Last month, the Federal Circuit vacated and remanded several related PTAB decisions because the PTAB did not consider evidence on inconsistent expert testimony from a related district court case.[1] The decision provides guidance on the proper process for filing supplemental information[2] before the PTAB—an area in which the PTAB has exercised considerable discretion. The decision also outlines what constitutes an “abuse of discretion” by the PTAB and best practices for raising such abuses on appeal.

In this decision, the petitioner used the same expert in both the IPRs and the related district court proceeding. The petitioner’s expert allegedly provided inconsistent testimony in the district court case— months after the briefing in the IPRs closed and only weeks before the IPR oral hearing. The patent owner sought to introduce the district court testimony in the IPRs in several ways, but the PTAB denied each attempt.

On appeal, the Federal Circuit explained the proper procedure for submitting supplemental information in an IPR’s late stages. First, a party must institute a conference call with the PTAB and request authorization to file a motion.[3] Further, the party must show "(1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice,” before the PTAB will allow the party to file a motion.[4] The "PTO considers the interests of justice as slightly higher than good cause."[5] Here, the allegedly inconsistent expert testimony did not exist during the normal IPR discovery period. And the Federal Circuit found the testimony “highly relevant to both the Board’s analysis of the specific issues on which [the expert] gave inconsistent testimony and to the Board’s overall view of his credibility."[6] The expert’s testimony was critical to the PTAB’s fact findings in the final written decisions and so the court found that “no reasonable fact finder would refuse to consider evidence of inconsistent sworn testimony.”[7] The court also explained that admitting and reviewing the allegedly inconsistent testimony would have placed minimal additional burden on the PTAB.

The Federal Circuit also found that the PTAB abused its discretion in the IPRs. The decision focused on the following PTAB errors:

  1. The PTAB lacked the information necessary to make a reasoned decision because the patent owner was not allowed to submit the actual evidence or to discuss the contents or types of the particular documents sought to be entered.
  2. The PTAB procedures allowed the PTAB to make significant evidentiary decisions without providing an explanation or a reasoned basis for its decisions.
  3. The PTAB procedures impeded meaningful appellate review of the agency decision-making. The PTAB provided no order explaining why it denied the patent holder’s request to file a motion to supplement the record. The PTAB made several decisions in the context of conference calls with the party, and the Federal Circuit had no written record of those calls for appellate review. The Federal Circuit was also unable to view the allegedly inconsistent testimony because it was not made part of the appellate record.

Ultimately, the Federal Circuit held that the PTAB abused its discretion because it relied on the expert’s credibility, and yet refused both to admit and consider the allegedly inconsistent trial testimony and to explain its decision. The PTAB’s final written decisions were vacated and remanded.

Practical Takeaways and Thoughts

  • If you discover new evidence one or more months after a PTAB institution decision, make sure to first request authorization to file a motion to submit the supplemental evidence and institute a conference call with the PTAB. Be ready to demonstrate (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice.
  • If the PTAB denies a request for authorization, check to see if the PTAB has provided a written explanation. If no written explanation is provided by the PTAB, raise the issue in a motion for rehearing to create a written record of the dispute, and, if necessary, file a motion to supplement the appellate record and include the necessary information. On appeal, highlight the lack of written record as a deficiency that does not allow meaningful appellate review of the PTAB’s decision.
  • Consider using different experts before the PTAB and before other courts. Further, working with experts that master the technology, patents, and all issues can help avoid inconsistent testimony.

[1]Ultratec, Inc. v. CaptionCall, LLC, No. 16-1706, 2017 U.S. App. LEXIS 16363 (Fed. Cir. Aug. 28, 2017).
[2]37 C.F.R. § 42.123 governs the procedure for filing supplemental information.
[3]See 37 C.F.R. § 42.123(b) (governing the procedure for a party seeking to submit supplemental information more than one month after the date the trial is instituted).

Ultratec, Inc., 2017 U.S. App. LEXIS 16363 at *9.
[6]Id. at *11.
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