Discretionary Denial: Even the “Best” Prosecution Prior Art May Not Be Right for an IPR

A pair of recent PTAB institution decisions highlights that petitioners should be cautious when relying on prior art that was cited during the prosecution of the challenged patent. Pursuant to 35 U.S.C. § 325(d), the PTAB has the discretion to deny institution if the petition relies on prior art or arguments that the examiner already addressed during patent prosecution. In two recent decisions that issued just one day apart and reached opposite conclusions, the PTAB provided some insight into circumstances that may lead to (or away from) a discretionary denial.

First, in Cloud9 Techs. v. IPC Systems (IPR2017-01615), the PTAB used its discretion to deny institution, finding that the patent owner “argued persuasively” that the asserted references had already been presented to the examiner during patent prosecution. Although one ground of the petition relied on a new reference that had not been before the examiner, the PTAB found the reference was offered merely as an alternative to prosecution prior art and would require reconsidering the examiner’s reasons for allowing the claims over the prosecution prior art. The petitioner also asserted that the examiner’s specific findings misinterpreted the prior art and provided an expert declaration presenting a different view of the prior art’s disclosures. However, the PTAB was unpersuaded and found that the declaration “alone does not overcome the circumstances presented here.”

The second decision, Multi Packaging Solutions v. CPI Card Group – Minnesota (IPR2017-01650), provided a study in contrasts. The petition likewise relied on references that the patent owner argued were substantially the same as those previously before the examiner. The PTAB, however, was not convinced. It found that even if the references “have similar disclosures” to the prosecution prior art, the IPR references were sufficiently different because they did not share common inventors, were not assigned to the same entity, issued years apart, were not a descendant of a shared ancestor application, and had some unique disclosures. Further and in contrast to Cloud9, the PTAB found that the petitioner’s expert declaration was new evidence where the examiner had allowed the claims “without significant analysis” of the prosecution prior art. Based on these findings, the PTAB concluded that the petition’s references were sufficiently different and instituted IPR.


These two cases differed both with respect to (1) the similarity (or lack thereof) of the IPR references to the prosecution prior art and (2) the uniqueness of an expert’s analysis compared to the examiner’s findings during prosecution. Emphasizing where a petition falls with respect to these issues is critical for both patent owners and petitioners.

Cloud9 illustrates that even a new reference, if viewed as an alternative for prosecution prior art, may not carry the day. In contrast, Multi Packaging illustrates that a reference with similar disclosures to those considered during prosecution, if differences are successfully highlighted, can be a basis for institution. Moreover, the extent to which the prosecution prior art is used may also impact a discretionary denial. In Cloud9, the petition cited prosecution prior art against all of the challenged claims. In Multi Packaging, in contrast, the petition cited prosecution prior art only against two dependent claims.

These decisions also illustrate the importance of an effective expert declaration. In Multi Packaging, the PTAB credited the declaration as providing new evidence. However, Cloud9 provides a warning that an expert declaration on its own may not be sufficient to persuade the PTAB that the examiner erred during prosecution.