Strategic Use of Post-Grant Proceedings In Light of Patent Reform October 11, 2011 The Leahy-Smith America Invents Act U.S. House of Representatives passed H.R. 1249 (technical name of the bill) on June 23, 2011. U.S. Senate passed H.R. 1249 on September 8, 2011. President Obama signed H.R. 1249 into law on Friday, September 16, 2011. September 16, 2011 is the enactment date controlling the effective date of the various provisions of the statute. 2 1
Post Grant USPTO Proceedings Provided By The America Invents Act AIA contemplates various post-grant proceedings Supplemental examination Third party pre-issuance submissions Citation of Prior Art and Written Statements Post-grant review Inter partes review Ex parte reexamination Derivation proceedings \ 3 Post Reform - USPTO Proceedings Proceeding Availability Threshold Grounds (Prior Art) Estoppel? Supplemental -Available starting on Sept. 16, 2012 Substantial new question Any information N/A Examination -Applies to all patents of patentability Third party pre-issuance submissions -Available starting on Sept. 16, 2012 -Applies to all patents Potential relevance to the examination of the application Patents/ published patent apps / printed publications N/A Citation of Prior Art and Written Statements -Available starting on Sept. 16, 2012 -Applies to all patents N/A Patents/published patent apps/ printed publications/ patent owner statements to Federal court of the Office N/A Post-grant review (9 month window) -Available starting on Sept. 16, 2012 -Applies only to patents subject to new 102, 103 -PTO can initially limit (e.g., 250/year) More likely than not that at least 1 claim is unpatentable Any ground that could be raised under paragraph (2) or (3) of section 282(b) (relating to invalidity of the patent or any claim). Raised or reasonably could have raised Inter partes review (after P.G.R.) -Available starting on Sept. 16, 2012 -Applies to all patents -PTO can initially limit (e.g., 250/year) Reasonable likelihood that petitioner would prevail on at least 1 claim Patents / published patent apps / printed publications Raised or reasonably could have raised Ex parte reexam (unchanged) Available now Substantial new question of patentability Patents / published patent apps / printed publications None (effective estoppel?) Derivation Proceedings Applies to all claims with priority dates on/after March 16, 2013 (Interference remains available for others) Claimed invention derived from another N/A N/A 4 2
Supplemental Examination (Sec. 12, 257) Who Patent owner initiated Not available to 3 rd parties Submission may include any information believed by patentee to be relevant Impact USPTO substantively examines submission USPTO institutes ex parte reexamination if substantial new question of patentability is raised by submission Cannot inoculate Patentee from inequitable conduct, if already alleged or if the result of materially fraudulent activity Ineffective for addressing existing allegations of inequitable conduct Material fraud still referable to Attorney General 5 During prosecution, any third party may now submit prior art of potential relevance to the examination of the application. Does not preclude anonymous submission (no requirement for disclosure of identity). Submission windows prescribed. Eligible for submission: any patent any published application Becomes part of prosecution history. Other requirements ( 122(e)(2)): Concise description of the asserted relevance of each submitted reference, Fee, and Statement of compliance with 122(e). Third Party Pre-Issuance Submissions (Sec. 8, 122(e)) 122(e)(1) Any third party may submit for consideration and inclusion in the record of a patent application, any patent, published patent application, or other printed publication of potential relevance to the examination of the application, if such submission is made in writing before the earlier of-- (A) the date a notice of allowance under section 151 is given or mailed in the application for patent; or (B) the later of-- (i) 6 months after the date on which the application for patent is first published under section 122 by the Office, or (ii) the date of the first rejection under section 132 of any claim by the examiner during the examination of the application for patent. 6 3
Citation of Prior Art and Written Statements ( 301) Akin to 3 rd Party Pre-Issuance Submissions (Sec. 8, 122(e)) Who/when: Any person at any time (anonymous) Submission scope: Patents and printed publications Patent owner statements regarding claim scope made in federal court or PTO proceeding (Can include supporting evidence (e.g., pleadings)) Effect: Submissions become part of written record Limited use by USPTO: claim interpretation purposes 7 Inter Partes Review (Sec. 6) Aspect Aspect Inter Partes Reexam (now) Inter Partes Review (reform) Tribunal Central Reexamination Unit Patent Trial and Appeals Board (PTAB) Timing for filing Any time After the later of closing of PGR window (or termination of PGR) Threshold Substantial new question of patentability Reasonable likelihood that petitioner would prevail on at least 1 claim Duration Open-ended Conclusion within 1 year of commencement (+6 months for cause) Prior art Patents and printed pubs Patents and printed pubs Appeal To BPAI, then Fed Circuit Directly to Fed Circuit Barred if D.Ct. proceedings No bar Barred if already filed DJ suit; or barred if request filed > 1 yr after being served Estoppel After final decision (all appeals exhausted) After PTAB final written determination 8 4
Post-Grant Review vs. Inter Partes Review (Sec. 6) Post-Grant Review ( 321-329) Inter Partes Review ( 311-319) When Within 9 months of issuance or reissue of patent Basis Any ground of invalidity (not just patents or publications) Threshold More likely than not that at least 1 claim is unpatentable After 9 months of issuance or reissue of patent, BUT before civil allegation of invalidity, and within 1 year of being served with a complaint by patentee Only prior art patents or printed publications under 102 or 103 Reasonable likelihood that petitioner would prevail on at least 1 claim Who Any person, other than the patent owner Must identify all real parties in interest (no anonymous submissions) Phase-in PTO may limit number of PGRs/IPRs for first 4 years after enactment (2011-2015) Other procedures Patentee may respond (deadline to be determined) PTO issues preliminary response w/in 3 months of patentee statement, or lapse of patentee s window Completion w/in one year after institution (+ six month extension for good cause) Limited discovery allowable (to be addressed by PTO regulations) Patentee may amend claims, but amendments cannot expand claims or add new matter Conducted by new Patent Trial & Appeal Board, and appealable to Federal Circuit Preponderance of the evidence (more likely than not) standard applies May be settled by parties 9 Post-Grant Review vs. EU Opposition (Sec. 6) Aspect Post-Grant Review (U.S.) Oppositions (EU) Commencement Window 9 months from issuance 9 months from issuance Discovery Limited discovery No discovery Consolidation if multiple challengers Discretionary consolidation (Director) Consolidated Settlement Can be settled Opposition proceedings may be continued by the EPO on its own motion Duration Estoppel 1 year (+ 6 month extension for good cause) Challenger estopped from raising art in district court that was raised or could have been raised in PGR Typically 2-3 years No estoppel 10 5
Estoppel in Post-Grant Review & Inter Partes Review Estoppel Each of PGR and IPR Timing of estoppel Attaches upon final written determination by PTAB Contrast current inter partes reexam: after all appeals exhausted Scope of estoppel Unchanged Claim-by-claim basis Breadth of estoppel Venue/Forum Extends to all PTO actions (not just future IPR or PGR) Extends also to ITC proceedings, and District Court proceedings Subject matter Applies to grounds raised or reasonably could have raised Contrast current Inter Partes reexam: raised or could have raised 11 Estoppel in Post-Grant Review & Inter Partes Review IPR and PGR: Preliminary Response to Petition After petition filed, Patent Owner may challenge propriety of petition ( 313 and 323) Similar to Ex parte reexam Patent Owner s statement except no provision for petitioner to file rebuttal to the Patent Owner statement 12 6
Post-Grant Review & Inter Partes Review (Cont d) Details re relationship to other proceedings ( 315 & 325) If challenger alleges invalidity in District Court before PGR/IPR petition No PGR/IPR proceeding in the PTO. If challenger alleges invalidity in District Court on or after the date the PGR/IPR petition is filed Automatic stay of DJ action challenging validity. Stay may be lifted if patentee requests, patentee files suit/counterclaim alleging infringement, or challenger moves to dismiss suit. Automatic stay does not apply to counterclaim challenging validity. IPR is unavailable if filed more than 1 year after infringement complaint was served PTO may consolidate multiple PGRs/IPRs Estoppel: Challenger cannot re-assert art that was raised or reasonably could have raised in PGR in another PTO proceeding, District court, or ITC For PGR only: If patentee sues within three months of patent grant, court may not stay motion for Preliminary Injunction in view of pending PGR petition or PGR proceeding Intervening rights apply for new, amended claims 13 Ex Parte Reexamination Unchanged Central Reexamination Unit (CRU) retains responsibility for Ex Parte Reexamination. The present threshold of a substantial new question of patentability (SNQ) continues. 14 7
Ex Parte Reexamination Requestor considerations Patentee interviews Yet no estoppel statistical likelihood of amendment/cancelation Favorable standard for claim interpretation Prepare a sustainable record (consider declarations) Anticipate and prepare for amendments (supplemental art) 15 Ex Parte Reexamination Patentee considerations Patentee interviews Always conduct Consider when/whether to provide Examiners access to inventors/experts Identify potential narrowing amendments Work with litigation counsel Be careful to observe protective orders (POs) However, be equally careful to avoid ignoring litigation, even if PO exists! Consider favorable and disfavorable claim constructions Consider reasonableness of broadest reasonable claim contruction Time is of the essence! 16 8
Derivation Proceedings Interference proceedings: Fades away after transition defined by priority. Continues to apply to claims having effective filing date before the 3/16/2013 (Sec 3, 146(n)(2)). Derivation proceedings (Sec 3, 135, 146, 291): Applies to claims having effective filing date on/after 3/16/2013 Requires that claim was derived from other inventor. Derivation proceedings in the U.S. District Court must be filed within one year of issuance of the patent containing derived claim(s). Derivation proceedings in the PTO must be filed within one year of publication of the application containing derived claim(s). 17 USPTO Proceedings Simplified Timing Provision Effective Date Eligibility Ex Parte Reexam (EPRx) Current (SNQ standard) All patents Inter Partes Reexam (IPRx) Until 9/15/12 (Likelihood of All patents success standard) Inter Partes Review (IPR) 9/16/12 All patents Post Grant Review (PGR) 9/16/12 Patents with priority on/after 3/16/13 18 Supplemental Exam (Patentee initiates) Third party pre-issuance Submissions Citation of Prior Art and Written Statements Derivation Proceedings (Replacing Interference, which is phasing out) 9/16/12 All patents 9/16/12 All patents 9/16/12 All patents (Claim interpretation only) 3/16/13 Patents with priority on/after 3/16/13; interference remains available for others 9
USPTO Proceedings - Timeline <9/16/2011 (Pre-Reform Era): EPRx and IPRx Only 9/16/2012 9/15/2012 (Transition 1): EPRx IPRx (new standard: likely to prevail against claim) 9/16/2012 9/15/2013 (Transition 2): Supplemental Examination 3 rd party pre-issuance submissions PGR & IPR (replace IPRx) EPRx >3/16/2013 (Final): Add Derivation proceedings (iff priority on/after 3/16/2013) 19 PTO vs. Litigation General considerations and perspectives - As a preliminary matter, decisions break along the following lines: - Role and company type - Patentees - Entrepreneurs - Patent Acquirers (Legislative jock) - Establishment - Defendants - Small Companies - Established Companies - Technology - EE/CS/ME - Medical device, Chem, Bio - Pharma 20 10
PTO vs. Litigation Ultimately, however, it comes down to decisions Principally, as a party seeking to defend itself, or otherwise challenge validity, two questions present: Do the tools make the USPTO a better forum than District Court? If so, which USPTO tool is preferred? - Does the answer change during the transition? 21 PTO vs. Litigation Factors informing selection between USPTO and District Court Standards applied Claim construction (Broadest reasonable applied before USPTO) Proof (preponderance applied before USPTO; clear and convincing elsewhere) Complexity of technology Utility/likelihood for favorable estoppel and/or intervening rights defenses Patentee insight into accused product Amendment and argument-based estoppels Impact of amendments on damages Counsel Many companies hire prosecution counsel to defend their patents Reason: Prosecution counsel is served, USPTO proceeding, protective order While some prosecutors are qualified we/challengers capitalize on those that are not Cost 22 11
PTO vs. Litigation Factors Disfavoring USPTO for Challenger Estoppel Juxtaposition of quick proceeding and extensive estoppel can yield dramatic results Extension of estoppel to non-art grounds for PGR (any ground) Amendments Open record with which to amend and strengthen existing claims Opportunity to address construction issues Opportunity to add claims 23 Choosing Among PTO Proceedings: If challenging at the USPTO, Factors for Challenger to Consider when Selecting Tool General: Threat level Identity of Patent Owner (competitor vs. NPE) Likelihood or existence of litigation Ex parte vs. PGR/IPR? PGR/IPR: Participation Concerns over new claims by patentee (reasonable number of substitute claims) Speed, if necessary to resolve validity questions before reaching conclusions in litigation Prevent ex parte Examiner interview/dialog Appeal: Assured to address validity under favorable claim construction standard Grounds other than prior art PTAB (?) EPRx No legal estoppel (effective estoppel) Anonymity CRU (known) 24 12
Choosing Among PTO Proceedings: If challenging at the USPTO, Factors for Challenger to Consider when Selecting Tool PGR vs. IPR? Timing (relative to issuance) timely knowledge? imminent threat? Grounds other than prior art Unknown: Discovery If prior to 9/16/2012, should a challenger use IPRx rather than PGR/IPR? Favoring IPRx Known procedures If unsuccessful, can still file ex parte Reexam No estoppel until all appeals exhausted under IPRx Favoring PGR/IPR Inter partes review proceedings can be settled Availability of discovery may strengthen challenge 25 Ex Parte Reexam vs. Pre-Issuance Submission If seeking to challenge without estoppel, Ex Parte Reexam or Pre/post-Issuance Submission? Neutral Extent of 3 rd party requester s participation Opportunity for anonymity Favoring Pre/Post-Issuance Submission: No SNQ standard Query whether post-issuance submission would estoppel later filing of Ex parte, since the art would only be considered for purposes of claim construction Favoring EPRx: CRU: Higher caliber examination; favorable statitics Limitation on RCEs (may be mitigated if CAs pending) 26 13
Ex Parte Reexam vs. Pre-Issuance Submission If not comfortable with ex parte reexamination, e.g., due to estoppel, should a challenger consider Pre-Issuance Submission vs. Citation of Prior Art? Largely a question of timing However, estoppel effect of Citation of Prior Art is unclear, since consideration is limited to claim construction 27 Ex Parte Reexam vs. Pre-Issuance Submission As patentee, do USPTO post-grant tools facilitate inoculation of prior art? Question 1: Would a Patentee be well advised to use supplemental examination to inoculate patent against potential inequitable conduct, or otherwise gain consideration of prior art? Question 2: What about post-issuance submissions under 301? Effective in destroying newness, and thus effectively estopping third parties from bringing Ex parte reexamination? If so, do they also extinguish risk relating to PGR/IPR? 28 14
Thank you Threshold & Pleading Estoppel: Civil actions ITC proceedings Estoppel: Later USPTO proceedings Scope, Grounds, Bases Ex Parte Reexam (current statute) Threshold and Estoppel in AIA Post Grant Processes 35 USC 303(a) (current law): Substantial new question of patentability (SNQ) None None 35 USC 302 and 301 (current law): Patents and printed publications Inter Partes Reexam (rev.) Reasonable likelihood of prevailing (RLP) SNQ continues to apply to pre 9/16/11 requests 35 USC 315(c) (current law): Raised or could have raised Applies to civil actions, not ITC 35 USC 317(b) (current law): Raised or could have raised Estoppel also applies to issues from civil actions 35 USC 311(a) and 301 (current law): Patents and printed publications Inter Partes Review (new) 35 USC 314(a): RLP 35 USC 315(a): Has not filed a civil action challenging validity 35 USC 315(e)(2) Raised or reasonably could have raised (RORCHR) May not assert issue Final written decision Civil actions & ITC 35 USC 315(e)(1) RORCHR May not request or maintain proceeding based on issue 35 USC 311(b): Patents or printed publications 35 USC 312(a)(3)(B): Can be supported by expert opinions, affidavits, etc. When Any time Any time 35 USC 311(c) After later of: 9 months after issuance (reissuance); or PGR is terminated Post Grant Review (PGR) (new) 35 USC 324(a): More likely than not (MLTN) that at least 1 claim is unpatentable 325(a): Must not have filed a civil action challenging validity 35 USC 325(e)(2) RORCHR May not assert issue Final written decision Civil actions & ITC 35 USC 325(e)(1) RORCHR May not request or maintain proceeding based on issue 35 USC 321(b): Issues relating to invalidity under 282(b)(2) or (3) 35 USC 324(b): Novel or unsettled question important to other patents or patent applications (does not require MLTN) 35 USC 321(c): 9 months after issuance (or reissuance) 35 USC 325(f): No challenge to non broadened reissue claims after original 9 month PGR period SEC. 18 Proceeding (new) SEC. 18(a)(1)(B) : must be sued or charged with infringement Otherwise same as PGR SEC. 18(a)(1)(D) Any ground raised (not RORCHR) Otherwise same as PGR SEC. 18(a)(1)(A) excludes 325(f), i.e. reissue claims may be challenged at any time Otherwise same as PGR SEC. 18(a)(1)(A) & (d) Covered business method patents Not technological inventions Otherwise same as PGR SEC. 18(a)(1)(B) Any time after suit or charge of infringement Statutory references are to sections of 35 USC as modified by AIA, unless otherwise specified Timeline Prosecution PG Proceedings Litigation PTO Structures & Processes Studies Copyright 2011 Intellectual Ventures Management, LLC (IV). All rights reserved. 30 15
Patent Life Cycle with Post Grant Challenges under AIA Not all available post grant proceedings may occur for a given patent Patent Application Filed Patent Issues Potential Inter Partes Review or Ex Parte Reexam Possible Post Grant Review Process & Appeal Potential Inter Partes Review or Ex Parte Reexam Patentee Files Suit SEC. 18 Petition Filed Potential Section 18 Proceeding for BMPs Motion to Stay (Note 1) Petition Process Ends; Appeal begins Appeal Ends Patent Suit Restarts Possible additional Ex Parte Reexams, Inter Partes Reviews and SEC. 18 Processes Patent Expires (See Note 2) (See Note 3) 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 No USPTO proceeding pending USPTO proceeding pending Enforcement stayed Note 1: There is an immediate right to interlocutory appeal to CAFC from district court decision on Motion to Stay for a Section 18 proceeding. Note 2: There is a range of possible pendencies for a Section 18 proceeding: shorter if the USPTO can meet the statutory deadlines, and longer if not. This may depend on the USPTO receiving sufficient funding to properly carry out Section 18 proceedings. Note 3: Completion date depends upon pendencies in the Section 18 proceeding. Timeline Prosecution PG Proceedings Litigation PTO Structures & Processes Studies Copyright 2011 Intellectual Ventures Management, LLC (IV). All rights reserved. 31 16