USPTO Post Grant Proceedings

Post-Grant Proceedings Are You Ready to Practice Before the New PTAB? Bryan K. Wheelock January 30, 2013 USPTO Post Grant Proceedings The AIA created three post grant proceedings for challenging the validity of a patent: Post Grant Review (PGR) Inter Partes Review (IPR) Covered Business Method Review (CBMR) 1

IPR and CMBR Filings 9 8 7 6 5 4 3 2 1 0 IPR and CBMR Filings CBMR IPR IPR and CMBR Filings 120 Cumulative IPR and CBMR Filings 100 80 Number 60 40 CBMR IPR 20 0 9/16/2012 10/16/2012 11/16/2012 12/16/2012 2

USPTO Post Grant Proceedings Are you ready to practice before the new PTAB? USPTO Post Grant Proceedings The PTAB will admit non-practitioners pro hac vice for good cause. PTAB requires a licensed practitioner be lead counsel. 3

USPTO Post Grant Proceedings PGR, IPR, and CBMR proceedings will typically be concluded within one year from initiation (eighteen months from the filing of the petition). USPTO Post Grant Proceedings Post grant proceedings are significantly faster than district court litigation, where the median time to trial is 2 to 3 years. 4

Median Time to Trial Source: PWC Patent Litigation Study Page 21, Chart 7B Time to Trial Source: PWC Patent Litigation Study Page 20, Chart 7A 5

USPTO Post Grant Proceedings The USPTO estimates that the cost of bringing or defending a post grant proceeding will be about $275,000 - $325,000 This is significantly cheaper than district court litigation, where the median cost of litigation is $1,500,000 - $2,500,000 Median Litigation Costs 6

Comparative Costs Source: USPTOPOST-GRANT.COM Costs of Post Grant Proceedings IPR PGR/CBMR Pre-March 19, 2013 Fee $27,200 $35,800 Pre-March 19, 2013 Fee for claims in $600 $800 excess of 20 Post-March 19, 2013 Request Fee $9,000 $12,000 Post-March 19, 2013 Request Fee $200 $250 (Claims > 20) Post-March 19, 2013 Post Institution $14,000 $18,000 Fee Post-March 19, 2013 Post Institution fee (Claims > 15) $400 $550 7

Chances for Success Nationwide average win rate for patent owners is 63%. Average win rate ranges from 53% to 81% for the top 20 patent districts Percentage 100 80 60 40 20 0 Overall Win Rates (Includes Consent and Default Judgments) 81 Source: LegalMetric www.legalmetric.com 63 Top 20 Districts and Nationwide 53 Chances for Success However the contested win rate is 25%, and ranges from about 43% to about 10%. Percentage 40 30 20 10 0 Contested Win Rates (No Consent or Default Judgments) 50 43 25 Top 20 Districts and Nationwide 10 Source: LegalMetric www.legalmetric.com 8

Chances for Success The overall success rate for Post Grant Proceedings is unknown, but the success rate for Inter Partes Reexamination may be as high as 89% Inter Partes Reexamination 1999-2012 47 11 42 All Claims Confirmed All Claims Cancelled Claims Amended Post Grant Challenges v. Litigation Initiation Claim Construction Standard of Proof on Issues of Validity IPR/PGR Reasonable Likelihood/ More Likely Than Not Broadest reasonable interpretation Preponderance of the evidence Discovery Limited Yes Amendment of Claims Yes No Litigation Actual case or controversy Court-construed meaning Clear and convincing evidence Estoppel Yes Yes Timing 18 months from petition to decision Average 2 1/2 years from filing to trial Cost $275,000-$350,000 $2.5-4 million 9

Discovery - Generally Post Grant Proceedings Mandatory Discovery (if agreed to, or requested) Routine Discovery (crossexamination) Additional Discovery in the interests of justice for IPR; for good cause for PGR and CMBR Litigation Full scope of relevance under FRCP 26 using: Interrogatories Requests for Production Requests for Admission Depositions Discovery - Depositions Post Grant Proceedings Counsel must not make objections or statements that suggest an answer to a witness. Objections should be limited to a single word or term. Office Trial Practice Guide Litigation An objection must be stated concisely in a nonargumentative and nonsuggestive manner. FRCP 26(c)(2) 10

Discovery - Depositions Post Grant Proceedings (c) Duration.... Seven hours for direct examination, four hours for cross-examination, and two hours for redirect examination. 37 C.F.R. 42.53 Litigation (1) Duration. Unless otherwise stipulated or ordered by the court, a deposition is limited to 1 day of 7 hours. FRCP 26(d)(1) Motions Motion for a protective order Motion for rehearing Motion for extended page limits Motion to seal (particular to address confidential information submitted after the termination of the proceeding) Motion to extend the duration of the proceeding (from 12 to 18 months) Motion for discovery 11

Motions Motion to exclude evidence Motion for additional time to respond/amend the scheduling order Motion to amend claims Motion for joinder Motion to file supplemental information Motion for judgment Motions for observations on cross-examination Motions DO NOT file a Motion that has not be authorized by the PTAB. Exceptions: Request for Rehearing, Observations on Cross-Examination, Motions to Exclude Evidence; Motions to Seal (filed with ); Motion to Waive Page Limits (filed with ) 12

Motions Motion (15 pages) Opposition to Motion (15 pages) 1 month Reply to Opposition (5 pages) 1 month Evidence Exclusion based upon lack of authentication is not favored by the PTAB. Evidence must be submitted with an amended Exhibit List. Objections to evidence must be made within five business days of submission, or are deemed waived. The specification of the patent is hearsay, and must be substantiated by a witness if the information is going to be relied upon. 13

When to litigate in the Patent Office? Whenever validity is a serious question. Particularly where the petitioner s product is not publicly available. Post Grant Proceedings Advantages Faster than litigation Cheaper than litigation Broad claim construction Lower standard of proof Disadvantages Limited scope of prior art Not a complete resolution of dispute Ability to Amend Claims Estoppel 14

Post Grant Proceedings The strongest reason not to use post grant proceedings to attack a patent is the ability of the patent owner to amend the claims. A Quick Look at IPR/PGR/CBMR 15

The petition for Inter Partes Review must contain: A certification that the patent for which review is sought is available for Inter Partes Review A certification that the petitioner is not barred or estopped from requesting Inter Partes Review 16

A statement of the relief requested, including: the claim the statutory grounds for the challenge how the claim is to be construed how the claim is unpatentable under the asserted statutory grounds The exhibit number of the supporting evidence, and a statement of the relevance of the evidence to the challenge raised identifying the specific portions of the evidence that support the challenge. where each element of the claim is found in the prior art. Common Mistakes Omitting Mandatory Notices Designation of Lead and Backup Counsel Identification of Service Information Failing to use proper exhibit numbers Including argument in claim charts Redundant grounds 17

Only contest the claims you need to eliminate, because each challenged claim presents an opportunity for the patentee to amend its claims. Consider how the patent owner may amend the claims before you file. Keep the grounds as simple (and few) as possible, because the board can take into account the complexity when deciding whether to institute IPR or PGR. Raising obviousness grounds opens the door to discovery regarding secondary considerations. A statement of facts is optional, but any facts stated are deemed admitted if not expressly contested by the Patent Owner. 18

BEST PRACTICES Cover Sheet Table of Contents Table of Authority Summary Table of the Grounds An Overview of the Patent Must includes a statement of claim construction Source: IPR 2012-00027 19

Must includes a statement of claim construction Source: IPR 2012-00022 Good Claim Charts are important 20

Good Claim Charts are important Source: IPR 2012-00005 A summary of the grounds is very useful SOURCE: IPR 2012-00005 21

A summary of the grounds is very useful SOURCE: IPR 2012-00041 A summary of the grounds is very useful Source: IPR 2013-00012 22

A summary of the grounds is very useful An overview of the challenged patent can be helpful. 23

A picture is worth a thousand words Source: IPR 2013-00033 A picture is worth a thousand words Source: IPR 2012-00006 24

Identify the Level of Ordinary Skill in the Art (where relevant) Source: IPR 2013-00016 Consider a Statement of Material Fact Source: IPR 2013-00016 25

Stays Pending IPR District Courts stay litigation for reexamination 58.8% of the time. District Courts have stayed litigation for IPRs 100% of the time (3/3) IPR must be brought during the first year of litigation. IPR must be completed within one year of initiation. Actions Due on Receipt of Patent owner must file a Power of Attorney a day prior to filing Mandatory Notices. Patent owner must file Mandatory Notices within 21 days of service of the 26

Patent Owner Preliminary Response Patent Owner Preliminary Response Potential patent owner preliminary responses include: (1) The petitioner is statutorily barred from pursuing a review. (2) The references asserted to establish that the claims are unpatentable are not in fact prior art. (3) The prior art lacks a material limitation in all of the independent claims. (4) The prior art teaches or suggests away from a combination that the petitioner is advocating. (5) The petitioner s claim interpretation for the challenged claims is unreasonable. (6) How the claims are directed to a patent-eligible invention. 27

Patent Owner Preliminary Response The Preliminary response should focus on why the proceeding should not be initiated, not why the patent is valid The Patent Owner generally cannot present testimony in the Preliminary Response A patent owner may file a statutory disclaimer of one or more challenged claims to streamline the proceedings. Patent Owner Preliminary Response Where a patent owner seeks to expedite the proceeding, the patent owner may file an election to waive the patent owner preliminary response. No adverse inference will be taken by such an election. If the parties are going to agree to Mandatory Disclosures, this agreement must be filed at the same time as the Patent Owner s Preliminary Response. 28

Decision on Decision on Decision on is final and unappealable, although er can request reconsideration A Scheduling Order will be provided concurrent with the decision to institute the proceeding, setting due dates for taking action. The Patentee has ten days to object to er s Exhibits. 29

Decision on Mandatory Initial Disclosure (if agreed by the parties) should be filed as Exhibits. The parties may automatically take discovery of information in any agreed Mandatory Initial Disclosures. Decision on The Board will initiate a conference call within about one month from the date of institution of the trial to discuss the Scheduling Order and any motions that the parties anticipate filing during the trial. Parties should identify any Motions they intend to bring two days before the conference call. Parties should be prepared to discuss: Protective Order Motions Need for discovery and/or compelled testimony 30

Patent Owner Response / Motion to Amend Patent Owner Response / Motion to Amend The patent owner has the opportunity to respond to the once a trial has been instituted. The patent owner must object to any facts set forth in the, or they are deemed admitted. The patent owner may file a first motion to amend the claims without the need to obtain prior Board authorization, although the patent owner still must confer with the Board before filing the motion. 31

Patent Owner Response / Motion to Amend The motion to amend can be conditional made conditional on the original claim being found to be unpatentable. The affect of amendments on the estoppel against the er is unclear. Reply / Opposition to Motion to Amend 32

Reply / Opposition to Motion to Amend The er has 5 days to object to the patent owners evidence. The petitioner can reply to the Patentee s Opposition, and to the Motion to Amend Claims. Patent Owner Reply to Opposition 33

Oral Hearing Oral Hearing Each party to a proceeding will be afforded an opportunity to present their case before at least three members of the Board. Generally, a petitioner to a hearing will go first followed by the patent owner or respondent after which a rebuttal may be given by the petitioner. The order may be reversed, e.g., where the only dispute is whether the patent owner s proposed substitute claims overcome the grounds for unpatentability set forth in the petition. 34

Final Written Decision Final Written Decision The estoppel effect takes effect upon the final written decision (before any appeal to the CAFC is completed) 35

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