Just How “New” Can New Reply Evidence Be?

A crucible, in more ways than one.

The proper reliance on new evidence in a Reply is a common issue at the patent office. The Board in Volkswagen Group of America, Inc. v. Emerachem Holdings, LLC, IPR2014-01555 (Paper 36), recently authorized briefing on whether the Petitioner had properly relied on new evidence in its Reply:

New issues raised in a reply have been, and continue to be, a problem in IPR cases. Belated presentation of reply evidence can be prejudicial to a patent owner. On the other hand, patent owners have too often cried foul when evidence is properly relied upon in a reply. In a reply, a petitioner legitimately may respond to arguments made in an opposition. To do so, often it is necessary to rely on (1) evidence already cited in a petition or (2) new evidence. A motion to supplement is not necessary if evidence relied upon in a reply is limited to responding to arguments made in an opposition. Furthermore in a petition, a petitioner does not have to anticipate all possible arguments which a patent owner made present in an opposition on the merits.

Volkswagen, Paper 36, at 5.

In Volkswagen, the Petitioner had argued in the Petition that a prior art patent, Hoekstra, inherently disclosed a particular claim limitation (specifically, a catalytic composite in which platinum is entirely coated with an alkaline earth oxide). The Patent Owner argued in response that Petitioner’s inherency argument was flawed, because the mass of platinum reported in Hoekstra’s only example (2.018 g) was too high relative to the amount of alkaline earth oxide to have resulted necessarily in a complete coating. In its Reply, the Petitioner argued that Hoekstra’s reported mass of platinum was a typographical error, as evidenced by foreign counterparts of the Hoekstra patent that it asserted correctly reflected the amount of platinum that had been used (0.018 g). The Petitioner then argued, based on admissions elicited from the Patent Owner’s expert, that once the corrected mass of platinum was taken into account, a complete coating was inherent in Hoekstra.

The Patent Owner argued to the Board that Petitioner’s new argument and evidence concerning the corrected platinum mass exceeded the permissible scope of a Reply. The Board granted the Patent Owner permission to file a motion to exclude them. Shortly after the Patent Owner filed its motion, and upon an indication from the Petitioner that the file wrapper for Hoekstra was unavailable, the Administrative Patent Judge in charge of the Volkswagen case (Fred E. McKelvey), located the file wrapper and introduced it into evidence as Exhibit 3002. The Hoekstra prosecution history shows that the platinum mass indeed was an error, that an amendment after allowance was filed to fix the error, but that the patent nevertheless issued with the error intact.

Both Parties’ briefing on the motion to exclude relied on the Board’s Final Written Decision in Corning Inc.v. DSM IP Assets B.V., IPR2013-00052 (Paper 88). In that decision an expanded panel of the Board declined to consider testing results presented in a Reply that purported to correct the testing described in the Petition. Id. at 11.  The Board concluded that correcting such a foundational piece of evidence in a Reply prejudices the Patent Owner. The Board has not yet ruled on the motion to exclude in Volkswagen and has flagged it as an issue to address during oral argument.

The issue in Volkswagen is less drastic than that in Corning. Although the erroneous platinum mass printed in Hoekstra undermined Petitioner’s arguments—as even Petitioner’s expert acknowledged—the Petition had not directly relied on that disclosure. Whereas in Corning the new Reply evidence was an entirely new submission of revised test data to replace admittedly flawed data presented in the Petition, in Volkswagen, the new Reply evidence purports to correct a well-documented error in the prior-art reference.

Whichever party prevails in Volkswagen, the fact that the issue is even disputed in Volkswagen is a potent reminder to Petitioners to scrutinize the references being cited as prior art for any flaws that could offer an easy escape hatch for the challenged Patent, and to address them in the Petition if possible; and it is a reminder to Patent Owners to scrutinize Petitioners’ Replies for any change in the grounds for unpatentability being asserted. The patent could stand or fall based on whether the Petitioner’s shifts its argument in the Reply.

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