The Federal Circuit Rejects Admitted Prior Art as the “Basis” for IPR Proceedings

Under 35 U.S.C. § 311(b), a Petitioner may seek to institute an IPR on grounds that “could be raised under section 102 or 103 and only on the basis of prior art consisting of patents or printed publications.” The Federal Circuit (Nos. 2020-1558, 2020-1559) recently decided that admissions regarding the prior art made in the challenged patent, commonly referred to as Applicant Admitted Prior Art (“AAPA”), cannot be “the basis” of an IPR but may have other uses for patent challengers.

In the IPR trial that was the subject of the appeal, the Petitioner alleged that the challenged claims would have been obvious in view of AAPA and a prior art patent. The PTAB found the Petitioner’s reliance on AAPA was proper under Section 311(b), reasoning that “prior art consisting of patents or printed publications” includes prior art contained in the challenged patent.

On appeal, the Federal Circuit vacated the PTAB’s decision, finding that AAPA cannot serve as “the basis” for an IPR as required by Section 311(b). The Court looked to its prior characterizations, and those of the Supreme Court, of the phrase “prior art consisting of patents or printed publications” as expressly requiring a prior art patent or printed publication. Since AAPA is within the challenged patent, which is not prior art to itself, the Federal Circuit concluded that AAPA cannot be “the basis” of an IPR.

Nevertheless, the Federal Circuit noted that petitioners may permissibly rely on AAPA, so long as the AAPA is not “the basis” of the IPR. AAPA may be used in the context of an obviousness analysis to provide a factual foundation as to what a POSA would have known at the time of the invention. For example, AAPA may be used to support a motivation to combine disclosures or to supply a missing claim limitation not otherwise disclosed in a cited prior art reference.

The key distinction, then, is whether AAPA serves as “the basis” for the ground. Accordingly, the Court remanded the case to the PTAB to determine whether the AAPA was “the basis” for the Petitioner’s ground of unpatentability.

Takeaways:

• AAPA cannot be “the basis” for IPRs. What that means—and even whether the Petitioner here overstepped that limit by modifying the AAPA using a prior art patent—remains to be determined since the Federal Court remanded to the PTAB to decide the issue in the first instance. Until this uncertainty is resolved, petitioners should be wary of using AAPA beyond the ways the Federal Circuit endorsed here, e.g., supporting a motivation to combine or supplying a missing claim limitation.
• The PTAB will likely apply the USPTO’s August 2020 guidance on using AAPA in IPRs. That guidance states that AAPA “standing alone” cannot be “the basis” of the IPR, and “at least one prior-art patent or printed publication [must] form the foundation or starting point of the IPR.” Such guidance may be instructive for parties about what the PTAB will permit.