The Updated PTAB Trial Practice Guide – Not Quite There Yet

By Russell Slifer
August 26, 2018

[W]hile the changes to the Trial Practice Guide begin to move the rules in the right direction, more is needed before post-grant proceedings will be accepted as neutral to all parties.  The PTAB should endeavor to adopt the time-honored burdens, presumptions and procedures used in the district courts for trying patent cases whenever reasonably possible.

The Patent Trial and Appeal Board (PTAB) recently issued a notice updating its Trial Practice Guide. For practitioners one of the biggest changes is the authorization of sur-replies.  This change effectively means that the opposing party gets the last word in most trial briefings.  Of interest to patent owners and petitioners, the update further revises the rules relating to the factors to be considered by the PTAB when deciding whether to institute a trial.

The Trial Practice Guide now acknowledges that in the AIA, Congress specifically granted the USPTO Director the responsibility to prescribe regulations setting forth the standards for instituting a review and for governing those reviews that are instituted. Among other considerations, the AIA charges the Director to consider the relationship of any such review to other USPTO proceedings and authorizes him or her to decline to institute a review even if the substantive threshold has otherwise been met. In this regard, Congress specifically instructed the Director, in § 316(b), to “consider the effect of any such regulation on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings instituted under this chapter.”

The Trial Practice Guide states that “[i]n General Plastic Co., Ltd. v. Canon Kabushiki Kaisha, the Board recognized these goals of the AIA, but also “recognize[d] the potential for abuse of the review process by repeated attacks on patents.” IPR2016-01357, slip op. 16–17 (PTAB Sept. 6, 2017) (Paper 19) (precedential).”  There are seven non-exclusive factors enumerated in General Plastic, but the Trial Guide is clear that there may be other reasons where the “‘effect . . . on the economy, the integrity of the patent system, the efficient administration of the Office, and the ability of the Office to timely complete proceedings,’ 35 U.S.C. § 316(b), favors denying a petition even though some claims meet the threshold standards for institution under 35 U.S.C. §§ 314(a), 324(a).”

More than a year ago I published numerous ways the USPTO could improve the IPR process with § 316(b) in mind.  Many of the suggestions were focused on the institution decision process.  For example, I proposed that, for the integrity of the patent system, the USPTO establish a rebuttable presumption that if the art or arguments relied upon by the petitioner are the same or substantially the same as that relied upon during the original examination to reject the challenged claim(s), the UPTO’s prior patentability determination relating to that art or arguments must be accepted as controlling, unless the determination is shown to be clearly wrong.  Forcing the petitioner to show why, up front, that prior USPTO decisions where erroneous is paramount to the integrity of the patent system.  Prior Agency decisions, such as an examiner’s careful consideration of a reference, need to be given an elevated level of deference and USPTO resources need to be conserved.

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Although the PTAB did not go as far as I suggested by establishing a rebuttable presumption, the PTAB did set forth several non-exclusive factors related to cited art, including whether the petitioner has sufficiently pointed out how the Office erred in evaluating the asserted prior art.  Other listed factors include the similarities and material differences between the asserted art and the prior art involved during examination, the cumulative nature of the asserted art, and the extent to which the asserted art was evaluated during examination.  Unfortunately, the Trial Guide does not fully shift the burden to the petitioner to explain the differences, but keeps the burden on the patent owner to show similarities.

I also suggested that the USPTO Director personally decide the institution of an IPR for patents covering drug or therapeutic biologic products that are undergoing FDA-required clinical testing, regulatory review and/or approval. This would include those patents that may be listed in the FDA’s Orange Book pursuant to the Hatch-Waxman Act or identified under the patent dance provisions of the BPCIA (the biosimilars act).  My suggestion was made in recognition of the conflict between the AIA trials at the USPTO and alternate proceedings already addressing patents in other forums.

Senator Orrin Hatch also recognizes the conflict between the UPTO trials and Hatch-Waxman proceedings and recently introduced the “Hatch-Waxman Integrity Act of 2018.”  This bill is intended to “prevent alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design.”

Although the updated Trial Practice Guide does not specifically address drug patents or Hatch-Waxman, it does note that “events in other proceedings related to the same patent, either at the Office, in district courts, or the ITC” may bear on the Board’s discretionary decision to institute or not institute.  As such, there may still be room for patent owners and the USPTO to decline to institute trials when doing so would create the kinds of conflict the Hatch-Waxman Integrity Act seeks to remedy.

Improvements still need to be made to ensure that the trials are fair.  For example, I suggested that the USPTO should require the petitioner, as part of the original petition, to fully disclose objective evidence of non-obviousness weighing in favor of patentability, or that refutes or tends to refute any factual contention being advanced in the petition.  In an Inter Parte proceeding to determine if the USPTO should invalidate an issued patent, the Agency, and patent owner, must have all evidence known to the petitioner disclosed up front.  There is no room for aggressive representation, better known as ball-hiding, so prevalent in district court litigation.  If a petitioner wishes to avail themselves of the PTAB proceedings, the petitioner should be required to disclose, prior to institution, all evidence of copying, the inability to or ineffectiveness of design arounds, commercial success, or contrary evidence reflected in petitioner’s internal documents or public statements, including tributes to the claimed invention.

Thus, while the changes to the Trial Practice Guide begin to move the rules in the right direction, more is needed before post-grant proceedings will be accepted as neutral to all parties.  The PTAB should endeavor to adopt the time-honored burdens, presumptions and procedures used in the district courts for trying patent cases whenever reasonably possible.  Petitioners should be required to prove that the art upon which they rely is not cumulative to that previously before the USPTO, a patent owner’s Preliminary Response presenting evidence raising genuine issues of material fact should be treated as it would be if presented in opposition to a summary judgment motion brought in the courts, and the presiding panel should determine witness credibility by hearing testimony and cross examination live.

For the AIA’s post grant and inter partes proceedings to survive and prosper in the long term, the direction begun with this latest revision to the Trial Practice Guide should be taken forward to the point that patent owners and petitioners alike see them as what Congress intended them to be – discretionary proceedings where the Director may, in keeping with the factors and considerations set for in the AIA, charge the PTAB with the responsibility of conducting fair and unbiased proceedings to reach correct and timely results.

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The Author

Russell Slifer

Russell Slifer is a Principal at Schwegman Lundberg & Woessner and the former Deputy Under Secretary of Commerce for Intellectual Property & Deputy Director of the United States Patent and Trademark Office. For more information or to contact Mr. Slifer, please visit his firm bio page.

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Discuss this

There are currently 2 Comments comments. Join the discussion.

  1. Night Writer August 26, 2018 3:17 pm

    Frankly, I think that trying to get justice by changing a discretionary institution standard is impossible.

    If anything, the more complicated the institution standard is the more discretion it gives to the PTAB judges (I know supposedly the director decides).

    We are moving to a judicial system like kings and queens. The fact finder just decides and there is nothing you can do about it and the king and queen are allowed to consider so much in making their decision that there is no way to predict the outcome. The king or queen decides.

  2. Steve August 27, 2018 9:34 am

    Appreciate the recap of the original law and it sounds like there is a lot the USPTO can change re, PTAB. Seems like standing, multiple prosecutions, a SOL to bring actions, the ability to amend, presumptions, are all things the USPTO could address in these guidelines but has not. Seems like almost nothing was done, while so much could be done within the USPTO authority they now have.

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