“[The Sotera violation] had already been addressed, and there was no need for the Board to provide a second explanation or repeat its reasoning in the final written decisions.” – USPTO Brief for the Intervenor
On December 30, Acting U.S. Patent and Trademark Office (USPTO) Director Derrick Brent filed an intervenor’s brief with the U.S. Court of Appeals for the Federal Circuit in an appeal brought by inventor Carrie Hafeman, following several inter partes review (IPR) proceedings filed against her patents by tech giants Google and Microsoft. While Hafeman seeks the reversal of final written decisions invalidating her patent claims due to the violation of a Sotera stipulation that had led to the PTAB’s institution, the USPTO brief mainly points to the unappealable nature of PTAB institution proceedings. The case calls into question whether Sotera stipulations, presumably filed to prevent duplicative validity arguments in U.S. district court and at the PTAB, are enforceable at the agency where such stipulations are cited in instituting patent validity trials.
USPTO: Section 314(d) Forecloses Hafeman’s Sotera Stipulation Challenge
Hafeman filed her opening brief at the Federal Circuit in September, arguing that the PTAB abused its discretion by failing to address real-party-in-interest LG’s violation of its Sotera stipulation. Hafeman owns patent claims covering a system for controlling device access using remote communication capabilities. In the Western District of Texas, LG was estopped from challenging the priority date of Hafeman’s patent claims for pursuing invalidity grounds that could have been contested at the PTAB, which violated LG’s Sotera stipulation. Although Hafeman’s opening brief identifies other reversible errors in the PTAB’s decisions, including improper claim construction, she contends that the PTAB should have terminated its IPRs that would not have been instituted without LG’s Sotera stipulation.
Brent’s brief for the intervenor, filed early last week, maintains that Hafeman’s Sotera arguments essentially challenge the PTAB’s decisions to institute the IPRs, which are unappealable based on the U.S. Supreme Court’s interpretation of the IPR institution statute codified at 35 U.S.C. § 314(d) in Thryv v. Click-to-Call Technologies (2020). Nor do the issues involved with LG’s Sotera violation give rise to the kind of due process “shenanigans” that could render institution decisions reviewable under the Supreme Court’s reasoning in Cuozzo Speed Technologies v. Lee (2016), argues the brief.
Although the PTAB has never terminated an IPR proceeding for violation of a Sotera stipulation, Hafeman noted that the Board has terminated proceedings for discovering misrepresentations made to obtain institution in I.M.L. SMU v. WAG Acquisition (2018), a case involving an undisclosed real-party-in-interest. Hafeman added that the Federal Circuit has recognized the PTAB’s authority to terminate IPR proceedings post-institution for misrepresentations in both Medtronic v. Robert Bosch Healthcare Systems (2016) and GNTX v. INTTRA (2015). By contrast, the USPTO brief notes that I.M.L. SMU is a non-precedential PTAB decision involving a violation of the statutory time-bar for IPR proceedings under Section 315(b), not an alleged violation of a Sotera stipulation that carries no statutory or regulatory requirements.
PTAB is Not the Proper Venue for Enforcing Sotera Violations, According to IPR Transcript
The USPTO also called Hafeman’s Administrative Procedures Act (APA) challenge “merely an attempt to circumvent 314(d)” by faulting the PTAB for not explicitly stating its reasoning to maintain the IPR proceedings in light of LG’s Sotera violation. Even if judicial review under the APA weren’t precluded by several America Invents Act (AIA) statutes displacing the APA’s cause of action for agency review, Brent argued that the Board properly explained its reasoning. In an email denying a request for rehearing filed by Hafeman, the PTAB explained that the alleged Sotera violation was a matter for the district court, not the Board. “This issue had already been addressed, and there was no need for the Board to provide a second explanation or repeat its reasoning in the final written decisions,” Brent’s brief states.
In her opening brief, Hafeman cited a pair of Federal Circuit cases for the premise that PTAB final written decisions must provide reasoned explanations responding to patent owner arguments. In Provisur Technologies v. Weber (2022), the CAFC noted that the APA requires the Board to “fully and particularly set out the bases upon which it reached its decision” to permit effective appellate review. Such concerns were also at issue in 2002’s In re Thrift, where the Federal Circuit reversed the PTAB’s predecessor for failing to provide adequate explanation of an invalidity ruling. In response, the USPTO called those cases inapposite, arguing that the PTAB’s email, which was entered into the IPR record, provided sufficient reasoning for denying Hafeman’s Sotera challenge.
PTAB transcripts support the notion that Sotera stipulations don’t carry weight in the IPR proceedings for which those stipulations are filed. At a hearing in December 2023, Administrative Patent Judge (APJ) Jeffrey Smith indicated that Hafeman had no recourse at the PTAB even assuming LG violated the stipulation, due largely to the fact that “there’s never been a board decision that actually went into the details of enforcing Sotera stipulations.”
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