2012 Winston & Strawn LLP

Transcription

1 2012 Winston & Strawn LLP

2 How the America Invents Act s Post-Issuance Proceedings Influence Litigation Strategy Brought to you by Winston & Strawn s Intellectual Property practice group 2012 Winston & Strawn LLP

3 Today s elunch Presenters Andrew R. Sommer Litigation Washington, D.C. asommer@winston.com 2012 Winston & Strawn LLP 3

4 Agenda 1. The AIA 2. Introduction to the New Post-Issuance Proceedings 3. Anatomy of a PTAB Trial 4. How the AIA s Post-Grant Proceedings May Impact Litigation a) Certain patents currently in litigation will be immune b) Declaratory Judgment Strategies c) Claim Construction Considerations d) Preliminary Injunctions e) Estoppels f) Intervening Rights g) Stays of Litigation 2012 Winston & Strawn LLP 4

5 The AIA: Part Litigation Reform No More Best Mode Codifies Joinder Rules Will Eliminate Interferences Broadens Prior Art Limits False Marking Cases Provides for Supplemental Examination Post-Issuance Challenges Precludes Jury from Considering Absence of Opinion 2012 Winston & Strawn LLP 5

6 Changes AIA Makes to Patent Litigation No More Best Mode Codifies Joinder Rules Will Eliminate Interferences Broadens Prior Art Limits False Marking Cases Provides for Supplemental Examination Post-Issuance Challenges Precludes Jury from Considering Absence of Opinion 2012 Winston & Strawn LLP 6

7 Introduction to New Post-Issuance Proceedings Inter partes review to replace inter partes reexamination Post-Grant Review Transitional Program for Covered Business Methods 2012 Winston & Strawn LLP 7

8 New Procedures Already Taking Effect Last day to file inter partes reexam: September 15, 2012 Inter partes review available September 16, Winston & Strawn LLP 8

9 New Procedures Coming Soon... Post-Grant Review Generally available for patents filed after March 16, Winston & Strawn LLP 9

10 New Trial Proceedings Inter partes review to replace inter partes reexamination Post-Grant Review Transitional Program for Covered Business Methods 2012 Winston & Strawn LLP 10

11 Inter Partes Review vs. Inter Partes Reexam Inter Partes Reexam Patents filed after Nov. 29, 1999 only Inter Partes Review Any patents* Program ends Sept. 15, 2012 Effective Sept. 16, 2012 Patents and printed publications only substantial new question changed to reasonable likelihood of prevailing on at least 1 claim No discovery No provision for settlement Estoppel after final decision Patents and printed publications only reasonable likelihood of prevailing on at least 1 claim Limited discovery Allows for settlement Estoppel after PTAB decision * Cannot file if sued more than 1 year before Sept. 16, 2012; if patent is subject to first-to-file, need to wait for 9 months 2012 Winston & Strawn LLP 11

12 Tougher Standard to Institute IPR Old Standard (Reexam) substantial new question of patentability New Standard (Inter Partes Reexam, IPR) reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition The new higher standard for post issuance review was created to make it even more difficult for these procedures to be used as tools for harassment. Sen. Patrick Leahy 157 Cong. Rec. S5428 (Sept. 8, 2011) 2012 Winston & Strawn LLP 12

13 New Trial Proceedings Inter partes review to replace inter partes reexamination Post-Grant Review Transitional Program for Covered Business Methods 2012 Winston & Strawn LLP 13

14 Post-Grant Review vs. Inter Partes Review Inter Partes Review Any patents* Filed at any time* Post-Grant Review Patents subject to first-to-file Only within 9 Months of issuance Effective September 16, 2012 Probably sometime after March 13, 2013 Patents and printed publications only Any Grounds for invalidity ( 101, 102, 103, 112, 251) reasonable likelihood of prevailing on at least 1 claim Discovery limited to deposition of declarant, or other discovery in the interest of justice Allows for settlement Estoppel after PTAB decision more likely than not at least 1 of the claims is unpatentable Discovery related to factual assertions Allows for settlement Estoppel after PTAB decision * Cannot file if sued more than 1 year before Sept. 16, 2012; if patent is subject to first-to-file, need to wait for 9 months 2012 Winston & Strawn LLP 14

15 New Trial Proceedings Inter partes review to replace inter partes reexamination Post-Grant Review Transitional Program for Covered Business Methods 2012 Winston & Strawn LLP 15

16 Covered Business Method Review vs. Inter Partes Review Inter Partes Review Covered Business Method Review Any patents* Filed at any time* Patents to methods, apparatus used in providing financial products or services Only if post-grant review unavailable; only if petitioner or privy charged with infringement Effective September 16, 2012 Effective September 16, 2012 Patents and printed publications only Any grounds for invalidity ( 101, 102, 103, 112, 251) reasonable likelihood standard more likely than not standard Discovery limited to deposition of declarant, or other discovery in the interest of justice Allows for settlement Estoppel after final decision Discovery related to factual assertions Allows for settlement Narrower Estoppel after PTAB decision -- Sunsets Sept. 16, 2020 * Cannot file if sued more than 1 year before Sept. 16, 2012; if patent is subject to first-to-file, need to wait for 9 months 2012 Winston & Strawn LLP 16

17 What s Covered by Covered Business Method Review? Sec. 18(d)(1): The term covered business method patent means a patent that claims a method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service, except that the term does not include patents for technological inventions. 37 C.F.R : Technological Invention. In determining whether a patent is for a technological invention solely for purposes of the Transitional Program for Covered Business Methods..., the following will be considered on a case-by-case basis: whether the claimed subject matter as a whole recites a technological feature that is novel and unobvious over the prior art; and solves a technical problem using a technical solution. See 77 Fed. Reg (Aug. 14, 2012) Winston & Strawn LLP 17

18 What s Covered by Covered Business Method Review? The definition of covered business methods was drafted to encompass patents claiming activities that are financial in nature, incidental to a financial activity or complementary to a financial activity. Sen. Charles Schumer Nothing in the America Invents Act limits use of section 18 to banks, insurance companies or other members of the financial services industry.... Rather, it applies to patents that can apply to financial products or services. 157 Cong. Rec. S5432 (Sept. 8, 2011) 2012 Winston & Strawn LLP 18

19 What s Covered by Covered Business Method Review? Final Rules Endorse a Broad View Not limited to patents in the financial services industry Not limited to patents in class 705 If any claim of the patent is directed to a covered business method, then the patent is eligible for review 2012 Winston & Strawn LLP 19

20 Debate Over CBM Review Prelude to Litigation Over Section 18? In Support of Bill Against Bill Tort reform to help cut back on the scourge of business method patents that have been plaguing American businesses Way to handle patents that issued following State Street, but should not have issued Provision is a rifleshot earmark and a giveaway to the banks Attempt to retroactively undo case already won by patentee providing second bite at the apple Unconstitutional taking reduces frivolous litigation over weak or overbroad patents... See, e.g., 157 Cong. Rec. S5410 (Sept. 8, 2011); 157 Cong. Rec. S5376 (Sept. 7, 2011); 157 Cong. Rec. H (Jun. 22, 2012) Winston & Strawn LLP 20

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22 Anatomy of a PTAB Trial 1. Scheduling 2. Preliminary Proceedings 3. Protective Orders 4. Discovery 5. Motions, Including Claim Amendments 6. Oral Argument 7. Final Decision 2012 Winston & Strawn LLP 22

23 Anatomy of a PTAB Trial: Scheduling 18 months discovery 3 mos. 1 year from suit 3 mos. 6 mos. extension (rare) 1 year 3 mos. patent owner s response decision on petition response to petition petition filed 2012 Winston & Strawn LLP 23

24 Anatomy of a PTAB Trial: Preliminary Proceedings The Petition: The AIA requires that a petition include: 1. Fee; 2. Identification of RPI; 3. Copies of patents and printed publications; 4. Supporting evidence; and 5. A written statement identifying a) challenged claims, b) grounds for the challenge, and c) supporting evidence. See 35 U.S.C. 312(a), 322(a). Patent Owner Preliminary Response : The AIA allows for the patent owner to file a preliminary response. See 35 U.S.C. 313, Winston & Strawn LLP 24

25 Anatomy of a PTAB Trial: Preliminary Proceedings New Rules for Petition: 1. Fee; 2. Grounds for standing to bring IPR; 3. Identification of challenged claim(s); 4. Claim Construction, and if means-plus-function, the corresponding structure; 5. Grounds for the challenge; and 6. Citation to exhibits (evidence). See 37 C.F.R , Winston & Strawn LLP 25

26 Anatomy of a PTAB Trial: Preliminary Proceedings New Rules for Optional Response: 1. Can indicate why no IPR, PGR should be instituted 2. Cannot amend claims 3. Cannot present new testimonial evidence, can present new documentary evidence 4. Can disclaim claims 5. Must be filed within 3 months of the petition See 37 C.F.R , Winston & Strawn LLP 26

27 Anatomy of a PTAB Trial: Protective Orders The Statute: PTO required to provide for protective orders governing handling of confidential information. See 35 U.S.C. 316(a)(7), 326(a)(7). The New Rules (Aug. 14, 2012): Parties are urged to agree on a protective order Absent agreement, default protective order will be entered Limits disclosure to certain individuals who sign acknowledgement Allows in-house counsel access Requires filing of redacted public versions of documents containing confidential and non-confidential information Experts must certify that they are not consultants for competitors of a party with respect to the subject matter of the proceeding 2012 Winston & Strawn LLP 27

28 Anatomy of a PTAB Trial: Discovery The Statute: PTO required to promulgate regulations governing discovery, including depositions, and sanctions for abuse of discovery. See 35 U.S.C. 316(a)(5), (6); 326(a)(5), (6). Different standards for discovery depending on whether trial is IPR or PGR IPR: Depositions of declarants and discovery otherwise necessary in the interests of justice. See 35 U.S.C. 316(a)(5). PGR: discovery... limited to evidence directly related to factual assertions advanced by either party in the proceeding 2012 Winston & Strawn LLP 28

29 Anatomy of a PTAB Trial: Discovery New 37 C.F.R : Routine discovery : exhibits cited cross-examination of declarants (direct testimony provided by declaration) relevant, non-privileged information inconsistent with a position advanced during the proceeding (extends to inventors, corporate officers, persons involved with the trial) All other discovery by agreement of the parties or by motion New 37 C.F.R : Detailed rules pertaining to the taking of testimony 2012 Winston & Strawn LLP 29

30 Anatomy of a PTAB Trial: Amendments Claim Amendments: PTO required to pass regulations allowing motions for claim amendments, cancellation, or substitution of a reasonable number of substitute claims. See 35 U.S.C. 316(a)(9), 326(a)(9). New Rules: Proposed amendments (1) must be made on motion; (2) must be made after conferring with the Board; (3) must not broaden the claims; and (4) must address the grounds of unpatentability. See 37 C.F.R , Reasonable number of substitute claims is presumptively 1 claim per cancelled claim. See 37 C.F.R (a)(3), (a)(3). Additional motions to amend must show good cause or be jointly requested to advance settlement. See 37 C.F.R (c), (c) Winston & Strawn LLP 30

31 Anatomy of a PTAB Trial: Oral Argument Oral Argument: AIA required PTO to establish rules providing either party with the right to an oral hearing as part of the proceeding. See 35 U.S.C. 316(a)(10); 326(a)(10). The New Rules: 37 C.F.R : Allows for oral argument Must be requested in writing in a separate paper and specify the issues to be argued Winston & Strawn LLP 31

32 Anatomy of a PTAB Trial: Final Decision and Appeal Final Decision: The AIA requires the PTAB to issue a written decision on the patentability of the challenged claims and any new claims. See 35 U.S.C. 318(a), 328(a). That decision is appealable to the Federal Circuit. See 35 U.S.C. 319, 329 (referring to 35 U.S.C ). Referred to in the rules as judgment and can be entered in a number of ways, including by cancellation of the challenged claims. Trials may be terminated in other ways too, including settlement without a judgment, or joinder with another proceeding Winston & Strawn LLP 32

33 How New Proceedings Impact Litigation 2012 Winston & Strawn LLP 33

34 Some Patents Become Ineligible for Inter Partes Proceedings for Certain Parties A patent subject to inter partes reexamination today may not be subject to inter partes review on September 16 th : Nov. 29, 1999 Pat. filing date If no litigation before Sept. 26, 2011 Served with complaint before Sept. 26, 2011 Inter partes reexam available (some patents) Pre-AIA Inter partes review available (all patents) IPR Unavailable to petitioner Post-AIA See 35 U.S.C. 315(b) (precluding IPR if the petition requesting the proceeding is filed more than 1 year after the date on which the petitioner... is served with a complaint ) Winston & Strawn LLP 34

35 Implications for Declaratory Judgment Strategies The AIA prohibits a DJ plaintiff seeking a declaration of invalidity from seeking IPR or PGR. See 35 U.S.C. 315(a)(1), 325(a)(1). Litigation automatically stayed if an IPR or PGR is filed concurrently or before DJ action challenging validity is filed. See 35 U.S.C. 315(a)(2), 325(a)(2). Accused infringer can t select both forums 2012 Winston & Strawn LLP 35

36 Implications for Declaratory Judgment Strategies But, what if... (1) Petitioner files DJ of noninfringement only (2) Waits for compulsory counterclaim of infringement (3) Asserts invalidity as a defense in response to compulsory counterclaim of infringement? Potential Litigation Strategy: Seems to keep the option of seeking IPR or PGR open while allowing accused infringer to chose forum for district court litigation Winston & Strawn LLP 36

37 Two Bites At Claim Construction Different claim construction standards apply in district court vs. the PTO PTAB must apply broadest reasonable interpretation Petitioner must present a claim construction (which may be responded to) in the petition. See 37 C.F.R (b)(3), (b)(3). An accused infringer can have two bites at claim construction 2012 Winston & Strawn LLP 37

38 Preliminary Injunction Considerations PGR may play role in preliminary injunction proceedings 35 U.S.C. 325(b): If suit filed within 3 months of patent issuing, court cannot stay if a motion for preliminary injunction is pending Therefore, if outside of 3 months of issuance, can court stay without considering PI motion? Impact on Procter & Gamble Co. v. Kraft Foods Global, Inc., 549 F.3d 842 (Fed. Cir. 2008) 2012 Winston & Strawn LLP 38

39 Preliminary Injunction Considerations Similarity in standards for preliminary injunction and PGR may result in PGR being filed to avoid PI Preliminary Injunction Standard Likelihood of success on the merits, including whether there is a substantial question of validity Standard for PGR more likely than not that at least 1 of the claims challenged... is unpatentable Kraft Foods requires courts to consider reexam Patent Owners may have more incentive to respond before decision on petition 2012 Winston & Strawn LLP 39

40 Estoppels Much earlier than inter partes reexamination Scope different for IPR, PGR, CBM Review Review IPR PGR CBM Review Scope of Estoppel - Issue was or could have been raised - Applies to petitioner, RPIs, and privies - Was or could have been raised - Applies to petitioner, RPIs, and privies -Was actually raised - Applies to petitioner, RPIs, not privies Potential issues with on again, off again estoppel in the event of appeals 2012 Winston & Strawn LLP 40

41 Can participation in a JDG Lead to Estoppel? Party A Party B Maybe Party A Party B Joint Defense Agreement 1 Joint Defense Agreement 2 PTO: Party A is not a real party in interest or privy for the purposes of the... petition solely on its participation in the JDG. See 77 Fed. Reg (Aug. 14, 2012). PTO: Participation in JDG is not irrelevant and deeper consideration of the facts of the particular case is necessary. Id Winston & Strawn LLP 41

42 Intervening Rights: Similar To Reexam Changes to claims or new claims may lead to changes in amount of damages (same as reexam) After Marine Polymer, not based on argument, claim must actually be amended Whether to risk estoppel and seek IPR or PGR may depend on strategic considerations, including potential for injunctive relief, strength of prior art, or other invalidity challenges 2012 Winston & Strawn LLP 42

43 Stays IPR, PGR, CBM stays of litigation for trials sought after litigation commenced remains discretionary CBM statute outlines traditional stay considerations, but allows for immediate interlocutory appeal of stay decision. See AIA, 18(b)(2). Speedy proceedings and faster estoppels may lead to more stays IPR, PGR, CBM review requires automatic stays if DJ action is filed after or concurrently with petition Winston & Strawn LLP 43

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45 2012 Winston & Strawn LLP Questions?

46 2012 Winston & Strawn LLP Thank You.