A unanimous Federal Circuit panel recently affirmed the PTAB’s decision denying a Petitioner’s request to file a motion to submit an expert report as supplemental information under 37 C.F.R. § 42.123(a). Redline Detection, LLC v. Star Envirotech, Inc., No. 15-1047 (Fed. Cir. Dec. 31, 2015).
USPTO regulations permit a party to file a motion to submit supplemental information after the Board issues its Institution Decision. 37 C.F.R. § 42.123. In particular, Section 42.123(a) states that a party may request to file a motion to submit supplemental information as long as (1) the request is made within one month of the institution date and (2) the supplemental information is relevant to a claim for which the trial is instituted.
Petitioner Redline challenged the validity of two claims of Star’s patent for methods of generating smoke for use in volatile and explosive environments, asserting twelve invalidity grounds over various combinations of four references. Redline did not submit an expert declaration with its Petition.
The PTAB instituted review on two of the twelve grounds. Within a month of the institution date, STAR sought leave to submit four new exhibits, including a sixty-page expert declaration that addressed the two institution grounds. The Board denied leave, determining that nothing in the regulations requires an automatic grant of a request to submit supplemental information as long as the timeliness and relevance requirements are met.
The Board emphasized that it has discretion to grant or deny such requests, and that the Board must always consider its statutory mandate “to ensure the efficient administration of the Office and the ability of the Office to complete IPR proceedings in a timely manner.” 35 U.S.C. § 316(b). Because the party filing the motion has the burden to prove that it is entitled to the requested relief, and Redline failed to do so, denial was proper.
On appeal, Redline argued that the Board abused its discretion, and that the plain language of the regulation required its motion be granted because it satisfied the timeliness and relevance requirements. The Federal Circuit disagreed, holding that the Board did not abuse its discretion. The plain language of Section 42.123 does not exclude the application of other general governing regulations. The Board rightly considered its mandate for economy, integrity, efficient administration, and timely consideration of IPRs in denying Redline’s motion.
In particular, the Federal Circuit rejected Redline’s reliance on Pacific Market Int’l, in which the Board authorized a short, ten-page supplemental expert report under of Section 42.123(a). Calling Redline’s characterization “inaccurate and misleading,” the Federal Circuit pointed out that the Pacific Market Int’l panel stated that Section 42.123 is not a routine avenue to pursue, nor does the regulation require an automatic acceptance of, supplemental information. Further, “Redline fails to appreciate the stark difference between the short, supplemental expert report which the PTAB reasonably permitted in Pacific Market International, and its de novo expert report submitted for the first time.”
As this decision shows, IPR petitioners should not count on a motion for supplemental information as a vehicle for submitting evidence not submitted with the petition. Now that the Federal Circuit has endorsed the Board’s ability to exercise its discretion in deciding such motions, it is reasonable to expect that the Board will continue to scrutinize such motions even where the timeliness and relevance requirements are met.