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Navigating Post Grant Challenges after the AIA


Written by Dolly J. Krishnaswamy
Law Student, New York University School of Law
Project Manager/Law Clerk, Goldstein Patent Law
Posted: December 3, 2013 @ 7:45 am
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When you’re dealing with any third-party patent and there’s a lawsuit pending –whether it’s against you or or your customer, from a non-practicing entity or a practicing entity– there’s no question that post grant challenge(PGC) options change strategy from the defendant’s perspective, says Samir Pandya, Senior IP Counsel of the Global Litigation Group at SAP, at the 2013 AIPLA Annual meeting.

 The State of PGCs Today

Before the America Invents Act (AIA), we had inter partes reexamination, ex parte reexamination, and the option to purely litigate. Since the AIA, we’ve done away with the first one. Ex parte reexamination is still technically an option, though many find it an unappealing one. “I have had very bad experiences with it. I have yet to see one really succeed. There may be a limited use for it in certain situations, but when you think about ex parte it’s easy enough to say I’m not going to worry about it as an option,” says Pandya. The third option of purely litigating is of course still on the table, but it’s increasingly becoming too expensive, too slow, or too tedious an option to pursue.

Under the AIA, the PTAB at the United States Patent and Trademark Office (“PTO”) is now accepting petitions to invalidate patents. The three types of PGCs available at the PTAB are inter partes review(IPR), covered business method review(CBM), and post-grant review (PGR). For all of these options, shortly after the petition is filed, a panel of three Administrative Patent Judges(APJs) issues a decision on whether they will be taking the case and what grounds of invalidity will be addressed in the proceeding. The main differences between these options are timing and grounds that can be raised. PGR can only be petitioned for in the first nine months after a patent has been issued, IPR has to be filed within the first 12 months, and CBM doesn’t have a time limit. In IPR, invalidity arguments have to be limited to prior art patents and publications, whereas CBM and PGR will allow in §101 and §112 arguments. CBMs are currently limited to financial products and services, though the Innovation Act may change that.

“It’s been a very successful year; I hope it continues. Last year, September 16, when we turned on the new system, I gave the go ahead at 11:59. There was a question: would people be filing cases? Right at 12:01 people started to file. Straight out of the gate there was some interest, and over the year we saw an increase in the number of filings,” says Judge Michael P. Tierney, Lead Administrative Patent Judge of the PTAB at the PTO. For the first year, from September 16, 2012 to September 30, 2013, the PTO had received 588 AIA petitions– 56 CBMs, 531 IPRs, and 1 derivation. This year, in just one month, from October 1, 2013 to October 31, 2013, the office has received and additional 96 AIA petitions– 77 IPRs and 19 CBMs, according to the PTO.  We’re on track to beat last year’s numbers at that rate.

How does the PTAB stack up against other district courts? The number one court last year was the District of Delaware with 1015 claims, then the Eastern District of Texas in second with 920 claims, and in third was the PTAB with 563 claims. (In fourth was the Central District of California with 258 claims, followed by the Northern District of California with 166 claims.)

The breakdown of the kinds of petitions the Board is seeing as of November 21st of this year is as follows: 549 petitions in electrical/computer, 111 petitions in mechanical, 64 petitions in chemical, 46 petitions in bio/pharmaceuticals, and 6 applications in design.*

Characteristics Unique to PGCs and Lessons to Take from Them

1. Take a shot. As evidenced by the numbers above, the Board takes as many cases as they reasonably can within the statute. If there’s a good case to be made that a case could be litigated in PTAB, it’s usually accepted. As of last month, the office has instituted 192 trials and denied 32 trials for an overall institution rate of 85.7 percent, according to a statistics report compiled by the PTO.

One example of this is Intellectual Venture Management, LLC v. XILINX, Inc., IPR2012-00018, Paper 12 (P.T.A.B. Jan. 24, 2013). Here, XILINX argued that IVM’s petition should be denied, because IVM failed to identify all the real parties in interest as required by 37 C.F.R. § 42.8(b)(1). XILINX pointed to another case in California where IVM was listed with 5 other defendants in a suit that had 63 entities as evidence of IVM’s failure. The Board ruled in IVM’s favor, saying that XINLINX had not given any argument for why the civil local rules of the Northern District of California are analogous to the Board’s rule on real parties in interest or for specifically why any of the 63 entities were real parties of interest.

Another example presents itself in Motorola Mobility, LLC v. Michael Arnouse, IPR2013-00010,  Paper 20 (P.T.A.B. Jan. 30, 2013) where the Board interpreted “service” under 35 U.S.C. §315(b)

–which provides that a party may not file a petition for IPR if the party had been served with a complaint alleging infringement more than one year previously– narrowly to allow a petition for IPR. Even though Arnouse did file a complaint more than a year before the petition, he didn’t provide Motorola with a summons when he sent the complaint. Arnouse argued that “served” in the statute means to give a person notice. However, the PTAB interpreted it narrowly to mean summons is required, meaning the clock for the one year count down to file had not yet started, and consequently, Motorola’s petition was allowed.

So, the lesson here is you might as well try to file a petition, because chances are the Board will find a way to accept it. Even if in the unlikely event that your petition does get denied, it’s important to remember that the decision not to review is not the same thing as admitting patentability of the patent owner’s patent, so you still haven’t lost much by filing.

2.Take a really good shot, because you only get one. In the PGC world, you only get one shot. The Board’s decision to institute a trial is final and non-appealable. There is a small caveat carved out under 37 C.F.R. § 42.71(c) which says that if you’re not happy with the decision the Board makes on your case, you could request a rehearing to see if there was “an abuse of discretion.” As you can imagine, the Board rarely ever finds abuse, says Greg H. Gardella,, partner in the Post Grant Patent Practice Group of Oblon, Spivak, McClelland Maier, and Neustadt, L.L.P. Your petition needs to be complete and thorough right at the beginning in order to ensure consideration. This includes arguments and evidence.

3.Treat this like an appellate court: narrow your issues, come prepared, and skip the basics. APJs are really busy with a significant case load, and the structure of the PTAB trial tips a hat to that. Just think of the PTAB as an appellate court; that’ll give you a few helpful hints for dealing with this forum.

You have to narrow the issues before you file, or the PTAB will do it for you. Trial will only be granted on the key substantive issues that are likely to control the written decision. For instance, in the Liberty Mutual Ins. Co. v. Progressive Casualty Ins. Co., CBM2012-00003, Paper 7 (P.T.A.B. Oct. 25, 2012) the petitioner asserted 422 grounds of unpatentability over prior art, averaging more than 21 grounds per claim, The Board, in the spirit of 37 C.F.R. § 42.1(b) and 35 U.S.C. § 326(b), said not all the grounds were entitled to consideration, because they were redundant and “would place a significant burden on the Patent Owner and the Board and would cause unnecessary delays.” (Id. at 2). If you’re wondering what counts as redundant, this case highlights two types of redundancy that will not be accepted. The first is when multiple prior art references are applied to show the same teaching to meet the same claim limitation without acknowledging why one piece of art is better than the other. The second is when a plurality of prior art is applied in partial combination –where some but not all of the pieces of prior art in a plurality is used– to show that claim is obvious and in full combination –where all the pieces of prior are in a plurality are used– to show that same claim is obvious. (Id. at 3). You have to very specifically say why reliance in part is better in some instances and why reliance in whole is better in other instances to avoid the ground being dismissed for redundancy.  “The see-what-sticks approach just doesn’t work very well in this office,” says Gardella.

You need to know the art and arguments very well before you file. The hearing is also similar to appellate court in that there’s no testimony and that the questions from the judges will be precise and will go right to the thick of the issues. They expect that you’re very well prepared.

APJs themselves are diligent and well informed on technical matters. As a result, the PTAB’s analysis is generally quite thorough, so you should presume that it will catch any defects in the arguments or evidence.

Additionally, because the APJs are technically informed, expert declarations should focus on the more complex and industry specific solutions instead of basic technical issues. For instance, experts could focus on facts not apparent from the references themselves or facts only someone in the art would know.

4. Make sure your discovery request fulfills the Garmin requirements. Discovery is strictly limited in PGCs in comparison to district litigation, because the PTAB is concerned with meeting deadlines. Before making a discovery request make sure you comply with the five factors the Board presented, in Garmin Intl., Inc. v. Cuozzo Speed Techs., LLC, IPR2012?00001, Paper 17 at 6?7 (P.T.A.B. Mar. 5, 2013), as important in determining what constitutes discovery satisfying the “necessary in the interest of justice” standard under 35 U.S.C. § 316(a)(5). Those factors require the following:

1)  The discovery request is more than a possibility and mere allegation, requiring evidence showing beyond speculation that they’ll find something useful in the discovery. “Useful” does not mean likely to yield relevant admissible evidence. (That’s the district court standard.) It means favorable in substantive value to a contention of the party moving for discovery. One such example is Cuozzo’s showing that the inventor talked to Garmin’s lawyer was not enough to justify getting file history on the Garmin patent as outlined in the discovery request, because it didn’t even show Garmin was aware of Cuozzo’s patent prior to making their navigation device, and so couldn’t show anything useful with respect to Cuozzo’s assertion of copying. You would need to show that Garmin tried to replicate that specific product. (Id. at 11-12). Basically if you can’t show a nexus for discovery the Board is not going to go forward. (For an example of when petitioner showed a sufficient nexus, see Corning Incorporated v. DSM IP Assets B.V., IPR2013-00043, Paper 27 at 3-4 (P.T.A.B. Jun. 21, 2013) where the Board granted DSM’s additional discovery request for lab notebooks.)

2)  The discovery request can’t ask for litigation positions and underlying basis.

3)  If you can generate equivalent information by yourself, without discovery, then the request won’t be granted.

4)  The discovery request must have easily understandable instructions. For example, interrogatory questions must be clear.

5)  The requests can’t be overly burdensome to answer, financially or in terms of time. Also the PTAB says asking for something like “Documents and Things You considered in preparing Your responses to patent owner’s Interrogatories,” which was Cuozzo’s first document request, is way too broad and has the odd consequence of meaning that the more thoughtful and researched the defendant was in responding to the interrogatories the more stuff they would have to produce in discovery. Garmin, IPR2012-0001 at 16. As for the “overly burdensome” factor, we can’t be sure where the line is exactly, but the Board in this case says 52,500+ dollars and 175+ labor hours (Garmin’s total estimate of responding to discovery request) definitely qualifies as overly burdensome. (Id. at 15).

While an “interests of justice” standard is employed to determine granting additional discovery in IPR, a slightly more lenient “good cause” standard is applied in PGR and CBM as dictated by 37 C.F.R. §§ 42.51(b)(2)(i) and 42.224. This standard requires the same five factors except factor one is changed from “useful” to “favorable in substantive value to a contention of the party moving for discovery.” This still requires more than just speculation on the petitioner’s part. See Bloomberg Inc. v. Markets-Alert Pty. Ltd., CBM2013-0005, Paper 32 (P.T.A.B. May 29, 2013) for application of this standard.

5. The last lesson is of course to follow the rules. Efficiency is the primary concern of the PTAB, and as a result, the Board is a stickler for adherence to rules. Parties need express permission for everything. You should presume that all belated or otherwise impermissible filings and evidence will be excluded. For example, 35 U.S.C. §315(b)(1) provides that an IPR may not be instituted if the petition is filed more than 1 year after the date on which the petitioner was served with a complaint alleging infringement of the patent. So don’t file a petition after that one-year mark. (By the way, any petition better be 60 pages or less, double-spaced, and in 14-point font, as provided by 37 C.F.R. §42.24(a)(i) and 42.6(a).)


About the Author

Dolly J. Krishnaswamy is currently a law student at NYU and holds a position as the vice chair of the communications committee in the ABA-IPL. She has previously worked as a science journalist in for Science magazine, had jobs in the tech community in New York City, and spent her undergrad studying genetics at Emory University.


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  1. “IPR has to be filed within the first 12 months” Did you not mean “after”

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