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American Intellectual Property Law Association

New USPTO Post Grant Proceedings

Materials Presented by Joerg-Uwe Szipl, Esq. Griffin and Szipl, PC

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EPO Quality Meeting, Arlington, VA April 28, 2014

18 Month PTAB Timeline

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1. Preparation

• Petitioner – Must act quickly if infringement litigation is possible. – Detailed petition is required,

• Claim charts are required, and • Expert declarations are common.

• Patentee – Must be prepared in advance, if possible, – Little time to prepare responses.

• Both parties: – Page limits on all filings can be a problem.

• Multiple petitions. 3

2. Threshold Issues for the Petitioner Reasonable Likelihood of Success

• IPR or CBM has been instituted in almost all petitions evaluated

– In many cases, granted on only a subset of grounds or petitioned claims

– BUT recently there have been a number of IPR petitions denied in full.

• PTAB is willing to consider rejections based upon references previously considered by PTO.

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Redundancy

• “multiple grounds, which are presented in a redundant

manner by a petitioner who makes no meaningful distinction between them, are contrary to the regulatory and statutory mandates, and therefore are not entitled to consideration.” Liberty Mutual Insurance Co. v. Progressive Casualty Insurance Co., slip op. CBM2012-00003 (PTAB Oct. 25, 2012) (requiring substantial reduction from 422 grounds of rejection based on 10 references for 20 claims).

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3. Initial Tactics of the Patentee

• Two opportunities to respond to the Petition:

– Preliminary Response • Opposing institution of proceeding

– Main Response & Amendment of Claims

• Claim construction tactics – “Broadest reasonable interpretation” for non-expired

patents

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4. Claim Amendments

• Claim amendments may be offered by Motion to Amend, at the time of the Patentee’s Response, following institution of the proceeding. – Only one opportunity to amend, and – The number of claims cannot be increased without a

showing of good cause.

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Claim Amendments

• The Patentee must make a showing of patentable distinction over the prior art: (a) specifically identifying features added to substitute claim vs. challenged claim; and (b) presenting “technical facts and reasoning about those feature(s), including construction of new claim terms” sufficient to demonstrate patentability. – The Patentee can rely on expert testimony to demonstrate

significance of added features – “A mere conclusory statement by counsel is on its face

inadequate.” Idle Free Systems, Inc. v. Bergstrom, Inc., slip op. IPR2012-00027 (PTAB June 11, 2013)

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Claim Amendments

• Petitioner can oppose a motion to amend -- “with specific evidence and reasoning, including

• citation and submission of any applicable prior art and

• reliance on declaration testimony of technical experts,

to rebut the patent owner’s position on patentability of the proposed substitute claims

– Opposition is not limited to prior art identified in original petition.

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Claim Amendments

Lessons learned: • Limited ability to add new or amended claims

• Consider reissue as an alternative

• Requires Patentee to distinguish prior art of record AND closest prior art known to patent owner • Potential admissions, and • Arguments might compromise unamended claims

• Petitioner may oppose based on art not of record

• Possibly, Petitioner can improve its case

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5. Discovery Requests

– Four types of discovery:

• Mandatory initial disclosures, • Routine discovery, • Additional discovery, and • Discovery by agreement of the parties.

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Routine discovery

– Production of exhibits cited in a paper or testimony

– Cross-examination of opposing declarants

• By deposition

– “Non-cumulative information that is inconsistent with a position advanced during the proceeding”

37 C.F.R. § 42.51(b)(1)(iii)

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Additional Discovery

• PTAB must authorize discovery beyond “routine discovery”

• 35 U.S.C. § 316(a)(5) and 37 C.F.R. § 41.51(b)(2): moving party must demonstrate that additional discovery sought is “in the interest of justice”

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Additional Discovery 5-part test for establishing “in the interest of justice”

(1) More than a possibility and mere allegation that something useful will be found, (2) Not merely seeking early identification of the other party’s litigation positions, (3) Lack of ability to generate equivalent information by other means, (4) Easily understandable requests, and (5) Requests are not overly burdensome to answer.

See Garmin International Inc. v. Cuozzo Speed Technologies LLC, slip. op. IPR2012-00001 (PTAB Mar. 5, 2013) 14

6. Oral Arguments

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The Panel

• 3 Administrative Patent Judges – Great ability in the law and the technology

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Oral Argument Format

• Usually 1 hour allocated to each of Patentee & Petitioner • Sequence:

– If no amendments: • Petitioner – Patentee – Petitioner

– If claims are amended: • Patentee – Petitioner - Patentee

• Demonstratives are permitted – Ask for video

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Oral Hearing: Attributes of a PTAB Hearing

• Adversarial, trial proceeding – PTAB is the fact-finder – Policy Focused

• Q&A format • All issues are eligible for consideration • Questions often solicit detailed information about the

record, exploring technical and legal issues – Interplay between the judges on the panel during

questioning – Extensive references to declarations and depositions – Claim construction issues often dominate

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7. Settlement

• Yes, you can settle a post grant proceeding; • However, the PTAB has refused to end some AIA

reviews that have reached an "advanced stage," even though the parties had settled. – Only the Petitioner is dismissed and the proceeding

continues with the Patentee. – In Interthinx v. Corelogic, Case CBM2012-00007

(Jan. 30, 2014): • Settlement was after full briefing and before the

hearing, and • All claims were eventually cancelled.

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8. Relationships with parallel litigation Stays

•As of December 13, 2013:

– 74 motions for stay were granted, and – 29 motions for stay were denied.

•Board Decisions can be found at http://www.uspto.gov/ip/boards/bpai/decisions/index.jsp •A frequently updated listing of district court orders on motions to stay is provided at fishpostgrant.com/stays 20

8. Relationships with parallel litigation Some principal stay considerations

• Will a stay simplify the issues in question and streamline the trial? – Will all asserted claims be addressed by the PTAB?

• Is discovery is complete and has a trial date has been set?

• Will a stay or denial unduly prejudice the nonmoving party?

• Will a stay present a clear tactical advantage for the moving party?

• Will a stay or denial reduce the burden of litigation on the parties and on the court?

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8. Relationships with parallel litigation Estoppel

• The petitioner in an inter partes review of a claim in a patent that results a final written decision, or the real party in interest or privy of the petitioner, may not assert in district court or the ITC any ground that the petitioner raised or reasonably could have raised during that inter partes review. 35 U.S.C. 315(e)(2). • Statistics suggest that potential Petitioners are not

very worried about estoppel. • It is unclear whether estoppel applies to grounds that

the PTAB has refused to consider when instituting review.

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8. Relationships with parallel litigation Protective order issues

• Some Protective Orders in District Courts limit involvement of attorneys or firms in prosecution of related patents. – Object is to avoid amendment of claims based on

confidential information about an opponent’s product or process.

– This limitation may be applied to PTAB proceedings, because claims can be amended.

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8. Relationships with parallel litigation Timing—the race to a judgment

• Cancellation of claims by the PTO before final judgment on appeal is effective, in spite of courts’ conclusion that the patent had not be shown to be invalid in the court proceedings.

• See Fresenius USA, Inc. v. Baxter Intern., Inc., 721 F.3d 1330 (Fed. Cir. 2013) (reexamination).

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Post Grant Review Proceedings (PGR)

• Patents Subject to PGR – Patents having at least one claim with an effective

filing date of March 16, 2013 or later. – These are the first-inventor-to-file patents under the

AIA • Who can file?

– A party who has not already filed a civil action challenging the validity of the patent

– Real Party in interest must be identified • Basis for filing may be any ground related to the

invalidity of the patent

PGR

• Time for filing: – Within 9 months of the issuance of the patent.

• Legal Standard for filing: – “more likely than not” at least one claim of the patent

will be found invalid – “novel or unsettled legal question” that is important to

other patents • Significant Fees:

– $12,000 upon petition – $18,000 upon institution

PGR

• Amendments: – Permitted but no expanded scope allowed – Intervening rights available after amendment

• Discovery: – Limited discovery available directly related to the factual

assertions raised by either party to the proceeding. • Burden of Proof

– Preponderance of the evidence – No presumption of validity – Lower burden of proof than in litigation

• Stay of pending litigation available

PGR

• Time to decision – 12-18 months

• Estoppel – Estoppel exists for issues that were raised or could

have been raised during the PGR

Take-Away

• PTAB Proceedings are different from: – Patent prosecution, – Reexamination, – Patent interferences, – Court litigation, and – Oppositions in other countries.

• PTAB Proceedings require: – Specialized skills, and – Experience.

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Resources

• USPTO sites: – AIA Main: http://www.uspto.gov/aia_implementation/index.jsp – Inter Partes: http://www.uspto.gov/aia_implementation/bpai.jsp – PTAB: http://www.uspto.gov/ip/boards/bpai/

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Thank you

Joerg-Uwe Szipl Griffin and Szipl, P.C.

[email protected]

Many of the materials herein were prepared by and previously

presented on behalf of AIPLA by John Pegram, Esq.

Fish and Richardson PC and Laura Brutman, Schiff Hardin LLC

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