“A Reasonable Adjudicator Would have Wanted to Review this Evidence.”
InUltratec, Inc. v. Captioncall, LLC., [2016-1706, 2016-1707, 2016-1708, 2016-1709, 2016-1710, 2016-1712, 2016-1713, 2016-1715, 2016-2366] (August 28, 2017), the Federal Circuit vacated and remanded Board decisions invalidating Ultratec’s patents relating to systems for assisting deaf or hard-of-hearingusers to make phone calls, in a group of IPRs, finding that the Board failed to consider materialevidence and failed to explain its decisions to exclude theevidence.
Captioncall submitted the testimony of an expert Benedict Occhiogrosso in the IPR’s. Ultratec moved to supplement the record with the conflicting Mr. Occhiogrosso trial testimony, but because Ultratec did not first request authorization to file the motion,the Board expunged themotion from the record.
Within a week of the jury trial in which Occhiogrosso testified, Ultratecrequested authorization to file a motion to submit portionsof Mr. Occhiogrosso’s trial testimony to the Board. Ultratec alleged that Mr. Occhiogrosso’s trial testimonyaddressing a prior art reference was inconsistent with hisIPR declarations. The Board held a conference call to consider Ultratec’srequest for authorization to file a motion to supplementthe IPR record with Mr. Occhiogrosso’s trialtestimony, but did not review the testimony whendeciding whether it could be admitted. The Board denied the request, promising a written order that was never provided.
After refusing to admit Mr. Occhiogrosso’s trial testimony,the Board issued final written decisions, holding thatevery challenged claim was either anticipated or wouldhave been obvious, relying heavily on the Board’s belief that Mr. Occhiogrosso was acredible witness, citing his declaration more than thirty times, at least once as to each of the eight patents.
Under the PTO’s regulations, a partyseeking to submit supplemental information more thanone month after the date an IPR is instituted must requestauthorization to file a motion to submit the information. 37 C.F.R. § 42.123(b). The request to submit newinformation must show: (1) why the supplemental information reasonably could not have been obtained earlier,and (2) that consideration of the supplemental information would be in the interests of justice. The PTOconsiders the interests of justice as slightly higher thangood cause:
Good cause and interests-of-justice are closely relatedstandards, but the interests-of-justicestandard is slightly higher than good cause. While a good cause standard requires a party toshow a specific factual reason to justify the neededdiscovery, under the interests-of-justice standard,the Board would look at all relevant factors. Specifically, to show good cause, a party would be requiredto make a particular and specific demonstrationof fact. Under the interests-of-justicestandard, the moving party would also be requiredto show that it was fully diligent in seeking discoveryand that there is no undue prejudice to thenon-moving party.
The Federal Circuit said that the record affords but one reasonable conclusion: Ultratec satisfied both of § 42.123(b)’s requirements for allowing Ultratec to file a motion toadmit Mr. Occhiogrosso’s trial testimony. First, the evidence could not have been obtained earlier. Ultratec emailed the Board requesting authorization to file a motion to supplement the record the week after the jury trial concluded. This is not evidence that could have been located earlier through a more diligent or exhaustive search; it did not exist during the IPR discovery period.
The Federal Circuit said that the fact that Ultratec could have, but did not, depose and obtain inconsistent testimony from Mr. Occhiogrosso during the IPR itself is not a basis for concluding otherwise. Ultratec argues that during cross examination at trial in front of the jury Mr. Occhiogrosso offered testimony that is inconsistent withhis IPR testimony. That inconsistent testimony did notexist sooner and thus could not have been proffered to theBoard sooner.
The Federal Circuit said that:
The Board offers no reasoned basis why it would notbe in the interest of justice to consider sworn inconsistent testimony on the identical issue. Ultratec sought to offerrecent sworn testimony of the same expert addressing the same patents, references, and limitations at issue in theIPRs. A reasonable adjudicator would have wanted toreview this evidence.
The Federal Circuit noted that conflictingtestimony by Mr. Occhiogrosso would be highlyrelevant to both the Board’s analysis of the specific issueson which he gave inconsistent testimony and to theBoard’s overall view of his credibility. Histestimony was critical to the Board’s fact findings, and under such circumstances, no reasonable fact finderwould refuse to consider evidence of inconsistent sworn testimony. The Federal Circuit further noted that admitting and reviewing Mr. Occhiogrosso’s trial testimony would have placed minimal additional burden on the Board.
A number of problems with the Board’s procedurescontributed to its errors in this case. First, the Board lacked the information necessary to make a reasoneddecision. Second, the Board’s procedures allowed it to make significantevidentiary decisions without providing an explanationor a reasoned basis for its decisions. Third, the Board’s procedures impede meaningful appellatereview of the agency decision-making.
The Federal Circuit noted a significant difference between court proceedings and proceedings before the Board:
In districtcourt litigation, a party dissatisfied with a ruling excluding evidence is allowed to make an offer of proof to preserveerror. Fed. R. Evid. 103. Parties in IPRs are notgiven similar protections.
The Federal Circuit concluded that the Board abused its discretion when it refused toadmit and consider Mr. Occhiogrosso’s trial testimony andwhen it refused to explain its decision.