Guest Post: Can an Inventorship Be Challenged in a PGR Proceeding?

Thomas D. Kohler and Kevin C. McGrath*

The enactment of the AIA brought several changes to processes for correcting and challenging inventorship.  Perhaps most notable were the elimination of 35 U.S.C. § 102(f) and the replacement of interference proceedings with derivation proceedings.  These changes have raised several questions on the implications of improper inventorship in a post-AIA patent.  See, e.g., Crouch, With 102(f) Eliminated, Is Inventorship Now Codified in 35 U.S.C. 101?, Patently-O (October 4, 2012).  Of the many questions yet to be addressed, one is whether an allegation of improper inventorship can be raised in a Post Grant Review (PGR) proceeding.

The PTAB recently had a chance to address that question when it ruled on the first ever PGR petition filed against a design patent.  Galaxia Electronics Co. v. Revolution Display, LLC,  PGR2016-00021, paper 11 (PTAB  November 2, 2016).   In deciding not to institute trial, the PTAB also made the first ever decision on an alleged inventorship error in a PGR proceeding.  However, the PTAB chose to not address the fundamental question of whether an alleged error in inventorship is a statutorily proper ground for institution of a PGR and instead denied institution by deciding the Petitioner failed to present adequate evidence to support its allegation.  While this may have been the judicially expedient way to resolve this specific petition, sooner or later the PTAB is going to have to deal with the question of whether inventorship challenges should be grounds for PGR.  When it does get to that question, the PTAB should decide there is no place in a PGR proceeding for inventorship challenges.

A PGR trial cannot be instituted unless the information in a petition demonstrates that it is more likely than not that at least one challenged claim is unpatentableSee 35 U.S.C. § 324; see also 37 C.F.R. § 42.208.  Even before the AIA, however, an allegation of improper inventorship typically did not result in invalidation.  See Viskase Corp. v. American National Can Co., 261 F.3d 1316, 1329 (Fed. Cir. 2001) (“Absent fraud or deceptive intent, the correction of inventorship does not affect the validity or enforceability of the patent for the period before the correction.”); see also 1-2 Donald S. Chisum, Chisum on Patents § 2.03 [4][a] (Matthew Bender) (“Misjoinder and nonjoinder [of inventors] have long been viewed as ‘technical’ defects, not to be favored as objections or defenses to patent rights.”).  The reason being that, despite 35 U.S.C. § 102(f) (pre-AIA), inventorship could be corrected in most instances under either §§ 251 (“Reissue Of Defective Patents”) or 256 (“Correction Of Named Inventor”).

A limited pre-AIA exception where inventorship could not be corrected was if a movant could not demonstrate the error arose without deceptive intent.  See, e.g., Pannu v. Iolab Corp., 155 F.3d 1344, 1350 n.4 (Fed. Cir. 1998) (noting the requirement of showing the error occurred without deceptive intent, but also that “good faith [was] presumed in the absence of a persuasive showing of deceptive intent”). The AIA removed that limited exception, thereby eliminating any possibility of invalidating a patent based on improper inventorship, assuming at least one of the owners is willing to make corrections deemed necessary.  Specifically, besides eliminating § 102(f), the AIA also amended sections 251 and 256 by removing the “without any deceptive intention” requirement from those two sections.  While commentators have questioned whether that pre-AIA requirement had any practical effect, see Chisum § 2.04[4][d], the amendments to sections 251 and 256 make it clear that any demonstrated inventorship error can be corrected; either by a certificate of correction, a reissue application, or by a suit under § 256 in Federal court.  See, e.g., Vapor Point, LLC v. Alford, 832 F.3d 1343, 1348 (Fed. Cir. 2016) (ruling on an action to correct inventorship brought under § 256).

Admittedly, in situations where a party has raised an inventorship issue in a PGR, it is unlikely that all alleged inventors would be willing to cooperate with the patent owner.  But this still is not a stumbling block to correction of inventorship because cooperation of all inventors is not necessarily required. As noted in MPEP § 1481.02(I), in the event an inventor is unavailable or uncooperative, a patent owner can still obtain correction via reissue.  See 37 C.F.R. §§ 1.175, 1.64; see also MPEP § 1412.04(II) (“Reissue As A Vehicle For Correcting Inventorship”).  Further, the patent owner may establish the right to take action pursuant to procedures described in MPEP § 325.  To the extent there was a legitimate dispute as to ownership affecting entitlement toact, that dispute is separate from inventorship and a matter governed under state law—a matter that simply cannot be resolved by the PTAB or anyone at the USPTO. See, e.g., Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1471 (Fed. Cir. 1998).

There is a further, practical problem to permitting inventorship challenges in a PGR.  If the PTAB were to institute trial on that ground (alone or among others), nothing would appear to prevent the patent owner from admitting the error and filing a reissue application or § 256 court action to correct it. It would then seem that fundamental due process considerations should allow the patent owner to correct a correctable error.  But the PTAB may not be able to wait to see if inventorship is corrected before ruling in the PGR because it is statutorily obligated to reach a final determination within 12-18 months of instituting trial.  35 U.S.C. § 326 (a)(11).  Based on the current backlog of reissue applications and other matters before the Central Reexamination Unit (CRU), it is unlikely that a reissue application could reach final disposition within the 12-18 month time period.   The USPTO would thus seem to be stepping into a quagmire if it does not eliminate inventorship error as a ground for PGR—a patent owner has a right to pursue correction of inventorship, yet the PTAB is obligated to reach a final decision before that correction can be effected.   On the other hand, if inventorship challenges before the PTAB are limited to Derivation proceedings, which are not statutorily mandated to be completed within a specific time frame and also contemplate correction of inventorship as a possible outcome (35 U.S.C. § 135(b)), that potential quagmire is avoided.

So even if, despite the elimination of § 102(f), inventorship can still be challenged under 35 U.S.C. §§ 101 or 171, such a challenge is not a statutorily proper ground for institution of a PGR because such a petition cannot demonstrate that it is more likely than not that at least one challenged claim is unpatentable.  And such a ruling would comport with the statutory-framework of the AIA—Congress created Derivation proceedings, the replacement for Interference proceedings (35 U.S.C. § 135 (pre-AIA)), as the sole proceeding before the Board for inventorship challenges to post-AIA patents.  See 35 U.S.C. § 135; see also 37 C.F.R. § 42.401 et seq.  Thus, inventorship challenges can still be brought before the PTAB, it is simply a matter of choosing the correct vehicle through which to do so.  While the PTAB chose not to address this issue this time, when next raised, it should decide the Derivation proceeding is the sole process to bring such a claim before the Board.

But until the PTAB rules definitively that inventorship error is not a ground on which PGR may be based, it is our view that failure to raise that ground in a petition will most likely lead to an estoppel on the issue.  See 35 U.S.C. § 325 (e).  Thus, for now, any PGR petitioner that thinks it might have a possible basis for challenging inventorship better raise that ground in its PGR petition or risk being estopped from later challenging the patent on that basis.

Tom Kohler and Kevin McGrath are director and associate, respectively, at Downs Rachlin Martin, PLLC which represented the Patent Owner in Galaxia Electronics Co. v. Revolution Display, LLC, PGR2016-00021 (PTAB May 18, 2016); the first PGR petition directed to a design patent.

7 thoughts on “Guest Post: Can an Inventorship Be Challenged in a PGR Proceeding?

  1. Wow, good thing patent law is simple/ sarc. Actually pretty sad how the AIA took an already complex area and mangled it beyond repair. My reaction during the AIA fight was an intention to create a court required interpretation of the new provisions resulting in an interference like inventorship dispute but with neither party getting the claims – ergo dead patent.

    1. Yes, in the transition period before all patents become AIA patents, especially re the interference transition clause, is complex. But that was an effort to not have an adverse retroactive effect on pre-AIA patents.

  2. Its nice to see someone putting serious thoughts into this issue.

    There is one place where we might see some proper inventorship designation disputes still occurring in only a few IPRs or reexaminations for many years against pre-AIA patents?* Namely, when the patent owner is claiming the benefit of prior conception plus diligence, or a prior actual reduction to practice, before the filing date of the cited patent, or the publication date of the cited publication, and there is a dispute as to whether the inventors named on the patent are entitled to the benefit of those claimed activities?

    *[PGRs are only applicable against newly issued patents, and CBMs will sunset in only a few years.]

  3. When priority of invention is no longer an issue, inventorship is only important in determining ownership. Not dealing with inventorship issues at filing is a formula for disaster as the omitted inventor will inevitably be located and he or she can grant any infringer a license thereby killing the value of the patent.

    1. Ned, as noted above, there will be pre-AIA patents being sued on and IPRed for many years for which invention date priority vis a vis non-bar prior art dates could still be very important in some cases.

      Your second sentence is a valid warning, but fortunately in most cases where an inventor’s name gets left off the patent [for whatever reason] that inventor is a co-worker with the same employee agreement legal obligation to assign his or her patent rights to the same employer.
      The joint ownership problem can indeed occur in joint ventures and consulting agreements with inadequate contractual consideration.

      1. Paul, consider the Shukh, where Seagate allegedly fired the employee when he complained about being omitted as an inventor from a Seagate patent application. If true, Seagate would come in the court here with unclean hands, and specific performance requires that there be no unclean hands by the party seeking specific performance of a legal obligation.

        So, I would suggest that an innocent mistake should present no problem to the company. But if they were some shenanigans?

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