In Perfect Surgical Techniques, Inc. v. Olympus America, Inc., No. 15-2043 (Fed. Cir. Nov. 15, 2016), the Federal Circuit found the diligence standard the PTAB applied in an IPR "too exacting," vacating the Board's decision that patentee PST failed to antedate a reference because reasonable diligence towards reduction to practice was not shown.
The Federal Circuit first clarified that the proper standard is to inquire under a rule of reason weighing corroborating evidence whether there was "reasonably continuous diligence," rejecting the Board's demand of "continuous exercise of reasonable diligence." The Court found that the Board's erroneously heightened burden of proof infected its analysis, explaining that the Board fixated on portions of the critical period where PST did not provide evidence of specific activities to conclude the exercise of diligence was not continuous. Accordingly, the Court vacated and remanded the Board's decision, explaining that the question before the Board on remand is "whether all of PST's evidence, considered as a whole and under a rule of reason, collectively corroborates [the inventor's] testimony that he worked reasonably continuously within the confines of his and [the application drafter's] occupations to diligently finalize the patent application during the 81-day critical period."
Judge Schall dissented, stating that the Board's approach was consistent with precedent and that the first of three identified periods of inactivity alone would constitute substantial evidence to support a lack of diligence.
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