Getting The Last Word: Requesting a Patent Owner Sur-Reply in AIA-PTAB Proceedings

Practitioners are familiar with the typical submission process in America Invents Act (“AIA”) – Patent Trial and Appeals Board (“PTAB”) proceedings.  First, the Petition is filed, and then the Patent Owner may submit a Patent Owner Preliminary Response. See Office Patent Trial Practice Guide, 77 Fed. Reg. 48757-58.  Subsequent to that filing, the PTAB will institute or not institute trial based on the presented grounds of unpatentability. Id.

If trial has been instituted, the Patent Owner will submit its full Patent Owner Response as a matter of right.[1] Id.  Thereafter, also as of right, Petitioner will submit its Reply.[2] Id.  This is where the issue of “new” evidence or argument arises.  Not surprisingly, Patent Owners have often sought permission from the PTAB to submit a sur-reply, for the purpose of addressing any arguments or evidence they believe is “new.” 

First, it is important to note that the PTAB already has a rule in place regarding the proper scope of a Petitioner reply. See 37 C.F.R. § 42.23(b) (“…A reply may only respond to arguments raised in the corresponding opposition, patent owner preliminary response, or patent owner response.”).  Here, the PTAB has referred to its own discretion to evaluate whether or not evidence and argument are properly within the scope of a reply in denying a Patent Owner’s request to submit a sur-reply. See, e.g., IPR2016-01428, Paper 26 (Aug. 16, 2017) at 2 (“We noted that whether a reply contains arguments or evidence that is outside the scope of a proper reply under 37 C.F.R. § 42.23(b) is left to our determination. We will determine whether the Petitioner’s Reply and evidence are outside the scope of a proper reply and evidence when we review all of the parties’ briefs and prepare the final written decision. If there are improper arguments and evidence presented with a reply, we can disregard the reply and related evidence, for example.”); IPR2016-01106, Paper 23 (Jul. 17, 2017) at 2 (“In the absence of special circumstance, we determine whether a reply and supporting evidence contain material exceeding the proper scope when we review all of the pertinent papers and prepare the final written decision.”).

However, the PTAB has also consistently granted Patent Owner requests for a sur-reply – including by way of a total of twenty-three (23) identified decisions[3] in the last year, compared to only eight (8)[4] identified denials during the same time period.  These numbers in favor of granted submissions are likely a function of selection bias.  That is, as the practice of requesting a sur-reply has developed, practitioners have likely taken notice of which decisions are favorable and those that are not.  We are hopeful this blog provides further helpful information along those lines.

One of the reasons supporting the grant of a sur-reply submission seems to be that Patent Owner carries the burden on some issues, and thus should have the “last word” when new evidence or arguments are presented on such issues. See, e.g., IPR2017-00165, Paper 35 (Nov. 9, 2017) (non-enablement); IPR2017-00087, Paper 37 (Nov. 14, 2017) (secondary considerations); IPR2016-01901, Paper 38 (Oct. 13, 2017) (objective indicia of non-obviousness); IPR2016-01198, Paper 37 (Jun. 13, 2017) (actual reduction to practice to antedate prior art reference); IPR2016-00950, Paper 42 (Jul. 14, 2017) (secondary considerations).  That said, at least one panel has recognized that Patent Owner solely carries the burden of production on the issue of secondary considerations, while the Petitioner carries the burden of persuasion, which led to a denial. See IPR2017-00433, Paper 50 (January 30, 2018) (“Petitioner contends, and we agree, that while Patent Owner has the burden of production for secondary considerations, Petitioner still bears the burden of proof, and accordingly, Patent Owner’s request should be denied”); see also IPR2017-00476, Paper 21 (January 31, 2018) (denying sur-reply directed to secondary considerations).

By contrast, the PTAB has specifically noted that Petitioner bears the burden as to unpatentability of claims over the prior art, and has used that as a reason why Petitioner should have the “last word” in its reply absent further justification. See, e.g., IPR2017-00117, Paper 19 (Nov. 29, 2017) at 2 (“We appreciate that Patent Owner would like to respond to and to have the last word.  However, it is the petitioner, under the applicable rules governing inter partes review, who bears the burden of proof and who makes the last submission to the panel.  Patent Owner did not articulate any appropriate reason for authorizing a sur-reply”) (emphasis in original).

Beyond issues concerning burden of proof, the PTAB has also noted fundamental fairness to Patent Owner where certain new evidence and argument have been submitted, such that Patent Owner should have an opportunity to respond. See, e.g., IPR2017-01724, Paper 25 (Sept. 28, 2017) at 3 (“We determine that because the declarations may contain new argument and/or evidence, at this juncture fairness dictates authorizing Patent Owner to file a sur-reply in each of these two cases that is no longer than five pages, supported by declarations that are limited to five pages.”); IPR2016-01462, Paper 39 (Aug. 29, 2017) at 4-5 (allowing sur-reply and declining to strike portion of reply relating to submission of a new exhibit and new argument not in Petition concerning “reasonable expectation of success” in obviousness combination); IPR IPR2017-00210, Paper 43 (February 20, 2018) (sur-reply authorized in view of Petitioner’s submission of declaration from new expert).

Notably, motions to strike “new” evidence and argument appear to be disfavored in this context. See, e.g., IPR2016-01914, Paper 53 (Nov. 17, 2017) (denying authorization to file motion to strike and allowing sur-reply); IPR2016-01724, Paper 25 (Sept. 28, 2017) (authorizing sur-reply in lieu of motion to strike); IPR2016-01006, Paper 21 (Jun. 22, 2017) (denying authorization to file motion to strike). Along these lines, the PTAB has noted that Patent Owners may address any alleged “new” arguments at the final oral hearing. See, e.g., IPR2017-00946, Paper 33 (March 8, 2018) at 4.

As for a sur-reply itself, often the PTAB does not allow for submission of additional evidence or declarations. See, e.g., IPR2016-01246, Paper 28 (Jul. 6, 2017) (no new evidence and noting PTAB “obligation to ‘secure the just, speedy, and inexpensive resolution of every proceeding’”) (citations omitted); IPR2016-01462, Paper 39 (Aug. 29, 2017) at 6 (no new evidence submitted with sur-reply); IPR2016-01914, Paper 53 (Nov. 17, 2017) at 4 (same).  In other limited circumstances, the PTAB has authorized new evidence accompanying a sur-reply. See, e.g., IPR2016-01724 Paper 25 (Sept. 28, 2017) at 3 (sur-reply with supporting declaration).  Similarly, the PTAB has only authorized a sur-sur-reply by Petitioner in response to a sur-reply in limited circumstances. See, e.g., IPR2016-01204, Paper 28 (Jul. 12, 2017) at 2; IPR2017-01278, Paper 41 (July 26, 2017) (noting Petitioner’s burden as to unpatentability).

As an alternative to a sur-reply, the PTAB has authorized a Patent Owner submission identifying what it considers “new,” and a corresponding Petitioner submission identifying the portions of the Patent Owner Response to which the new arguments or evidence are a proper response or where in the original Petition or elsewhere in the record the evidence or argument may be located. See, e.g., PGR2016-00044, Paper 22 (Sept. 13, 2017) at 2; IPR2016-01006, Paper 21 (Jun. 22, 2017) at 2.  In at least one instance, the PTAB has authorized the filing of such lists along with a sur-reply and sur-sur-reply. See IPR2016-01610, Paper 116 (Sept. 20, 2017).

So, there is an active practice by Patent Owners of requesting a sur-reply in numerous circumstances.  A review of the decisions within the last year shows Patent Owners would be wise to specifically identify why a sur-reply is necessary, and not to solely rely on issues of burden or “timeliness” of evidence and arguments.  That said, requesting a sur-reply can be a useful tool in a Patent Owner’s toolset where there are limited abilities to have “airtime” with the panel before the final oral hearing.

[1] Patent Owner may also submit a Motion to Amend, but such papers are not relevant to this blog post.

[2] No other merits-related submission is allowed on behalf of the Patent Owner as of right, except for a Motion for an Observation on Cross Examination of a Reply Witness. Id.

[3] See IPR2017-00165, Paper 35 (Nov. 9, 2017); IPR2017-00087, Paper 37 (Nov. 14, 2017); IPR2016-01914, Paper 53 (Nov. 17, 2017); IPR2016-01901, Paper 38 (Oct. 13, 2017); IPR2016-01724, Paper 25 (Sept. 28, 2017); IPR2016-01479, Paper 28 (Sept. 6, 2017); IPR2016-01462, Paper 39 (Aug. 29, 2017); IPR2016-01434, Paper 35 (Jul. 25, 2017); IPR2016-01246, Paper 28 (Jul. 6, 2017); IPR2016-01204, Paper 28 (Jul. 12, 2017); IPR2016-01198, Paper 37 (Jun. 13, 2017); IPR2016-01100, Paper 23 (June 26, 2017); IPR2016-01027, Paper 32 (Jul. 7, 2017); IPR2016-00950, Paper 42 (Jul. 14, 2017); IPR2016-01370, Paper 42 (Oct. 4, 2017); IPR2016-01610, Paper 116 (Sept. 20, 2017); IPR2016-01435, Paper 37 (Jun. 29, 2017) (sur-reply in the form of identifying additional expert testimony); IPR2017-01278, Paper 41 (Jul. 26, 2017); IPR2017-00210, Paper 43 (February 20, 2018); IPR2017-00648, Paper 29 (March 2, 2018); IPR2017-00858, Paper 22 (March 7, 2018) at 2; IPR2017-00861, Paper 29 (March 6, 2018); IPR2017-00912, Paper 22 (April 24, 2018).  Note that citations in this blog may be to orders that apply to multiple proceedings.

[4] IPR2017-00117, Paper 19 (Nov. 29, 2017); IPR2016-01550, Paper 44 (Sept. 22, 2017); IPR2016-01428, Paper 26 (Aug. 16, 2017); IPR2016-01106, Paper 23 (Jul. 17, 2017); IPR2016-01646, Paper 26 (Oct. 16, 2017); IPR2017-00433, Paper 50 (January 30, 2018); IPR2017-00476, Paper 21 (January 31, 2018); IPR2017-00946, Paper 33 (March 8, 2018) at 4.