Ultratec, Inc. v. CaptionCall, LLC


Docket No. 2016-1706-10, -1712, 1715 (IPR2013-00540, -00541-45, -00550)

NEWMAN, LINN, MOORE
August 28, 2017

Brief summary: Board found to have “abused its discretion when it refused to admit and consider [the expert’s] trial testimony and…refused to explain its decision.”

Summary: Ultratec appealed PTAB finding after IPR that all claims to its multiple patents relating to system for assisting deaf or hard-of-hearing users to make phone calls were either anticipated or would have been obvious. As explained in the FC panel opinion, the parties are also litigating in the DC, where a jury found the patents valid and infringed, and awarded $44.1 million in damages. Final Written Decisions (FWDs) in these IPRs were issued five months after the DC verdict, which then “stayed all post-judgment proceedings pending final resolution of the IPRs.” CaptionCall used the same invalidity expert at the DC and for the IPRs. Ultratec unsuccessfully attempted to introduce evidence into the IPRs showing inconsistenices between CaptionCall’s expert testimony and his written declarations presented during IPR. The Board refused to consider that evidence “[b]ecause Ultratec had not first requested authorization to file the motion” and “no evidence is permitted to be filed” with the briefing which “must not include a discussion of the contents or types of the particular documents sought to be entered” (37 CFR § 42.123(b)). A conference call was held and the Board denied Ultratec’s request (without reviewing the testimony), indicated a written order would follow, but that order was never issued. The FC panel explained that the FWDs “rely heavily on the Board’s belief that [the expert] was a credible witness.” “Ultratec moved for reconsideration on a variety of grounds,” including the conflicting evidence issue. The Board also only allowed the appellate record to be supplemented with two documents, not including an email requesting a conference call on that issue. The FC panel explained it “review[s] the Board’s decision of how it manages its permissive rules of trial proceedings for abuse of discretion”, which is found “if the decision: (1) is clearly unreasonable, arbitrary, or fanciful; (2) is based on an erroneous conclusion of law; (3) rests on clearly erroneous fact findings; or (4) involves a record that contains no evidence on which the Board could rationally base its decision” (Redline Detection, FC 2015; 35 USC § 316(a)(3)). It found that “[a] number of problems” led to “errors in this case” including the Board “lack[ing] the information necessary to make a reasoned decision”, “mak[ing] significant evidentiary decisions without providing an explanation or a reasoned basis for its decisions” (Motor Vehicle Mfs. Ass’n, US 1983), and that its “procedures impede meaningful appellate review of the agency decision-making” (Rovalma, FC 2017; In re Lee, FC 2002; SEC, US 1943). The FC panel concluded “[t]he Board abused its discretion when it refused to admit and consider [the expert’s] trial testimony and…refused to explain its decision.” Since the Board relied on the expert’s credibility in every IPR”, it vacated “every decision” (In re Van Os, FC 2017).

This entry was posted in Inter Parties Review (IPR), IPR. Bookmark the permalink.

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