The key question is—what constitutes a new argument? If a party previously argued that an object was red, and proposes to argue, at final oral hearing, that the object was green, clearly that is a new argument. If the party proposes to argue, at final oral hearing, that the object was pink, it is still a new argument. If the party proposes to argue, at final oral hearing, that red actually covers a range of spectra, that is a new argument unless the contention was previously made in an appropriate paper. It is unfair to the other party to bring a new twist or angle into a party’s case at such a late stage of the proceeding. That would include different characterizations of the evidence and different inferences drawn from the evidence. If certain testimony previously was not developed, discussed, or explained in a party’s papers, it may not be developed, discussed, explained, or summarized, for the first time, in the form of demonstrative slides at final oral hearing.

The Board expects demonstrative exhibits to be “visual aids,” and not a rearticulation of the argument that the parties presented in their papers. The Board explained that “written text setting forth various statements, characterizations, and assertions go beyond serving as visual aids, as they constitute additional briefings themselves. What counsel articulates orally diminishes in relative significance. There is no proper basis for presenting such additional ‘briefings’ as demonstrative exhibits, especially if such demonstrative exhibits are to be kept in the official record.”

In reaching this decision, the Board noted that when a particular demonstrative exhibit is challenged, that party has the burden of showing where in the record it is supported by the filings. Moreover, the Board explained that demonstratives are not to be used to “expand upon the declaration testimony already presented.” Instead, “the party’s own case should be developed within the paper which presented and relied on the declaration” testimony. Thus, “[t]he final oral hearing is not an opportunity for a party to expand upon its reliance on declaration testimony, in a manner not already previously presented.”

What does this mean for parties seeking to pursue a post-issuance trial before the PTAB? Well, at least for petitioners, they should include any demonstratives that they may want to include in the trial either in their petition itself or in the supporting declarations. Including graphics, such as annotated patent figure, and other demonstrative evidence in connection with the petition will help ensure that certain demonstratives are not excluded from the oral hearing at the conclusion of the proceedings. Moreover, parties should be sure that the deposition testimony that they wish to rely on is in the record, and is properly explained in the briefing that the testimony is cited in connection with.

The Board’s rules for trial practice require “[a]ny objection to evidence submitted during a preliminary proceeding” to be served within ten business days of the institution of the trial. 37 C.F.R. § 42.64(b)(1). If an objection to evidence submitted during the preliminary proceedings is served, “[t]he party relying on the evidence to which an objection is timely served may respond to the objection by serving supplemental evidence within ten business days of service of the objection.” 37 C.F.R. § 42.64(b)(2). These rules were at the center of a dispute in Nuvasive, Inc. v. Warsaw Orthopedic, Inc., IPR2013-00206, Paper 22 (Oct. 15, 2013); Nuvasive, Inc. v. Warsaw Orthopedic, Inc., IPR2013-00208, Paper 21 (Oct. 15, 2013). Specifically, the petitioner had objected to certain evidence submitted in connection with the Patent Owner Preliminary Response. Since patent owners are not allowed to submit testimonial evidence in connection with its Patent Owner Preliminary Response, the question arose about whether the Patent Owner needed to submit declaration evidence to moot the objection within ten business days of service of the objection. The Patent Owner took the position that it could submit the declaration with its Patent Owner Response within three months of institution of the trial.

The Board agreed with the patent owner. The Board explained that “[u]nlike a petitioner, who must set forth its case in its entirety when it files a petition (35 U.S.C. § 312), the patent owner has an opportunity to file a preliminary response (35 U.S.C. § 313), and if a trial is instituted, the patent owner may then file a patent owner response (35 U.S.C. § 316(a)(8)). A patent owner may rely on new testimonial evidence in support of its patent owner response; evidence that it could not have submitted in support of its preliminary response. 37 C.F.R. § 42.107(c). Accordingly, objections made to patent owner evidence in connection with the patent owner preliminary response may become moot, because the patent owner may file a full response with additional evidence once a trial is instituted. The arguments and evidence that a patent owner makes and relies on for its full response may be quite different from the arguments and evidence it relied on during the preliminary proceeding. . . . Thus, a petitioner that seeks to cure an objection would need to do so within ten business days, because the patent owner would need to know what substitute evidence it needs to respond to in its patent owner response. In contrast, a patent owner may not necessarily need to cure an objection that was made to evidence submitted during the preliminary proceeding, because the objection may become moot in light of the patent owner’s full response.” The Board concluded that the Patent Owner could submit the new testimonial evidence in its Patent Owner response.

In supporting its ruling, the Board cited 37 C.F.R. § 42.5, which relates to the Board’s authority to manage the conduct of the proceedings. This suggests that the Board’s ruling is specific to this case, and that patent owners wishing to avoid having to submit declaration testimony to moot an objection within ten days of service of the objection should seek Board authorization to supply the declaration with its Patent Owner response.

The Board was recently presented with the situation in which a patent owner served a party with a complaint for infringement of the patent at issue as part of a counterclaim. The question was whether the assertion of a patent in a counterclaim constituted service of a “complaint” giving rise to the one-year bar under 35 U.S.C. § 315(b). The Board held that it was.

“Nothing in the legislative history indicates that Congress intended to apply the § 315(b) time limit to some, rather than all, accused infringers. Construing ‘complaint’ in § 315(b) restrictively, to exclude counterclaims that present allegations of infringement, would have just that effect. It would leave a patent open to serial attack, even after years of patent infringement litigation, in the event that the accused infringer is accused of infringement only via a counterclaim. That interpretation would frustrate Congressional intent, and would lead to unjustified discrimination among otherwise similarly-situated accused infringers. See Graham Cnty. Soil & Water Conservation Dist. v. U.S. ex rel. Wilson, 559 U.S. 280, 298 (2010) (acknowledging the “conventional judicial duty to give faithful meaning to the language Congress adopted in the light of the evident legislative purpose”) (internal quotation omitted).” The Board explained that “[a] complaint and a counterclaim instead bear marked similarities. A counterclaim imposes the same burdens on the parties as does a complaint. A counterclaim alleges a cause of action, just like a complaint; confirming that equivalence, Wright and Miller explains that a counterclaim ‘basically is a defendant’s complaint.’ 5 FED. PRAC. & PROC. CIV. § 1184 (3d ed.). The same rules of pleading apply to a counterclaim of infringement as to a complaint. FED. R. CIV. P. 8(a); Vivid Technologies, Inc. v. Am. Sci. & Eng’g, Inc., 200 F.3d 795, 803 (Fed. Cir. 1999) (remanding for entry of infringement counterclaim that ‘violated no rule of pleading’). By filing a counterclaim, the defendant, in effect, sues the plaintiff within the same civil action. When the counterclaim alleges patent infringement, the original plaintiff becomes an accused infringer who has been sued for patent infringement. The accused infringer must answer the counterclaim or face default. See Info. Sys. & Networks Corp. v. United States, 994 F.2d 792, 797 (Fed. Cir. 1993) (‘[D]efault judgment is an important sanction which deters parties from ignoring the requirement to file an answer to a counterclaim.’). The similarities between a complaint and a counterclaim underscore their equivalence for purposes of § 315(b).” The Board also noted that a dismissal of the complaint with prejudice does not “purge” that cause of action.

The Board has announced the following hearings in the upcoming weeks. The hearings are open to the public and will each last 2 hours.

• Nichia Corp. v. Emcore Corp., IPR2012-00005 will be heard at 1 PM on November 6, 2013.
• Intellectual Ventures Mgmt., LLC v. Xilinx, Inc., IPR2012-00020 and IPR2012-00023 will both be heard at 1:30PM on November 7, 2013.
• Microsoft Corp. v. Proxyconn, Inc., IPR2012-00026 and IPR2013-00109 (joined) will be heard at 10 AM on November 18, 2013.