Post-Grant Patent Proceedings Before the PTABmedia.straffordpub.com/products/post-grant-patent...2013/06/12 · IBM, Oracle, MSFT, Apple, Motorola, RIM, SAP 60+% of filings target

Post-Grant Patent Proceedings Before the PTAB Best Practices for Patentees and Third Parties in Inter Partes Review,

Post-Grant Review and Covered Business Method Patent Challenges

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WEDNESDAY, JUNE 12, 2013

Presenting a live 90-minute webinar with interactive Q&A

Scott A. McKeown, Partner, Oblon Spivak McClelland Maier & Neustadt, Alexandria, Va.

Greg H. Gardella, Partner, Oblon Spivak McClelland Maier & Neustadt, Alexandria, Va.

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© Copyright 2013 Oblon, Spivak, McClelland, Maier & Neustadt L.L.P.

PTAB Strategies & Tactics Scott McKeown

Greg Gardella

PTAB is a Litigation Game

Changer

300+ Post Grant Patentability Challenges

Liberal stays

CBM

Strong challenger results

Speed!!

Trolls Public Enemy #1

Second round of reform legislation in 2013

Expansion of CBM (very likely)

Claim construction changes?

Estoppel? 6 1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com

1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com 7

What Advantages Does the PTAB

Offer Patent Challengers?

Vastly Improve Chances of Success

BRI (broadest reasonable interpretation)

No Presumption of Validity (Patentability)

Technical Audience

Preponderance of evidence (51%)

Clear & Convincing 80%+ (Courts/ITC)

Claim Construction within 4-6 months

Obtain settlement leverage faster…disrupt war chest

Courts..Markman/SJ...take years

7 7 1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com


What Advantages Does the PTAB

Offer Patent Challengers?

Much Lower Cost

Patent litigation $3-5 million to trial (minimum)

IPR (100s of $K) (CBM, PGR, higher)

Troll Model Unsuited for USPTO

No Significant Discovery Burden (PTAB)

SPEED Changes Everything!!

Technical Judges (no examiners)

Accelerated claim construction

Cloud of doubt over portfolio (war chest effect)



What Risks Does the PTAB Pose

to Patent Challengers?

Estoppel (PTAB)

But is it really a concern?

Not for CBM…which is likely to expand

Not all defenses at risk…reasonably raised?

Average Texas juror vs. PTAB Judge?

“New” Procedure…not really

Estoppel (Reexam)

Practical estoppel…stronger patent, more claims

Anonymity at a price



PTAB Timing Controls

IPR/PGR

Defendant 1 year litigation bar (IPR)

Triggered upon service of complaint

Includes privies

Earlier suits dismissed w/o prejudice do not prevent

IPR (MacAuto IPR)

DJ control (invalidity) (IPR/PGR)

Lose USPTO option thereafter

Can file later for strategic reasons

DJ on non-infringement….(Ariosa)

TPCBMP no litigation controls

1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com 10 10 1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com


Post Grant Choice: Post Grant

Review (PGR)

Why use Post Grant Review?

Future consideration, not yet available (2015)

Primary benefit is expanded scope 101, 112, etc

More of interest to Bio/Pharma

Significant estoppel!! (Goodlatte Draft)

Broader discovery

Threshold standard different, but not really

Limited Window

Not expected to be popular.

Congress could address



Post Grant Choice: Covered

Business Method (CBM)

Why use CBM?

Special standing requirements

Limited to business methods/ecommerce

Exclude technological inventions

Must have been sued or charged with infringement

Strong stay provisions…deadly even

interlocutory

No significant estoppel

No litigation timing concerns


USPTO or Court?

13

PTAB Timeline

8/17/2013

Petitioner Reply

2/17/2013 - 2/17/2014

Post Grant PTAB Proceedings

(17-23 Months)

9/17/2012 8/17/20141/1/2013 1/1/2014

2/17/2013

Order/Sched.

3/17/2013

Conference Call

Discuss Scheduling,

Protective Order &

Motions

PO Discovery

2/17/2013 - 6/17/2013

6/17/2013 - 8/17/2013

Petitioner Discovery

Oblon Spivak

Patentspostgrant.com

© Copyright 2012

9/17/2013

PO Reply

2/17/2014 - 8/17/2014

Director Extension?

9/17/2012 - 2/17/2013

Front End ~ 5 Months

6/17/2013

PO Response/Amend 2/17/2014

Written Decision?

-Beware Substantial

Evidence Standard-

10/26/2013

Settlement/Request for Hearing

--motions to exclude, observations, etc--

12/12/2013

Oral Hearing

8/17/2013 - 9/17/2013

PO Discovery

12/17/2012

PO Resp?

10/19/2012

Mandatory Disclosures

14 1940 Duke Street, Alexandria, VA 22314, 703.413.3000, Fax 703.413.2220, www.oblon.com


Strategic Post Grant Options

Patentee Strategies/Considerations



Patentee Strategies

What to do First?

Secure counsel quickly

Mandatory Notices

Significant impact on pending portfolio/assertion

Take seriously…not a reexamination

Discovery Plan….don’t plan on getting any!

Mandatory disclosures?

Preliminary Response

3 months…maybe less

Should you file one?

In most cases, probably not..rarely successful




Understand the realities: Where are you in the 12 month window?

Why win early?...estoppel from trial

3PR Declaration evidence?

No new testimony in PR

Issues of standing?...CBM

Court watching?

Need to Amend?

Waive?…probably not



Cross examination necessary…additional discovery?

Consider paring down case with focused filing

Dependent claims

Forget your Markman

Forget “previously considered” arguments

Don’t do depo prep for the petitioner!

If filing

Focus on BRI

Technical distinctions


Request for Rehearing

Don’t compound a mistake

Rarely successful


Discovery

CBM maybe….IPR forget it

Garmin International Inc, et al v. Cuozzo Speed Technologies

LLC

No speculation or fishing expeditions

No litigation positions

Can you get it yourself?

Are the instructions straight forward

Narrow and limited scope of requests?

Secondary considerations most common request

Additional discovery granted in one IPR of 250

Litigators are not in Kansas anymore


Discovery

Depositions

No speaking objections

Prep is crucial

Notice up when date agreed upon

Video?...why?

Amendment option brings new dynamic

District court style cross examination, not useful

Not a beauty contest

May do more harm than good


Oral Argument

Trial is over…not starting

Limited opportunity…likely 1 hour per side

CBM maybe more

Live testimony…rare

Unlikely in IPR

Much like inter partes reexam hearing

Story telling better relate to your claim language

Expect to be interrupted and questioned

Settle?


USPTO or Court?

Third Party Strategies/Considerations



PTAB Strategies

1. Stay

2. Intervening Rights (rare for litigated patents)

3. Non-infringement defense, disclaimer/amend

4. Lower settlement expectations

5. Avoid Injunction/Willfulness

6. (New) Break patent troll business model

7. (New) Damage Continuation Portfolios

8. (New) Force Earlier Settlements



Post Grant Choice: Inter Partes

Review (IPR)

Why use Inter Partes Review? Contested….favorable Challenger statistics: 89% success

No anonymity (estoppel)

Primarily alternative to litigation

Fast…$23k fee (3/19/13 9k…14K)

New in name, but old in function

Patents and printed pubs only

Most popular USPTO proceeding for combating trolls, uses:

Stays

Claim construction

Portfolio attack

Must be completed within 12 months



Post Grant Choice: Inter Partes

Review (IPR)

Why use Inter Partes Review?

PTAB Trial Section: Litigation, Interference and

Industry Experience (law clerks, litigators)

3 Judges per case (no examiners)

160 proceedings in first 6 months

20 CBMs ~250 IPRs

IBM, Oracle, MSFT, Apple, Motorola, RIM, SAP

60+% of filings target trolls

Courts staying cases in recognition of differences with

patent reexamination (speed, quality)



Short Circuiting High Cost

Litigation

Stays, Stopping Litigation Leverage

Judges attitudes vary, but such is unlikely to continue

Plaintiff prejudice argument undermined by speed of

PTAB

Reverse prejudice….

Judges sensitive to one sided shut down ???

ITC??

Forced earlier in cases by design

Multi-defendant scenarios can create uncertainty

Beware early settlements/failure to join

Litigation bias against USPTO outdated (examiner based)



Litigation Venue

Strategy

(DJ) Non-infringement before IPR filing

Invalidity counterclaim is not a “civil action challenging validity”

(Ariosa IPR)

USPTO finds statute clear

(DJ on or after IPR Filing

Automatic stay

Venue “selection and freeze” mechanism

Patentee must move the court to lift stay, file counterclaim, or

separate infringement action.

Will courts really care if the proceeding is truly completed in 12-

18 months?

Discretionary stays increasing.



Force Claim Construction

Petitions require claim construction

Excessively broad troll constructions suffer

(Garmin IPR) Use PTAB as Markman control

Side step estoppel and get desired result

Not suitable for all cases

Argue functional claims as means-plus-function

A determining unit to determine….

Bolster indefiniteness defense, narrow scope

Attack priority via intervening art

PTO will consider 112 in this context only



Attack Continuation Portfolios &

Related Patents

Tool Against Patent Filers With Extensive

Continuation Portfolios

42.73(d)(2) Patent applicant or owner. A patent applicant or owner whose claim is

canceled is precluded from taking action inconsistent with the adverse

judgment, including obtaining in any patent:

(i) A claim that is not patentably distinct to a finally refused or cancelled

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.



Patent Owner Estoppel??

Follows interference model, but combined impact of 42.3

and 42.73(d) may be to disrupt continuation practice.

Amendment, or losing will cut off continuations

Discourages amendment during PTAB proceeding

Effectively precludes broadening?

Race to issuance?

Encourage Restriction strategies

Later Reexam Strategies?



JDG Considerations

Who controls the PTAB filing?

Real parties must be named

Fee sharing?

Strategic input/control

Wait and see joinder practice

Stay likely to require agreement to be bound

Insurance from settlement

Beware 12 month window

Exception for joinder, don’t wait



Jury vs. PTAB Judge?

Conclusions

The patent litigation landscape has changed in the U.S.

Small trolls cases are no longer viable investments especially for

e-commerce/business methods. (patent zombies)

Mega Trolls and large portfolios while formidable, can be

substantially damaged by patentee estoppel

Speed of PTAB has yet to be experienced by many courts, this will

change soon

Patentees need to understand their audience…and risk

Build larger portfolios

80% troll win rate in court, 11% at PTAB



Thank You

Scott A. McKeown

Greg Gardella

[email protected]

[email protected]

mailto:[email protected]:[email protected]

Post-Grant Patent Proceedings Before the PTABmedia.straffordpub.com/products/post-grant-patent...2013/06/12 · IBM, Oracle, MSFT, Apple, Motorola, RIM, SAP 60+% of filings target

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