Hunting Titan Inc. v. DynaEnergetics Europe GmbH
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Only under Rare Circumstances Can the Patent Trial & Appeal Board Find Proposed Substitute Claims Unpatentable on Its Own

The US Court of Appeals for the Federal Circuit addressed, for the first time, the issue of when the Patent Trial & Appeal Board (Board) may raise a ground of unpatentability that was not advanced by a petitioner in relation to proposed substitute claims. The Court upheld the standard defining the “rare circumstances” in which such a ruling is proper while questioning the Board’s reasoning and application of the standard. Hunting Titan, Inc. v. DynaEnergetics Europe GMBH, Case Nos. 20-2163; -2191 (Fed. Cir. Mar. 24, 2022) (Prost, C.J., Reyna, Hughes, JJ.) (Prost, C.J., concurring).

Hunting Titan challenged DynaEnergetics’ patent in an inter partes review (IPR) based on anticipation and obviousness grounds. The Board found all the original claims of the patent unpatentable as anticipated. DynaEnergetics moved to amend to add proposed substitute claims. Hunting Titan opposed the motion to amend but advanced only obviousness grounds against the proposed substitute claims. The Board determined sua sponte that the proposed substitute claims were unpatentable as anticipated and, therefore, denied the motion to amend. DynaEnergetics requested rehearing, and the Precedential Opinion Panel (POP) reversed the Board’s denial of the motion to amend and determined that Hunting Titan did not prove that the proposed substitute claims were unpatentable.

The POP decided that “only under rare circumstances” should the Board sua sponte raise a ground for unpatentability not advanced by the petitioner in relation to proposed substitute claims. The rare circumstances include only two situations:

  1. When the petitioner is not involved in the motion to amend, such as when a petitioner chooses not to oppose the motion or ceases to participate in the proceeding altogether
  2. When evidence of unpatentability is readily identifiable and persuasive, such as if the substitute claims are unpatentable for the same reasons as the original claims.

The POP stated that in most circumstances, it is best to rely on the adversarial system and expect the petitioner to raise the unpatentability grounds for consideration.

The Federal Circuit upheld the POP’s standard for when the Board may sua sponte find proposed substitute claims unpatentable but also found the POP’s reasoning “problematic” because it placed too much emphasis on the adversarial system. The Court noted that Board proceedings, such as IPRs, are fundamentally a review of an earlier administrative proceeding, as opposed to civil litigation, The POP’s rationale was based on the public interest being served by an adversarial system rather than on the public interest being served by maintaining integrity of the patent system.

The Federal Circuit also questioned the POP’s application of its new standard to the case at hand, noting that the readily identifiable evidence exception should have been applied when the Board found the proposed substitute claims unpatentable for the same reasons it found the original claims to be unpatentable.

In her concurring opinion, Chief Judge Prost noted that “[i]t makes little sense to limit the [Board], in its role within the agency responsible for issuing patents, to the petitioner’s arguments.” Instead, “the Board must determine whether the [...]

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Stick to Your Guns: PTAB Should Rarely Issue New Grounds of Unpatentability

The Patent Trial and Appeal Board (PTAB) Precedential Opinion Panel (POP) issued a precedential opinion in an inter partes review (IPR) to resolve two questions:

  • May the PTAB raise a ground of unpatentability not developed by the petitioner?
  • If it does so, must the PTAB provide the parties notice and an opportunity to respond to the new ground of unpatentability?

Hunting Titan, Inc. v. DynaEnergetics Europe GmbH, Case No. IPR2018-00600 (USPTO July 6, 2020) (Boalick, CAPJ) (granting request for POP rehearing). The POP held that while the PTAB may raise new grounds of unpatentability, it should refrain from doing so except in rare instances. If it does raise new grounds of unpatentability, the PTAB must provide the parties notice and an opportunity to respond to the new grounds.

Titan filed a petition requesting IPR of a patent owned by DynaEnergetics directed to a perforating gun assembly for wellbore tools. One of the grounds alleged anticipation by a prior art reference (Schacherer). The PTAB instituted review, and DynaEnergetics timely moved to amend the claims. Opposing the motion to amend, Titan argued that the substitute claims were obvious over various prior art references, including the Schacherer reference. Titan did not argue anticipation as to the substitute claims. In its final written decision, the PTAB held that the amended claims were unpatentable because they were anticipated by Schacherer. DynaEnergetics moved for reconsideration and POP review.

The POP granted review to provide precedential guidance on new grounds of unpatentability. Citing to the recent US Court of Appeals for the Federal Circuit decision in Nike, Inc. v. Adidas AG, the POP determined that the PTAB may raise new grounds of unpatentability in certain cases, but those cases should be exceedingly rare. The POP reasoned that the adversarial nature of an IPR proceeding puts the competing parties in a better position to identify and argue the strongest grounds. The POP rejected the notion that the PTAB should independently examine the patentability of every proposed substitute claim, as if it were a reexamination proceeding, by culling through the prior art to determine if better unpatentability arguments could have been presented. Only in rare cases that are no longer adversarial, such as when a petitioner does not oppose a motion to amend or when a petitioner ceases to participate in an instituted IPR that proceeds to a final judgment, would it be reasonable for the PTAB to consider new grounds of unpatentability. Although the POP did not articulate every exceptional scenario, it suggested that when the record “readily and persuasively” establishes that substitute claims are unpatentable, it would be reasonable for the PTAB to rely on a new ground of unpatentability. Titan’s IPR was not an exceptional case, so the POP reversed the panel’s decision as to the substitute claims.

The POP also explained that the parties must be given notice and an opportunity to respond to any new grounds the PTAB may raise. With respect to substitute claims, notice cannot come from the grounds [...]

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