Navigating the Post-Grant Landscape John Alemanni Matthew Holohan 2017 Kilpatrick Townsend
Overview Substantial Changes Proposed Scope of Estoppel Remains Uncertain Appellate Issues and Cases Covered Business Methods 2
STRONGER Patents Act of 2017 Introduced by Senators Coons (D-Delaware) and Cotton Introduced June 21, 2017 A bill to strengthen the position of the United States as the world's leading innovator by amending title 35, United States Code, to protect the property rights of the inventors that grow the country's economy. S. 1390 115th Congress: STRONGER Patents Act of 2017. Amendments to Post-Grant Proceedings Statute Proposed Changes Benefit Patent Owners 3
STRONGER Patents Act of 2017 Reinstates presumption of validity District Court (Phillips) construction instead of BRI Limits who can be a petitioner standing for DJ action Defers to District Court findings of validity on 102/103 Makes amendments easier Strengthens the estoppel effect Prohibits arguments on 102/103 grounds in district court if IPR/PGR already found the claim not unpatentable Only one review per claim Allows extension of the trial time limit for good cause, to allow for a patentability study 4
STRONGER Patents Act of 2017 Heightened standard for review Clear and convincing evidence Allows conversion to an expedited IPR/PGR examination, if both parties join the motion Allows appeal of institution decision by patent owner Requires different panels of judges for the institution decision and the review Adds a re-examination off-ramp Allow any person at any time to request reexamination with payment of the normal fee, except that a one-year time bar after being sued on the patent will apply Allows for injunctions during IPR/PGR 5
Estoppel Effects 35 U.S.C. 315 In an IPR that results in a final written decision on a patent claim, the petitioner (and any real parties in interest or privies of the petitioner) may not assert a claim of invalidity in a U.S. Patent and Trademark Office, district court, or U.S. International Trade Commission proceeding against that patent claim on any ground that the petitioner raised or reasonably could have raised in the IPR.
Estoppel Effects Shaw Industries Group v. Automated Creel Systems, IPR2013-00132 (PTAB Dec. 30, 2016) 817 F.3d 1293 (Fed. Cir. 2016) Shaw proposed 15 grounds; the PTAB instituted on 3. Federal Circuit held the provision does not estop an IPR challenger from bringing subsequent invalidity challenges on grounds that were raised in the IPR petition but not instituted by the PTAB. The IPR does not begin until it is instituted. Therefore petitioner cannot raise grounds not instituted. Reduced risk of filing for petitioners
Estoppel District Courts Verinata Health Inc. v. Ariosa Diagnostics Inc. (N.D.C.A. Jan., 2017). Ariosa filed a number of IPR s. Some grounds were instituted and others were not, including because Ariosa had not demonstrated a resonable likelihood of prevailing. Verinata filed a Motion to Strike Ariosa s invalidity contentions The judge denied the Motion in part. Accordingly, the Court finds that under Shaw, statutory estoppel only bars the petitioner, or the real party-in-interest or privy of the petitioner, from asserting invalidity grounds raised, or that reasonably could have been raised, during IPRs of the patents-in-suit. p. 6 (emphasis added). In a write of mandamus, Illumina has asked the Federal Circuit to review the decision.
Estoppel District Courts Intellectual Ventures v. Toshiba Corp., No. 13-453 (D. Del. Dec. 19, 2016). District court found same effect when references had not been presented to the PTAB at all If only instituted grounds can give rise to estoppel, grounds never raised at all cannot be estopped J. Robinson acknowledged: extending the above logic to prior art references that were never presented to the PTAB at all (despite their public nature) confounds the very purpose of this parallel administrative proceeding Federal circuit has not addressed. PTAB has - finding estoppel applies Apotex Inc. v. Wyeth LLC, No. IPR2015-00873, 2015 WL 5523393 (P.T.A.B., Sept. 16, 2015). 9
Estoppel - PTAB Great West Casualty Co. et al. v. Intellectual Ventures II LLC, IPR2016-01534, paper 13 Great West filed an IPR petition on a publication not previously raised. Great West argued that under Shaw, it could not have been raised during the IPR. [S]uch an interpretation of Section 315(e)(1) would render superfluous reasonably could have raised. [W]e discern a substantive distinction between a ground that a petitioner attempted to raise, but was denied a trial, and a ground that a petitioner could have raised, but elected not to raise in its previous petition or petitions. Petition was denied institution.
Practical Estoppel PTAB Finding
Estoppel - PTAB PTAB Recently Designated 3 Decisions Informative In each decision, the Board denied institution for one or more grounds under 325(d) Unified Patents, Inc. v. Berman, Case IPR2016-01571 (PTAB Dec. 14, 2016) (Paper 10) Relied on a combination that included a reference the examiner considered during prosecution and a second reference that was deemed cumulative. Hospira, Inc. v. Genentech, Inc., Case IPR2017-00739 (PTAB July 27, 2017) (Paper 16) The examiner s previous priority determination was found dispositive as to each of the asserted grounds. Cultec, Inc. v. Stormtech LLC, Case IPR2017-00777 (PTAB Aug. 22, 2017) (Paper 7) Relied on art that the examiner either previously considered or that was cumulative of that art. 12
Constitutional Challenge to AIA Oil States Energy Services LLC v. Greene s Energy Group, LLC, Supreme Court granted certiorari, June 12, 2017 Whether inter partes review an adversarial process used by the Patent and Trademark Office (PTO) to analyze the validity of existing patents violates the Constitution by extinguishing private property rights through a non-article III forum without a jury.
Constitutional Challenge to AIA Supreme Court asked the U.S. for its views, and the U.S. said in briefing that the petition should be denied Decisions from the Roberts Court have identified patents as exclusive and valuable property rights.
Appeals from PTAB Decisions SAS Institute Inc. v. Complementsoft, LLC, 825 F.3d 1341 (Fed. Cir. 2016) (Newman, J., dissenting). J. Newman points out legislative intent Petition for certiorari granted May 22, 2017 SAS Institute Inc. v. Lee Does 35 U.S.C. 318(a), which provides that the Patent Trial and Appeal Board in an inter partes review shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner, require that Board to issue a final written decision as to every claim challenged by the petitioner, or does it allow that Board to issue a final written decision with respect to the patentability of only some of the patent claims challenged by the petitioner, as the Federal Circuit held? 15
Appeals from PTAB Decisions The PTAB does not issue final written decisions on claims challenged in the IPR petition but not instituted in the IPR trial. 35 U.S.C. 318(a): If an inter partes review is instituted and not dismissed under this chapter, the Patent Trial and Appeal Board shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added under section 316(d). 16
Appeals from PTAB Decisions Wi-Fi One, LLC v. Broadcom Corporation (Fed. Cir. 2017) Wi-Fi argues that Broadcom was in privity with entities involved in parallel district court litigation and should have been subject to the time bar Argued at Federal Circuit en banc, May 4, 2017 Should this court overrule Achates Reference Publishing, Inc. v. Apple Inc., 803 F.3d 652 (Fed. Cir. 2015) and hold that judicial review is available for a patent owner to challenge the PTO s determination that the petitioner satisfied the timeliness requirement of 35 U.S.C. 315(b) governing the filing of petitions for inter partes review? 17
Appeals from PTAB Decisions Phigenix v. Immunogen (Fed. Cir. Jan. 9, 2017) Phigenix s appeal was dismissed for lack of standing Stated economic injury was related to inability to license its own similar patent, and the court found that Phigenix failed to establish an injury in fact Petitioner in IPR may not have standing to appeal a final written decision 18
Covered Business Methods Secure Axcess, LLC v. PNC Bank National Association (Fed. Cir. 2017) Definition of business method at issue Federal Circuit overturned PTAB s categorization as a CBM patent and vacated the PTAB s determination that the claims were unpatentable as obvious; J. Lourie dissented The PTAB had reasoned that because the patent is directed to solving problems related to providing a web site to customers of financial institutions, it performs operations used in the administration of a financial product or service. Federal Circuit: the statutory definition of CBM patent requires a claim having a financial activity element CBM statute expires 2020 19
Contact Information John C. Alemanni, Partner Winston-Salem 336.607.7311 jalemanni@kilpatricktownsend.com Matthew C. Holohan, Partner Denver 303.405.1488 mholohan@kilpatricktownsend.com 20
AIA Trial Statistics as of June 30, 2017 2017 Kilpatrick Townsend
AIA Statistics Petitions by Trial Type 22
AIA Statistics Petitions by Technology in FY17 23
AIA Statistics Petitions Filed by Month, 6/1/16 to 6/30/17 24
AIA Statistics Preliminary Response Filing Rates 25
AIA Statistics Institution Rates (FY13 to FY17) 26
AIA Statistics Institution Rates by Technology (cumulative) 27
AIA Statistics Pre-Institution Settlements (FY13 to FY17) 28
AIA Statistics Post-Institution Settlements (FY13 to FY17) 29
AIA Statistics Status of Petitions (cumulative) 30
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