Moore, Circuit Judge.
The present appeals arise from a series of inter partes reviews ("IPRs") between Ultratec, Inc. ("Ultratec") and CaptionCall, LLC ("CaptionCall"). Ultratec owns U.S. Patent Nos. 5,909,482 ("the '482 patent"), 6,233,314 ("the '314 patent"), 6,594,346 ("the '346 patent"), 6,603,835 ("the '835 patent"), 7,003,082 ("the '082 patent"), 7,319,740 ("the '740 patent"), 7,555,104 ("the '104 patent"), and 8,213,578 ("the '578 patent"). The patents disclose and claim systems for assisting deaf or hard-of-hearing users to make phone calls. CaptionCall petitioned for IPR of certain claims of Ultratec's patents. The Patent Trial and Appeal Board ("the Board") held that all challenged claims were either anticipated or would have been obvious in light of a variety of prior art references. Ultratec appealed to our court. The United States Patent and Trademark Office and the Department of Justice (collectively, "the PTO") intervened to defend the Board's decisions. Because the Board failed to consider material evidence and failed to explain its decisions to exclude the evidence, we vacate and remand.
Ultratec and CaptionCall are currently litigating in both district court and before the Board. Ultratec sued CaptionCall and its parent company for infringement in the Western District of Wisconsin. The case proceeded to trial, where the jury found the patents valid and infringed and awarded damages of $44.1 million. Five months after the verdict, the Board issued final written decisions holding all challenged claims of Ultratec's patents were either anticipated or would have been obvious. The district court subsequently stayed all post-judgment proceedings pending final resolution of the IPRs.
CaptionCall retained the same invalidity expert — Mr. Benedict Occhiogrosso — in the district court litigation and the IPRs. In some instances, Mr. Occhiogrosso testified about the same issues and references in both proceedings. Ultratec sought to
Ultratec moved to supplement the record with the inconsistent Occhiogrosso trial testimony. Because Ultratec had not first requested authorization to file the motion with the inconsistent testimony, the Board expunged the motion from the record. PTO Br. at 10 n.8. The Board's regulations require that a party seeking to introduce supplemental evidence more than one month after institution first request authorization to file a motion to submit the evidence. 37 C.F.R. § 42.123(b). As the PTO explained to Ultratec, with regard to its request to file a motion to supplement the record, "[n]o evidence is permitted to be filed," and the briefing "must not include a discussion of the contents or types of the particular documents sought to be entered." PTO Br. at 10 n.8. On October 30, 2014, within a week of the jury trial, Ultratec requested authorization to file a motion to submit portions of Mr. Occhiogrosso's trial testimony to the Board. Ultratec alleged that Mr. Occhiogrosso's trial testimony addressing a prior art reference was inconsistent with his IPR declarations on that same point.
The Board issued final written decisions, holding that every challenged claim was either anticipated or would have been obvious. These final written decisions rely heavily on the Board's belief that Mr. Occhiogrosso was a credible witness. See, e.g., J.A. 11,206 ("It is within our discretion to assign the appropriate weight to the testimony offered by Mr. Occhiogrosso."). The Board cited Mr. Occhiogrosso's testimony over thirty times to support its findings, including at least once for each of the eight patents on appeal.
Ultratec moved for reconsideration on a variety of grounds, including that the Board failed to consider Mr. Occhiogrosso's trial testimony and failed to explain its decision to exclude the new evidence. See J.A. 6818-20. The Board denied the motion to reconsider. It reasoned:
J.A. 6394-95 (emphasis in original).
Ultratec filed a motion to supplement the appellate record, requesting that the Board make part of the record Ultratec's request for authorization to file a motion to supplement the record with Mr. Occhiogrosso's trial testimony and the Board's denial of that request. J.A. 9002-03. The Board held that "the records would be adequately supplemented" by adding only two documents: Ultratec's motion for rehearing of the final written decision, and the Board's denial of that motion. J.A. 9003. Ultratec then filed a second motion to supplement the appellate record. This time, Ultratec requested the Board include Ultratec's October 30, 2014 email to the Board requesting a conference call to address its request for authorization to file a motion. The Board denied the motion. It explained the "emails requesting conference calls are intended to be administrative in nature; it is improper for substantive arguments to be made in emails requesting conference calls." J.A. 9046 n.3.
Ultratec appealed to our court. The PTO intervened to defend the Board's decision. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(4)(A).
We review the Board's decision of how it manages its permissive rules of trial proceedings for abuse of discretion.
Congress gave the PTO authority to "prescribe regulations establishing procedures for the submission of supplemental information after the petition is filed." 35 U.S.C. § 316(a)(3). Under the PTO's regulations, a party seeking to submit supplemental information more than one month after the date an IPR is instituted must request authorization to file a motion to submit the information. 37 C.F.R. § 42.123(b). The request to submit new information must show: (1) why the supplemental information reasonably could not have been obtained earlier, and (2) that consideration of the supplemental information would be in the interests of justice. Id. The PTO considers the interests of justice as slightly higher than good cause:
77 Fed. Reg. 48,719 (Aug. 14, 2012). The Board's Patent Trial Practice Guide explains that when a party desires to request authorization to file a motion, it should institute a conference call with the Board. 77 Fed. Reg. 48,762-63 (Aug. 14, 2012). The Guide explains that:
Id.
This record affords but one reasonable conclusion: Ultratec satisfied both of § 42.123(b)'s requirements for allowing Ultratec to file a motion to admit Mr. Occhiogrosso's trial testimony. First, the evidence could not have been obtained earlier. Ultratec emailed the Board requesting authorization to file a motion to supplement the record the week after the jury trial concluded. This is not evidence that could have been located earlier through a more diligent or exhaustive search; it did not exist during the IPR discovery period. The fact that Ultratec could have, but did not, depose and obtain inconsistent testimony from Mr. Occhiogrosso during the IPR itself is not a basis for concluding otherwise. Ultratec argues that during cross examination at trial in front of the jury Mr. Occhiogrosso offered testimony that is inconsistent with his IPR testimony. That inconsistent testimony did not exist sooner and thus could not have been proffered to the Board sooner.
The Board offers no reasoned basis why it would not be in the interest of justice to consider sworn inconsistent testimony on the identical issue. Ultratec sought to offer
Admitting and reviewing Mr. Occhiogrosso's trial testimony would have placed minimal additional burden on the Board. Live testimony is rare in IPR hearings, which typically last only about an hour. See 77 Fed. Reg. at 48,762. The Board — as it did in these IPRs — makes credibility determinations based only on written declarations. Ultratec sought to introduce more written testimony. This is the exact type of evidence the Board routinely relies upon to determine credibility. There would have been very little administrative burden to reviewing more on-point testimony from the same expert on the same exact issues. Had the testimony been inconsistent, a reasonable fact finder would consider the inconsistencies. Had the testimony been consistent, the Board would not have had to spend any more time on the issue.
A number of problems with the Board's procedures contributed to its errors in this case. First, the Board lacked the information necessary to make a reasoned decision. According to the Board, the movant cannot submit for consideration the evidence it seeks to admit into the record, and its briefing "must not include a discussion of the contents or types of the particular documents sought to be entered." PTO Br. at 10 n.8. In this case, the Board denied a request to admit evidence without ever seeing the evidence it was denying; it never reviewed Mr. Occhiogrosso's testimony because Ultratec was not allowed to submit that evidence with its request to file a motion to supplement the record. The Board's only exposure to the disputed testimony was the parties' competing characterizations of it during the conference call for which there exists no record.
Second, the Board's procedures allowed it to make significant evidentiary decisions without providing an explanation or a reasoned basis for its decisions. See Motor Vehicle Mfs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) ("[T]he agency must examine the relevant data and articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made." (internal quotation marks omitted)).
CaptionCall and the PTO argue Ultratec bore the responsibility to memorialize the conference call if it desired a written record. CaptionCall Br. 28; PTO Br. 25. There are, however, no statutes, regulations, statements in the Patent Trial Practice Guide, nor even notes on the PTO's website informing parties that they have the right to hire a stenographer to transcribe conference calls. We find no burden on the patentee to memorialize
The only reason there is any written record of the dispute is because Ultratec raised the issue in a motion for rehearing. The Board addressed the issue in its order denying rehearing, but it did not explain why it denied the request for authorization. See J.A. 6394-95. The Board noted that a conference call occurred, but it never stated what was discussed on the call. J.A. 6394. Nor did the Board address the substance of Mr. Occhiogrosso's trial testimony. Id. And although the Board cited the interests of justice provision of 37 C.F.R. § 42.123(b), it never explained why its actions were in the interests of justice. Id. The Board explained that it was not obligated to provide an explanation in the first place. The Board reasoned that "Patent Owner argues that the record is incomplete because we did not issue an order denying its motion. Req. Reh'g 13-14. Patent Owner's [sic] mischaracterizes the events in this proceeding because no such motion was denied; we denied Patent Owner's request for authorization to submit evidence and, as such, no order denying its motion was necessary." Id. If the APA requires the Board to explain a denial of a motion then it likewise requires the Board to explain the denial of a request to make a motion. To the extent the Board views the two-step process it created to file motions as insulating it from its APA obligations, this is incorrect.
The Board abused its discretion when it refused to admit and consider Mr. Occhiogrosso's trial testimony and when it refused to explain its decision. Because the Board relied on Mr. Occhiogrosso's credibility in every IPR, we vacate every decision. See In re Van Os, 844 F.3d 1359, 1362 (Fed. Cir. 2017) ("[W]hen the Board's action is potentially lawful but insufficiently or inappropriately explained, we have consistently vacated and remanded for further proceedings." (internal quotation marks omitted)). On remand, the Board shall admit and consider Mr. Occhiogrosso's trial testimony. If the Board finds he gave inconsistent testimony, the Board shall consider the impact on the specific patents at issue in the trial testimony as well as on his credibility as a whole.
The Board's final written decisions are vacated and remanded.
Costs to Ultratec.