New Post Grant Proceedings: Basics by

New Post Grant Proceedings: Basics by Tom Irving Copyright Finnegan 2013 May 14, 2013

Disclaimer These materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials reflect only the personal views of the authors and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the author and Finnegan, Henderson, Farabow, Garrett & Dunner, LLP cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the author or Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. While every attempt was made to ensure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

Pre-AIA Board of Patent Appeals & Interferences Filing Examining Corps Inter Partes Reexam Ex Parte Reexam Issuance Pre-issuance Submissions 3

AIA Options Patent Trial and Appeal Board Inter Partes Review Filing Examining Corps Post-Grant Review Ex Parte Reexam Issuance Pre-issuance Submissions (revised and improved) See De Corte, et al article, AIA Postgrant Review &European Oppositions: Will They Work In Tandem, Or Rather Pass Like Ships In The Night?, 14 NCLJ (Fall 2012) 4

Overview Ex Parte Reexam PGR IPR Effective New rules: Sept. 16, 2012 Timing Scope Threshold at any time during the period of enforceability of a patent Prior art patents or printed publications substantial new question of patentability affecting any claim Sept. 16, 2012, filed against claims with an effective filing date on or after March 16, 2013 (AIA SEC 3(n)(1) claims). < or = 9 months after patent granted on an application filed on or after March 16, 2013 any ground of invalidity Director Kappos: PGR is only 101, 102, 103, 112 No IC or infringement Double patenting? more likely than not that at least 1 of the claims challenged in the petition is unpatentable Sept. 16, 2012, filed on any U.S. patent in existence as of or after that date >9 months after issuance or if PGR is instituted, after the date of termination of the PGR (Pre-AIA patents -- no waiting period) only on the basis of prior art consisting of patents or printed publications that raises issues under 102 or 103 reasonable likelihood that the petitioner would prevail 5

PGR for Covered Business Methods (CBM) Timing of filing Patents filed before or after AIA Standing Must be sued or charged with infringing patent Patent must be covered business method and not technological invention Covered business method Method or corresponding apparatus for performing data processing or other operations used in the practice, administration, or management of a financial product or service 6

Pending Inteferences SEC. 6 (f)(3) PENDING INTERFERENCES. (A) PROCEDURES IN GENERAL. The Director shall determine the procedures under which an interference commenced before the effective date set forth in paragraph (2)(A) is to proceed, including whether such interference (i) is to be dismissed without prejudice to the filing of a petition for a post-grant review ; or (ii) is to proceed as if this Act had not been enacted. What does the PTO do with a mixed application (where AIA SEC. 3(n)(1) and 3(n)(2) apply)? 7

Inter Partes Review (IPR) and Post-Grant Review (PGR): Not Anonymous; Specific Attack IPR PARTIES: 312(a)(2): Must identify all real parties in interest. SPECIFIC ATTACKS: 312(a)(3): Must identify each claim challenged, the grounds for each challenge, and the evidence supporting each challenge. Copies of patents and printed publications PGR PARTIES: 322(a)(2): Must identify all real parties in interest. SPECIFIC ATTACKS: 322(a)(3): Must identify each claim challenged, the grounds for each challenge, and the evidence supporting each challenge. Copies of patents and printed publications Affidavits or declarations Affidavits or declarations 8

PGR Threshold for Initiation 324(a): THRESHOLD. Director may not authorize a postgrant review to be instituted unless the Director determines that the information presented in the petition filed under section 321, if such information is not rebutted, would demonstrate that it is more likely than not that at least 1 of the claims challenged in the petition is unpatentable. Note contrast in language for IPR 314(a) threshold, which explicitly directs US PTO to consider the patentee s preliminary response. Also note, new 37 C.F.R. 42.208 includes consideration of patentee s preliminary response in determining PGR threshold. 9

PGR Threshold for Initiation 324(b) ADDITIONAL GROUNDS. The determination required under subsection (a) may also be satisfied by a showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. Constitutional? USPTO indicated that this ground will be used sparingly. See 77 Fed. Reg. 48,680 at 48,692 (Aug. 14, 2012)( Section 42.208(d) provides that a determination under 42.208(c) may be satisfied by a showing that the petition raises a novel or unsettled legal question that is important to other patents or patent applications. This rule is consistent with 35 U.S.C. 324(b). The expectation is that this ground for a post-grant review would be used sparingly. ) 10

IPR Threshold for Initiation 314(a): THRESHOLD. Director may not authorize a postgrant review to be instituted unless the Director determines that the information presented in the petition filed under section 311 and any response filed under section 313 shows that there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged in the petition. See also, new 37 C.F.R. 42.108 See December 2011 denials for inter partes request for reexam in 95/001,792 and 95/001,813 11

IPR: Threshold for Initiation SNQP more likely than not RLP prima facie case of unpatentability plus? reasonable likelihood of prevailing ( RLP ) higher than SNQP? But, USPTO indicated that reasonable likelihood standard for an IPR (said to mirror the preliminary injunction standard), is actually a lower standard than PGR s more likely than not. See 77 Fed. Reg. 48,680 at 48,702 (August 14, 2012) (Response to Comment 59). 12

Discovery in Inter Partes Review (IPR) IPR DISCOVERY: 316(a)(5): discovery of relevant evidence, including that discovery shall be limited to: (A) deposition of witnesses submitting affidavits or declarations; (B) what is otherwise necessary in the interest of justice. Historically, a difficult discovery standard. routine discovery provisions (37 C.F.R. 42.51(b)(1)) any exhibit cited in a paper or in testimony; cross examination of affidavit testimony; relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contains the inconsistency. This requirement does not make discoverable anything otherwise protected by legally recognized privileges such as attorney-client or attorney work product. This requirement extends to inventors, corporate officers, and persons involved in the preparation or filing of the documents or things. 13

Discovery in Inter Partes Review (IPR) IPR DISCOVERY: 316(a)(5) (con t) additional discovery upon showing in interests of justice (37 C.F.R. 42.51(b)(2)(i)) moving party show that it was fully diligent in seeking discovery and that there is no undue prejudice to the non-moving party; totality of the relevant circumstances (Response to Comment 132, 77 Fed. Reg. 48,612 at 48,641 (Aug. 14, 2012) 14

the mere possibility of finding something useful is insufficient IPR Discovery Decision Garmin International Inc. v. Cuozzo Speed Technologies LLC, IPR2012-00001 (March 5, 2013) PTAB: Request too broad and did not meet standard of interests of justice conspicuously absent from Cuozzo's motion is a threshold amount of evidence or reasoning tending to show beyond speculation that the information to be discovered will be 'useful' to Cuozzo. the mere possibility of finding something useful is insufficient to grant a discovery request. 15

Discovery in Post-Grant Review (PGR) PGR DISCOVERY: 326(a)(5): discovery of relevant evidence, including that such discovery shall be limited to evidence directly related to factual assertions advanced by either party in the proceeding; routine discovery provisions (37 C.F.R. 42.51(b)(1)) any exhibit cited in a paper or in testimony; cross examination of affidavit testimony; relevant information that is inconsistent with a position advanced by the party during the proceeding concurrent with the filing of the documents or things that contains the inconsistency. This requirement does not make discoverable anything otherwise protected by legally recognized privileges such as attorney-client or attorney work product. This requirement extends to inventors, corporate officers, and persons involved in the preparation or filing of the documents or things. 16

Discovery in Post-Grant Review (PGR) PGR DISCOVERY: 326(a)(5) (con t) additional discovery (37 C.F.R. 42.51(b)(2)(i) limited to evidence directly related to factual assertions advanced by either party in the proceeding (see 42.224).» 42.224 Discovery. Notwithstanding the discovery provisions of subpart A: (a) Requests for additional discovery may be granted upon a showing of good cause as to why the discovery is needed; and (b) Discovery is limited to evidence directly related to factual assertions advanced by either party in the proceeding. 17

IPR Inter Partes Review (IPR) and Post-Grant Review (PGR): Estoppel ESTOPPEL: 315(e): If final written decision under 318(a), estoppel before USPTO, district court, or ITC on any ground that the petitioner raised or reasonably could have raised during that post-grant review. (petitioner/real party in interest/privy) PGR ESTOPPEL: 325(e): If final written decision under 328(a), estoppel before USPTO, district court, or ITC on any ground that the petitioner raised or reasonably could have raised during that post-grant review. (petitioner/real party in interest/privy) Same as PGR but possibly narrower in scope because fewer issues can be raised in IPR. Estoppel only runs one way - issues raised by the petitioner in litigation or that could have been raised by the petitioner in litigation can still be relied on for PGR, IPR or ex parte reexam. 18

No Estoppel Attaches If Parties Settle Before Termination IPR SETTLEMENT: 317(a): allowed no estoppel attaches to petitioner if IPR is terminated. if no petitioner remains in the IPR, then Office may terminate the IPR or proceed to final written decision. PGR SETTLEMENT: 327(a): allowed No estoppel attaches to petitioner if PGR is terminated. If no petitioner remains in the PGR, then Office may terminate the PGR or proceed to final written decision See also 37 C.F.R. 42.73(d)(1) 19

Note: Rules Set Out Patent Owner Estoppel Too! 42.73(d)(3) Patent applicant or owner. A patent applicant or owner is precluded from taking action inconsistent with the adverse judgment, including obtaining in any patent: (i) A claim that is not patentably distinct from a finally refused or canceled claim; or (ii) An amendment of a specification or of a drawing that was denied during the trial proceeding, but this provision does not apply to an application or patent that has a different written description. 20

Patentee Possibility? Strategy: Put in at least one hundred claims in each patent application to protect fully the invention? Force challenger to spend more to challenge all the claims? PGR $12000 file petition for up to 20 claims; $250/claim for every claim over 20 (+18000 if PGR instituted). IPR $9000 file petition for up to 20 claims, $200/claim for every claim over 20 (+14000 if IPR instituted). 21

Practice Tips 9-month from issuance time limit for PGR -> increase efforts to monitor/analyze competitors patents and dates. Estoppel provisions of PGR and IPR -> carefully consider arguments before filing PGR/IPR and possible estoppel effect. If too limited, worth the risk of big estoppel? Will Ex Parte Reexam, with no estoppel and anonymity be better? 22

Slide from USPTO APJ Tierney AIPLA Spring Meeting, May 1, 2013 Inter Partes Review 42.100 42.123 Post-Grant Review 42.200 42.224 Umbrella Trial Rules 42.1 42.80 Covered Business Method (CBM) Patent Review 42.300 42.304 Derivation Proceeding Proposed 42.400 42.412 23

Slide from USPTO APJ Tierney AIPLA Spring Meeting, May 1, 2013 AIA Trial Proceedings 24

Slide from USPTO APJ Tierney AIPLA Spring Meeting, May 1, 2013 250 200 213 PTAB Inter Partes and CBM Filings (Sept 17, 2012 - April 29, 2013) 234 150 100 50 21 0 Inter Partes CBM Total 25

CBM petition denied, 3 PTAB Decisions CBM trial instituted, 9 IPR trial instituted, 22 IPR petition denied, 1 IPR petition dismissed, 1 Source: Trybus, et al, Patent Trial And Appeal Board Contested Proceedings The First Six Months, BNA's Patent, Trademark & Copyright Journal -- Daily Update, April 29, 2013. 26

Most Active Petitioners 12 11.5 11 Oracle, 11 10.5 10 Corning, 10 Liberty Mutual, 10 9.5 9 Petitioners Source: Trybus, et al, Patent Trial And Appeal Board Contested Proceedings The First Six Months, BNA's Patent, Trademark & Copyright Journal -- Daily Update, April 29, 2013. 27

Slide from USPTO APJ Tierney AIPLA Spring Meeting, May 1, 2013 Technology Breakdowns of AIA Petitions as of April 29, 2013 Technology Number of Petitions Percentage Electrical/ Computer 160 68.4% Mechanical 29 12.4% Chemical 32 13.7% Bio/Pharma 12 5.1% Design 1 0.4%

15 Filings IPRs Source: McDermott Will & Emery LLP Report, Six-Month Report Card: Post-Issuance Proceedings Under the AIA, April 2013 167 CBM PGRs 182 total filings since Sept. 16, 2012. 92% for IPR, 8% for CBM PGR. 180 160 140 120 100 80 60 40 20 0 167 24 22 IPRs Filed Decided Granted or granted-inpart 167 IPR filings. Decision on petition in 14%, 92% granted or granted-in-part. Average time from filing petition to decision whether to institute a review =143 days. 16 14 12 10 8 6 4 2 0 CBM PGRs Filed Decided Granted or granted-in-art 15 CBM PGR filings. Decision on petition in 80%, 75% granted or granted-in-part. Average time from filing petition to decision whether to institute a review =140 days. 29

Lessons Learned So Far PTAB being very strict on compliance with rules. e.g., motions to waive page limit denied (but petitioners get around by filing multiple petitions) Even when granted petition, sometimes have granted based on only some of the claims and/or arguments set forth in petition. PTAB looking to narrow issues as soon as possible so can meet 1-year time frame. Declaratory judgment action not bar from filing an IPR petition if only seek a declaration of non-infringement. 30

Slide 60 of USPTO Presentation Feb. 25, 2013 The America Invents Act: Final Provisions to Become Effective Lessons Learned So Far Conclusions need to be supported by: Sound legal analysis Citations to evidentiary record Better to provide detailed analysis for limited number of challenges than identify large number of challenges for which little analysis is provided 31

Slide 61 of USPTO Presentation Feb. 25, 2013 The America Invents Act: Final Provisions to Become Effective Lessons Learned Claim Construction Claim constructions should be supported by citations to the record that justify the proffered construction and analysis provided as to why the claim construction is the broadest reasonable construction. 37 C.F.R. 42.104(b)(3) An example of a failure to provide a sufficient claim construction occurs where claim terms are open to interpretation but party merely restates claim construction standard to be used, e.g., A claim subject to inter partes review receives the broadest reasonable construction in light of the specification of the patent in which it appears. 37 C.F.R. 42.100(b). 32

Slide 62 of USPTO Presentation Feb. 25, 2013 The America Invents Act: Final Provisions to Become Effective Lessons Learned Obviousness The question of obviousness is resolved based on underlying factual determinations identified in Graham. This includes addressing differences between claimed subject matter and the prior art. Address the specific teachings of the art relied upon rather than rely upon what others have said, e.g., The Examiner found that all limitations of the challenged claims except X were present in AAA, BBB and CCC. Additional reference DDD teaches X. Thus, the challenged claims are unpatentable as obvious over prior art references AAA, BBB, CCC and DDD. 33

Slide 63 of USPTO Presentation Feb. 25, 2013 The America Invents Act: Final Provisions to Become Effective Lessons Learned Obviousness Parties are to address whether there is a reason to combine art (KSR) and avoid conclusory statements such as: It would have been obvious at the time of the priority date of the challenged patent to incorporate a widget as disclosed by references AAA, BBB, CCC, DDD or EEE into FFF s wadget. See MPEP 2143(A), (C) 34

Slide 64 of USPTO Presentation Feb. 25, 2013 The America Invents Act: Final Provisions to Become Effective Lessons Learned Discovery Requests for specific documents with a sufficient showing of relevance are more likely to be granted whereas requests for general classes of documents are typically denied. Mere possibility exists that discovery request will lead to something useful is insufficient to meet necessary interests of justice standard. 35 USC 316(a)(5). Requests must not be overly burdensome given expedited nature of trials. Board will take into account whether party seeking information can reasonably obtain the information sought without need for discovery. 35

Thank you. Tom Irving Finnegan, Henderson, Farabow, Garrett & Dunner, LLP 901 New York Avenue, NW Washington, DC 20001-4413 202.408.4082 tom.irving@finnegan.com 36