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Director Vidal Grants Director Review And Reverses PTAB’s Denial Of Institution Of IPRs For Toy Gun Patents
07/17/2024On July 9, 2024, Director Vidal of the United States Patent and Trademark Office (USPTO) granted Director Review in a set of three related inter partes review (IPR) proceedings between Petitioner Prime Time Toys LLC and Patent Owner Spin Master, Inc. (IPR2023-01339, IPR2023-01348, and IPR2023-01461). In her decision, Director Vidal reversed the Patent Trial and Appeal Board’s (“PTAB’s”) denial of institution and remanded the case back to the Board for further proceedings. This is a rare decision by Director Vidal, as she has only granted Director Review for six of the approximately thirty requests for Director Review decided so far in 2024.
The challenged patents (U.S. Patent Nos. 8,640,683; 8,371,282; and 8,596,255) involve “soft-projectile launching devices” that use absorbent polymer projectiles. Spin Master, along with Hasbro, Inc., had asserted the ’683 and ’282 patents against various entities, including Prime Time Toys, in a Section 337 investigation before the International Trade Commission (ITC-337-TA-1325) in July 2022. Prime Time Toys petitioned for IPR of these two patents on August 23, 2023, and for IPR of the ’255 patent on October 3, 2023.
The Petitioner challenged these patents based on two prior art references: a Bulgarian patent publication entitled “Air-Force Electric Rifle” that discloses an electric airsoft gun “for military simulations or training, or for entertainment in airsoft games,” and a webpage called “Spitballs” that discloses projectiles that absorb water when soaked. Petitioner argued that it would have been obvious to combine the teachings of these references to create a safer air gun with less risk of injury. The PTAB initially denied institution of the review, agreeing with Patent Owner’s argument that there was no motivation to combine the references, that the risk of injury was not a problem that needed solving, and that Petitioner had not shown that the combination would solve any injury problem. The Petitioner then sought Director Review.
Director Vidal disagreed with the PTAB’s decision, finding that the PTAB had improperly evaluated the evidence and had set too high a standard for establishing a motivation to combine the references.
The Director found that the PTAB erred in several specific ways. First, the PTAB’s motivation to combine analysis failed to address admissions made by Patent Owner’s expert in the ITC investigation that safety was a concern for airsoft guns. Second, the PTAB’s motivation-to-combine analysis imposed an improperly high burden on the Petitioners to establish “absolute success” by requiring Petitioners to show that softer ammunition is the best option to increase safety. Third, the PTAB erred by ignoring evidence of simultaneous invention in its secondary consideration analysis.
The Director also addressed Patent Owner’s discretionary denial arguments under General Plastics, which the PTAB did not reach in its denial of institution. These arguments were based on IPR petitions filed by other respondents in the ITC investigation that asserted some of the same art at issue in the proceedings on appeal. Director Vidal noted, however, that these other IPRs terminated due to settlement prior to decisions on institution. Under these circumstances, Director Vidal held that, where the first and second petitioners are neither the same party, nor possess a significant relationship, exercising discretion to deny the Petition is not justified.
Finding that Petitioner had shown a reasonable likelihood of prevailing, Director Vidal granted Director Review, reversed the PTAB’s Decision Denying Institution, and remanded to the PTAB to institute trial.
