Posts Tagged: "PTAB"

Thoughts on Ex parte Khvorova

Ex parte Khvorova is the first PTAB decision on patent eligibility in the life sciences. Until now, the PTAB has been remarkably silent on eligibility in life sciences in the midst of significant judicial activity. The invention relates to synthetically designed and produced small interfering RNA (“siRNA”) molecules, which were discovered in nature for their ability to suppress gene expression. Claim 85 recites a method of rationally designing siRNA molecules with optimal suppression efficacy.

10 Years Later – A Look at the Efficacy of the Pre-Appeal Brief Conference Program

For 61% of the non-defective requests, the panel decided that there was an actual issue for appeal, such that the applicant would either need to file an Appeal Brief, reengage the Examiner or abandon the application. For 33% of the non-defective requests, the panel decided that prosecution was to be reopened. For only 6% of requests were the panel decisions that an application was to be allowed.

Study of the Post Grant Procedures Is Needed Now

Very few thought that the IPR procedure would be used by creative hedge fund managers to reap benefits for the price drop of pharmaceutical companies’ stock that have had their important drugs challenged in an IPR. Most would not have thought that small patent owners would be swamped by serial petitions to invalidate their patents. Others were very surprised at the limited manner in which the USPTO permitted the patent owner to amend her claims during the process. And many did not expect the USPTO to interpret statutory language of the AIA to include so much subject matter in what was intended to be a limited-scope CBM program.

Federal Circuit Review – Issue 59 – July 17, 2015

In this issue of the Federal Circuit Review: (1) Personal Jurisdiction Remains Unchanged – Federal Circuit Declines “Stream-of-Commerce” Theory; (2) Court Denies Fee Award Under Octane But Recognizes “Troll”-Like Behavior is Relevant Consideration; (3) 35 U.S.C. § 324(e) Does Not Bar Judicial Review of Initial USPTO Determination That Patent is for a “Covered Business Method” (Versata I); and (4) 35 U.S.C. § 324(e) Bars District Court Review of USPTO Decision to Institute CBM Review (Versata II).

The Problematical IPR Proceedings of the AIA: BRI, Reviewability, Constitutionality

In three related decisions (most recently including a denial of rehearing en banc by a badly divided 6-5 decision issued concurrently with reissuance of the earlier panel decision) titled In re Cuozzo Speed Technologies, the Federal Circuit has held: (1) claim construction in IPR proceedings is governed by the prosecution standard of “broadest reasonable interpretation,” rather than the adjudicatory standard applied in the district courts (i.e., claim terms have their “ordinary and customary meaning” per the 2004 Federal Circuit decision of Phillips v. AHW Corp.); and (2) the Federal Circuit lacks appellate jurisdiction to review the PTAB’s decision to institute an IPR proceeding. Whether the AIA permits appellate review of improperly instituted IPR proceedings, the Administrative Procedures Act clearly permits such appellate review.

It’s Time to Whack ‘IPR Trolls’

Having to defend their patent in post grant reviews such as an IPR can easily cost patent owners between $700,000 to over $1 million when the subject matter of the patent under challenge relates to the biological or pharmaceutical sciences, due in part to the need to cast a wide net for relevant prior art, according to experienced practitioners like Brad Olson, a partner with Barnes and Thornburg, LLP. Such expenses are particularly threatening to new companies finding the patents that drive their business under attack just as they are desperately trying to raise money for their very survival. Given the track record of IPR’s as “patent death squads” potential investors or licensees can’t be blamed for waiting until the reviews are completed to finalize pending deals.

Functional Claiming of Computer-Implemented Inventions in View of Recent Decisions

The opinion focused on whether adequate structure corresponding to the “coordinating” function is disclosed in the specification. After determining that a special purpose computer is required to perform the function, the court searched for an algorithm for performing the function, but did not find one. The court rejected Williamson’s argument that the distributed learning control module controls communications among the various computer systems and that the “coordinating” function provides a presenter with streaming media selection functionality. The disclosures relied upon by Williamson were thought of by the court as merely functions of the distributed learning control module and opined that the specification does not set forth an algorithm for performing the claimed functions.

Avoiding Invocation of Functional Claim Language in Computer-Implemented Inventions

Functional claim language is increasingly being used by practitioners to capture the metes and bounds of an invention, especially in computer-implemented inventions. Sometimes using functional language in a claim limitation is unavoidable. Functional language does not, in and of itself, render a claim improper. However, as recently experienced in Williamson v. Citrix (en banc) and Robert Bosch, using functional language carries a significant risk of having the claim invalidated as indefinite following a determination that the claim invokes § 112(f) even when the patentee does not intend to have the claim treated under § 112(f).

Amendment to extend CBM defeated in House Judiciary Committee

One of the issues that took up a significant amount of time during the first half of the hearing was the proposed extension of the transitional program covered business method review. The amendment submitted by Congressman Issa (R-CA) sought to extend CBM by pushing back the sunset period until December 31, 2026. The Issa amendment to extend CBM was defeated by a vote of 18-13.

Senate Judiciary Committee to Markup PATENT Act

According to Grassley’s office, the amended PATENT Act will provide important reforms for the way that the Patent Trial and Appeals Board (PTAB) of the United States Patent and Trademark Office (USPTO) operates. For instance, the managers amendment would: (1) Require the PTAB to apply the claim construction standard used in federal district court (i.e., the Phillips standard) and further requires the PTAB to consider if claims have previously been construed in district court. (2) Makes explicit that for purposes of PTAB adjudications patents are presumed to be valid, although does so retaining the current law providing that the petitioner has the burden to prove a proposition of unpatentability by a preponderance of the evidence. (3) Makes clear that the Director has discretion not to institute an IPR or PGR if doing so would not serve the interests of justice. (4) Allows patent owners to submit evidence in response to a petition to institute an IPR or PGR, and petitioners to file a reply to respond to new issues. (5) Directs the PTO to modify the institution process so that the same panels do not make institution and merits decisions. (6) Directs the PTO to engage in rulemaking in order to institute a Rule 11-type obligation in IPR and PGR proceedings.

Comprehensive Study of Patent Trial and Appeal Board Decisions

the study determined that 73.5% of the challenged claims did not survive review in IPR proceedings that reached a final decision on the merits. The report also shows that, in final decisions from the PTAB, 37.5% of the claims initially challenged were found unpatentable under 35 U.S.C. § 102 (anticipation), while 57.6% of the claims were found unpatentable under 35 U.S.C. § 103 (obviousness). (Some claims were found unpatentable under both grounds.) In a recent study of patent decisions in district court cases, the district courts invalidated claims under Section 102 at a rate of 31.1% and under Section 103 at a rate of 27.8%.

Petition Dismissal is Appropriate for Improper Use of PTAB Resources

Congress created AIA trial proceeding to combat trolls, not create an altogether new class of them. Since the initial filings of Hayman, the STRONG ACT has been introduced in the Senate and includes a provision that would require standing for IPR petitioners (presumably to thwart such filings). However, companies not only employ IPR as an alternative to ongoing litigation but as a due diligence tool to avoid such situations in the first instance. Innovators looking to develop a new product line, or new area of business should have the freedom to clear the landscape of improvidently granted patents via the PTAB without having to wait for a lawsuit, or threat of one. Such knee-jerk legislative fixes will have unintended, and unfortunate consequences.

Patent Abuse or Genius? Is Kyle Bass Abusing the Patent System?

Time and time again throughout the legislative history post grant proceedings were explained as being a faster, low-cost alternative to litigating validity disputes in Federal District Court. That being the case, it would seem extremely odd that any petitioner could bring a post grant challenge to a patent when that petitioner would not have standing to sue to invalidate the patent in Federal District Court. However, the statute does say that a person other than the patent owner can file a petition to institute an inter partes review.

Post Grant Patent Challenges Concern Universities, Pharma

Gulbrandsen’s chief complaint with the U.S. system centers around the fact that it has become enormously easy to challenge issued patents once they have been granted. In fact, organizations in pursuit of acquired technology are leveraging the kill-rate at the Patent Trial and Appeal Board (PTAB) at the United States Patent and Trademark Office (USPTO), to negotiate lower licensing payments. Threats are made that patents will be challenged in Inter Partes review, “so that you amend the license and reduce the fees,” Gulbrandsen explained. “So, immediately you know that devalues the patent and devalues the license agreement that you’ve got.”

USPTO makes changes to AIA post grant proceedings

The immediate modification to the page limits for motions to amend is more in line with reality given the high burdens placed on patent owners. Even when patent owners sought additional pages, the norm was a three to five page extension. So getting ten extra pages is a welcome change. Changing the page limits, alone, is unlikely to impact the calculus underlying the strategic choice to amend. But when the choice is made to amend, patent owners will be better able to meet their burden.