Sughrue Mion, PLLC Washington, Tokyo, San Diego, Silicon Valley 7/2/2012

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1 Sughrue Mion, PLLC Washington, Tokyo, San Diego, Silicon Valley This presentation is for educational purposes only, and it does not provide legal advice or comment on the application of US law or regulations to any specific patent, application or legal dispute. The views expressed herein are not necessarily those of Sughrue Mion, PLLC or any of its clients. Ken Burchfiel 1

2 STRATEGIC USE OF POST- GRANT OPPOSITIONS IN U.S. PATENT LITIGATION GRUR, München, den Ken Burchfiel George Lehnigk Raja Saliba Sughrue Mion, PLLC 2011 Act Post-Grant Proceedings PUB GRANT 9 PGR initiated PGR decision Interf. decision IPR initiated IPR decision Decision Interference Derivation Post-grant review Inter partes Review Ex parte Reexamination Supplemental Examination Business method review Protest solid line requester action; dashed line action. All periods are approximate. 2

3 Inter Partes PTO Proceedings New inter partes proceedings for challenging patents: Inter partes review Post-grant review Administrative litigation in Limited to issues of validity Independent of US district court infringement actions Inter Partes PTO Proceedings Inter partes review: Based only on published prior art Lack of novelty or obviousness Filed 9 months or more after patent issues must be filed within 1 year of patent infringement litigation commencement Final validity decision within 1 year 3

4 Inter Partes PTO Proceedings Post-grant review: Based on any ground of unpatentability Lack of novelty or obviousness On sale or publicly known -- anywhere Lack of written description or enablement Nonstatutory subject matter Filed within 9 months of patent issuance Final validity decision within 1 year Critical Issues Estoppel against raising certain defenses in litigation Settlement Intervening rights limit past infringement damages 4

5 Estoppel If there is a final written decision by the with respect to a claim, the petitioner May not assert a defense in district court litigation that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes proceeding Settlement Settlement: Terminates opposition without trial no estoppel Leverage Licensing 5

6 Intervening Rights Any amended or new claim that is incorporated into a patent is subject to intervening rights of any person liable for infringement of anything patented by the new claim Damages for past infringement are eliminated (if no original claim is infringed) even if the new claim is infringed Benefits to Patent Challengers Post-grant oppositions will provide: A parallel path in patent litigation-- Validity issues decided in Infringement issues decided in court limiting scope of discovery limiting litigation expenses 6

7 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE OPPOSITION INITIATED 1 YEAR 7

8 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE OPPOSITION INITIATED STAY OF LITIGATION? FEDERAL CIRCUIT 1 YEAR 2 YEARS 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE DENIAL OF PRELIMINARY INJUNCTION? OPPOSITION INITIATED STAY OF LITIGATION? 1 YEAR 2 YEARS 8

9 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE VALID LIMITED DISCOVERY TRIAL OF ONLY OPPOSITION INITIATED 1 YEAR 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE OPPOSITION INITIATED VALID INVALID LIMITED DISCOVERY NO TRIAL TRIAL OF ONLY 1 YEAR 9

10 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE VALID LIMITED DISCOVERY TRIAL OF ONLY OPPOSITION INITIATED 1 YEAR INVALID AMENDED NO TRIAL LIMITED DISCOVERY TRIAL, NO PAST DAMAGES US Patent Litigation Is a divided trial strategy advantageous? Early validity decision in and immediate appeal to Federal Circuit Reduced burden of proof for invalidity in oppositions Reduced litigation costs without pretrial discovery Defenses that will be estopped 10

11 Strategic Use of Review Lower invalidity standard than district court: lower burden of proof for invalidity broader claim construction for invalidity no claim construction hearing Invalidity Defenses 2010 DISTRICT COURT 2010 VALIDITY S 102/103 publications (IPR) Other statutory bases (PGR) Total statutory Inequitable Conduct Patentee wins 63% 56% 60% 78% Defendant wins 37% 43% 40% 22% 11

12 Inter partes Reexamination Results TOTAL NUMBER OF REQUESTS All claims confirmed All claims canceled Claims amended Number of patents in litigitaion Percent of requests granted Number of cases decided 86 71% 95% 278 RESULT 13% 44% 43% Infringement Decisions 2010 DISTRICT COURT S 2010 Literal infringement Doctrine of equivalents Induced or contributory infringement Total Patentee wins 30% 13% 43% 29% Defendant wins 70% 87% 57% 71%

13 Inter Partes Attorney Fees Petition preparation: $46,000 Expert witness affidavits Patent owner's response: $34,000 Trial: $193,000 Inter partes action: s, oppositions, replies Expert witness depositions Post-Grant Attorney Fees Petition preparation: $61,000 Expert witness affidavits Fact witness affidavits Patent owner's response: $34,000 Trial: $242,000 Inter partes action: s, oppositions, replies Witness depositions 13

14 Patent Litigation Costs 2011 Strategic Use of Review Basic questions: can invalidity be easily cured in review? are past damages significant? is designing around possible? is a preliminary injunction a concern? will estoppel limit critical defenses? are there non-prior art defenses? is settlement a possibility? 14

15 POST-GRANT TRIAL PROCEDURE Inter Partes PTO Proceedings Different from current inter partes reexamination Administrative litigation with Trial conducted by an APJ Active management by APJ s practice Discovery Depositions 15

16 2-Track Patent Litigation 1 YEAR 2 YEARS 3 YEARS US COURT ACTION PRETRIAL DISCOVERY TRIAL OF VALIDITY BY JUDGE OPPOSITION INITIATED 1 YEAR Simple Inter Partes Review Petition > 9 months after issuance 0 Initial response Initiation 2 months 5 months Owner s response 9 months Opposer s response 11 months REPLY Owner s reply months Hearing Board final decision 14 months? 17 months 16

17 Simple Inter Partes Review Petition s Initial response Initiation Owner s response opposer s reply? scheduling conference initial motions 6 Opposer s response motion - supplement evidence REPLY Owner s reply? Hearing Board final decision parties submit evidence Simple Inter Partes Review s U.S. Patent A EXPERT A Opposer relies on a single reference claims lack novelty submits expert declaration documentary evidence 6 Patent owner s initial response argues against institution 7 REPLY

18 Simple Inter Partes Review U.S. Patent A s REPLY EXPERT A EXPERT B After institution-- parties present motions patent owner cross-examines Expert A moves to substitute one amended claim submits Expert B s declaration on nonobviousness 8 10 Simple Inter Partes Review U.S. Patent A s REPLY EXPERT A EXPERT B U.S. Patent B EXPERT C Supp Response Opposer responds: cross-examines Expert B submits response and motion: additional reference second declaration on obviousness of new claim Patent owner replies: cross-examines expert moves to present supplemental response 18

19 Simple Inter Partes Review U.S. Patent A EXPERT A 0 1 s REPLY EXPERT B U.S. Patent B EXPERT C Supp Response Parties submit evidence: documents deposition transcripts/dvds Parties submit objections to evidence: deposition conduct admissibility Parties request oral hearing Simple Inter Partes Review U.S. Patent A EXPERT A 0 1 s REPLY EXPERT B U.S. Patent B EXPERT C Supp Response Oral hearing by PTAB three-apj panel parties arguments based on record, DVD testimony witnesses? Final decision direct appeal to Federal Circuit 19

20 Simple Post-Grant Review U.S. Patent A PRIOR PUBLIC USE EXPERT A FACT s REPLY EXPERT B U.S. Patent B EXPERT C Supp Response FACT DISCOVERY Opposer also relies on prior public use in Italy Owner response after initiation: cross examines witnesses moves for additional discovery on factual basis of public use documents are produced additional witness depositions Complex Post-Grant Review U.S. Patent A NON- ENABLEMENT EXPERT A EXPERT D s EXPERT B U.S. Patent B Second opposer raises nonenablement of patent claims Relies on an expert declaration EXPERT C 7 REPLY Supp Response

21 Complex Post-Grant Review U.S. Patent A NON- ENABLEMENT s EXPERT A EXPERT B U.S. Patent B EXPERT D EXPERT E EXPERT C s EXPERT C REPLY Supp Response Supp Reply Supplemental response Complex Post-Grant Review s U.S. Patent A EXPERT A EXPERT B U.S. Patent B EXPERT C s to consolidate s for discovery and crossexamination s for response to amendments NON- ENABLEMENT EXPERT D EXPERT E EXPERT C s REPLY Supp Response Supp Reply Supplemental response 21

22 Combined Oppositions s to consolidate s to sever s for response to amendments s for discovery and crossexamination s for response to amendments s for discovery and crossexamination s to consolidate s to sever BENEFIT- Post-Grant Review 22

23 Resources LinkedIn group: Opposition Practice Links to interpretations, comments and implementation: Vielen Dank! Ken Burchfiel Sughrue Mion, PLLC 23