How to Protect Your Patent from Post Grant Proceedings

By Gene Quinn
September 21, 2014

The American Invents Act (AIA) created three new ways to challenge the validity of claims in already issued patents. While the AIA was signed into law on September 16, 2011, the new post grant proceedings did not become effective until one year after the signing, on September 16, 2012. These three new post grant proceedings are post-grant review, inter partes review and covered business method review, which is a variety of post-grant review that is limited to business methods relating to the financial industry. Because post-grant review was specifically limited in applicability to patents that were examined under the new first to file law, only patents that have an effective filing date on or after March 16, 2013, are capable of being reviewed in a post-grant review proceeding. Therefore, so far the USPTO has only seen inter partes review and covered business method cases.

On August, 14, 2012, the United States Patent and Trademark Office promulgated final rules applicable to these new proceedings, and at that time the USPTO said that they anticipated  that 420 petitions for inter partes review would be filed in fiscal year 2013.  The USPTO also said they anticipated that in fiscal year 2014 there would be 450 petitions for inter partes review filed. See 77 FR 157 (August 14, 2012) 48713. The Patent Office severely under estimated the popularity of post grant proceedings, particularly inter partes review.

Inter partes review has been extraordinarily popular due to the fact that the rules are stacked in favor of the challenger. Indeed, recently Scott McKeown who is a partner at Oblon Spivak and co-chair of the Oblon post grant practice group wrote on his blog that the Patent Trial and Appeals Board (PTAB) “offers unprecedented speed with none of the patentee safeguards of the district court.” The biggest safeguard that a patentee enjoys at the district court is a presumption of validity. In other words, during a patent litigation in the district court the patent is presumed valid and will remain valid unless and until the challenger can demonstrate by clear and convincing evidence that the claim (or claims) are invalid. At the Patent Office, however, the patent does not enjoy any presumption of validity and the challenger need only meet a preponderance of the evidence standard, which is substantially less onerous than the clear and convincing standard in a patent litigation in the district court.

In addition to the rules being stacked in favor of the challenger, post grant proceedings have been popular because the Patent Office is granting petitions for such review in a high percentage of cases, and so far in the overwhelming number of cases the PTAB has found in favor of the challenger. Indeed, some 80% of claims challenged at the PTAB are instituted for trial, and upward of 85% of patent claims will be cancelled or amended before the PTAB. See The PTAB Roadblock to Patent Monetization. These statistics have lead Chief Judge Randall Rader of the United States Court of Appeals for the Federal Circuit to describe the PTAB as “acting as death squads killing property rights.”

What this means for the patent owner is this: If a post grant proceeding challenge is filed against your patent you should anticipate that the petition will be granted, an administrative patent trial will ensure, and you are in serious jeopardy of losing the challenged claims. Furthermore, you cannot anticipate that you will be able to amend your claims because the PTAB has granted exactly 1 motion to amend, which seems to have been granted merely because the challenging party did not object to the amendment.

[PTAB-1]

There are, however, strategies available to attempt to ward off post grant challenges for those who have not yet had a patent issue, or who still have the opportunity to file a reissue application to broaden patents obtained, or who still have one or more pending applications open at the Patent Office.

Filing a post grant proceeding challenge is not inexpensive. This is not to say that filing such challenges is ordinarily cost prohibitive. When you compare the costs to fighting a patent in a patent litigation in the district court where even an average patent case can easily cost between $2 million to $3 million in attorneys fees to defend, the total cost of an ordinary post grant challenge is quite a bargain. Still, the filing fees for a petition alone are not irrelevant.

The petitioner in an inter partes petition must pay $23,000 for the right to challenge 20 or fewer patent claims. There is also an additional fee of $600 per claim in excess of 20 claims. The fees are even greater for covered business method petitions, where the initial filing fee is $30,000 for 20 or fewer claims challenged, with an additional fee of $800 for each additional claim challenged over 20. Add to this the fact that it will easily cost every penny of $300,000 start to finish for an inter partes review, and that some firms quote as high as $1,000,000 in fees start to finish, with a proper patent prosecution strategy you can make the post grant proceedings too expensive to pursue.

With this in mind, patent owners must modify their strategies during prosecution to make their patents and portfolios less susceptible to post grant challenges. This strategy must take into account the cost of filing a petition by a challenger. Patent owners must obtain enough claims and enough patents to make it extremely expensive for a challenger to go down the path toward an administrative patent trial where the deck is stacked against the patentee. This will require patent owners to obtain patent claims with numerous dependent claims that cover as many variations as possible, but also to ensure that the dependent claims build on one another little by little so as to create a claim set that refers back to as many previous claims as possible. Such a claim mosaic will raise the filing fee that must be paid to institute a post grant challenge.

The rub here is how does the USPTO determine how many claims are being challenged when challenged claims are dependent and refer back to one or more other claims. The USPTO explained: “for fee calculation purposes, each claim challenged will be counted as well as any claim from which a claim depends, unless the parent claim is also separately challenged.” 77 FR 157 (August 14, 2012) 48619. The USPTO went on to provide several examples:

Example 1: Claims 1–30 are challenged where each of claims 2–30 are dependent claims and depend only upon claim 1. There are 30 claims challenged for purposes of fee calculation.

Example 2: Claims 21–40 are challenged where each of claims 21–40 are dependent claims and depend only upon claim 1. As claims 21–40 depend from claim 1, claim 1 counts toward the total number of claims challenged. Thus, there are 21 claims challenged for fee calculation purposes.

Example 3: Claims 1, 11–20, and 31– 40 are challenged. Each of claims 1 and 31–40 are independent claims. Each of claims 11–20 are dependent claims and depend upon claim 9, which in turn depends upon claim 8, which in turn depends upon claim 1. As claims 11–20 depend upon parent claims 8 and 9, claims 8 and 9 would count as challenged claims towards the total number of claims challenged. As claim 1 is separately challenged, it would not count twice towards the total number of claims challenged. Thus, there are 23 claims challenged for fee calculation purposes.

Example 4: Claims 1, 11–20, and 31– 40 are challenged. Each of claims 1 and 31–40 are independent claims. Claim 11 depends upon claim 1 and claims 12– 20 depend upon claim 11. As each of the challenged claims is based on a separately challenged independent claim, there are 21 challenged claims.

In none of these cases is the filing fee going to be a real deterrent if the challenger has decided to pursue either inter partes review of covered business method review. Notice, however, that in each example the dependent claims challenged depended only on a single other patent claim. But what if you were to get a patent that had 50 claims and the most valuable claims were 41 through 50, each of which referred back to each of the first 40 claims in one way or another. That would mean that the filing fee for a single inter partes petition that would challenge claims 41-50 would cost $41,000. If there were 100 claims in the issued patent the filing fee would be $65,000.

Of course, due the page limitations what can and does happen is that the challenger would not file a single petition for inter partes review, but instead may file several simultaneous petitions to challenge the claims. In this scenario, if you have a large number of claims even if you do not strategically use dependent claims that incrementally build on each other you likely will force the challenger to need to file multiple inter partes petitions, which in and of itself raises the filing cost, as well as the cost of preparing and litigating. So if you have 60 claims and the challenger needs to challenge all 60 they may choose to file three separate petitions to lay out the case within the page limits, which would cost the challenger three separate filing fees, or $69,000.

[Varsity-1]

But what if you don’t just have one patent with an above average number of claims, but what if you continually mine the disclosure to obtain hundreds of patent claims over a dozen or more patents? If the specification is written as an omnibus specification that is capable of fully supporting a real innovation there should easily be enough matter disclosed in the first filing to support hundreds, if not thousands of patent claims. Until now there has really been marginal benefit to seek protection on all of the various combinations that could be claimed because there are additional claim fees required in order to obtain those claims. Having said that, if you have a valuable patent property you absolutely must seek far more claims and far more patents than you ordinarily would in a world that didn’t have a PTAB killing patents.

Whether we like it or not there is a substantial backlash against innovators and at this moment in history patents are largely viewed as evil and unnecessary. In this climate it is necessary for innovators to strategically engage in patent prosecution to obtain more patents with more claims so that even the more favorable standard at the PTAB will not be enough to warrant challenging your patents in a post grant administrative trial at the USPTO. Of course, the other benefit of having so many patents and patent claims is that at some point even the PTAB should presumably be unable to in an intellectually honest way find that all of your claims are invalid.

Until we get to that equilibrium, and perhaps until we get to a new Administration controlling federal government agencies and a more pro-innovation Congress, patent owners need to take matters into their own hands. That unfortunately will make obtaining a strong patent portfolio more expensive than a few years ago, but closing your eyes to existing reality and instead wishing for the past is not a winning strategy. If you are going to spend money to acquire commercially valuable patents you might as well spend enough so that the patents have the greatest chance of living through this patent-killing era.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 15 Comments comments.

  1. Pro Se September 21, 2014 11:10 am

    There’s a danger in anyone trying to hold tight through this anti-patent era, latches!!! I got threatened with IPR filings and defendants use that threat now as a standard practice. What I found helpful is finding the defendants own attempts to get the same art (patent apps work best) and including a list of it in my own patent folder. So filing an IPR against me now becomes not only the defendant shooting themselves in the foot should they not disclose the alledged information of the IPR in their own art, but let’s see how well the chances are that “big company A” counsel will be hired by “big company b” in the future after having contributed an attack on art that goes on record to attack all patents as part of the related “state of the art” file wrapper disclosure…

    Remeber the part is a movie when the guy walks in with a pulled grenade and says “if I go down, then we all go down?”… Find a way to create that scenario for your patents.

  2. Attack Me, Attack Yourself September 21, 2014 9:25 pm

    Right you are Pro Se. In addition, since 101 rejections by the PTO are so prevalent now, also review the arguments your infringer-adversaries are proffering to the PTO in their effort to traverse their own 101 rejections on their own patent applications.

    Then use their own arguments against them with the PTO and the courts as they contradict themselves when trying to have your claims ruled 101 ineligible.

    Their arguments against yours … becomes arguments against theirs.

    A few companies have realized this and wisely elected to stick with 102/103 attacks; steering clear of 101 attacks on others patents for this very reason.

    But most have not.

  3. Paul F. Morgan September 22, 2014 9:26 am

    Gene, I believe the above statistics on IPR petition grant rates have now changed somewhat.

    Also, the important fact that everyone seems to be ignoring about IPRs is that the main reason IPRs are successful is simply that the patent or publication prior art found by petitioners (in very thorough prior art searchs) is almost always much better prior art than the prior art the application examiner found in a typical application examination search of only a few hours. Especially with the amount of searchable prior art doubling approximately every ten years.
    102/103 does not draw any distinction as to how much time and effort it takes to find prior art, as long as it is publicly accessable. Long before the AIA, prior art has been held to include even be a single indexed copy of a typed thesis in one small foreign library.

  4. Benny September 22, 2014 10:13 am

    Paul,
    I am entirely in agreement with you. However, the tone of the article – I may be misreading it – seems to be more about how to prevent your patent being challenged regardless of whether or not it can be proved that it does not meet the requirements for grant. The idea that a patent should be held valid and enforceable even though prior art exists to prove the rights are not held by the first to innovate is a symptom of system which is not in good working order.

  5. Rick G. September 22, 2014 12:07 pm

    “However, the tone of the article – I may be misreading it – seems to be more about how to prevent your patent being challenged regardless of whether or not it can be proved that it does not meet the requirements for grant.”

    Seems par for the course for this website. Gene Quinn is a self-professed “patent apologist.”

    That’s why Steve and Gene are always very careful to point out that the patents they highlight are “interesting” and never “plainly invalid.”

  6. MaxDrei September 23, 2014 2:36 am

    On “interesting” there is a difference between post-issue validity proceedings at the USPTO and at the EPO.

    It goes to the presumption of validity.

    If you survive Opposition at the EPO your patent has a higher presumption of validity. That’s because evidence of invalidity is tested on a “preponderance” standard both at the EPO and, later, in the courts.

    In the USA, after issue, the party attacking validity needs evidence that is clear and convincing. Only at the USPTO is the patent owner exposed to the lower “preponderance” standard.

    In consequence, the rush to attack validity at the USPTO and the understandable efforts by patent owners to ward off such attacks.

    What for me is interesting is the different ways the two jurisdictions use, to keep down the numbers of post-issue validity attacks at the PTO. The USPTO does it with swingeing fees. The EPO does it with self-interest. It is just not clever to oppose an issued patent at the EPO if the patent is going to survive, somewhat narrower but now emanating an aura of unassailability.

    Do I see it right? How much higher is the presumption of validity in the USA, for claims that have survived post-issue attack at the USPTO?

  7. Anon September 23, 2014 10:38 am

    MaxDrei,

    I do not understand your question.

    In truth, the presumption of validity does not change at all in the US system. In perception, the change would be exactly the same for both the US system and the EPO: the patent is more robust against the particular art that has been brought to bear, with no legal change in the actual legal state of validity. Are you saying that in the EPO that once a patent is challenged, any further challenges must in fact meet a higher standard?

    Can you restate your view?

  8. MaxDrei September 23, 2014 1:27 pm

    Thanks anon, for convincingly answering my “How much” question with your answer “Nothing”.

    What I’m on about is the good old adage that what doesn’t kill you makes you stronger.

    Suppose post-Alice, you fancy your chances of a 101 defence in court. But even as you mull it over, somebody runs that attack at the PTO. And fails. Would your assessment of your own chances of success in court sink a bit? Or would you not be troubled at all by the outcome at the PTO?

    In Europe, issued claims often go down on enablement or added matter, quite independent of the cited art. Even with the same art, the English court would assess it on the evidence of opposed technical experts, differently than at the EPO. So even with the same art, the outcome can be different. But courts in Europe prefer not to contradict the EPO. Hence my thought that an aura of unassailability hangs around an EPO patent that has seen off an opposition, despite the attacker needing only to get over a preponderance standard.

    English Courts issue a “Certificate of Contested Validity”. If you attack validity despite such a Certificate, and fail, it can have severe consequences when the court awards costs.

    But back to the USA. If the patent is a threat, you just have to have a pop at it in the USPTO, don’t you? Otherwise folks (judges, business people, analysts) might say what they say in Germany, namely “Infringer, you had your chance to blow the patent away. But you chose not to use it. So, it’s your own fault you are now getting enjoined”

  9. Anon September 23, 2014 1:55 pm

    I recognize the adage.

    That does not answer my return question to you on the law. I do note that the adage does feed the perception, but as I note, that perception is not the law, and does little in a court of law, does it not?

    As far as using the same art for different purposes, that is a new wrinkle to the conversation, and yet again – here in the US, the same result, which moves your original question along, not at all.

    I am not certain that I grasp the point that you are trying to make – that somehow a difference in how each sovereign treats the notion of presumption of validity has a driving effect somehow. So I apologize, but I have to ask yet again for you to restate your question.

  10. MaxDrei September 23, 2014 4:37 pm

    Anon you already answered my original question. There is no need for me to re-state it.

    As to your return question which you say I have not answered, the answer (No) is not hard to derive from my reply above.

    For my part I don’t understand where in what I wrote you came to the idea of “using the same art for different purposes”. Alas, we have difficulty holding any sort of conversation, you and me, for I don’t understand you and you don’t understand me.

    How does one protect on’s patent against post-grant proceedings? One way (as Gene suggests) is to make the cost of mounting such proceedings prohibitive. Another way might be how folks do it at the EPO, namely, deliberately to choose to go to issue with claims that are robust against validity attacks. Then, either the atack never materialises or, if it does happen, it does the patent owner a favour, in that the issued claims shrug off the attack and acquire an enhanced aura of validity. A perception of strength (whether at issue or after post grant proceedings) might not be “the law” but (in business as in many other places) mighty valuable nevertheless.

  11. Anon September 23, 2014 6:21 pm

    Thanks MaxDrei for letting me know I answered your question (even if I am still scratching my head as to what point you were trying to make regarding the presumption of validity).

    Your new thought just is not as cut-and-dried as you portray. Taking claims to issue that are robust is a fallacy given how our Court has decided that it can rewrite patent law whenever it wants to. There is no such thing as begin able to know what the Court will decide so many years after a grant is obtained, much less after an application is filed (when the limit on new matter can be added),

    By the way, did you see the kudos extended to your side of the pond’s Sir Jacob? I daresay that if our judiciary had the mindset of tending only to the law and to the facts (leaving policy for the legislature), that your suggestion would in fact be implementable.

  12. MaxDrei September 24, 2014 2:09 am

    English patents judge Robin Jacob I know well. Here is his Wikipedia entry:

    http://en.wikipedia.org/wiki/Robin_Jacob_(judge)

    You will see that he got his degree in physics from Cambridge. A degree in the natural sciences would give one respect for laws and facts, wouldn’t it? Besides, as is the norm in England, he spent something like 20 years as a barrister (advocate) in patent cases (sometimes acting for the patent owner and sometimes for the accused infringer) before ascending to the bench to judge them all.

    Did I “see the kudos” though? No. I have no idea what you mean.

    Here’s another English judge for you. A Christian. In favour of hanging. Known as “The People’s Judge”. Very controversial. No law without morality, he said. And no morality without Religion. How about that?

    http://en.wikipedia.org/wiki/Alfred_Denning,_Baron_Denning

    What’s my point on the Presumption? Very simple really. That you have to have a go at the patent at the USPTO (where the presumption is a preponderance) because you can’t afford not to. If you leave it till later, you have to get over the higher C+C hurdle.

  13. MaxDrei September 24, 2014 2:10 am

    I now see that my Comment # 12 is stuck in moderation.

  14. MaxDrei September 24, 2014 9:27 am

    ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/jacob.pdf

    Based on what I just saw on the other blog, I think the Link above is what Anon at #11 is inviting us all to read.

    Having digested that, you might want to visit Wikipedia on Robin Jacob, to find that he has a degree in natural sciences (physics) from Cambridge, followed by decades of experience as a patents barrister before his ascent to the bench.

  15. Anon September 24, 2014 11:41 am

    One does not need to visit wikipedia MaxDrei, in the direct link Sir Jacob lays out his credentials.

    That he sticks to the law and to the facts, rather than pursuing the frolic of “policy” is what I find most refreshing from the man and how he views his role as a judge.