Providing a Detailed Explanation of the Evidence

by Dennis Crouch

The decision in Parus Holdings, Inc. v. Google LLC, — F.4th — (Fed. Cir. 2023), underscores the importance of adhering to the PTAB procedural requirements, particularly the prohibition against incorporating arguments by reference from one document into another during an IPR, as stipulated in 37 C.F.R. § 42.6(a)(3). The court’s affirmation of the PTAB’s decision not to consider arguments and evidence that violated this rule sends a clear message to future litigants: all arguments must be explicitly presented in the briefs, and the PTAB is not obligated to consider evidence or arguments that are not properly presented.

During the IPR the patentee (Parus Holdings) made a number of arguments  supporting the validity of the challenged claims.  Relevant for this appeal was its attempt to provide evidence showing it was the first to make the claimed invention, antedating the prior art. However, the PTAB declined to consider Parus’s arguments and evidence because of the procedural approach taken by the patentee. the substance of those arguments were made within several declarations, but not actually within the briefs. Rather, the briefs merely incorporated those arguments by-reference into its Response and Sur-reply briefs.  The problem, PTAB practice rules prohibit incorporation by reference. 37 C.F.R. § 42.6(a)(3).

(3) Incorporation by reference; combined documents. Arguments must not be incorporated by reference from one document into another document. Combined motions, oppositions, replies, or other combined documents are not permitted.


On appeal, the Court of Appeals for the Federal Circuit affirmed the PTAB’s decision. The court agreed that the PTAB was correct in disregarding Parus’s arguments that were in violation of the rule (no abuse of discretion).  The court also disagreed with Parus’s argument that the PTAB should have considered all record evidence, regardless of how it was presented. The justification here is that the PTAB is restricted to deciding cases on arguments that advanced by a party and to which the opposing party was given a chance to respond. Allowing subtle incorporation by reference raises potential confusion on these issues.  The court further noted that Parus had almost 3,000 unused words in its Patent Owner Response and could have sought leave to exceed its word count under 37 C.F.R. § 42.24(a)(2) or reallocated more of its briefs to that argument, but chose not to use the avenues available to it.  The result then is that the reference qualifies prior art and the obviousness holding stands.

In the case, the court noted that the patentee had an increased burden in this instance because it was not simply rebuffing claims from a patent challenger, but affirmatively asserting a pre-filing priority date.

When I look at the briefs, it looks awfully close to sufficient arguments.  The following comes from the briefs by the patentee:

The inventors conceived of the claimed subject matter before Kovatch’s January 4, 2000 U.S. priority filing date. . . .

Here, the source code, documents, and testimony show that at least by July 12, 1999, Alexander Kurganov, and Valery Zhukov conceived of and invented the claimed subject matter while working on the web-based upgrades to the Webley Assistant. Kurganov Decl. at ¶ 13. . . .

As shown through Alexander Kurganov’s testimony, which is corroborated by the time-stamped source code, emails documents, and the testimony of Paul Mulka and Benedict Occhiogrosso, the inventors conceived of the subject matter no later than July 12, 1999. Following conception, the inventors were reasonably and continuously diligent as the Webley Assistant enhancements was the only project they were working on at Webley and they were employed full-time. The evidence produced in Mr. Kurganov’s declaration, along with the accompanying exhibits, demonstrate that the enhancements to the Webley Assistant reduced the ’431 and ’084 inventions to practice in a prototype no later than December 31, 1999, five days before Kovatch’s earliest filing date of January 4, 2000.

To the extent that it is argued that the ’431 and ’084 inventions were not reduced to a prototype until January 7, 2000, the date the last source code file was added to the source code revision system, the inventors worked diligently to reduce the invention to practice from the critical date of January 4, 2000, until the grammar file was entered into the source code revision system on January 7, 2000. See Ex. 2059, Occhiogrosso Dec. at ¶¶ 44-91; Ex. 2060, Mulka Dec. at ¶¶ 1-6; Ex. 2020, Kurganov Dec. at ¶¶ 103-119.

. . . To show diligence during this short period, Patent Owner relies on the source code revision logs and emails, as well as the testimony of Paul Mulka. The source code revision logs and Paul Mulka’s testimony shows that from December 1999 to early January 2000, the inventors were employed full-time on the Webley Assistant project, and every file, or file modification they committed to the source code revision system, was for the Webley Assistant project. Accordingly, the activity represented by these source code revision logs exceeds the reasonable diligence required.

On appeal, the court apparently concluded that the citations here were not specific enough.

The burden of production cannot be met simply by throwing mountains of evidence at the Board without explanation or identification of the relevant portions of that evidence. One cannot reasonably expect the Board to sift through hundreds of documents, thousands of pages, to find the relevant facts.

Slip Op.  The court explained that a “detailed explanation of the evidence” is required under the rule, and this does not suffice.


NOTE – the court cites to 37 C.F.R. § 42.44, as requiring a “detailed explanation of the evidence.” However, that provision does not appear to be part of the Federal Regulation.  The court has not previously required this level of explanation within the briefing.

= = =

U.S. Patent 7,076,431 and U.S. Patent 9,451,084.

7 thoughts on “Providing a Detailed Explanation of the Evidence

  1. 4

    I am a little concerned that a procedure error on the part of the attorney for the patentee should so grievously harm the substantive rights of the patentee. It seems the courts are retreating back to the time of the robber barons where civil procedure and not substantive legal merits of the case determined rights. You should win you case by having a better factual case. You should not win you case simply by hiring the better lawyer as appears to have happened in this case.

  2. 3

    This case demonstrating yet again that if you have to rely on predating prior art with evidence and argument, you’re in trouble.

    Very serious trouble.

    The PTAB hates it. The courts including the CAFC hates it.

    There be no rule of reason here.

  3. 2

    The panel’s citation to non-existent “37 C.F.R. 42.44” is a little embarrassing, especially given that this was designated as a precedential decision. The Federal Circuit even included a small dig at the PTAB (in footnote 2) for failing to cite that non-existent section.

    The actual regulation requiring a “detailed explanation of the significance of the evidence” is 37 C.F.R. 42.22, which only applies to “petitions” and “motions.” A patent owner response qualifies as neither of those. Under 37 C.F.R. 42.23, “oppositions” are subject to the same requirements as “motions,” but a patent owner response is not generally regarded as an opposition.

    I suspect they’ll issue an amended order removing the citation to “42.44,” and I don’t think the panel’s mistake would have changed the overall outcome.

    1. 2.1

      My bad, my point about a patent owner response not being an “opposition” overlooked that 37 C.F.R. 42.120 says that a patent owner response is filed “as an opposition,” which may make it subject to the same requirements of an “opposition” under 42.23 (except page limits), which in turn would make it subject to the “detailed explanation of the significance of the evidence” requirement of 42.22.

      This provides a basis to say that the rules do require a patent owner response to include a “detailed explanation of the significance of the evidence,” and the panel decision did string-cite to these other sections. The court could just amend their decision to remove the citation to non-existent 42.44 and draw the linkage more explicitly through these other sections.

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