Post Grant Review. Strategy. Nathan Frederick Director, IP Services

Transcription

1 Post Grant Review Strategy Nathan Frederick Director, IP Services Cardinal Intellectual Property 1603 Orrington Avenue, 20th Floor Evanston, IL Phone: Fax:

2 Outline History & benefits of post-grant proceedings Description of IPR, CBM, & PGR Comparison of IPR, CBM, & PGR Choosing IPR, CBM, & PGR PGR explored Post grant challenge plan Questions 2

3 History & Benefits of Post-Grant Proceedings On September 16, 2012 the America Invents Act (AIA) added three post-grant challenges: Inter Partes Review Covered Business Method Review Post Grant Review The post-grant challenges were an effort by Congress to serve as an effective and efficient alternative to district court litigation. 3

4 History & Benefits of Post-Grant Proceedings Benefits include: Presumption of validity does not exist: Unlike in district court, patents are not assumed to be valid at the Patent Trial and Appeal Board ("PTAB"). See 35 U.S.C. 282 ("[a] patent shall be presumed valid"). In IPR, patentability of the claims is being challenged, rather than validity. Estoppel is potentially limited. Only patents or publication prior art may be raised in IPR proceedings, and therefore a petitioner can only be estopped from arguing invalidity on those bases. A defendant could still raise other bases for invalidity in district court, such as nonpatentable subject matter, statutory bars triggered by public use or sale, or lack of sufficient written description and enablement. 4

5 History & Benefits of Post-Grant Proceedings Benefits include: Timing is usually faster. Approximate time to trial in district court is 2.5 years. In comparison, IPR trials are instituted within six months after petition is filed, and the PTAB must come to a final determination within one year of institution. Cost savings. The median cost of PTAB proceedings from filing the petition through an appeal is $350,000. The median cost for patent litigation depends on the amount at risk, but even in cases where there is less than $1 million at risk, the median cost just through discovery is $400,000. If there is more than $25 million at risk, then the median costs through a trial is $5 million, 10 times the cost of a PTAB proceeding. Technical expertise. Unlike district court judges, the PTAB is staffed with patent attorneys with technical backgrounds. 5 Source: Vermont, Samson. AIPLA Survey of Costs of Patent Litigation and Inter Partes Review. PatentAttorney.com, Jan. 30,

6 History & Benefits of Post-Grant Proceedings Number of AIA Petitions Filed Each Year by Trial Type Source: Patent Trial and Appeal Board Statistics, USPTO (Jul. 31, 2017), 6

7 Inter Partes Review (IPR) Most common post-grant proceeding Reviews patentability of claims under 102 or 103 Novelty Obviousness Prior art must consist of patents or printed publications Review may be instituted upon a showing that there is a reasonable likelihood that petitioner would prevail with respect to at least one claim. 7

8 Inter Partes Review (IPR) Timeline IPR begins when a third party files a petition after the later of either - 9 months after the grant of the patent or issuance of a reissue patent or - If post-grant review is instituted, the termination of post-grant review - These deadlines to not apply to first-to-invent patents If proceeding is instituted, a final determination by the Patent Trial and Appeal Board will be issued within 1 year (extendable for good cause by 6 months). Burden is preponderance of the evidence rather than clear and convincing. 8

9 Current Trends in IPR Proceedings Data from the USPTO indicates that the PTAB has become more conservative in instituting IPR proceedings. Petitioners could be bringing weaker cases PTAB could be responding to the characterization of AIA trials as overwhelmingly propetitioner Source: Patent Trial and Appeal Board Statistics, USPTO (Jul. 31, 2017),. 9

10 Current Trends in IPR Proceedings Once post-grant proceedings have been instituted, the PTAB s decisions still trend in favor of the petitioners on a per claim basis % 9% 8% 42% 46% Patentable Cancelled/ Disclaimed 40% 51% Patentable Cancelled/ Disclaimed 41% 51% Patentable Cancelled/ Disclaimed There appears to be a greater likelihood for the PTAB finding invalidity when comparing the USPTO s statistics on a per petition basis % 13% 72% All Claims Some Claims No Claims 15% 16% 69% All Claims Some Claims No Claims Unpatenable 17% 18% 65% All Claims Some Claims No Claims Unpatenable Sources: Patent Trial and Appeal Board Statistics, USPTO,

11 Covered Business Methods (CBM) Must be sued or charged with infringement. Only available until September 16, Only applies to covered business method patents. Claims a method or corresponding apparatus for performing data processing or other operations used in a financial product or service; and Does not claim a technological invention (37 C.F.R ) Available after PRG is no longer available or completed. 11

12 Covered Business Methods (CBM) Reviews patentability of claims under 101, 102, 103, 112, double patenting but not best mode Review may be instituted upon a showing that at least one challenged claim is more likely than not to be declared unpatentable. Timeline From patent grant to 9 months after patent grant or reissue If proceeding is instituted, a final determination by the Patent Trial and Appeal Board will be issued within 1 year (extendable for good cause by 6 months). Burden is preponderance of the evidence rather than clear and convincing. 12

13 Current Trends in CBM Proceedings Institution rates for CBM review are consistent with the conservative trend observed in IPR proceedings , 74% Instituted Joinders Denials , 63% Instituted Joinders Denials , 50% Instituted Joinders Denials 16 11, 41% Instituted Joinders Denials 6 0 Source: Patent Trial and Appeal Board Statistics, USPTO (Mar. 31, 2017),

14 Current Trends in CBM Proceedings CMB invalidation trends on a per claim basis are also similar to those in IPR proceedings. Despite shrinking institution rates, invalidation rates still favor the petitioner. 5.2% % % % 56.6% Patentable Cancelled/ Disclaimed 30.9% 60.2% Patentable Cancelled/ Disclaimed 33.7% 58.7% Patentable Cancelled/ Disclaimed On a per petition basis, USPTO statistics again show an increased likelihood for the PTAB to reach a finding of invalidity 3.9% % % % 81.8% All Claims Some Claims No Claims Unpatenable 16.1% 81.8% All Claims Some Claims No Claims 14.8% 81.5% All Claims Some Claims No Claims Source: Patent Trial and Appeal Board Statistics, USPTO (July. 31, 2017),

15 CBM Review Most Common Grounds Asserted Most Common Grounds Instituted / / Schecter, Manny, et. al. The Effects of Alice on Covered Business Method (CBM) Reviews, Northwestern Journal of Technology and Intellectual Property. Winter 2017, Volume 14, Issue 3, Article 4. 15

16 Post Grant Review (PRG) For patents issued under first-inventor-to-file. Reviews patentability of claims under 101, 102, 103, 112, double patenting but not best mode Review may be instituted upon a showing that at least one challenged claim is more likely than not to be declared unpatentable. 16

17 Post Grant Review (PRG) Timeline From patent grant to 9 months after patent grant or reissue If proceeding is instituted, a final determination by the Patent Trial and Appeal Board will be issued within 1 year (extendable for good cause by 6 months). Burden is preponderance of the evidence rather than clear and convincing. 17

18 Current Trends in PGR Proceedings PGR petitions are a small percentage (0.8%) of total post-grant proceedings Eligible first-inventor-to-file patents are just beginning to issue out of the USPTO 0.8% 7.6% PGR Petitions CBM Petitions IPR Petitions 91.6% 30 More PGR petitions are being filed Projected Filed PGR Petitions Source: Patent Trial and Appeal Board Statistics, USPTO (Jul. 31, 2017),

19 Current Trends in PGR Proceedings As of January 31, 2017, there have been 6 PGR final written decisions In five of those decisions, all instituted claims were held unpatentable - 3 Decisions unpatentable under Decision unpatentable under 112 (US Endodontics v. Gold Standard Instruments LLC) - 1 Decision unpatentable under 112 and 103 (Telebrands Corp. v. Tinnus Enterprises LLC) All claims were found to be patentable in the remaining final written decision - Altaire Pharms. Inc. v. Paragon Biotek Inc. 83% Patentable Irving, Thomas L., et al., Some Early Trends in Post-Grant Review. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Jan. 31, f57-baf b20-28b61c081f03

20 Comparison of IPR, CBM, & PGR Post Grant Challenge Petitioner Estoppel Standard Basis Available Applicable Timing Inter Partes Review (IPR) Have not previously filed a lawsuit challenging the validity of the patent and has not been served with a complaint alleging infringement of the patent more than 1 year prior (exception for joinder) Raised or reasonably could have raised Applied to subsequent USPTO/district court/itc action Reasonable likelihood 102 and 103 based on patents and printed publications For first-inventor-tofile, from the later of: (i) 9 months after patent grant or reissue; or (ii) the date of termination of any post grant review of the patent. For first-toinvent, available after grant or reissue. Patent issued under first-to-invent or first-inventor-to-file Must be completed within 12 months from institution, with 6 months good cause exception possible Covered Business Method (CBM) Must be sued or charged with infringement. Financial product or service and excludes technological inventions. Office raised or reasonably could have raised District Court - raised More likely than not 101,102, 103, 112, double patenting but not best mode Available 9/16/12-9/16/20 (for firstinventor-to-file only after PGR not available or completed) Patents issued under first-to-invent and first-inventor-to-file Must be completed within 12 months from institution, with 6 months good cause exception possible Post Grant Review (PGR) Have not previously filed a lawsuit challenging the validity of the patent Raised or reasonably could have raised Applied to subsequent USPTO/district court/itc action More likely than not 101,102, 103, 112, double patenting but not best mode From patent grant to 9 months after patent grant or reissue Patent issued under first-inventor-to-file Must be completed within 12 months from institution, with 6 months good cause exception possible 20

21 IPR vs. CBM vs. PGR Post Grant Challenge Institution Rate % of Claims Found % of Some or All Claims Found IPR 75% 68% 67% 63% 46% 51% 51% 87% 84% 82% CBM 74% 63% 50% 41% 56% 60% 59% 96% 98% 96% PGR N/A 100% 72% 38% N/A 100% 83% N/A 100% 83%

22 Choosing IPR, CBM, or PGR No Yes Yes Yes No No Yes No Yes No No Yes No No No Yes Yes Yes No Yes Yes No 22

23 PGR Explored Most Common Grounds Asserted Most Common Grounds Instituted Source: Miller, Jeffrey A., et. al., Post-Grant Review: A Promising New Tool for Invalidating Patents? Arnold & Porter Kaye Scholer, Jan. 18,

24 PGR Explored - While 59% of all AIA petitions are related to electrical/computer claims, only 33% of PGR claims involve these technology centers. - When compared to all AIA petitions, there is a higher percentage of PGR petitions related to chemical and bio/pharma claims. - May be due to greater confidence by petitioners in the challenges available under a PGR, which include 112 challenges, and non-printed publication prior art challenges. 24 Source: Irving, Thomas L., et al., Some Early Trends in Post-Grant Review. Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, Jan. 31,

25 PGR Explored Expected to increase Success rates should be higher than IPR but lower than CBM Institution rate should be lower than IPR due to more likely than not vs reasonable likelihood After 9/2020, will be the sole PTAB remedy to challenge under 101 &

26 Post Grant Challenge Plan Time constraints PGR -9 months from grant IPR - 1 year from service of complaint Preparation Some estimates suggest that preparing a PGR, IPR, or CBM can take as long as three months Prior art searching Claim construction research Preparing the petition and supporting declarations Etc. Charles R. Macedo and Jung S. Hahm, Understanding PTAB Trials: Key Milestones in IPR, PGR and CBM Proceedings, Practical Law (Oct. 14, 2014), 26

27 Post Grant Challenge Plan Tracking/Searching Conduct FTO searches Monitor competitor portfolios - Organized based on technology - Organized based on your product lines Monitor key applications for issuance Client Examples 27

28 Conclusion Questions? 28