AIA: How U.S. PTO Proceedings. are Changing Patent Litigation. Post-Grant Review Under the. Practice. David Hoffman. James Babineau.

Transcription

1 December 11, 2014 Post-Grant Review Under the AIA: How U.S. PTO Proceedings are Changing Patent Litigation Practice Matthew Wernli David Hoffman James Babineau

2 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 2

3 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 3

4 PTAB Proceedings - Comparison Proceeding When Does It Apply? Legal standard Grounds (Prior Art) Estoppel? Federal District Court PGR: Postgrant review IPR: Inter partes review (after PGR) CBM: Covered Business Method After claim of infringement Clear and convincing First available on Sept. 16, 2012 Applies only to post AIA claims PTO can initially limit (e.g., 250/year) -9 month window after issuance First available on Sept. 16, 2012 Applies to all patents PTO can initially limit (e.g., 250/year) First available on Sept. 16, 2012 Applies to all patents related to financial services but excludes technological inventions Petitioner sued or charged with infringement More likely than not that at least 1 claim is unpatentable Reasonable likelihood that petitioner would prevail on at least 1 claim More likely than not that at least 1 claim is unpatentable Any invalidity ground Common law estoppel Any invalidity ground Raised or reasonably could have raised Patents Published patent apps Printed publications Raised or reasonably could have raised Any invalidity ground Raised (USPTO and Civil) or reasonably could have raised (USPTO) 4

5 IPR Trial Proceedings 5

6 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 6

7 Courtroom / Litigation Skills Needed Discovery Issues Live Witness Testimony Preserving Issues for Appeal Prosecution Bars / Protective Orders Familiarity with Pending Litigation Adversarial Case Tenor Live Hearing 7

8 Patent Office Skills Needed Lead Counsel Must be USPTO-Licensed Familiarity with PTO/PTAB Procedures Claim Construction Standards Fluency in Technology PTAB Panel v. Jury Persuasion 8

9 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 9

10 Estoppel What happens to the loser of a PTAB Proceeding? Petitioner Estoppel: IPR: Estopped from asserting any ground raised or reasonably could have been raised CBM: Estopped from asserting only grounds actually raised Patent Owner Estoppel: Loses rights going forward and cannot pursue additional indistinct rights Prosecution history estoppel 10

11 PTAB Institution Discretion PTAB Institution Discretion to deny petition: Prevent a second bite at the apple Require a new challenge Control the number of proceedings Subsequent IPRs dismissed if: Cumulative Petitioner was involved in earlier adversarial PTO proceedings Seeking to correct deficiencies in earlier filing 11

12 Petitioner Estoppel To whom does estoppel apply? The petitioner, or the real party in interest or privy of the petitioner To which claims is estoppel applied? Estoppel applies on a claim-by-claim basis or does it? Reasonably could have raised How far does it extend? 12

13 Estoppel and Finality District Court: Scenario 1 PTAB final written decision (FWD) rendered during discovery USPTO 6 Months No More Than 12 Months District Court 13

14 Estoppel and Finality District Court: Scenario 2 PTAB decides (FWD) after discovery closes, but before trial USPTO 6 Months No More Than 12 Months District Court 14

15 Estoppel and Finality District Court: Scenario 3 PTAB decides (FWD) during/after trial USPTO 6 Months No More Than 12 Months District Court 15

16 Estoppel and Finality District Court: Scenario 4 District Court case has progressed to the CAFC USPTO 6 Months No More Than 12 Months District Court 16

17 Finality in Summary When does PTAB decision trump district court? Race to Finality PTAB proceeding becomes final first the USPTO issues a certificate cancelling all claims in an infringement action, the cause of action vanishes and the infringement action must be dismissed District court decision becomes final first any PTAB win cannot upset a verdict of infringement or past damages resulting from the verdict What do we mean by final? Exhausted all appeals expiration of time for filing a writ of cert with the Supreme Court or denial of the same 17

18 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 18

19 Stay of Litigations In typical case of infringement suit followed by an IPR request District Judge has discretion whether to stay so far, over 90% of IPRs to date involve related litigation Because IPR is faster than IPRx, stay is more likely AIA encourages a stay of District Court case pending a CBM Review Are they being stayed? Yes, at a rate of about 77% through October. Timing when to file your motion to stay to increase chances of success? 19

20 Stays and Estoppel How does my estoppel impact my stayed litigation? If there is a stay, the answer is deceivingly simple in appearance: A PTAB decision finding patentability of claims yields a lift in the stay while precluding assertion of invalidity grounds implicated by the estoppel But the Fed Cir may reverse the PTAB, and kill the patent or The Fed Cir may remand to the PTAB 20

21 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 21

22 Timing an IPR Filing Statutory Deadline: one year of start of litigation Strategic Considerations Race to Finality Likelihood of Stay Discovery Interaction of Multiple IPRs 22

23 Prompting Settlement Before Litigation As a Litigation Defendant During 3 rd Party Litigation 23

24 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 24

25 Statistics (Technology Breakdown) USPTO, December 4,

26 IPR Statistics IPR s Filed? 2144 filed through December 4, filed in November 2014 Application of Threshold: Reasonable Likelihood of Success IPR continues to be instituted in most petitions evaluated (76% in 2014 v. 87% in 2013) In many cases, however, IPR was ordered on only a subset of the grounds requested 26

27 CBM Statistics CBM s Filed? 262 filed through December 4, filed in November 2014 Application of Threshold: More Likely Than Not CBM also instituted in vast majority of Petitions evaluated (72% for 2014 v. 82% for 2013) Here too, CBM is often ordered on only a subset of petitioned grounds and/or claims 27

28 FWD s Statistics FWD s on the Merits Issued IPR: 130 through December 4, 2014 CBM: 13 through December 4, 2014 Most have found all challenged claims unpatentable almost 75% canceled in FWD One motion to amend claims granted to date 28

29 Statistics In 2013, the PTAB was the 3 rd most active forum for US patent validity challenges In 2014, the PTAB is trending 2 nd 29

30 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 30

31 Appeals from PTAB Proceedings Federal Circuit appeals from the PTO have increased 7% in 2014 over 2013 Historically, appeals from PTO decisions have a low (<15% per year) reversal rate The latest wave (mid-2013 to now) of PTO appeals hold some interesting issues. 31

32 Appeals from PTAB Proceedings Can institution decisions be directly appealed/challenged at all? Is mandamus available for anything? What is the appropriate claim construction standard in PTAB proceedings? How does Chenery apply to alternative affirmance grounds? 32

33 What we think Can institution decisions be directly appealed/challenged at all? Is mandamus available for anything? Federal Circuit may use 35 USC 314 to refuse to take appeals/challenges Mandamus is rare at Federal Circuit and so far continues to be 33

34 What we think What is the appropriate claim construction standard in PTAB proceedings? Is it broadest reasonable interpretation? Currently at least three appeals on this issue to be decided by Federal Circuit 34

35 What we think How does Chenery apply to alternative affirmance grounds? The strictness with which Chenery is applied will be panel dependent The Federal Circuit is more likely to consider alternative bases for affirmance when they present pure legal issues and do not require fact-finding Rule 36 summary affirmances permit the Court to sub silento affirm on a basis that is not exactly the same as the PTAB s decision. 35

36 Post-Grant Review Under the AIA Agenda I. Brief Review of PTAB Proceedings II. PTAB Proceedings who should be on the team? III. Estoppel Effects of PTAB Proceedings in District Court IV. Stays in District Court Based on PTAB Proceedings V. PTAB Proceedings to Prompt Settlement VI. Statistics Is the PTAB a Death Squad for Patents? VII. Issues on Appeal VIII. Resources 36

37 Post-Grant Review Under the AIA Resources F&R web sites: Post-Grant for Practitioners: General: IPR: PGR: Rules governing post-grant: USPTO sites: AIA Main: Inter Partes: 37

38 Post-Grant Review Under the AIA Questions? 38

39 Thank You! Matthew K. Wernli Principal, Austin James W. Babineau Principal, Austin David Hoffman Principal, Austin

40 Copyright 2014 Fish & Richardson P.C. These materials may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice. The material contained in this presentation has been gathered by the lawyers at Fish & Richardson P.C. for informational purposes only, is not intended to be legal advice and does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel. Unsolicited s and information sent to Fish & Richardson P.C. will not be considered confidential and do not create an attorney-client relationship with Fish & Richardson P.C. or any of our attorneys. Furthermore, these communications and materials may be disclosed to others and may not receive a response. If you are not already a client of Fish & Richardson P.C., do not include any confidential information in this message. For more information about Fish & Richardson P.C. and our practices, please visit 40

41 The enactment of the America Invents Act (AIA) on September 16, 2012, provided a number of new post-grant tools to challenge patent validity. These proceedings have become an important part of litigation strategy, and in some instances are helping to reduce the time and cost associated with patent litigation. Post-grant proceedings, often referred to as patent office litigation, involve trials before the Patent Trial and Appeal board (PTAB) governed by USPTO rules. As such, these proceedings sit squarely at the intersection of Fish & Richardson s #1 ranked patent litigation and #1 ranked patent prosecution practices. The firm s expertise in patent reexamination prior to AIA, and in patent prosecution filing more than 5,000 patents in 2013 allows us to capitalize on our detailed knowledge and understanding of the USPTO. In addition, the firm s extensive patent litigation experience ranked as the most active patent litigation firm for 10 consecutive years positions us to maximize the use of litigation tools made available through post-grant proceedings, and to leverage the use of these proceedings in litigation strategy. Fish is currently the most active firm in post-grant proceedings by a large margin, representing clients across a wide range of industries as petitioner and patent owner. Fish is currently the most active firm in post-grant proceedings by a large margin, representing clients across a wide range of industries as petitioner and patent owner. For practitioners and those looking to learn more about post-grant proceedings, our team provides a number of practical tools through our dedicated website, fishpostgrant.com, including: Monthly webinars covering post-grant topics, including recent decisions, lessons learned, practice tips, and trends Detailed case summaries and decisions, including articles published by members of our post-grant practice A frequently updated listing of district court orders related to motions to stay filed based on pending post-grant proceedings. For more information, please contact your Fish & Richardson attorney or visit fishpostgrant.com.

42 Post-Grant Practice Resources Fish & Richardson has produced a variety of resources for post-grant practitioners. Dedicated post-grant website: Details on each proceeding, including procedural timelines Case summaries, news alerts, commentary, and other articles of note Frequently updated listing of stays related to post-grant proceedings Post-Grant for Practitioners Webinar Series: Monthly webinar series focusing on post-grant issues of interest to practitioners Audio and video replays available on fishpostgrant.com, and through the post-grant app Post-Grant App for Smartphones: Download from fishpostgrant.com/app Available for iphone and Android devices Pushes frequently updated content from fishpostgrant.com to your mobile device Audio and video replay of post-grant webinars Atlanta Austin Boston Dallas Delaware Houston Munich New York Silicon Valley Southern California Twin Cities Washington, DC Fish & Richardson is a global patent, and intellectual property (IP) litigation, and commercial litigation law firm with more than 400 attorneys and technology specialists across the U.S. and Europe. Fish has been named the #1 patent litigation firm in the U.S. for 10 consecutive years. Fish has been winning cases worth billions in controversy often by making new law for the most innovative clients and influential industry leaders since For more information, visit These materials may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice. The material contained in this brochure has been gathered by the lawyers at Fish & Richardson P.C. for informational purposes only and is not intended to be legal advice. Transmission is not intended to create and receipt does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel. fr.com :: fishpostgrant.com

43 Firm Overview Fish & Richardson is an international law firm dedicated to intellectual property, litigation, and technology law. Founded in 1878, the firm has represented some of the greatest inventors of all time, including Alexander Graham Bell, Thomas Edison, and the Wright brothers. Recognized as a world leader in intellectual property, the firm has 11 offices in the United States and one in Germany. The breadth and depth of Fish s expertise set it apart from both general practice firms and IP boutique practices. With a superior reputation for consistent, high-quality work in all its practice areas, Fish serves the needs of diverse clients ranging from start-ups to multinational corporations to world-renowned academic and research institutions. Our team includes over 400 attorneys and technology specialists, over 70 of whom have PhDs across a broad spectrum of industries and technologies, and we have legal staff trained in virtually every technical field. Litigation Fish is widely recognized as having the premier patent litigation practice in the world, with a proven record of successfully handling hightech, high-stakes matters. Since 2004, Corporate Counsel has ranked Fish as the most active patent litigation firm in the U.S. Because of our unmatched volume of patent litigation experience and significant record of success, we have deep institutional knowledge and insight into translating the language of patents and FDA applications into a language people can understand, as demonstrated by our robust Hatch-Waxman practice. In addition to our global intellectual property litigation practice, we have a broad and multifaceted commercial litigation practice. The diverse group of experienced attorneys who make up our commercial litigation team provides comprehensive business and legal counsel to companies on complicated matters, including breach of contract, deceptive trade practices, common law conversion, tortious interference, unfair competition, civil conspiracy, defamation, employment law matters, white-collar defense, and government investigations. Fish also has an impressive team of appellate attorneys who have the highest technical and legal qualifications; this team includes more than 30 former Federal Circuit clerks. Fish brings a multidisciplinary approach to International Trade Commission proceedings, possessing an exceptional mix of knowledge of U.S. patent law, litigation, and the ITC s unique rules and procedures. Fish tops the list of ITC law firms and was recently named International Trade Group of the Year by Law360 and ITC Litigation Firm of the Year by Managing Intellectual Property.

44 Named the #1 Patent Litigation Firm for 10 Years Corporate Counsel, IP Litigation Law Firm of the Year U.S. News and Best Lawyers, 2014 IP Litigation Department of the Year Finalist The American Lawyer, 2014 IP Group of the Year Law360, 2013 Go-To Intellectual Property Law Firm for Top Fortune 500 Companies Corporate Counsel, Named to Intellectual Property Hot List The National Law Journal, 2013 fr.com Patents Consistently ranked as the leading patent firm in the United States, we pride ourselves on providing highly specialized patent counseling that maximizes the value of our clients IP. The depth and breadth of technological backgrounds within the firm ensure that clients matters are handled by attorneys with specific, applicable technology experience. In fact, many attorneys hold PhDs or other advanced degrees relevant to the industries they serve, and many previously worked in-house or as patent examiners at the USPTO. Patent Totals 2013 U.S. Foreign Filed 5,019 3,270 Issued 3,102 1,881 To ensure efficiency and minimize clients costs, we use a number of industry-leading technology tools. We provide client extranets that allow clients to check matter status in real time and generate personalized reports, we take advantage of electronic filing and correspondence with the USPTO, and we leverage centralized docketing. Beyond patent prosecution, we regularly provide opinions and strategic counseling, portfolio management, and EU opposition proceedings, and we engage in IP due diligence and licensing transactions. Post-Grant Proceedings Successfully challenging patent validity at the USPTO requires a rare combination of patent prosecution and litigation skills and a team adept at working closely together across practice areas. Fish s post-grant practice is co-chaired by members of our award-winning patent prosecution and patent litigation practices, which enables us to apply the lessons we learn and skills we acquire in the courtroom to proceedings at the USPTO. This unique position has led to Fish s becoming one of the most active firms in handling post-grant proceedings. Trademarks With our practical, business-oriented approach to managing large, international trademark portfolios, we are a firm of choice for global brand protection. Our clients own some of the most recognizable trademarks in the world and turn to us to enforce and protect their corporate names, logos, and products. Fish s experience includes trademark counseling, prosecution, and clearance work as well as complex enforcement and litigation. Our connections with foreign trademark counsel and our Munich office allow us to furnish a comprehensive package of trademark services for virtually any jurisdiction in the world while offering clients the benefit of one single point of contact. Regulatory Trademark Totals 2013 U.S. Foreign Filed Issued Based in Fish s Washington, DC, office, the professionals in our multidisciplinary regulatory and government affairs group help clients successfully navigate a labyrinth of domestic and foreign regulations, enabling them to limit potential exposure to liability, deftly manage crisis situations, and maximize business opportunities. For more than 130 years, Fish has served great innovators protecting and defending big ideas and helping clients build successful businesses on the foundation of creative ingenuity. Today, the firm continues with this mission. In all our offices, our team of legal professionals has the experience, vision, and commitment to help clients not only succeed today but also become the legends of tomorrow. Atlanta Austin Boston Dallas Delaware Houston Munich New York Silicon Valley Southern California Twin Cities Washington, DC Fish & Richardson is a global commercial litigation, patent, and intellectual property (IP) litigation law firm with more than 400 attorneys and technology specialists across the U.S. and Europe. Fish has been named the #1 patent litigation firm in the U.S. for 10 consecutive years. Fish has been winning cases worth billions in controversy often by making new law for the most innovative clients and influential industry leaders since For more information, visit These materials may be considered advertising for legal services under the laws and rules of professional conduct of the jurisdictions in which we practice. The material contained in this brochure has been gathered by the lawyers at Fish & Richardson P.C. for informational purposes only and is not intended to be legal advice. Transmission is not intended to create and receipt does not establish an attorney-client relationship. Legal advice of any nature should be sought from legal counsel Fish & Richardson P.C. All Rights Reserved. Document No. FRFO-0100