The Federal Circuit reversed a PTAB’s decision finding that an inter partes review (IPR) proceeding could be based on the applicant’s admission of prior art (AAPA) contained in the challenged patent.

The Federal Circuit held that the plain language of the IPR statute limiting IPRs to “patents and printed publications,” the Supreme Court’s and its own prior rulings, and the use of same term in another part of the patent statute meant that AAPA could not be used as a basis of a ground of challenge in an IPR.

But, the Federal Circuit did not ban all consideration of AAPA in an IPR, allowing it to be treated similar to assertions of “general knowledge” or statements in an expert’s affidavit, specifically authorizing AAPA for purposes such as “furnishing a motivation to combine” or “supplying a missing claim limitation.”

After providing this guidance, the Federal Circuit remanded the IPR back to the USPTO to determine, in the first instance, whether AAPA improperly formed the “basis” of the challenge presented.

Thus, patent challengers should weigh whether the risk of using AAPA, losing the IPR if AAPA is found to rise to the level of a "basis" of a challenge, is worth the benefit of a permissible use of AAPA.  And, if used, patent owners should evaluate whether an argument can be made that the patent challenger has used AAPA impermissibly.