Patentee's claim construction and evidence can be used to show unpatentability
On May 11 2017 the Federal Circuit in Rovalma, SA v Bohler-Edelstahl GMBH & Co KG held that the Patent Trial and Appeal Board (PTAB) did not exceed its authority when it adopted a patentee's claim construction and submissions, during inter partes review, to find the patentee's own patent unpatentable.
Rovalma was granted a patent directed towards hot work steels in October 2013. In October 2014 Bohler-Edelstahl petitioned the PTAB for an inter partes review of all claims of Rovalma's patent. The PTAB adopted Rovalma's claim construction and, based on Rovalma's own submissions, determined that Rovalma's patent was unpatentable for obviousness. Notably, Bohler-Edelstahl submitted no arguments or evidence for obviousness or unpatentability based on Rovalma's construction.
Rovalma appealed, asserting that the PTAB had exceeded its statutory authority and therefore committed prejudicial error in relying on Rovalma's own submissions to find obviousness. Although the case was remanded for the PTAB's lack of clarity, the Federal Circuit held that the PTAB was within its statutorily granted authority to use a patentee's own submissions against it.
In asserting prejudicial error, Rovalma pointed to the 2016 Federal Circuit's decision in In re Magnum Oil Tools International, Ltd. In Magnum Oil, the court noted that the US Patent and Trademark Office (USPTO) was not free to make arguments for petitioners that were not previously raised and "must base its decision on arguments that were advanced by a party, and to which the opposing party was given a chance to respond".
In light of Magnum Oil, Rovalma asserted that the PTAB had erred in relying on Rovalma's submissions, rather than those of Bohler-Edelstahl, to find unpatentability. However, the Federal Circuit read Magnum Oil as:
- prohibiting a review board from presenting an argument that could have, but was not actually included in a petition; and
- requiring that a party to a review proceeding be provided sufficient notice and an opportunity to be heard.
Accordingly, the court refused to read Mangum Oil as establishing "a statutory rule prohibiting the board from ever relying on a patent owner's own submissions in determining unpatentability".
In reviewing the PTAB decision, the Federal Circuit found that the PTAB did not create any argument for the parties. However, whether Rovalma was provided sufficient notice and opportunity to be heard regarding the PTAB's use of its own submissions to show obviousness was unclear. Accordingly, the case was remanded back to the PTAB.
Since the institution of the PTAB, inter partes review has fast become a popular method for businesses to resolve patent validity disputes. Inter partes review can provide a relatively quick and cheap alternative to patent litigation or similar examination proceedings. However, Rovalma serves as a warning to petitioners and respondents that careful drafting and trial strategy are no less essential in an inter partes review than any other judicial proceeding.
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