Federal Circuit Limits Discovery in Inter Partes Re-examination Proceedings

We reported last week on the discovery limitations under United States Patent and Trademark Office (“PTO”) guidelines as they pertain to inter partes review (“IPR”) proceedings. On Wednesday, in Abbott Labs. v. Cordis Corp., the Federal Circuit ruled that discovery is not allowed in inter partes re-examinations.

The case stemmed from Abbott’s motion to quash two subpoenas duces tecum issued by Cordis which sought documents for use in a pending IPR re-examination. Id. at 2. In the underlying action, Cordis sued Abbott in the District Court for the District of New Jersey for infringement of two of its patents directed to drug-eluting stents. Id. at 3. The PTO agreed to inter partes re-examination of the patents and by office action, the examiners found both patents obvious. Id. at 3-4. Cordis requested that subpoenas be issued ordering Abbott to produce documents for use in the pending re-examinations. Id. at 4. In particular, Cordis asserted that it believed these documents would help establish evidence copying of and other secondary considerations towards a finding of non-obviousness. Id. Cordis relied on 35 U.S.C. § 24 as its basis for issuance of these subpoenas. Id. at 2. Section 24 states, in relevant part, “the provisions of the Federal Rules of Civil Procedure relating to the attendance of witnesses and to the production of documents and things shall apply to contested cases in the Patent and Trademark Office.” 35 U.S.C. § 24. The District Court for the Eastern District of Virginia had granted the subpoenas in the pending PTO re-examinations, however, in separate action before the PTO, Cordis’ petitions were denied. Abbott, at 4-5.

On appeal, the Federal Circuit recognized that the AIA replaced inter partes re-examinations with inter partes review proceedings (IPR). Id. at 15. While the Court noted, and, as previously reported, IPR proceedings expressly permit depositions, it also recognized that there is no such allowance in re-examinations. Id. The Court considered whether and which type of PTO cases permit such discovery. Id. at 2. Writing for the panel comprised of Chief Judge Rader and Circuit Judge Reyna, Circuit Judge Dyk found that on review of the express language of section 24, its relationship with adjacent provisions of title 35, its legislative history, and the interpretation given to it by other courts, section 24 only empowers a district court to issue a subpoena for use in a “contested case” and that inter partes re-examinations are not “contested cases” under section 24.  Id. at 6, 18.

The language of section 24 states that “[t]he clerk of any United States Court for the district wherein testimony is to be taken for use in any contested case in the Patent and Trademark Office.” 35 U.S.C. § 24. Focusing on “testimony,” the Court considered the history of the Patent Act. Abbott, at 8. In section 1 of the Patent Act of 1861, sections 23 and 24 were a single sentence, specifically enacted to assist the PTO in obtaining “needed testimony.” Id. at 10. In its present form, section 23 allows the Director to establish rules for taking depositions as authorized by law in district court and to take such depositions for use by the PTO. 35 U.S.C. § 23. The panel considered section 24 as clarified by section 23 and construed “contested cases” as limited to include only those in which PTO regulations authorize the parties to take depositions. Id. at 14.

With regard to taking depositions, the panel reviewed PTO regulations and recognized that the regulations discriminate between matters before an examiner and matters before the board with specific mention of deposition powers in the latter and recognizing no such power in the former. Id. at 15-16. Accordingly, the Court held that 35 U.S.C. § 24 only empowers a district court to issue subpoenas for use in a proceeding before the PTO if the PTO’s regulations authorize parties to take depositions for use in that proceeding, i.e. proceedings before the board, including: interferences, derivation proceedings, and the new Board proceedings created by the AIA. Id.

Based on this decision, inter partes re-examination proceedings, held before an examiner, are not “contested cases” within the meaning of section 24, and, therefore subpoenas under section 24 are not available.

However, as suggested by the panel, section 24 subpoenas would be presumptively available in “adjudicative proceeding[s]” of the PTO, including the IPR, post-grant review (“PGR”) proceedings  under the transitional program for covered business method (“CBM”) patents introduced by the America Invents Act (“AIA). Id. at 15. Although a potentially significant tool, its application will no doubt be impacted by the general discovery limitations of PTO adjudicative proceedings relative to district court litigation. We will continue to monitor and report on issues and trends in PTO adjudicative proceedings under the AIA as experience grows with them.

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