Patent Lawyer Blog
In a significant decision that resolves ongoing disputes among Patent Trial and Appeal Board (PTAB) panels, Acting USPTO Director Coke Morgan Stewart has granted Director Review and established clearer standards for when inter partes review (IPR) petitions should be denied under 35 U.S.C. § 325(d) when prior art was previously considered during patent prosecution.
Case Background
The decision in Ecto World, LLC and SV3, LLC v. RAI Strategic Holdings, Inc. (IPR2024-01280) involved a petition challenging Patent 11,925,202 B2, where all asserted prior art references had been submitted during the original patent prosecution in an Information Disclosure Statement (IDS) containing more than 1,000 references, which is “over 40 times the size of a typical IDS,” according to the Director’s analysis. The PTAB had initially denied institution under § 325(d), which allows the Director to deny review when “the same or substantially the same prior art or arguments previously were presented to the Office.”
Key Ruling: Petitioners Must Explain Examiner Error
The Director’s decision resolves a critical split among PTAB panels regarding whether petitioners must explicitly demonstrate how the patent examiner erred when relying on previously-considered prior art. The ruling establishes that petitioners must provide an analysis even when the asserted prior art appears on an IDS but was not applied by the examiner. “A petitioner must explain, with reference to Becton Dickinson factors (c), (e), and (f), how the Examiner erred in overlooking the prior art,” the Director stated, clarifying the second prong of the Advanced Bionics framework. The decision specifically addresses situations where examiners may have overlooked relevant teachings: “A petitioner also may point to the fact that even though the asserted prior art is listed on an IDS, the Examiner did not issue any prior art rejections during examination, so the Examiner materially erred by overlooking certain teachings in the prior art on the IDS.”
Burden Shifting Rejected
The Director firmly rejected attempts by petitioners to shift their burden to the PTAB, noting that “Petitioner’s suggestion that the Board should have scoured the Petition to cobble together an argument under the second part of Advanced Bionics improperly shifts Petitioner’s burden to demonstrate material error onto the Board.” This ruling emphasizes that “Judges are not like pigs, hunting for truffles buried [in the record].”
Volume of References May Support Institution
Despite clarifying that petitioners must demonstrate examiner error, the Director indicated that the sheer volume of references in an IDS may sometimes support institution. In this case, the examiner had specifically requested that the applicant identify references deserving “particular attention,” but received no response. “These facts may demonstrate that discretionary denial under § 325(d) is not warranted,” the Director noted, considering that most IDS submissions contain fewer than 25 references, while this case involved more than 1,000.
Fintiv Analysis Also Addressed
The decision also addressed parallel proceedings under the Fintiv factors, noting that the USPTO’s Feb. 28, 2025 rescission of its 2022 interim procedure memo restored the Board’s discretion to deny IPRs based on parallel International Trade Commission (ITC) proceedings. The Director ordered additional briefing on both § 325(d) and Fintiv factors, instructing that “The Board should address the parties’ Fintiv arguments only if the Board determines not to exercise discretion to deny institution under § 325(d).”
Takeaway for Petitioners
This Director Review decision provides crucial guidance for practitioners navigating § 325(d) challenges, particularly in cases involving large IDS submissions. The ruling establishes that petitioners cannot simply rely on the strength of their invalidity contentions, but must specifically articulate how the examiner’s consideration of the prior art was materially deficient. The decision balances the USPTO’s interest in preventing redundant proceedings with ensuring that patent validity challenges receive appropriate consideration, especially when the original examination may have been hindered by an overwhelming volume of disclosed prior art.
The authors of www.PatentLawyerBlog.com are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Greg Cordrey at 949.623.7236 or GCordrey@jmbm.com.