PTAB Year in Review – A Survey of AIA 35 U.S.C. § 102(b) Prior Art Exceptions at the PTAB

Introduction

The Leahy-Smith America Invents Act (“AIA”) redefined what constitutes prior art by making the U.S. patent system a “first-to-file” system instead of the pre-AIA “first-to-invent” system. Thus, under AIA 35 U.S.C. § 102(a), prior art is determined based on the effective filing date of the claimed invention, rather than the date of invention. But not all art preceding the effective filing date of a patent necessarily qualifies as prior art, due to certain exceptions under § 102(b).

Although the AIA has been in effect for well over 10 years, case law addressing AIA § 102(b) prior art exceptions remains relatively sparse. This is true both at the Federal Circuit and at the Patent Trial and Appeal Board (“PTAB”). However, earlier this year the Federal Circuit decided Celanese Int’l Corp. v. Int’s Trade Comm’n¹ and Sanho Corp. v. Kaijet Tech. Intl. Ltd., Inc.², which each addressed §102(b) prior art exceptions. This prompted us to explore the PTAB’s approach to assessing § 102(b) prior art exceptions. In particular, we examine the Board’s analysis given certain fact patterns and evidence, and provide examples of evidence that could exclude an otherwise invalidating § 102(a) reference under a § 102(b) exception.

35 U.S.C. § 102(b) prior art exceptions

Under 35 U.S.C. § 102(a)(1), an invention is not patentable if “the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”³ Section 102(b)(1) provides certain exceptions for § 102(a)(1) disclosures made one year or less before the filing date of the claimed invention if:

(A) the § 102(a)(1) disclosure was made by the inventor or a joint inventor or by another who obtained the subject matter directly or indirectly from the inventor or a joint inventor; or

(B) the §102(a)(1) disclosure had been previously publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter directly or indirectly from the inventor or a joint inventor.⁴

Under 35 U.S.C. § 102(a)(2), an invention is not patentable if the claimed invention was described in an issued patent, or a published patent application, that names another inventor and was effectively filed before the effective filing date of the claimed invention.⁵ Section 102(b)(2) provides certain exceptions for § 102(a)(2) disclosures if:

(A) the § 102(a)(2) disclosure was obtained directly or indirectly from the inventor or a joint inventor;

(B) the § 102(a)(2) disclosure was, before the effective filing date of the § 102(a)(2) patent or application, publicly disclosed by the inventor or a joint inventor or another who obtained the disclosures directly or indirectly from the inventor or a joint inventor; or

(C) both the § 102(a)(2) disclosure and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.⁶

The Federal Circuit recently addressed § 102(b) prior art exceptions in Celanese ⁷ and Sanho.⁸ In Celanese, the court addressed whether a prior sale of a product made using a secret process triggered the § 102(a)(1) on-sale bar to patentability of that process. There, the court declined to assess the possibility of a § 102(b)(1) prior art exception because the prior sale occurred more than one year before the effective filing date of the patent at issue.⁹ Sanho (an IPR appeal), however, squarely addressed § 102(b) exceptions. In the IPR, Sanho argued that one of the asserted prior art patent references was not § 102(a)(2) prior art due to a prior non-confidential sale between the parties creating an exception under §102(b)(2)(B). The PTAB found, and the Federal Circuit affirmed, that the prior sale—although non-confidential—was nevertheless still a private sale and thus did not qualify as a public disclosure under § 102(b)(2)(B).¹⁰

These opinions from the Federal Circuit prompted us to examine cases in which the PTAB has assessed § 102(b) prior art exceptions. Below, we summarize these Board decisions based on the types of evidence and arguments presented.

Prior inventor disclosure of § 102(a)(1) subject matter

A § 102(a)(1) disclosure may be disqualified as prior art under § 102(b)(1)(A) if (i) the disclosure is made one year or less before the effective filing date and (ii) the subject matter of the disclosure was previously disclosed by the inventor or a joint inventor. In January 2024, the PTAB addressed § 102(b)(1)(A) exceptions (prior inventor disclosures) in Murray & Poole Enterprises Ltd. v. Institut de Cardiologie de Montreal.¹¹ In Murray, the PTAB considered whether a published multi-author study qualified as an inventor disclosure under § 102(b)(1)(A) and (B). Murray’s IPR petition asserted anticipation and obviousness grounds that included a reference called “Bouabdallaoui.” Bouabdallaoui, an article discussing a clinical study, was co-authored by seven individuals, one of whom was the inventor of the challenged patent. Patent owner, “ICM,” argued that the sole inventor of the challenged patent was also the corresponding author of Bouabdalloui, and lead investigator of the clinical study. Thus, according to ICM, Bouabdallaoui was excluded as prior art because it published less than one year before the challenged patent’s effective filing date, and the relied-upon disclosures in Bouabdallaoui are those of the inventor.¹² In support of its argument, ICM submitted a declaration from the inventor explaining his role in the clinical study and his authorship of Bouabdallaoui.¹³ Petitioner Murray argued that Bouabdallaoui had seven co-authors, and there was no evidence that the relied-upon disclosures in Bouabdallaoui were made “by the inventor” to satisfy §102(b)(1)(A).¹⁴ Murray also argued that there was “no evidence from any other co-authors disclaiming contribution to the relevant subject matter.”¹⁵ In its decision on institution, the PTAB found that ICM’s inventor declaration was insufficient to disqualify Bouabdallaoui as prior art because, inter alia, the declaration did not explain the inventor’s relationship with all other co-authors, and thus, did not establish that the inventor was the sole inventor of the relied-upon disclosures in Bouabdallaoui.¹⁶ The PTAB instituted trial, concluding that this issue “will benefit from development during trial.”¹⁷ A Final Written Decision in Murray is expected in January 2025.

The PTAB also addressed § 102(b)(1)(A) and (B) inventor disclosure exceptions in Incyte Corp. v. Concert Pharms., Inc.¹⁸ Incyte’s PGR petition asserted obviousness challenges that included a reference patent called “Silverman,” which was Concert’s own patent. Incyte argued that Silverman was prior art under § 102(a)(1) as of Silverman’s 2016 issue date. In its obviousness arguments, Incyte alleged that Silverman’s disclosure of a specific compound (“Compound I”) provided a lead compound for a skilled artisan to select and further develop. Concert argued that the Compound I disclosures in Silverman were (i) a disclosure by the inventor of the challenged patent (§ 102(b)(1)(A)) and (ii) a public disclosure by the inventor (§ 102(b)(1)(B)).¹⁹ As Concert explained, an inventor of the challenged patent had submit-ted a declaration (“Uttamsingh Declaration”) during prosecution of the Silverman patent, disclosing Compound I and associated data.²⁰ According to Concert, the declaration became publicly available in the Silverman prosecution history before Silverman granted.

The PTAB considered Concert’s arguments but instituted the PGR, finding that Concert’s “evidence that the prior art exceptions . . . apply to Silverman [was] insufficiently persuasive at this stage and need[ed] to be tested at trial.”²¹ However, in its Final Written Decision, the PTAB found that the Uttamsingh Declaration is “a disclosure from an inventor of the challenged [] patent,” which “result[s] in exclusion of the teachings a person of ordinary skill in the art would have gleaned from reading Silverman.”²² And without Silverman’s Compound I disclosures, “[n]o other information or argument was presented in the Petition to support a motivation to use Compound (I) of the genus of Formula A of Silverman.”²³

Prior public use or sale of § 102(a)(1) subject matter

A § 102(a)(1) disclosure may be disqualified as prior art under § 102(b)(1)(B) if (i) the disclosure is made one year or less before the effective filing date and (ii) the subject matter of the disclosure was previously disclosed via a prior sale or public use of the subject matter. For example, in MerchSource LLC v. DODOCase VR, Inc., the PTAB considered whether a prior public sale excluded a prior art reference under § 102(b)(1)(B).²⁴ MerchSource’s IPR grounds included a reference called “Tech#,” which, according to MerchSource, was a Youtube video that published online before the effective filing date of the challenged patent. MerchSource argued that Tech# qualified as a printed publication under § 102(a)(1) because it was publicly available online. DODOCase argued that Tech# was not prior art because public sales of its products, which DODOCase argued were prior public disclosures by the inventor under § 102(b)(1)(B), occurred before the date of the Tech# video. To support its argument, DODOCase relied upon videos from the inventor; assembly instructions for the product; and a declaration from the inventor describing the prior disclosures. Notwithstanding DODOCase’s evidence of prior sales, the PTAB decided the § 102(b) issue would benefit from further development at trial, and instituted the IPR.²⁵ In particular, the Board stated that “Petitioner will have an opportunity [during the IPR] to cross-examine the testimony of Patent Owner’s declarant.”²⁶ The proceeding was terminated prior to the PTAB issuing a Final Written Decision.

In CQV Co. Ltd v. Merck Patent GmbH, the PTAB considered whether a prior public use or sale of a product could exclude prior art under § 102(b)(1)(A).²⁷ Here, Petitioner CQV challenged Merck’s patent claims as obvious over a product called “Xirallic,” alleging that Xirallic was publicly available before the effective filing date of Merck’s patent. CQV relied solely on fact witness testimony from two of its employees, who testified they had purchased and tested a sample of Xirallic before the effective filing date of the challenged patent. Merck argued that the Xirallic product was Merck’s own product and any sale or offer for sale was not prior art under §102(b)(1)(A) because it was a disclosure made by the inventor. In its Final Written Decision, the PTAB concluded that CQV failed to meet its evidentiary burden of showing that Xirallic was in public use, on sale, or otherwise available to the public because CQV relied solely on fact witness testimony without additional corroborating evidence.²⁸

Prior public use or public sale of § 102(a)(2) subject matter

Under § 102(b)(2)(B), a prior public sale or public use may constitute a “public disclosure” and disqualify a reference patent or patent application as § 102(a)(2) prior art. In K/S HIMPP v. Bragi GmbH, the Board addressed both § 102(b)(2)(B) exceptions (inventor public disclosures before prior art patents and applications) and § 102(b)(1)(B) exceptions (prior inventor public disclosures).²⁹ K/S HIMPP’s petition relied on disclosures in a patent reference called the “Hensen Patent,” which was filed on October 8, 2015, just before the challenged patent’s effective filing date of November 13, 2015, along with a September 10, 2015 video from the inventor of the Hensen Patent that demonstrated the use of a product (the “Hensen Video”).³⁰ In its preliminary response, Bragi asserted that—before the Hensen Patent’s October 2015 filing date—the inventor publicly disclosed the relied-upon subject matter in the Hensen Patent through a series of published articles and website disclosures discussing the product (the “Kickstarter” disclosures), and published videos demonstrating the product’s use.³¹ Bragi asserted that the Kickstarter was published after February 2015, but before September 10, 2015. According to Bragi, the relied-upon disclosures in the Hensen Patent were excluded as prior art under § 102(b)(2)(B). But, Bragi did not address the prior art status of the Hensen Video.

Before its institution decision, the PTAB authorized additional briefing from the parties limited to the prior art status of the Hensen Patent. K/S HIMPP argued that the Hensen Patent was entitled to an earlier claimed priority date that pre-dated Bragi’s §102(b)(2)(B) Kickstarter disclosures.³² In its Decision on Institution, the PTAB focused on the § 102(a)(2) prior art status of the Hensen Patent. The PTAB agreed with K/S HIMPP, deciding at institution that while Bragi had effectively shown that its Kickstarter disclosures pre-dated the Hensen Patent’s October 2015 filing date (and thus likely would have excluded the Hensen Patent as prior art as of that date), K/S HIMPP had effectively rebutted that showing with evidence that the Hensen Patent was entitled to an earlier effective filing date that pre-dated Bragi’s Kick-starter disclosures.³³ The PTAB concluded that K/M HIMPP has established that the Hensen Patent was prior art and accordingly instituted trial.³⁴ The PTAB also found that the Hensen Video was prior art under § 102(a)(1) because it was a printed publication and Bragi did not address the prior art status of the Hensen Video.³⁵

During the IPR, Bragi asserted that the Hensen Video was not prior art because Bragi’s Kickstarter disclosures were public disclosures by the inventor before the September 10, 2015 publication date of the Hensen Video.³⁶ According to Bragi, the Kickstarter disclosed the same subject matter as the Hensen Video, and thus, the Hensen Video was excluded from prior art under § 102(b)(2)(B). K/S HIMPP asserted that the Kickstarter did not disclose the same subject matter as the Hensen Video, and submitted a declaration that emphasized the differences in the visual representations of the products shown in the Kickstarter compared to the Hensen Video.³⁷ Thus, according to K/S HIMPP, the Hensen Video was prior art under § 102(a)(1) as a prior printed publication.

In its November 4, 2024 Final Written Decision finding all claims unpatentable, the PTAB determined that the § 102(b)(1)(B) exception did not remove the Hensen Video as prior art. Interestingly, the PTAB noted that “there is no pertinent case law on th[e] issue” related to the § 102(b) prior art exceptions, and consulted the Manual for Patent Examining Procedure (“M.P.E.P.”) for guidance.³⁸ The Board acknowledged that the M.P.E.P. is not a binding authority, but its guidance was “a persuasive interpretation of the [§ 102(b)] statute.”³⁹ Ultimately, the PTAB determined that the Kickstarter did not disclose the same subject matter as the Hensen Video because the disclosures were “not identical, and the two subject matters at least embody different species of the” challenged patent.⁴⁰

The PTAB similarly addressed § 102(b)(2)(B) exceptions in Wilson Elecs. LLC v. Cellphone-Mate, Inc.⁴¹ Here, Wilson’s IPR grounds included a reference patent called “Van Buren.” In its preliminary response, Cellphone-Mate argued that it had publicly disclosed the invention before Van Buren’s effective filing date by publicly displaying the device (called “Force5”) at a trade show.⁴² Cellphone-Mate also presented evidence of prior blog posts about the device, webinars and videos of the inventor discussing the Force5 product, as well as industry publications showing the device was on sale.⁴³ Unlike the cases above in which the PTAB instituted trial to better develop the record, in Wilson, the PTAB denied institution. In particular, the PTAB concluded that Cellphone-Mate presented evidence of publicly disclosing the relied-upon subject matter in Van Buren before Van Buren’s filing date, while Wilson “has not explained its challenge of the claims over Van Buren with sufficient particularity to show Van Buren is prior art.”⁴⁴

Commonly owned § 102(a)(2) subject matter

Under § 102(b)(2)(C), a prior art disclosure may be disqualified as prior art if the subject matter disclosed and the claimed invention were commonly owned before the filing date of the claimed invention. For example, in Sanofi Pasteur Inc. v. Pfizer Inc.⁴⁵, Sanofi’s IPR grounds included two PCT publications. In its preliminary response, Pfizer asserted that the PCT publications were not prior art because they were commonly owned and subject to an obligation of assignment at the time the challenged claims were filed. The PTAB agreed with Pfizer and denied institution, stating that Pfizer “provided evidence that these publications were subject to assignment to Patent Owner as of the effective filing date of the” challenged patent, and the assignments were recorded before the publication dates of the PCT applications.⁴⁶

Similarly, in Incyte Corp. v. Concert Pharms., Inc. (discussed earlier in this article), Concert raised an alternative argument that the Silverman patent was not prior art under § 102(b)(2)(C) because both Silverman and the challenged patent were assigned to Concert.⁴⁷ In its pre-institution reply brief, Incyte argued that the assignment to Concert was executed by the inventors 18 months after the challenged patent’s effective filing date.⁴⁸ Thus, according to Incyte, the inventors (not Concert) owned the challenged patent as of its effective filing date and there was no common owner-ship exception.⁴⁹ The PTAB instituted trial, finding Concert’s later-executed assignment alone was insufficient to show common ownership under § 102(b)(2)(C).⁵⁰ During trial, Concert argued that the inventors were under an obligation to assign the challenged patent to Concert before the effective filing date, and submitted as evidence the inventors’ employment agreement.⁵¹ The PTAB ultimately concluded that it did not need to reach the common ownership issue because Incyte had narrowed its trial arguments to whether Silverman qualified as § 102(a)(1) (not § 102(a)(2)) prior art.52

Conclusion

While this sample size of PTAB decisions is small, we note the following trends. At the institution stage, the PTAB may conclude that patent owner arguments attempting to disqualify art under § 102(b)(1) or (b)(2) are insufficient for purposes of denying institution. This is especially so when patent owners rely on bare inventor declarations with-out any corroborating evidence. However, patent owners may be able to maintain or even further develop those same arguments during trial, which can lead to successful disqualification of the prior art reference, so long as the inventor had disclosed the same subject matter as the prior art reference. Evidence of common ownership (e.g., such as recoded assignments) may have a higher likelihood of successfully disqualifying prior art under § 102(b)(2)(C) at the institution stage.

[1] 111 F.4th 1338 (Fed. Cir. 2024).
[2] 108 F.4th 1376 (Fed. Cir. 2024).
[3] 35 U.S.C. § 102(a)(1).
[4] 35 U.S.C. § 102(b)(1).
[5] 35 U.S.C. § 102(a)(2).
[6] 35 U.S.C. § 102(b)(2).
[7] 111 F.4th 1338 (Fed. Cir. 2024).
[8] 108 F.4th 1376 (Fed. Cir. 2024).
[9] 111 F.4th at 1347.
[10] 108 F.4th at 1385.
[11] IPR2023-01064, Paper 9 (P.T.A.B., Jan. 16, 2024).
[12] Id., Paper 6 at 4–5.
[13] Id., Paper 9 at 52.
[14] Id., Paper 7 at 2–3.
[15] Id.
[16] Id. Paper 9 at 55.
[17] Id., Paper 9 at 56.
[18] PGR2021-00006, Paper 68 (P.T.A.B., May 11, 2022).
[19] Id., Paper 68 at 17.
[20] Id.
[21] Id., Paper 20 at 19.
[22] Id., Paper 68 at 42.
[23] Id., Paper 68 at 59.
[24] IPR2018-00494, Paper 12 (P.T.A.B., Aug. 22, 2018); see also, MerchSource LLC v. DODOCase VR, Inc., PGR2018-00019, Paper 11 (P.T.A.B., Aug. 29, 2019).
[25] IPR2018-00494, Paper 12 at 20.
[26] Id.
[27] PGR2021-00054, Paper 56 (P.T.A.B. Aug. 11, 2022).
[28] Id., at 29.
[29] IPR2023-00901, Paper 14 (P.T.A.B., Nov. 13, 2023).
[30] Id., Paper 3 at 6.
[31] See id., Paper 11 at 17–37.
[32] See id., Paper 12 at 1–4.
[33] Id., Paper 14 at 12.
[34] Id., Paper 14 at 12, 27.
[35] Id., Paper 14 at 15.
[36] Id., Paper 39 at 11.
[37] Id., Paper 39 at 15.
[38] Id., Paper 39 at 14 n.10.
[39] Id.
[40] Id., Paper 39 at 16.
[41] IPR2018-017798, Paper 10 (P.T.A.B., April 23, 2019).
[42] Id., Paper 8 at 28–29, 33–34.
[43] See id., Paper 8 at 28–36.
[44] Id., Paper 10 at 35.
[45] IPR2018-00188, Paper 10 (P.T.A.B., June 5, 2018).
[46] Id., Paper 10 at 14.
[47] PGR2021-00006, Paper 11 at 21.
[48] Id., Paper 17 at 2.
[49] Id.
[50] Id., Paper 20 at 19.
[51] Id., Paper 37 at 18.
[52] Id., Paper 68 at 13 n.3.

This article appeared in the 2024 PTAB Year in Review: Analysis & Trends report.