Last Week In The Federal Circuit (March 21-25): Oil is a Hot Commodity These Days—Even on the Federal Circuit

When it comes to oil, even the Federal Circuit’s hands are sometimes tied. Last week, the Federal Circuit affirmed a Patent Trial and Appeal Board Precedential Opinion Panel decision for claims related to oil wells, although the Court expressed some skepticism about the agency’s reasoning. Below we provide our usual weekly statistics and a detailed discussion of our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 3

Non-precedential opinions: 11

Rule 36: 0

Longest pending case from argument: Hunting Titan, Inc. v. DynaEnergetics Europe GmbH, No. 20-2163 (143 days)

Shortest (non-Rule 36) pending case from argument: VDPP LLC v. VIZIO, Inc., No. 21-2040 (17 days)

Case of the week: Hunting Titan, Inc. v. DynaEnergetics Europe GmbH

Panel: Judges Hughes, Prost, and Reyna, with Judge Hughes writing the opinion and Judge Prost authoring a concurring opinion

You should read this case if: you have a matter where the Board holds proposed amended claims unpatentable based on newly raised grounds.

DynaEnergetics owns the coveted patent at issue, which is directed to a perforating gun used to improve a flow path for oil into wells. During an inter partes review challenging the patent’s claims, DynaEnergetics moved to amend and add substitute claims. The petitioner, Hunting Titan, opposed but failed to assert that the prior art anticipated the proposed substitute claims, as it had for the original claims. The Board disregarded this failure and ultimately found that the original and proposed substitute claims were unpatentable for anticipation.

A Precedential Opinion Panel of the Patent Trial and Appeal Board agreed to review the original Board panel’s findings. The precedential panel focused on the circumstances in which the Board can go beyond party-presented challenges when considering the patentability of proposed substitute claims. Absent an exception, the precedential panel held that the Board does not have an affirmative duty to sua sponte raise patentability challenges and should do so only in “rare” circumstances. These rare circumstances may include where (1) a petitioner ceases to participate in the proceeding altogether, (2) a petitioner chooses not to oppose the motion to amend, or (3) evidence of unpatentability is “readily identifiable and persuasive such that the Board should take it up in the interest of supporting the integrity of the patent system.” Applying this standard, the precedential panel allowed the substitute claims, reversing the original panel’s decision to reject them.

The Federal Circuit affirmed the outcome but not necessarily the precedential panel’s analysis. The Court “f[ou]nd problematic the Panel’s reasoning behind its decision to confine the Board’s discretion to sua sponte raise patentability issues to only rare circumstances.” The precedential panel had thought that the adversarial nature of inter partes reviews supported confining Board review in that manner. But that overlooked the basic purpose of inter partes review proceedings: to reexamine an earlier agency decision and ensure “that patent monopolies are kept within their legitimate scope.”

Nonetheless, the Federal Circuit ultimately held that the petitioner was not entitled to relief on appeal. The Court explained that the precedential panel’s consideration of a readily-identifiable-evidence exception for the Board to raise patentability issues sua sponte was at least consistent with Federal Circuit precedent. But the Court refused to review the precedential panel’s application of that exception to the facts in this case, because the Court concluded that the petitioner had failed to argue on appeal that the precedential panel misapplied the exception. Emphasizing the narrowness of this holding, the Court affirmed. In the end, a win for patent owner DynaEnergetics—but perhaps not drivers at the pump.