In In re NuVasive, Inc., the Federal Circuit clarified what constitutes adequate notice to a Patent Owner of “pertinent portions” of a prior art reference relied upon in an IPR petition. Case No. 2015-1672 (Fed. Cir. Nov. 9, 2016).

On appeal to the Federal Circuit after the Board cancelled all but one of the challenged claims under 35 U.S.C. § 103, the Patent Owner argued that it did not receive adequate notice or opportunity to address certain portions of the Michelson reference upon which the Board largely based its obviousness finding. The Federal Circuit agreed in part.

The Petitioner filed two IPR petitions, each of which addressed two claim limitations, a length dimension and a length ratio. In the first petition, the Petitioner relied upon Michelson for the length dimension, but also briefly suggested it disclosed the ratio limitation. Further, in the first petition, the Petitioner briefly cited Figure 18 of the Michelson reference. In the second petition, the Petitioner neither argued that the ratio limitation was disclosed by Michelson, nor cited Figure 18.

NuVasive did not address Figure 18 in either of its Patent Owner Responses to the petitions.

In each of its Replies, the Petitioner cited Figure 18 of Michelson and argued that it disclosed both claim limitations. The Patent Owner objected that this was new grounds for invalidity asserted for the first time in the Replies, and requested leave to file motions to strike or to file Surreplies. The Board denied all requests. Further, at oral argument, the Board neither allowed the Patent Owner to make substantive arguments in response to the alleged disclosure of both claim limitations by Michelson, nor in response to Figure 18 of Michelson.

The Board issued its Final Written Decisions finding all but one of the challenged claims obvious, relying largely on Figure 18 of Michelson for disclosure of both claim limitations. The Federal Circuit reversed as to the second petition but affirmed as to the first petition, noting that the first petition was “barely sufficient” to give NuVasive sufficient opportunity to respond, since it specifically disclosed Figure 18 and referred, tangentially, to both of the claim limitations.

The Federal Circuit held that the second petition “did not notify [the Patent Owner] of the assertions about the pertinent portions of Michelson that later became critical,” violating the Patent Owner’s rights under the Administrative Procedure Act. Noting that the Patent Owner had no notice of the Figure 18 argument before it filed its Patent Owner Response, the Court indicated that it was insufficient that the Patent Owner was given the chance to “respond to other factual assertions about Michelson,” outside of those that the Board relied on to find the claims obvious.

In holding the second petition inadequate, the Federal Circuit provided some guidance as to the factors that render an opportunity to respond to a prior art reference inadequate. For example, the Court noted that the opportunity to cross-examine and file “observations” on the Petitioner’s expert were insufficient. The Court also noted that the Patent Owner’s “cut-and-paste” strategy of similar discussions of Michelson in both of its Patent Owner Responses was insufficient to constitute a reply to the Figure 18 argument.