Starting on September 16, 2012, on the first anniversary of the signing of the America Invents Act, the Patent Trial and Appeal Board (PTAB) was born. The jurisdiction of the PTAB is greatly expanded compared to the previous Board of Patent Appeals and Interferences (BPAI). Most specifically, the PTAB now conducts trials within the patent office. These trials are required by the new procedures ushered in by the AIA, namely Inter Partes Review (IPR), Post-Grant Review (PGR) and Covered Business Method (CBM) Review. These three new flavors of patent challenge allow a petitioner to challenge the propriety of one or more patent claims once they have been granted by the Patent Office.
As the chart created by the USPTO below shows, Inter Partes Review is gaining in popularity since it first became available on September 16, 2012. While Post Grant Review cannot be filed unless the challenge is against a patent that issued under the new first to file rules that went into effect on March 16, 2013, an IPR can be filed to challenge any patent issued on, before or after September 16, 2012.
When a patent is challenged by an IPR the challenge must be taken very seriously. Patent Office statistics for FY 2013 and FY 2014 through January 31, 2014, show that there have been a total of 361 decisions on IPR petitions, with 288 trials instituted. There have been 11 cases that have been joined and only 62 petitions denied, which corresponds with an 82.8% IPR petition grant rate. Having said this, the IPR grant rate during FY 2013 was 87.2%, while so far during FY 2014 the IPR grate rate has been 77.2%. This drop in IPR granting rate, while statistically relevant, should not lull patent owners into a false sense of security.
What follows is an overview of the rules and laws that apply to IPR. For more information please see The PTAB Roadblock to Patent Monetization.
Inter Partes Review Basics
A person who is not the owner of a patent may file a petition with the Patent Office to institute an Inter Partes Review of an issued patent. The petitioner in an Inter Partes Review may request to cancel as unpatentable one or more claims of a patent only on a ground that could be raised under 35 U.S.C. 102 or 103 and only on the basis of prior art consisting of patents or printed publications. See 35 U.S.C. 331(b). Contrast this with post-grant review, where the grounds that can be raised to challenge a patent also include 35 U.S.C. 101 and 112, with the exception of best mode compliance.
The Patent Trial and Appeal Board (PTAB) will conduct each Inter Partes Review. If an Inter Partes Review is instituted and not dismissed, the Patent Trial and Appeal Board will issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner and any new claim added by the patent owner.
A petition for Inter Partes Review may be filed after the later of either: (1) The date that is nine months after the grant of a patent or issuance of a reissue of a patent; or (2) if a post-grant review is instituted, the date of the termination of that post-grant review. See 35 U.S.C. 311(c).
Additionally, 35 U.S.C. 315(b) provides that an Inter Partes Review may not be instituted if the petition requesting the proceeding is filed more than one year after the date on which the petitioner, real party-in-interest, or privy of the petitioner is served with a complaint alleging infringement of the patent.
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Requirements of a petition for Inter Partes Review
A petition for Inter Partes Review must satisfy the following conditions:
- The petition must be accompanied by payment of the fee.
- The petition must identify all real parties in interest.
- The petition must identify, in writing and with particularity, each claim challenged, the grounds on which the challenge to each claim is based, and the evidence that supports the grounds for the challenge to each claim, including:
- Copies of patents and printed publications that the petitioner relies upon in support of the petition and
- Affidavits or declarations of supporting evidence and opinions, if the petitioner relies on expert opinions.
- The petition must provide such other information as the Director may require by regulation.
- The petitioner must provide copies of any of the documents required to the patent owner or, if applicable, the designated representative of the patent owner.
After receipt of a petition for Inter Partes Review the Patent Office will make the petition available to the public as soon as is practicable.
If an Inter Partes Review petition is filed the patent owner has the right to file a preliminary response to the petition that sets forth reasons why no inter partes review should be instituted based upon the failure of the petition to meet any requirement.
The preliminary response must be filed no later than three months after the date of a notice indicating that the request to institute an Inter Partes Review has been granted a filing date. A patent owner may expedite the proceeding by filing an election to waive the patent owner preliminary response.
The preliminary response shall not present new testimony evidence beyond that already of record, except as authorized by the Board.
Institution of Inter Partes Review
The Office may not authorize an Inter Partes Review to be instituted unless there is a reasonable likelihood that the petitioner would prevail with respect to at least one of the claims challenged in the petition. The Office will determine whether to institute an Inter Partes Review within three months after: (1) Receiving a preliminary response to the petition; or (2) if no such preliminary response is filed, the last date on which such response may be filed.
The determination by the Director whether to institute an inter partes review under 35 U.S.C. 314 is final and nonappealable. See 35 U.S.C. 314(d).
Automatic stay of civil litigation
35 U.S.C. 315(a)(2) provides for an automatic stay of a civil action brought by the petitioner or real party-in-interest challenging the validity of a claim of the patent and filed on or after the date on which the petition for Inter Partes Review was filed. However, a counterclaim challenging the validity of a claim of a patent does not constitute a civil action challenging the validity of a claim of a patent for purposes of 35 U.S.C. 315(a).
The petitioner in an Inter Partes Review of a claim in a patent, which results in a final written decision, or the real party-in-interest or privy of the petitioner, 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 that Inter Partes Review. See 35 U.S.C. 315(e)(1). Similarly, there is estoppel against an Inter Partes Review petitioner, or the real party-in-interest or privy of the petitioner, in certain civil actions and certain other proceedings before the United States International Trade Commission (ITC) if that Inter Partes Review results in a final written decision. See 35 U.S.C. 315(e)(2).
A patent owner may as a matter of right file one motion to amend the patent. Unless a due date is provided in a Board order, a motion to amend must be filed no later than the filing of a patent owner response. 37 CFR 42.121(a)(1). A motion to amend may be denied entry where the amendment does address an issue raised by the petition or seeks to not enlarge the scope of the claims of the patent or introduce new matter. 37 CFR 42.121(a)(2).
The patent owner amendment may cancel any challenged patent claim or propose a reasonable number of substitute claims. The rebuttable presumption is that only a single substitute claim would be needed to replace each challenged claim. 37 CFR 42.121(a)(3).
Additional motions to amend may be permitted upon the joint request of the petitioner and the patent owner to materially advance the settlement of a proceeding.
Burden of proof
In an Inter Partes Review the petitioner has the burden of proving unpatentability by a preponderance of the evidence.
An Inter Partes Review will be terminated with respect to any petitioner upon the joint request of the petitioner and the patent owner, unless the Office has decided the merits of the proceeding before the request for termination is filed. Any agreement or understanding between the patent owner and a petitioner, made in connection with, or in contemplation of, the termination of a Inter Partes Review must be in writing, and a true copy of such agreement or understanding will be filed in the Office before the termination. If the Inter Partes Review is terminated with respect to a petitioner no estoppel will attach to that petitioner, or to the real party-in-interest or privy of the petitioner, on the basis of that petitioner’s institution of that Inter Partes Review. If no petitioner remains in the Inter Partes Review, the Office may terminate the review or proceed to a final written decision. See 35 U.S.C. 317.
A party dissatisfied with the final written decision of the Patent Trial and Appeal Board may appeal the decision pursuant to 35 U.S.C. 141–144. Any party to the Inter Partes Review will have the right to be a party to the appeal. See 35 U.S.C. 319.