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Covidien petitioned the PTO for an inter partes review of Ethicon’s patent.  The Patent Trial and Appeals Board (PTAB) instituted the IPR and then, following the trial, held that the claims at issue were invalid as being obvious.  Ethicon appealed to the Federal Circuit arguing that the PTAB’s final decision was invalid, because the same PTAB panel made both the decision to institute the IPR and the final decision holding the claims invalid.  The Federal Circuit held, however, that the PTAB’s procedures were correct under the AIA.  Under the AIA, it is the Director who determines whether to initiate an IPR and the PTAB who makes the final determination of patentability.  Here, the PTO determined that it was proper for the Director to have delegated the determination of whether to initiate the IPR to the PTAB and determined that there is no other separate procedural-fairness infirmity that would violate due process. 

On the merits of the PTAB’s decision, Ethicon argued that the PTAB erred by failing to consider the secondary considerations of non-obviousness, including evidence of the commercial success of the allegedly infringing Covidien product.  The court held that such evidence was not determinative of non-obviousness, because the evidence demonstrated commercial success was due to other, non-patented features and therefore the requisite nexus to the infringing features could not be shown. 

In her dissent, Judge Newman argued that the AIA itself requires that two separate entities determine whether to institute the IPR and make the final decision, as evident from the statute itself which refers separately to the Director and to the PTAB.  

Ethicon Endo-Surgery, Inc. v. Covidien LP, Case No. 2014-1771 (January 13, 2016); Opinion by: Dyk, joined by Taranto; Dissent by Newman; Appealed From: United States Patent Trial and Appeal Board.  Read the full opinion here.

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