CAFC Says PTAB Properly Rejected An IPR Petitioner's Supplemental Evidence
The CAFC recently affirmed a PTAB decision that rejected supplemental evidence submitted by an IPR Petitioner. Redline Detection, LLC v. Star Envirotech, Inc., No. 2015-1047 (Fed. Cir. December 31, 2015). This is another instance where the PTAB has excluded evidence and arguments for the sake of procedural efficiency, but at the expense of the merits of the substantive issues in the case. The CAFC apparently agrees with this approach. (see Id.; and Arioso Diagnostics v. Verinata Health, Inc., Nos. 2015-1215, 2015-1226 (Fed. Cir. Nov. 16, 2015) (wherein the CAFC noted that when the procedural rules are impartially applied, “a challenge can fail even if different evidence and arguments might have led to success.”))
The Petitioner (Redline) submitted an expert declaration soon after the Board’s decision to institute a review. Redline apparently believed that 37 C.F.R §42.123(a) grants parties a right to file relevant evidence within one month after institution. But the Board disagreed, ruling that Redline’s compliance with the relevance and timeliness requirements of §42.123(a) did not automatically entitle it to submit supplemental information. The Board emphasized that PTO regulations also require the Board to “ensure efficient administration” of IPR proceedings, and on that basis required Redline to justify its failure to include the information with its original petition. But Redline’s only excuse was a desire to reduce the cost of the petition. The Board ruled that this was not sufficient and expunged the new evidence from the record.
The CAFC endorsed this decision, reiterating that it must defer to the PTAB’s interpretation of IPR rules and regulations unless that interpretation is “plainly erroneous or inconsistent with the regulation.” (Redline at p. 9). The lesson for prospective Petitioners is to include your entire case in the Petition and hold nothing back. A reply will be available if needed, but only for responding to arguments raised by the Patent Owner in opposition.