The patent litigation landscape forever changed on September 16, 2012. On that date the Patent Trial & Appeal Board (PTAB) was born. The precursor to the PTAB was the Board of Patent Appeals and Interferences (BPAI), which would hear appeals from applicants who had their patent applications rejected and also conducted interference proceedings. With the signing of the America Invents Act (AIA) the PTAB was born and the jurisdiction of the appellate body within the United States Patent & Trademark Office (USPTO) was greatly expanded.
This Board, the adjudicative body of the USPTO, consists of technically and scientifically trained administrative patent judges (APJs). The PTAB was created, in part, to adjudicate the new patent challenge mechanisms of the America Invents Act, which include Post Grant Review (PGR), Inter Partes Review (IPR) and Covered Business Methods (CBM). Since 2012 roughly 1,000 challenges have been filed as petitions for either Inter Partes Review or the transitional Covered Business Method challenge proceeding. Post Grant Review is only available for patents that were granted as the result of first to file, which did not go into effect until March 16, 2013, so there will be some time before we see Post Grant Review given the tremendous backlog at the Patent Office.
By most accounts the interest in the new AIA post grant challenge proceedings is even more than anticipated. The growing popularity of the PTAB is grounded in the practical benefits offered to patent challengers. That is, not only is the PTAB faster and more cost effective than pursuing the same challenge in a federal district court, but it is far more likely to be successful given the lower burden of proof, lack of presumption of validity, broader claim construction, and the technical expertise of the specialized judges. Statistics indicate that 80% of claims challenged at the PTAB are instituted for trial. Further, if the outcome of inter partes reexamination is any gauge on the ultimate outcomes of IPR, CBM and PGR, upward of 85% of patent claims will be cancelled or amended before the PTAB. Given intervening rights even having a claim amended is a victory for the challenger.
The “new normal” created by the PTAB has drastically altered the patent assertion landscape. Simply stated, when a patent owner is notified that a patent they own is being brought into a post grant proceeding the statistics, if not the gravity of the threat, suggest that it must be taken seriously immediately and competent representation must be obtained quickly. The burdens are different at the PTAB than they would be in the Federal District Court. Specifically, the PTAB will employ the standard USPTO technique of giving patent claims their broadest reasonable interpretation, which will make it easier for a claim to be determined to overlap with the prior art. Furthermore, in litigation patent claims are presumed valid and the defendant must prove by clear and convincing evidence that a claim is invalid for one or more reasons.
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General principles embodied in Federal Circuit precedent suggest just how powerful a tool these post grant proceedings could potentially become. For example, Federal Circuit precedent suggests that once a claim is found invalid by the USPTO the ruling of invalidity can trump a finding of validity in the courts if the infringement case is not completed. The implications of findings and rulings in contested proceedings on the parallel litigations are being explored as the first wave of IPR and CBM proceedings conclude at the PTAB.
Of course, as with so many things in life there is a good that comes with the bad. Post grant proceedings do come with some substantial estoppel concerns, at least for the moment. The petitioner (or privy) in a post-grant review may not request or maintain a proceeding before the Patent Office with respect to that claim on any ground that the petitioner raised or reasonably could have raised during a post grant proceeding. Thus, there is something of a “speak now or forever hold your peace” aspect to post grant proceedings.
Those familiar with the current round of patent reform legislation will recall that this estoppel provision is in the Congressional crosshairs. If those pushing reform ultimately prevail the estoppel provision will apply only with respect to what was specifically raised. The fear among patent owners is that such a change would not only allow, but would practically invite serial post grant challenges. While many say the fear is absurd the reality is that many of the tech elite engage patent litigation as a war of attrition, so it is hardly a stretch to predict that the removal of the estoppel provisions insofar as prior art that could have been raised would invite serial challenges. If that happens post grant proceedings would become nearly completely one-sided in favor of the patent challenger at the expense of the patent owner.
On Wednesday, February 12, 2014, I will moderate a discussion of the PTAB and the various post grant proceedings ushered in by the AIA. The title of the discussion is PTAB Roadblock to Patent Monetization. Joining me will be leading PTAB specialists Scott A. McKeown (Oblong Spivak) and Robert Greene Sterne (Sterne Kessler). McKeown and Sterne together are handling more of the contested proceedings and the legacy reexaminations than probably any other pair of patent practitioners. They will share their comprehensive perspectives and practical insights concerning what is really going on at the PTAB. I will try and stay out of the way, keep the discussion moving along and perhaps add a bit of color to make the presentation a painless, perhaps even fun, credit of CLE.
Our presentation will be in dialogue format and will seeks to address the following topics and questions:
- Getting the attention of the client and explaining what is at stake.
- Reaction to PTAB and CAFC decisions and predictions about what the future holds.
- Is it malpractice not to advise a client to pursue post-grant proceedings at the PTAB?
- What is a trial at the PTAB like? Is this examination or something different?
- How can a patentee best present the story of the invention?
- How can a challenger best prove the state of the art and obviousness?
- Creating a complete record at the PTAB and avoiding waiver.
- The impact of parallel district court and ITC proceedings involving the same patent.
- Possible new legislation expanding or changing the current contested proceeding framework?
If you are interested in attending this program, which is a webcast, you can register by CLICKING HERE.