In Cultec, Inc. v. StormTech LLC, IPR2017-00777, Paper 7 (Aug. 22, 2017), the Patent Trial and Appeal Board (Board) denied an inter partes review because the same or substantially the same prior art or arguments were said to have been previously presented to the Patent Office during ex parte prosecution of the challenged patent by way of a third-party submission under 37 C.F.R.  § 1.290.[1] In addition to other disadvantages associated with third-party submissions, such as providing the patent applicant an opportunity to address the submitted art in an ex parte context, would-be petitioners also need to consider that such a submission could foreclose a future inter partes review. The Cultec decision (Decision) also highlights the unpredictability of any particular panel in exercising its discretion under 35 U.S.C. § 325(d) to deny a petition.[2]

In this case, the petitioner challenged claims 1-20 of U.S. Patent No. 9,255,394 (the ’394 patent) as obvious over primary reference Cobb in view of secondary references Fouss and/or Ellis (Decision at 7). The third-party submission was filed in the application that matured into the ’394 patent and presented Cobb for consideration by the examiner.[3] The submission stated that Cobb was cited in related U.S. patent application No. 14/175,477 (the ’477 application) in an office action dated Sept. 17, 2015, and that the statement of relevance presented in the office action “is adopted for this submission” (id. at 8-9, citing the third-party submission). The ’477 application matured into U.S. Patent No. 9,556,576 (the ’576 patent), and the ’576 patent and the ’394 patent and their underlying applications were said to disclose the same subject matter, as both applications were continuations of the same parent application and claimed priority to the same provisional application (id. at 9). Because the examiner of the ’477 application was also the examiner of the ’394 patent, the Board concluded that “the Examiner was well-aware of the Cobb reference and its specific disclosure” (id. at 9-10). 

Despite the third-party submission and/or Cobb not being addressed in an office action during prosecution of the ’394 patent, the Board found that the examiner considered the third-party submission because “[t]he Submission was signed by the Examiner” (id. at 10). Although the third-party submission relied on a chart with a detailed identification of the relevant portions of Cobb, it did not address Cobb in combination with Fouss and Ellis, the secondary references relied on in the petition. In any event, the Board found that “[t]he claim charts submitted with the Petition are an expanded version of the claim chart submitted with the Third Party Submission” (id.).

With respect to Fouss, the Board stated that “the Examiner cited and applied Fouss throughout the examination proceedings” of the ’394 patent” (id. at 11). Although this was true, Fouss was cited as a primary reference in combination with another secondary reference, Moore. With respect to Ellis, the Board found that a different secondary reference cited in the Sept. 17, 2015, office action of the ’477 application disclosed the same subject matter that was being relied on in Ellis, such that Ellis’s disclosure was said to be previously presented in the third-party submission (id. at 12).

Accordingly, the Board found the entry of the third-party submission sufficient to exercise its discretion under § 325(d) to deny the petition, even though the examiner never applied the primary Cobb reference in an office action, let alone addressed Cobb in combination with the secondary references cited in the petition during prosecution of the ’394 patent. This result would appear to contrast with many instances where the Board has opted not to exercise its discretion when the prior art references cited in the petition were of record (i.e., initialed by the examiner and listed on the face of the challenged patent) but were not specifically applied to the challenged claims. See TRW Automotive US LLC v. Magna Electronics Inc., IPR2014-00261, Paper 19, page 12 (June 26, 2014); Vizio, Inc. v. Nichia Corporation, IPR2017-00551, Paper 9, page 8 (July 7, 2017). Not only does this Decision serve as a cautionary tale regarding third-party submissions, but it also serves as an example of the discretionary nature of § 325(d), giving wide latitude to the Board and a degree of unpredictability to the parties.

[1] 37 C.F.R. §1.290(a) provides that “[a] third party may submit, for consideration and entry in the record of a patent application, any patents, published patent applications, or other printed publications of potential relevance to the examination of the application if the submission is made in accordance with 35 U.S.C. § 122(e) and this section.”

[2] 35 U.S.C. § 325(d) states in relevant part, “In determining whether to institute or order a proceeding under this chapter, chapter 30, or chapter 31, the Director may take into account whether, and reject the petition or request because, the same or substantially the same prior art or arguments previously were presented to the [Patent and Trademark] Office.”

[3] The Board noted that the lead counsel for the petitioner was the same attorney who filed the third-party submission (id. at 8).