented grounds that were almost identical to those considered by the Examiner in a prior reexamination of the ‘363 patent.  Where the Examiner had considered the Spaur reference in view of Kniffin in prosecution, Volkswagen argued that the claims were unpatentable over Kniffin in view of Spaur.  The Board found the recasting of the obviousness grounds inconsequential, and exercised its discretion to deny all proposed grounds for the 7 claims.

Such arguments are regularly presented in preliminary responses and have been successful in certain cases.  See e.g., Prism Pharma Co., Ltd. v. Choongwae Pharma Corp., IPR2014-00315 (PTAB denies institution because the Examiner and his supervisor considered the same priority date and prior art issues in prosecution); Nora Lighting, Inc. v. Juno Manufacturing, LLC, IPR2015-00601 (Board denies institution where substantially similar arguments were considered in a prior ex parte reexamination).  Even when not explicitly utilized by the Board in denying petitions, patent owners have had success pointing out that the Office had previously considered petitioner arguments.  While the Board might expressly decline to use its § 325(d) discretion, they may elect to provide their own analysis that closely follows the prior reasoning of the Examiner.  See e.g., S.S. Steiner, Inc. v. John I. Haas, Inc., IPR2014-01490.

Section 325(d)’s discretion for denying grounds previously considered by the Office provides a number of opportunities for a patent owner to improve their PTAB trial position at institution or to win outright.  First, the Board can wholly deny grounds based on this discretion, as evidenced this week in the Volkswagen case.  Second, the provision provides an opportunity for the patent owner to cast doubt on a ground that has already been evaluated in another Office proceeding, possibly resulting in a similarly reasoned denial of the ground by the Board on the merits at institution. Finally, casting doubt under § 325(d) in a preliminary response can provide the Board a reason to select one ground over another in making redundancy decisions, thereby allowing a patent owner to improve the odds that a troublesome ground is denied through arguments that analogous art for that ground has already been considered in prosecution.

PTAB Decision: Volkswagen v. Joao IPR2015-01612

By: Matt Johnson (Jones Day Bio)