Firm Logo American Intellectual Property Law Association Prac%cal Guide to Post Grant Review Daniel C. Mulveny AIPLA Chemical Prac%ce Roadshow Wilmington, Delaware June 20, 2013
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1 1 AIPLA
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American Intellectual Property Law Association
Prac%cal Guide to Post Grant Review
Daniel C. Mulveny AIPLA Chemical Prac%ce Roadshow
Wilmington, Delaware
June 20, 2013
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Program
• Introduc*on to Post Grant Review (PGR) • Preliminary
• Scheduling • Strategy for PGR • Mo*ons
• Discovery • Claim Construc*on
• Stays Pending Review
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Introduc%on to PGR Proceedings
• PGR is a trial adjudicated by the Patent Trial and Appeal Board (PTAB)
• Applies only to patents issued under the new “First to File” laws (i.e. filed aKer March 16, 2013)
• PGR Pe**on must be filed within 9mo of issue
• Can be based on any ground of invalidity • PGRs can be appealed directly to the Federal Circuit • The Office has published a Trial Prac*ce Guide (“TPG”)
– 77 Fed. Reg. 48756 et seq. (Aug. 14, 2012)
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Patent Trial and Appeal Board
• The Patent Trial and Appeal Board (PTAB) was established by the America Invents Act to review ex parte prosecu*on appeals and reexamina*on appeals and for conduc*ng deriva*on proceedings, inter partes reviews and post-‐grant reviews.
• Formerly the Board of Patent Appeals and Interferences (BPAI)
• PGR Decisions are made by Administra*ve Patent Judges (3-‐member panels)
• PTAB became effec*ve September 16, 2012
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Reasonable Likelihood of to Prevail Standard for PGR
• Standard for Ins%tu%on: – Reasonably likelihood to prevail
– “The ‘reasonable likelihood to prevail’ standard is a somewhat flexible standard that allows the judge room for the exercise of judgment
• Does not require the party prove ul*mate success on the merits at the preliminary stage
• Only a reasonable probability of success is required.
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PGR Procedure: Office and PTAB Authority
• PTAB Jurisdic*on over PGR proceedings is granted by 35 U.S.C. § 6(b)
• Under this statute, the PTAB is permifed to conduct PGR proceedings
• Congress gave the Office power to promulgate rules governing PGR proceedings in the AIA
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PGR Procedure: Counsel
• Counsel and Backup Counsel required • Backup counsel expected to conduct business on behalf of lead
counsel if lead counsel unavailable
– Given 1-‐year statutory *me period for PGR, unlikely to get any extensions based on unavailability of counsel
• Be sure your lead and backup counsel are kept equally informed
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Duty of Candor and Sanc%ons
• PTAB has imposed a duty of candor on both the aforneys and individuals involved in PGR proceedings
• PTAB has the power to impose sanc*ons for misconduct:
1. Failure to comply with an order
2. Advancing a frivolous or misleading argument
3. Misrepresenta*on of fact
4. Engaging in dilatory tac*cs
5. Abuse of discovery
6. Abuse of process
7. Any other improper use of the proceeding, including ac*ons that harass or cause unnecessary delay
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Sanc%ons Available to PTAB
• If misconduct is found, the PTAB has the power to impose sanc*ons such as:
1. Holding facts to have been established
2. Expunging or precluding the filing of a paper
3. Precluding the presentment or contest of an issue
4. Precluding a party from obtaining or opposing discovery
5. Exclude evidence
6. Award of costs, including aforney fees
7. Requiring a terminal disclaimer or disclaimer of patent term
8. Gran*ng judgment in the trial or dismissal of the pe**on
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PGR Mandatory Disclosures
• The following informa*on must be provided: 1. Iden*fica*on of the real party in interest or privy 2. Any related mafers
• Any other judicial or administra*ve mafer that would affect, or be affected by the proceeding
• Includes any patent claiming, or may claim, the benefit of the priority of the patent at issue in the proceeding
• Includes ex parte reexamina*ons
3. Service informa*on • Par*es must keep the Office up to date with correspondence
addresses
• Par*es can agree to electronic service and that filing of a document with the Office cons*tutes service
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Iden%ty of the Real Party in Interest
• Two purposes for this requirement 1. Assist the Board in iden*fica*on of any poten*al conflicts 2. Assure proper applica*on of the estoppel provisions
• Estoppel provides three important func*ons 1. Protect patent owners from harassment from mul*ple PGR
pe**ons
2. Prevent par*es from gejng a “second bite at the apple”
3. Protect the integrity of the USPTO and Federal Courts by assuring that all issues are properly raised and vefed
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Determina%on of Real Party in Interest
• Highly fact-‐dependent analysis done on case-‐by-‐case basis
• PTAB will look to federal common law for guidance
• At a minimum, the “real party in interest” is the party(ies) who requested the PGR pe**on to be filed
• Privity to be evaluated along flexible and equitable considera*ons – Whether the rela*onship is sufficiently close such that one party should be bound by the trial outcome and related estoppels
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Confiden%ality of the Record
• USPTO wants to strike a balance between public access to the record and the par*es’ interest in protec*ng “truly sensi*ve informa*on”
• Unless otherwise ordered, the PGR record will be made public
• Mo*ons reques*ng the seal of documents must be made concurrent with the filing
• Protec*ve Orders are permifed – See Default Protec*ve Order, TPG Appendix B at 48769-‐771 – Note Default Protec*ve Order provides access to named par*es and in-‐house counsel
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Scheduling
• General *meline for PGR procedings
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Scheduling Orders
Model Scheduling Order
Due Date 1 Patent Owner (“PO”) Response to Pe**on [3 months] PO Mo*on to Amend the Patent Due Date 2 Pe**oner’s Reply to PO Response [3 months]
Pe**on Opposi*on to PO Mo*on to Amend Due Date 3 PO Reply to Pe**oner’s Opposi*on to Mo*on to Amend [1 month] Due Date 4 Pe**oner’s Mo*on for Observa*on regarding cross-‐exam of Reply witnesses [3 weeks] Mo*ons to Exclude Evidence Request for Oral Argument Due Date 5 PO response to Mo*on for Observa*on [2 weeks]
Opposi*ons to Mo*ons to Exclude Evidence Due Date 6 Reply to Opposi*on to Mo*on to Exclude Evidence [1 week] Due Date 7 Oral Argument (i.e., Trial) [set on request]
See TPG at 48768-‐769
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Scheduling Orders (cont’d)
• The TPG states that par*es are en*tled to s*pulate to different dates for Due Dates 1-‐5 – Cannot be later than Due Date 6, however
• No extension of Due Dates 6 and 7 will be permifed • In SAP America v. Versata Dev. Group, the Board set a scheduling order that allowed changes to Due Dates 1-‐3, however, Due Dates 4-‐7 were fixed
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Mo%ons: Be Prepared
• Similar to interference proceedings, mo*ons typically require prior authoriza*on from the Board
• Generally authoriza*on will be obtained during the ini*al conference call – Usually within 1 month of ins*tu*on of PGR proceeding
• Board generally requires a list of proposed mo*ons to be submifed no later than 2 days prior to the ini*al teleconference
• Know what mo*ons you want to file as soon as possible!
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Mo%ons to Amend
• No prior authoriza*on required for first mo*on to amend, however, patent owner required to confer with Board prior to filing
• Board wants to know whether the mo*on will impact the schedule or require addi*onal discovery
• Further mo*ons to amend require authoriza*on for reasons such as: – Mo*on would materially advance seflement – Showing of good cause
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Discovery
• The AIA gave the Office the power to create a discovery process for PGR proceedings
• Under the AIA, discovery in a PGR proceeding is limited to “evidence directly related to factual asser*ons advanced by either party”, 35 U.S.C.§326(a)(5)
• The Board has iden*fied four classes of pretrial discovery: 1. Mandatory ini*al disclosures 2. Rou*ne discovery 3. Addi*onal discovery 4. Compelled tes*mony
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Mandatory Ini%al Disclosures
• Can be made either by agreement or by mo*on – Any agreement must be submifed to the Board no later than the filing date of the Patent Owner’s preliminary response
• Two op*ons for mandatory ini*al disclosures: 1. Disclosures as required by Fed. R. Civ. P. 26(a)(1)
• Name and contact informa*on of anyone likely to have discoverable informa*on
• Copy of, or descrip*on of, documents, ESI, and things
2. Disclosures related to the basis of the PGR pe**on • Informa*on rela*ng to asserted invalida*ng prior non-‐published
public disclosure
• Informa*on rela*ng to secondary indicia of non-‐obviousness to rebut an obviousness asser*on
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Rou%ne Discovery
• No Board authoriza*on necessary • Includes:
1. Produc*on of any exhibit cited in filed document or tes*mony
2. Cross-‐examina*on of other sides’ declarants
3. Relevant informa*on that is inconsistent with a posi*on advanced during the proceeding • This informa*on must be provided concurrent with the filing of the
documents or things containing the inconsistency
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Addi%onal Discovery
• Addi*onal discovery is that beyond mandatory ini*al disclosures and rou*ne discovery
• Any request for addi*onal discovery must be by mo*on
• Alterna*vely, the par*es may agree to the discovery outside of the Board
• Includes discovery available under the Federal Rules of Civil Procedure
• For PGR, the standard to allow addi*onal discovery is whether the movant shows “good cause”
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Garmin Int’l v. Cuozzo: Discovery Dispute
• Patent owner (Cuozzo) sought further discovery and claimed it was en*tled to the discovery as a mafer of right as “rou*ne discovery”
• The Board found the discovery was beyond the scope of “rou*ne discovery” – Rou*ne discovery is “narrowly directed to specific informa*on known to the responding party to be inconsistent with a posi*on advanced by that party in the proceeding”
– Rou*ne discover is “not broadly directed to any subject area in general within which the reques*ng party hopes to discover such inconsistent informa*on”
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Garmin Int’l v. Cuozzo: Discovery Dispute (cont’d)
• Cuozzo’s request was for “addi*onal discovery” • In considering the request, the Board stressed that IPR discovery is “significantly different” from that available under the Federal Rules of Civil Procedure
• Board iden*fied five (5) factors to consider: 1. More than a possibility and mere allega*on
2. Li*ga*on posi*ons and underlying basis 3. Ability to generate equivalent informa*on by other means 4. Easily understandable instruc*ons 5. Not overly burdensome
• The Board ruled Cuozzo’s discovery was not necessary
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Compelled Tes%mony
• A party can request authoriza*on from the Board to compel tes*mony
• If granted, the tes*mony may be obtained: – Ex parte, subject to subsequent cross-‐examina*on – Inter partes
• Time allowed: – 7 hours direct – 4 hours cross – 2 hours redirect
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Claim Construc%on
• Board will interpret claims using the broadest reasonable construc*on in the context of the specifica*on
• Board will follow Federal caselaw for claim construc*on – E.g. Phillips v. AWH Corp. and other cases
– Claim terms will generally be given their ordinary and accustomed meaning as would be understood by one of ordinary skill in the art
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Claim Construc%on and Copending Li%ga%on
• Garmin Int’l v. Cuozzo Speed Techs. (Jan. 9, 2013)
• In Garmin, the Board noted that it uses a different standard from that of the federal courts
• However, the Board will follow federal caselaw • Board rejected Garmin’s proposed claim construc*on based on a li*ga*on posi*on taken by Cuozzo – No reason to assume that Cuozzo’s li*ga*on posi*on is correct
– Li*ga*on posi*ons are unreliable – Garmin itself cri*cized Cuozzo’s li*ga*on posi*on as not being correct
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Stays Pending PGR Review
• For IPR (and likely PGR), the district courts typically apply the three-‐part analysis used in ex parte reexamina*on cases 1. Whether gran*ng stay will simplify issues for trial 2. Status of the li*ga*on, par*cularly, whether discovery is
complete and a trial date has been set
3. Whether gran*ng a stay would cause the non-‐movant undue prejudice or give the movant a clear tac*cal advantage
• Courts have been addressing whether to stay on a case by case basis and considering the facts of each case
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Stays Pending CBM Review
• Congress provided a different test for CBM review
• Courts must consider four factors: 1. Whether gran*ng stay will simplify issues for trial 2. Status of the li*ga*on, par*cularly, whether discovery is
complete and a trial date has been set
3. Whether gran*ng a stay would cause the non-‐movant undue prejudice or give the movant a clear tac*cal advantage
4. Whether a stay, or denial thereof, will reduce the burden of li;ga;on on the par;es and on the court
• Congress intended to increase the number stays pending CBM review
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Market-‐Alerts v Bloomberg: Stay Pending CBM
• The District of Delaware discussed the four factor test required under the AIA for CBM review
• The Court found that all four factors weighed in favor of gran*ng a stay
• Not all of the defendants moved to stay • Market-‐Alerts argued that the AIA did not give the Court authority to stay unless requested
• The Court recognized its authority was limited under the AIA, however, it concluded that it had authority to stay arising from its inherent powers in the interest of judicial and li*gant economy
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Thanks for your aXen%on! Ques%ons?
Daniel C. Mulveny Novak Druce Connolly Bove + Quigg LLP
Ninth Floor 1007 North Orange Street Wilmington, DE 19801
USA
+1 302.658.9141
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