Presented by Karl Fink, Nikki Little, and Tim Maloney. AIPLA Corporate Practice Committee Breakfast Meeting May 18, 2016

Transcription

1 Presented by Karl Fink, Nikki Little, and Tim Maloney AIPLA Corporate Practice Committee Breakfast Meeting May 18, Fitch, Even, Tabin & Flannery LLP

2 Overview Introduction to Proceedings Challenger s Perspective Patent Owner s Perspective 2

3 PTAB Contested Proceedings Petitioner Reply & Opposition to Amendment PO Preliminary Response PO Reply on Amendment Petition Filed Institution Decision PO Response & Motion to Amend Oral Hearing Final Written Decision 3 months No more than 3 months 3 months 3 months 1 month 5 months PO Discovery Period Petitioner Discovery Period PO Discovery Period Evidentiary Motions No more than 12 months Appeals Institution Decision not appealable Final Written Decision appealable to Federal Circuit 3

4 IPRs versus CBMs IPRs CBMs Timing Patent Types Permitted Challenges > 9 mo. after issuance AND < 12 mo. after complaint All 102 and 103 Patents and printed publications > 9 mo. after issuance Claims financial product or service and NOT technological invention 101, 102, 103, and 112 Broader range of prior art Estoppel Raised or reasonably could have raised Raised 4

5 Discovery Sequenced, limited discovery Primarily depositions of experts Permission required for additional discovery Document production requests Proof relating to printed publications Inventor depositions Discovery of litigation positions disfavored 5

6 Claim Construction District Court Phillips standard PTAB Broadest Reasonable Interpretation standard Exception: Expired patents Standards are similar in theory Heavy emphasis on claim language and specification BUT often yield different results in practice PTAB tends to construe very broadly Dist. Ct. more of a mixed bag PTAB need not defer to events in concurrent litigation 6

7 Experts Declarations and depositions Live testimony typically not permitted at oral hearing Before May 2016: Patent Owner could not use expert in Preliminary Response Now: Patent Owner may use expert in Preliminary Response Fact disputes decided against Patent Owner at preliminary stage 7

8 Claim Amendments Amendment must narrow claim May be contingent upon original claim being held invalid Patent Owner must Identify 112 support for entire claim Demonstrate patentability over closest known prior art PTAB has granted less than 5% of proposed amendments 8

9 Stay of Parallel Litigation District Court has discretion Factors Stage and status of lawsuit Potential to simplify issues Does IPR/CBM address all asserted claims? Impact of delay on Patent Owner Would delay irreparably harm Patent Owner? 9

10 Statistics IPRs CBMs Petitions Filed 1 4, Preliminary Responses Filed % 91.1% Trial Instituted on Some Claims % 65.7% Challenged Claims Cancelled % 84.8% Instituted Claims Cancelled % 97.6% Sources: 1. Patent Trial and Appeal Board Statistics, 2/29/ Analysis on PTAB Contested Proceedings, Fitzpatrick Cella Harper & Scinto 10

11 Challenger s Perspective PTAB Advantages High success rates Lower burden of proof Broader claim construction Technically trained Panel No jury bias Faster (18 months) Less expensive Stay of litigation likely Patent Owner on defensive Claim amendments unlikely PTAB Disadvantages CBM limited to financial patents IPR limited to 102/103 based on patents/ publications Limited discovery Expose experts to cross-exam Invalidity arguments may harm noninfringement defenses Potential for mixed result (especially in multi-patent litigation) Estoppel 11

12 Challenger s Perspective Timing considerations Must file IPR within 1 year of service of complaint Must file IPR before any declaratory judgment complaint May file CBM any time after being charged with infringement File early in litigation to increase chances of staying litigation File early in litigation to force patent owner to state a claim construction position File later in litigation to take advantage of seeing Patent Owner s positions, reduction in asserted claims 12

13 Challenger s Perspective Estoppel considerations Need back-up plan for asserting invalidity in litigation Co-defendants joining IPR? Joint defense and/or common interests groups? 13

14 Challenger s Perspective Summary of strategic considerations Likelihood of better result than litigation alone? Which art to assert? Assert 101 and other defenses in CBM? How infringement positions will be affected Timing Back-up plan (due to estoppel) Co-defendant s issues Joint defense and common interest groups 14

15 Challenger s Perspective Is PTAB the best option? (Most defendants think so) Reminders of other things to consider Nature of Patent Owner Number of patents and asserted claims Creates two-front attack 15

16 Challenger s Perspective During proceeding Not many procedural decisions to make Expert depositions only likely discovery Few if any motions or claim amendments Relaxed evidentiary standard (but remember odd rule about objections to admissibility) 16

17 Patent Owner s Perspective Initial Assessment Evaluation of Petition Scope of asserted challenges Nature of asserted challenges Nature of asserted prior art Quality of expert declaration Claim construction positions Persuasiveness of arguments Procedural defects Overall quality of work product 17

18 Patent Owner s Perspective Initial Assessment Evaluation of strategic options Predicted outcome of Institution Decision Predicted outcome of trial Impact of predicted outcomes on litigation Are the important claims in trouble? Can infringement of less-vulnerable claims be shown? Are there other claims available to assert? Sufficient patent term to consider claim amendment? 18

19 Patent Owner s Perspective Initial Assessment What does Petition signal about Challenger? Confidence in invalidity position Vulnerability on infringement Pursuing a clear and well-integrated strategy Pursuing a shotgun approach Invoking PTAB to defeat entire patent or just narrow issues Fight to the death strategy Settlement-driven strategy 19

20 Patent Owner s Perspective Preliminary Response File Preliminary Response? Opportunity to narrow scope of challenge Common to achieve 50 90% reduction in number of rejections Procedural rules favor narrowing proceeding High percentage of instituted claims are invalidated Preliminary Response is best chance to influence outcome Once trial is instituted, presumption of validity is effectively reversed Challenger does not get to reply before Institution Decision 20

21 Patent Owner s Perspective Preliminary Response Procedural challenges Standing Filed too late, estoppel, in privity with a barred party, etc. CBMs: Financial product or service and not a technological invention Failure to identify all real parties in interest Redundant arguments Lack of clarity identifying challenges and supporting evidence Conclusory arguments 21

22 Patent Owner s Perspective Preliminary Response Substantive challenges to claim construction Overbreadth due to ignoring claims as a whole Overbreadth due to ignoring usage of term in specification Failure to construe other scope determinant terms Failure to fully construe means-plus-function terms Consistency with litigation positions Expose flip-flopping on critical issues Especially when same experts involved 22

23 Patent Owner s Perspective Preliminary Response Substantive challenge to prior art arguments Based on erroneous claim construction Unclear arguments 102/103 waffling Sound-bite portrayals of prior art teachings Overly aggressive anticipation arguments Conclusory obviousness arguments Reference does not qualify as prior art 23

24 Patent Owner s Perspective Preliminary Response Challenges to 101 arguments Is patent even CBM-eligible? Specific technical advance; not abstract idea Use of expert to establish technical nature of problem and solution Attack articulation of abstract idea as not tied to claim limitations Attack exaggerated claims of undue preemption Attack unhelpful analogies to conventional manual activities Analogize to the few post-alice cases upholding claims 24

25 Patent Owner s Perspective Preliminary Response Should you use an expert at preliminary stage? Advantages Provide industry context for patent and prior art Correct erroneous interpretations of prior art More effectively attack 103 arguments Disadvantages Expense Difficult to avoid raising fact disputes 25

26 Patent Owner s Perspective Full Patent Owner Response Address Panel s reasoning in Institution Decision Reinforce arguments with expert declaration Erroneous interpretation of prior art disclosures Illogical, conclusory, or incomplete 103 arguments Use admissions obtained from Challenger s expert Demonstrate secondary considerations of non-obviousness Preserve arguments for appeal Jurisdiction, claim construction, etc. 26

27 Patent Owner s Perspective Oral Argument Last chance to change Panel s mind Panels are well-prepared Focus on Strongest arguments Dispositive claim construction disputes Most-critical omissions from prior art Expose key errors in Challenger s expert submissions Expose lawyer argument rebutted by qualified expert testimony 27