APJs Refuse to Consider Redundant Proposed Grounds for Rejection in Covered Business Method Petition

Scott Daniels | November 16, 2012

A panel of eight APJs, including Chief APJ Smith, ordered withdrawal of redundant grounds for rejection in the Petition filed in Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM2012-00003.

Writing for panel, APJ Jameson Lee stated that “numerous redundant grounds would place a significant burden on the Patent Owner and the Board, and would cause unnecessary delays.”  A Petitioner “has the burden of proof to establish that it is entitled to the requested relief” and must draw a “meaningful distinction between” its proposed rejections.  “A petitioner who does not state the differences between a challenged claim and the prior art, and relies instead on the Patent Owner and the Board to determine those differences based on the rest of the submission in the petition risks having the corresponding ground of obviousness not included for trial for failing to adequately state a claim for relief.”

With the Petition under consideration here, APJ Lee explained that there are two types of redundancy, “horizontal” and “vertical.”  Horizontal redundancy

involves a plurality of prior art references applied not in combination to complement each other but as distinct and separate alternatives. All of the myriad references relied on provide essentially the same teaching to meet the same claim limitation, and the associated arguments do not explain why one reference more closely satisfies the claim limitation at issue in some respects than another reference, and vice versa. Because the references are not identical, each reference has to be better in some respect or else the references are collectively/horizontally redundant.

(Emphasis added).  Here, the APJs found that a number of the references asserted in the Petition were relied upon to provide essentially the same disclosure against a single claim, but the Petition failed to explain whether one reference might have a more relevant disclosure than the other references, with respect to that claim.  Accordingly, the APJs ordered the Petitioner to choose one of the references and forsake the others.  If the Petitioner fails to do so, the APJs will choose for it, specifically, they will choose the cited reference having the earliest publication date.

The second type of redundancy, “vertical,” involves

a plurality of prior art applied both in partial combination and in full combination. In the former case, fewer references than the entire combination are sufficient to render a claim obvious, and in the latter case the entire combination is relied on to render the same claim obvious. There must be an explanation of why the reliance in part may be the stronger assertion as applied in certain instances and why the reliance in whole may also be the stronger assertion in other instances. Without a bi-directional explanation, the assertions are/vertically redundant.

(Emphasis added).  “Vertical redundancy,” APJ Lee repeated,

 exists when there is assertion of an additional prior art reference to support another ground of unpatentability when a base ground already has been asserted against the same claim without the additional reference and the Petitioner has not explained what are the relative strength and weakness of each ground. To move forward with such a multiplicity of grounds, Petitioner must articulate a reasonable basis to believe that from a certain perspective the base ground is stronger, and that from another perspective the ground with additional reference is stronger.

Thus, where the Petition proposes both a rejection based on a combination of a smaller number of references (“the partial combination”) and a rejection based on the same references plus one or more additional references (“the full combination”), the Petition must state the circumstances in which the partial combination is stronger, and the circumstances in which the full combination is stronger.  Without such an explanation, the proposed rejections are “vertically redundant.”

APJ Lee explained the rationale:

If either the base ground or the ground with additional reference is better from all perspectives, Petitioner should assert the stronger ground and not burden the Patent Owner and the Board with the other. If there is no difference, Petitioner should assert just one ground. Only if the Petitioner reasonably articulates why each ground has strength and weakness relative to the other should both grounds be asserted for consideration.

As with the APJs finding of horizontal redundancy, the Petitioner is required to choose one of its proposed combinations of prior art and give up the others, and if the Petitioner fails to do so, the APJs will choose for it.

What to make of all this?  The APJ’s ruling sounds more complicated than it really is.  In any event, practitioners must adapt.

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