PTAB Trial Proceedings and Parallel Litigation: Impact, Strategy & Consequences

Transcription

1 Finnegan, Henderson, Farabow, Garrett & Dunner, LLP PTAB Trial Proceedings and Parallel Litigation: Impact, Strategy & Consequences 2015 National CLE Conference Friday, January 9, 2015 Presented by Denise W. DeFranco Recent PTAB statistics (Denise) Real parties, joint parties, and defense group dynamics (Scott) Pitfalls and opportunities (Scott) Amending at the PTAB or elsewhere (Scott) New rules and shifting perspectives (Scott) Choice of forum: PTAB v. District Court (Denise) Stay of litigation (Denise) Appeals from PTAB proceedings (Denise) QUESTIONS AGENDA 2 1

2 Claim Disposition % IPR Results by Claim % % Instituted Claims Cancelled by PTAB Instituted Claims Survived Instituted Claims Conceded by Owner % CBM Results by Claim % % Instituted Claims Cancelled by PTAB Instituted Claims Survived Instituted Claims Conceded by Owner Current as of January 1, 2015 Source: Finnegan Research 3 Case Disposition IPR Results by Case % % % No Instituted or Substitute Claims Survived At Least One Instituted Claim Survived Considered Substitute Claims Allowed Current as of January 1, 2015 Source: Finnegan Research 4 2

3 Claim Disposition Current as of January 1, 2015 Source: Finnegan Research 5 Timing Current as of January 1, 2015 Source: Finnegan Research 6 3

4 Claim Construction Current as of January 1, 2015 Source: Finnegan Research 7 Claim Construction Current as of January 1, 2015 Source: Finnegan Research 8 4

5 Claim Construction Current as of January 1, 2015 Source: Finnegan Research 9 Choosing a Forum: District Court vs. PTAB 10 5

6 Another Day at the Office Monday morning 9:30 a.m. and a package arrives 11 Correspondence from the United States you have just received a copy of a complaint that was filed in a court last Friday in the United States 12 6

7 The Complaint You are the alleged infringer of a U.S. Patent 13 Evaluate Options Stop allegedly infringing behavior Approach patent owner for a license Develop non-infringement defenses Develop invalidity defenses Consider countersuit: For patent infringement For unfair trade practices 14 7

8 Choose Forum for Invalidity Defenses Seek to Invalidate Patent in District Court Where Sued? Challenge Patent at U.S. Patent & Trademark Office 15 Overview of Relevant Considerations Availability of post-grant challenges Procedural advantages and disadvantages Cost comparison using case study Time to resolution Scope of discovery Other practical considerations 16 8

9 Availability of New Post-Grant Proceedings IPR PGR CBM What? Any patent Any patent issued from an application filed on or after March 16, 2013 Time Limits? Scope? Within 12 months of being sued for infringement Limited to patents and printed publications Within nine months of issuance Any invalidity ground under 35 USC 282 Any covered business method where petitioner charged with infringement Sunset after eight years (Sept. 16, 2020) Any invalidity ground under 35 USC Covered Business Method Covered Business Method 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 (not including technology inventions) 18 9

10 Procedural Advantages of USPTO ISSUE PGR/CBM/IPR DISTRICT COURT Burden of proof Preponderance of the Clear and convincing evidence evidence Claim construction Broadest reasonable construction Phillips: - intrinsic record (other claims, specification, prosecution history) - extrinsic evidence (experts; other prior art) Decision maker Patent Trial and Appeal Board (APJ s) - Dictionaries District court judge or jury 19 Procedural Disadvantages of USPTO ISSUE PGR/IPR/CBM DISTRICT COURT Estoppel Issues raised or could have been raised Amend claims Yes No Yes (no post-grant challenge if lose in district court) 20 10

11 PTO Fees For Post-Grant Proceedings Institution Fee Excess Claims Fee IPR $27,200 $600 per claim above 20 PGR $35,800 $800 per claim above Case Study for Three Patents in T-PGR PTO Initiation Fee PTO Excess Claims Fee Total Fees Patent 1 $35,800 $64,000 $99,800 (100 claims) Patent 2 $35,800 $48,000 $83,800 (80 claims) Patent 3 $35,800 $0 $35,800 (20 claims) Total $107,400 $112,000 $219,400 Exemplary Legal Fees for T-PGR: $300K-700K Compare $3-5MM+ for litigation vs. $500K-$1MM in T-PGR Potential $ K reduction in litigation costs based on T-PGR work that won t be repeated in litigation due to estoppel 22 11

12 Time to Resolution PROCEEDING IPR/PGR/CBM District Court (very quick) District Court (typical) TIME TO RESOLUTION About 18 months 20 months 2-3 years 23 District Court v. PTO District Court PTO 24 12

13 Other Patents Considerations Which defense is stronger, non-infringement or invalidity? Are you practicing the prior art such than any claim amendment would give rise to new non-infringement defense? Conversely, would you still infringe even if the patent were amended to overcome the prior art? Is a litigation stay available in district court? Would claim construction issues benefit from early appeal to U.S. Court of Appeals for the Federal Circuit? How many patents are asserted in litigation? 25 Stays of Litigation 26 13

14 IPR Stays in Related Litigation Stays in litigation with IPR Automatic stay if Petitioner files DJ action on or after filing petition, unless: Patent owner asks court to lift stay, Patent owner files civil action or counterclaim for infringement, or Petitioner asks to dismiss civil action. 35 U.S.C. 315(b). A counterclaim of invalidity does not trigger an automatic stay. 35 USC 315(a). 27 CBM PGR Stays in Related Litigation Stays in litigation with CBM/PGR (AIA section 18(b)) Court shall consider: Whether stay will simplify issues and streamline trial Whether discovery is complete and trial date is set Whether stay will unduly prejudice non-moving party Whether stay will reduce the burden of litigation Immediate interlocutory appeal Federal Circuit reviews de novo Discretion of district court 28 14

15 Statistics for Stays of Litigation Post-AIA Motions to Stay Pending IPR, PGR, SE, or CBM 2012 (from 9/16) (YTD) Total Granted Denied Other Total Success rate 50.0% 62.6% 47.4% 54.8% Source: Docket Navigator (July 8, 2014) 29 AIA Post-Grant Proceedings: The Coming Tsunami of Appeals 30 15

16 Tsunami of PTAB Appeals? As of Nov. 27, 2014: 2,122 inter partes review (IPR) petitions 262 covered business method review (CBM) petitions 3 post-grant review (PGR) petitions PTAB instituting at high rate and holding claims unpatentable at high rate 31 Tsunami of PTAB Appeals? 32 16

17 Sources of PTAB Appeals IPR, CBM and PGR appeals under 35 U.S.C. 141: A party to an inter partes review or a post-grant review who is dissatisfied with the final written decision of the Patent Trial and Appeal Board under section 318 (a) or 328 (a) (as the case may be) may appeal the Board s decision only to the United States Court of Appeals for the Federal Circuit. Interlocutory appeals of CBM stay denials under AIA 18 Mandamus? 33 Commencing a PTAB Appeal Must file a timely Notice of Appeal: [n]o later than sixty-three (63) days after the date of the final Board decision. 37 CFR 90.3(a). [m]ust be filed with the Director, 37 CFR 90.2(a), with copy of notice to PTAB, 37 CFR 90.2(a), and three copies to Federal Circuit clerk, Fed. Cir. R. 15(a)(1) Must provide sufficient information to allow the Director to determine whether to intervene. 37 CFR 90.2(a)(3)(ii). Cross-appeals: Within 14 days of the Notice of Appeal. FRAP 4(a)(3)

18 First Rulings: Appeal of Institution Denials Appeal of institution denials: After PTAB refused institution and party appealed directly to CAFC, Federal Circuit held that institution decision could not be appealed because of Section 314(d) s broadly worded bar on appeal. St. Jude v. Volcano, 749 F.3d 1373, 1376 (Fed. Cir. 2014). Court noted that Section 314(d) may well preclude all review [of a noninstitution decision] by any route, but it need not decide that issue here. Id. See also Zoll v. Phillips, 2014 WL (Fed. Cir. Aug 25, 2014). 35 First Rulings: Mandamus Mandamus petition relating to institution: PTAB refused to institute IPR proceedings on five patents Federal Circuit found that Petitioner had no clear and indisputable right to challenge a non-institution decision directly in this court, including by way of mandamus. In re Dominion Dealer Solutions, 749 F.3d 1379, 1381 (Fed. Cir. 2014)

19 Strategic Tips: Make a Record Make a record Introduce facts into the record to support theme: Expert declarations Factual declarations Discussion of prior art references Preserve legal arguments for appeal Take advantage of opportunities to object to evidence Take advantage of opportunities to comment on evidence 37 Strategic Tips: Preserve Issues for Appeal Preserve Arguments: Object to evidence as introduced Make substantive objections during depositions (801, 802, 803) Motion to exclude evidence Observations on testimony Request for rehearing Respond at every opportunity to set forth your positions 38 19

20 Practitioners Guide to PTAB Trials The Practitioner's Guide to Trials Before the Patent Trial and Appeal Board is a focused desk reference with checklists, charts, and practice tips. Practice-focused sections include: A quick reference for PTAB statutes and rules Building patent trials into your litigation strategy A detailed description of a PTAB trial from petition preparation to appeals to the U.S. Court of Appeals for the Federal Circuit Publisher: The ABA Section of Intellectual Property Law 39 Finnegan s AIA Blog ABOUT THIS BLOG AIABlog.com is a resource of Finnegan providing news and information about U.S. patent practice under the America Invents Act (AIA)

21 Questions? 41 Speaker Information Denise W. DeFranco has been representing companies in patent infringement litigation in both trial and appellate courts for more than two decades. She has successfully litigated cases involving a broad range of technologies, including biotechnology, medical devices, pharmaceuticals, telecommunications, electronics, and software. Denise is currently serving on the Council of the ABA Intellectual Property Law Section and as the President-Elect of AIPLA, on the ladder to become President in October Denise W. DeFranco Finnegan, Henderson, Farabow, Garrett & Dunner, LLP Two Seaport Lane Boston, MA Fax denise.defranco@finnegan.com 42 21

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