Intellectual
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` PROPERTY
` PROPERTY
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`(cid:1)(cid:1)(cid:116)(cid:1)(cid:1)(cid:39)(cid:66)(cid:77)(cid:77)(cid:1)(cid:19)(cid:17)(cid:18)(cid:22)
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`
`Meet the men and women M h d
`
`
`shaking up patent law as
`judges on the Patent Trial
`and Appeal Board.
`
`Voip-Pal Ex. 2062
`IPR2016-01198 and IPR2016-01201
`
`

`

`COVER STORY
`
`Litigating before the Patent Trial and Appeal Board means moving quickly.
`The 2011 America Invents Act did more than create a faster, cheaper alternative to
`district court litigation, it gave birth to a new court
`that’s becoming more important than legislators ever imagined.
`
`BY SCOTT GRAHAM AND LISA SHUCHMAN
`
`W h e n S c o t t K a m h o l z
`
`joined the Patent Trial
`and Appeal Board in
`2012, he expected to
`ease into the new job by
`spending a couple of years handling rel-
`atively simple ex parte appeals.
`“But no, that didn’t happen,” Kamholz
`says with a chuckle. With petitions for
`inter partes review flooding the board
`(PTAB), Kamholz transferred to the
`Trials Division two months after join-
`ing. A few months later he was made a
`manager, and by the time he returned to
`private practice this spring he’d touched
`120 America Invents Act proceedings.
`“They needed people to step up,” he says.
`Kamholz was on the front lines as the
`America Invents Act (AIA) remade the
`PTAB and created new proceedings that
`revolutionized patent litigation. About
`60 new administrative judges, many
`
`with prestigious resumes in private prac-
`tice and government service, have joined
`about 25 veterans of the PTAB’s prede-
`cessor, the Board of Patent Appeals and
`Interferences, to take on most of the
`inter partes reviews (IPRs) and covered
`business method reviews to date.
`Though the tribunal has become a
`critical venue for patent litigation in all
`industries, its new members and un-
`tested authority has also made it a blank
`slate for clients and practitioners. Now,
`after roughly three years of PTAB pro-
`ceedings, lawyers are developing a sense
`of the judges’ personalities and track
`records. ALM spoke with more than
`a dozen PTAB experts and compiled
`data from the analytics website Docket
`Alarm to glean an insider’s view of the
`new forum.
`Practitioners describe an engaged
`bench populated by lawyer-scientists
`
`eager to drill down into the nitty-gritty
`of inventions and the art that preceded
`it. “You can’t wave your hand, gloss over
`weaknesses in a case and assume they
`won’t catch them. They will,” says Erika
`Arner, a partner at Finnegan, Henderson,
`Farabow, Garrett & Dunner who filed
`the first ever PTAB petition in 2012 and
`has been involved in dozens since.
`“They’re going to ask the kinds of
`questions that make you feel like the
`witness that’s being deposed,” says Rob-
`ert Steinberg, chairman of Latham &
`Watkins’ PTAB practice.
`It can be unpredictable, too, as might
`be expected of a board developing rules
`and precedents almost from scratch.
`Oblon partner Scott McKeown was
`awestruck when two PTAB judges with
`electrical engineering degrees began ex-
`amining an inventor about his computer
`code. “In district court, you never would
`
`ILLUSTRATIONS BY NIGEL BUCHANAN
`
`

`

`PETER CHEN
`
`JOINED BOARD: 2013
`PREVIOUSLY: Latham & Watkins;
`McDermott Will & Emery;
`Cadence Design Systems
`J.D.: UC-Davis; M.A., biology
`(Stanford)
`PRIMARY TECH AREAS:
`Semiconductors, electrical
`and optical systems; computer
`architecture software and
`information security
`
`SALLY MEDLEY
`
`JOINED BOARD: 2000
`PREVIOUS: PTO examiner
`BEFORE LAW: Systems
`engineer, Lockheed; NASA
`J.D.: George Mason
`MBA: Florida Institute of
`Technology
`PRIMARY TECH AREAS:
`Transportation, e-commerce,
`construction and agriculture;
`communications
`
`GRACE KARAFFA
`OBERMANN
`
`JOINED BOARD: 2012
`PREVIOUSLY: Davidson Berquist;
`U.S. DOJ; Fish & Neave
`BEFORE LAW: Chemist, FMC Corp.
`CLERKSHIP: Federal Circuit
`Judge Raymond Clevenger III
`J.D.: George Washington;
`B.A., chemistry (Rutgers)
`PRIMARY TECH AREAS:
`Biotechnology and organic;
`semiconductors, electrical and
`optical systems
`
`THOMAS GIANNETTI
`
`JOINED BOARD: 2012
`PREVIOUSLY: Jones Day;
`Fish & Neave
`BEFORE LAW: Engineer,
`Westinghouse Electric Corp.
`J.D.: George Washington
`M.A., electrical engineering
`(Carnegie Mellon)
`PRIMARY TECH AREAS:
`Computer architecture software
`and information security;
`semiconductors,
`electrical and optical systems
`
`
`
`see a judge asking to be walked through
`code, line by line,” says McKeown.
`Kamholz strongly encourages practi-
`tioners to hold moot courts before ap-
`pearing. “Sometimes we were relent-
`less,” he says. “It’s one of the hottest
`benches going.”
`
`GROWTH SPURT
`
`The 2011 American Invents Act creat-
`ed a faster, cheaper alternative to district
`court litigation of patent validity. The
`mechanism has proven hugely popular
`with companies facing claims of patent
`infringement, though some patent hold-
`ers say that’s because the board has been
`too eager to invalidate patent claims.
`Randall Rader, the former chief
`judge of the U.S. Court of Appeals
`for the Federal Circuit, famously de-
`scribed the board as “a death squad”
`
`for patents, though to date the Federal
`Circuit has shown plenty of deference
`to PTAB decisions.
`The PTAB had received 3,500 peti-
`tions in AIA proceedings through June,
`and 150 to 170 continue to be filed each
`month. The board has held 466 trials,
`with 318 (68 percent) ending in the can-
`cellation of all instituted claims. By stat-
`ute, it operates on a swift time frame:
`The AIA mandated that the board must
`make a decision on whether to institute
`review within six months of receiving a
`petition and issue final decisions within
`one year after the decision to review.
`Following passage of the AIA, the
`board grew from fewer than 100 judges
`to about 230 today. The work includes
`traditional ex parte appeals, AIA pro-
`ceedings and management/administra-
`tion, with many judges doing some of
`each. The PTO does not release informa-
`
`tion about its judges, But data compiled
`from Docket Alarm, a legal research and
`analytics website developed by IP litiga-
`tor Michael Sander, indicates that about
`80 judges have done the heavy lifting so
`far on AIA post-grant proceedings.
`Several veterans of the PTAB’s pre-
`decessor, including Judges Jameson Lee,
`Joni Chang, Sally Medley and Michael
`Tierney, appear to have taken leadership
`roles on the new board, while ranking
`among the top producers so far. Cases
`aren’t assigned randomly at the PTAB—
`board management tries to staff each case
`with at least one veteran PTAB judge,
`one who’s more junior and at least one
`with expertise in the technology area.
`Lee, Medley and Tierney have appeared
`on many groundbreaking PTAB cases to
`date, and Chang is said to have a voice in
`case assignments, along with the panel’s
`outgoing chief judge, James Smith.
`
` Intellectual Property | Fa l l 2 015
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`JAMES SMITH
`
`OUTGOING CHIEF JUDGE
`JOINED BOARD: 2011
`PREVIOUSLY: Baxter International;
`Lexmark; Nokia; Emory University
`CLERKSHIP: Federal Circuit Judge
`Paul Michel
`J.D.: Duke University
`B.A., electrical engineering
`(University of Maryland)
`
`JACQUELINE
`WRIGHT BONILLA
`
`JOINED BOARD: 2012
`PREVIOUSLY: Foley & Lardner;
`Finnegan Henderson
`CLERKSHIP: Federal Circuit
`Judge Randall Rader
`J.D.: University of Virginia
`Ph.D: Pharmacology, University of Virginia
`PRIMARY TECH AREAS: Biotechnology and
`organic; semiconductors, electrical and
`optical systems
`
`MICHAEL TIERNEY
`
`JOINED BOARD: 2000
`PREVIOUSLY: Morgan Lewis;
`PTO examiner
`J.D.: University of Washington
`B.A., chemical engineering
`(University of Washington)
`PRIMARY TECH AREAS: Computer
`architecture software and information
`security; chemical and materials
`engineering
`
`NATHAN KELLEY
`
`DEPUTY CHIEF JUDGE
`JOINED BOARD: 2015
`PREVIOUSLY: PTO Solicitor’s
`Office; Sterne Kessler
`CLERKSHIP: Federal Circuit
`Judge Randall Rader
`J.D.: George Mason University
`B.A., electrical engineering
`(George Mason University)
`
`Lee and Tierney sat on the very first
`IPR, Garmin v. Cuozzo Speed Technolo-
`gies, with Lee authoring a decision that
`set forth board discovery rules along
`the way. “The fact that he was on that
`panel was not an accident,” says Mat-
`thew Cutler, a Harness Dickey & Pierce
`partner who writes a blog on patent of-
`fice litigation. The Federal Circuit af-
`firmed Lee’s decision 2-1.
`Tierney and Medley presided over the
`first covered business method review,
`SAP America v. Versata, where Tierney
`held that CBMs can include review for
`Section 101 patent eligibility. The Federal
`Circuit again affirmed in a split decision.
`
`THE NEWCOMERS
`
`Joining the PTO veterans are a raft
`of new members Chief Judge Smith
`recruited over the last few years from
`global powerhouses such as Latham &
`Watkins, Morrison & Foerster and Jones
`
`Day; big firms with strong IP brands
`such as Foley & Lardner, Ropes & Gray
`and Fish & Richardson; and IP boutiques
`including Sterne, Kessler, Goldstein &
`Fox and Harness Dickey. Smith, who in
`May announced plans to step down lat-
`er this year, also brought in intellectual
`property attorneys from the U.S. Justice
`Department’s Civil Division and the In-
`ternational Trade Commission.
`At least 23 of the AIA judges hold ad-
`vanced degrees in engineering, chemistry
`or other sciences to go along with their
`J.D.s. A few, like Kamholz, are M.D.s. “It
`is the biggest concentration of patent tal-
`ent I’ve ever experienced,” Kamholz says.
`Two of the newbies—Thomas Gi-
`annetti and Grace Karaffa Obermann—
`have already been designated lead judges
`and section supervisors. Giannetti previ-
`ously spent 25 years as a partner at Jones
`Day and Fish & Neave, and once worked
`as an engineer at Westinghouse Electric
`Corp. Obermann was a chemist at FMC
`
`Corp. before a 12-year stint with the
`Justice Department, where she handled
`IP disputes over everything from bombs
`and satellites to postage stamp art, ac-
`cording to her LinkedIn biography. She
`was a Federal Circuit clerk for Judge
`Raymond Clevenger III and practiced at
`IP boutique Davidson, Berquist, Jackson
`& Gowdey.
`Kamholz, who has returned to Foley
`Hoag, worked under Giannetti and de-
`scribes him as “very sensible and practical”
`but with an ability to see the big picture.
`That was especially important because
`“every decision that we were making then,
`early on, potentially had a big impact” on
`other cases down the road.
`Obermann, meanwhile, is one of the
`judges who will decide probably the
`most politically charged issue now fac-
`ing the PTAB: whether a hedge fund that
`has brought IPRs against pharmaceutical
`companies for the apparent purpose of
`driving down their stock prices is abusing
`
`Fa l l 2 015 | Intellectual Property
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`

`

`COVER STORY
`
`“There’s very
`little margin for
`error in these
`proceedings.
`Better to ask
`questions
`and solve the
`problem.”
`—Scott Kamholz
`
` Intellectual Property | Fa l l 2 015
`
`Harness Dickey’s Cutler recommends
`investing time in reading the PTAB’s in-
`formative decisions. (The board has is-
`sued only one precedential decision, but
`informative decisions are the next closest
`thing.) With a one-year deadline for fi-
`nal decisions, don’t expect wide-ranging,
`district court-style discovery, he says.
`“Rule No. 1 of IPRs is speedy, just and ef-
`ficient. You’ll see that thread through a
`lot of their decisions,” he adds.
`When procedural disputes do arise,
`the judges often work them out with the
`parties over the phone, without brief-
`ing. Baker Botts partner Eliot Williams
`recalls a quick teleconference when an
`objection was raised to the scope of a
`reply brief. “They then caucused while
`we were on hold. They came back on the
`line a few minutes later with a ruling,”
`Williams says. “They have to move fast
`and that’s how they do it.”
`The board welcomes such calls, Kam-
`holz says, provided the parties have first
`
`the IPR process. Obermann and several
`colleagues are weighing a motion by Cel-
`gene Corp. to dismiss four IPRs brought
`by the Hayman Capital-backed Coalition
`for Affordable Drugs.
`Another newbie, Jacqueline Wright
`Bonilla, actually has a double dose of
`those cases. A pharmacology Ph.D. who
`practiced at Foley & Lardner for 10 years
`and clerked for Rader at the Federal Cir-
`cuit, Bonilla is presiding over additional
`Hayman IPRs against Biogen, Shire Plc.
`and Cosmo Pharmaceuticals SA.
`
`JUST A PHONE CALL AWAY
`
`Dorsey & Whitney partner Adam
`Floyd was a PTAB judge from 2012 to
`2014. He has a simple suggestion for law-
`yers new to practicing before the board:
`Use claim charts. “We see a lot of people
`file these petitions without claim charts,
`which I think is odd,” he says. Claim
`charts help narrow the issues, he says.
`
`DIEGO M. RADZINSCHI
`
`

`

`COVER STORY
`
`made a good faith effort to resolve sticking
`points themselves. “There’s very little margin
`for error in these proceedings,” Kamholz says.
`“Better to ask questions and solve the problem.”
`A case can turn on those phone calls.
`Paul Hastings partner Joseph Palys was
`having no luck with his argument that RPX
`Corp. was doing the bidding of Apple Inc.
`when it brought an IPR against VirnetX
`Inc. “At first, the board didn’t want to hear
`about it,” Palys recalls. Then during a 2014
`conference call Palys persuaded Tierney
`to call up a PDF of RPX’s petition on his
`computer, taking him through the meta-
`data to find the names of Apple attorneys
`embedded among the document authors.
`“Now that we know about the metadata,
`we’ve gone through it, you’ve explained it in
`detail, I’m looking and discussing with the
`panel members,” said Tierney, according to
`a transcript. Moments later the judges ap-
`proved Palys’ motion for additional discovery,
`which ultimately led to denial of the petition
`over the privity issue.
`
`BEYOND THE BASICS
`
`Oral hearings are more formal than the
`conference calls. Counsel rise when the judg-
`es come in and address them as “your honor”
`or “judge.” Hearings can last anywhere from
`an hour to most of the day. PTAB judges are
`based all over the country and one or more
`often appear by remote video.
`PTAB judges do not need primers on pat-
`ent law fundamentals or the latest Federal
`Circuit case law. “They sometimes gently
`chide lawyers who try to explain the law to
`them,” says Ropes & Gray partner Steven
`Baughman. “They’re gracious about it but
`they will tell them, ‘You don’t need to tell us
`this. We do know what the law is.’”
`Often the panel member with the most
`expertise in the subject area will take the
`lead. Questions might begin with “When I
`wrote code …” or “When I was an engineer …”
`But regardless of how they’re phrased, the im-
`portant thing to know is there will be many
`of them.
`“There’s no experience quite like it,” says
`Baughman. “They’ve read everything. They
`know all the arguments. You might spend
`
`Fa l l 2 015 | Intellectual Property
`
`MAKING THEIR MARK
`
`About 80 judges have done the heavy lifting so far on AIA post-grant proceedings.
`Here’s what the early data shows:
`
`MOST CASES
`Most participations in decisions to institute and final written decisions
`
`JUDGE
`
`PETITIONS
`
`JUDGE
`
`FINAL DECS
`
`Chang, Joni
`Lee, Jameson
`Turner, Kevin
`Medley, Sally
`Bisk, Jennifer
`McNamara, Brian
`Easthom, Karl
`Zecher, Michael
`Tierney, Michael
`Arbes, Justin
`
`259
`232
`219
`186
`167
`158
`153
`144
`142
`140
`
`Lee, Jameson
`Medley, Sally
`Bisk, Jennifer
`Chang, Joni
`Tierney, Michael
`Arbes, Justin
`McNamara, Brian
`Giannetti, Thomas
`Kim, Michael
`Zecher, Michael
`
`67
`64
`54
`53
`53
`46
`46
`44
`37
`34
`
`HIGHEST
`INSTITUTION RATE
`on some or all claims
`
`LOWEST
`INSTITUTION RATE
`on some or all claims
`
`JUDGE
`
`% INSTITUTED
`
`JUDGE
`
`% INSTITUTED
`
`Stephens, Debra
`Meyer, Jennifer
`Kim, Michael
`Mitchell, Susan
`Turner, Kevin
`Benoit, Barbara
`Chang, Joni
`Cocks, Josiah
`McKone, Dave
`Pettigrew, Lynne
`
`97%
`96%
`92%
`92%
`90%
`89%
`87%
`85%
`85%
`84%
`
`Gaudette, Linda
`Perry, Glenn
`Jefferson, Trevor
`Gerstenblith, Bart
`Siu, Stephen
`Grossman, Barry
`Arbes, Justin
`Fitzpatrick, Michael
`Oberman, Grace
`Quinn, Miriam
`
`46%
`58%
`60%
`61%
`61%
`63%
`66%
`66%
`67%
`67%
`
`HIGHEST
`CANCELLATION RATE
`on some or all claims
`
`LOWEST
`CANCELLATION RATE
`on some or all claims
`
`JUDGE
`
`% CANCEL
`
`JUDGE
`
`% CANCEL
`
`Blankenship, Howard
`Cocks, Josiah
`Deshpande, Kaylan
`Fitzpatrick, Michael
`Medley, Sally
`Parvis, Barbara
`Siu, Stephen
`Snedden, Sheridan
`Easthom, Karl
`Pettigrew, Lynne
`
`100%
`100%
`100%
`100%
`100%
`100%
`100%
`100%
`97%
`97%
`
`Green, Lora
`Quinn, Miriam
`Bisk, Jennifer
`Yang, Zhenyu
`Moore, Bryan
`Anderson, Gregg
`Prats, Francisco
`Turner, Kevin
`Arbes, Justin
`Tierney, Michael
`
`69%
`75%
`76%
`76%
`77%
`81%
`81%
`82%
`85%
`85%
`
`Source: Docket Alarm data, as of July 2015
`
`

`

`two hours before them answering ques-
`tions. You can’t take a thematic approach
`or focus on talking points.”
`Baker Botts’ Williams suggests a rea-
`son: “The PTAB judges are fact-finders,”
`he notes, “whereas in district court the
`fact-finder is the jury.”
`Kamholz, the former PTAB judge,
`says that when he heard ex parte appeals,
`he usually had a good idea going into the
`hearing where he was headed. AIA trials
`were different, in part because evidence
`can keep coming in after briefing is com-
`plete. “It’s probably the first time coun-
`sel has the opportunity to put the whole
`record together and show how it fits as a
`unit,” he says. “It can be very important.”
`While the oral hearings are general-
`ly conducted like appellate arguments,
`there are exceptions. A panel led by
`Judges Giannetti and Ward heard live
`testimony at a 2014 hearing from in-
`ventor Steven Orr about his police ra-
`dar detection system. Oblon’s McKe-
`own elected not to cross-examine,
`but Ward short-circuited that plan by
`quizzing Orr himself about code that
`was missing from an alleged proto-
`type. Then Giannetti asked why there
`were no test data or personal observa-
`tions that would corroborate the pro-
`totype claim.
`McKeown says the questioning sur-
`prised everyone, but helped his team
`win the case and “exemplifies the PT-
`AB’s capabilities.”
`
`LEARNING CURVE
`
`The PTAB is under new manage-
`ment this summer. Former PTO Solici-
`tor Nathan Kelley is in line to take over
`for Smith on at least an acting basis,
`now that the board has issued new pro-
`
`COVER STORY
`
`PTAB judges
`“sometimes
`gently chide
`lawyers who try
`to explain the
`law to them.”
`—Steven Baughman
`
`cedural rules and Congress is weighing
`its own tweaks.
`Kamholz describes Smith as a leader
`who always responded quickly to email
`and was available to consult, even as the
`job was pulling him in a dozen differ-
`ent directions. Smith also dealt with
`the scrutiny that came the PTAB’s way.
`“The leadership of the board I think did
`a fantastic job of insulating us from that
`swirl of interest,” he says. “I was left
`free to focus on my cases.”
`K a m holz pred ict s much of t he
`controversy will recede as institution
`rates continue dropping. Originally
`they were as high as 87 percent; now
`they’re at 70 percent “and it’s probably
`trending down” further. He believes
`petitioners were so cautious about the
`brand new proceedings at first, they
`tended to bring only slam-dunk cases.
`After they saw the high institution
`rates, and more district judges staying
`litigation, perhaps weaker cases were
`
`filed, leading now to the lower rates.
`The board may have played a role too,
`Kamholz says.
`After one full cycle of institution,
`briefing and fully developed records,
`the board may have attained a more
`practical sense of which petitions are
`more likely than not to result in cancel-
`lations, he says. It also may have taken
`some time for counsel to figure out the
`most effective defense strategies.
`“I wonder if maybe we were too le-
`nient on instituting” in the early days,
`Kamholz says. “We had nothing to com-
`pare it against.”
`
`Contact the reporters at sgraham@alm.com
`and lshuchman@alm.com.
`
`Reprinted with permission from the Fall 2015 edition of
`INTELLECTUAL PROPERTY an ALM Supplement to
`CORPORATE COUNSEL © 2015 ALM Media Properties,
`LLC. All rights reserved. Further duplication without
`permission is prohibited. For information, contact 877-257-
`3382 or reprints@alm.com. # 016-09-15-02
`
` Intellectual Property | Fa l l 2 015
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