Post-Grant Proceedings Are You Ready to Practice … 1 Post-Grant Proceedings Are You Ready to...

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Post-Grant ProceedingsAre You Ready to Practice Before the New PTAB?

Bryan K. WheelockJanuary 30, 2013

USPTO Post Grant Proceedings

The AIA created three post grant proceedings for challenging the validity of a patent:

Post Grant Review (PGR)

Inter Partes Review (IPR)

Covered Business Method Review (CBMR)

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IPR and CMBR Filings

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IPR and CBMR Filings

CBMR

IPR

IPR and CMBR Filings

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Cumulative IPR and CBMR Filings

CBMR

IPR

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Are you ready to practice before the new PTAB?


The PTAB will admit non-practitioners pro hac vice for goodcause.

PTAB requires a licensed practitioner be lead counsel.

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PGR, IPR, and CBMR proceedings will typically be concluded within one year from initiation (eighteen months from the filing of the petition).


Post grant proceedings are significantly faster than district court litigation, where the median time to trial is 2 to 3 years.

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Median Time to Trial

Source: PWC Patent Litigation StudyPage 21, Chart 7B

Time to Trial

Source: PWC Patent Litigation StudyPage 20, Chart 7A

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The USPTO estimates that the cost of bringing or defending a post grant proceeding will be about $275,000 - $325,000

This is significantly cheaper than district court litigation, where the median cost of litigation is $1,500,000 - $2,500,000

Median Litigation Costs

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Comparative Costs

Source: USPTOPOST-GRANT.COM

Costs of Post Grant ProceedingsIPR PGR/CBMR

Pre-March 19, 2013 Fee $27,200 $35,800

Pre-March 19, 2013 Fee for claims in excess of 20

$600 $800

Post-March 19, 2013 Request Fee $9,000 $12,000

Post-March 19, 2013 Request Fee (Claims > 20)

$200 $250

Post-March 19, 2013 Post Institution Fee

$14,000 $18,000

Post-March 19, 2013 Post Institution fee (Claims > 15)

$400 $550

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Chances for Success

Nationwide average win rate for patent owners is 63%.

Average win rate ranges from 53% to 81% for the top 20 patent districts Source: LegalMetric www.legalmetric.com

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Overall Win Rates (Includes Consent and

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Chances for Success

However the contested win rate is 25%, and ranges from about 43% to about 10%.

Source: LegalMetric www.legalmetric.com

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Contested Win Rates (No Consent or Default

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Chances for Success

The overall success rate for Post Grant Proceedings is unknown, but the success rate for Inter Partes Reexamination may be as high as 89%

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Inter PartesReexamination 1999 -2012

All Claims Confirmed

All Claims Cancelled

Claims Amended

Post Grant Challenges v. Litigation IPR/PGR Litigation

Initiation Reasonable Likelihood/More Likely Than Not

Actual case or controversy

Claim Construction Broadest reasonableinterpretation

Court-construed meaning

Standard of Proof on Issues of Validity

Preponderance of the evidence

Clear and convincing evidence

Discovery Limited Yes

Amendment of Claims Yes No

Estoppel Yes Yes

Timing 18 months from petition to decision

Average 2 1/2 years from filing to trial

Cost $275,000-$350,000 $2.5-4 million

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Discovery - Generally

Post Grant Proceedings

Mandatory Discovery (if agreed to, or requested)

Routine Discovery (cross-examination)

Additional Discovery “in the interests of justice” for

IPR; “for good cause” for PGR and CMBR

Litigation

Full scope of relevance under FRCP 26 using: Interrogatories

Requests for Production

Requests for Admission

Depositions

Discovery - Depositions


“Counsel must not make objections or statements that suggest an answer to a witness. Objections should be limited to a single word or term.” Office Trial Practice Guide

Litigation

“An objection must be stated concisely in a nonargumentative and nonsuggestive manner.” FRCP 26(c)(2)

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Discovery - Depositions


“(c) Duration. . . . “Seven hours for direct examination, four hours for cross-examination, and two hours for redirect examination.” 37 C.F.R. §42.53

Litigation

“(1) Duration. Unless otherwise stipulated or ordered by the court, a deposition is limited to 1 day of 7 hours.” FRCP 26(d)(1)

Motions

Motion for a protective order

Motion for rehearing

Motion for extended page limits

Motion to seal (particular to address confidential information submitted after the termination of the proceeding)

Motion to extend the duration of the proceeding (from 12 to 18 months)

Motion for discovery

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Motions

Motion to exclude evidence

Motion for additional time to respond/amend the scheduling order

Motion to amend claims

Motion for joinder

Motion to file supplemental information

Motion for judgment

Motions for observations on cross-examination

Motions

DO NOT file a Motion that has not be authorized by the PTAB.

Exceptions: Request for Rehearing, Observations on Cross-Examination, Motions to Exclude Evidence; Motions to Seal (filed with Petition); Motion to Waive Page Limits (filed with Petition)

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Motions

Motion (15 pages)

Opposition to Motion (15 pages) – 1 month

Reply to Opposition (5 pages) – 1 month

Evidence

Exclusion based upon lack of authentication is not favored by the PTAB.

Evidence must be submitted with an amended Exhibit List.

Objections to evidence must be made within five business days of submission, or are deemed waived.

The specification of the patent is hearsay, and must be substantiated by a witness if the information is going to be relied upon.

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When to litigate in the Patent Office?

Whenever validity is a serious question.

Particularly where the petitioner’s product is not publicly available.


Advantages

Faster than litigation

Cheaper than litigation

Broad claim construction

Lower standard of proof

Disadvantages

Limited scope of prior art

Not a complete resolution of dispute

Ability to Amend Claims

Estoppel

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The strongest reason not to use post grant proceedings to attack a patent is the ability of the patent owner to amend the claims.

A Quick Look at IPR/PGR/CBMR

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Petition

Petition

The petition for Inter Partes Review must contain:

A certification that the patent for which review is sought is available for Inter Partes Review

A certification that the petitioner is not barred or estopped from requesting Inter Partes Review

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Petition A statement of the relief requested, including:

the claim

the statutory grounds for the challenge

how the claim is to be construed

how the claim is unpatentable

under the asserted statutory grounds

The exhibit number of the supporting evidence, and a statement of the relevance of the evidence to the challenge raised identifying the specific portions of the evidence that support the challenge.

where each element of the claim is found in the prior art.

Petition

Common Mistakes

Omitting Mandatory Notices

Designation of Lead and Backup Counsel

Identification of Service Information

Failing to use proper exhibit numbers

Including argument in claim charts

Redundant grounds

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Petition

Only contest the claims you need to eliminate, because each challenged claim presents an opportunity for the patentee to amend its claims.

Consider how the patent owner may amend the claims before you file.

Keep the grounds as simple (and few) as possible, because the board can take into account the complexity when deciding whether to institute IPR or PGR.

Petition

Raising obviousness grounds opens the door to discovery regarding secondary considerations.

A statement of facts is optional, but any facts stated are deemed admitted if not expressly contested by the Patent Owner.

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Petition

BEST PRACTICES

Cover Sheet

Table of Contents

Table of Authority

Summary Table of the Grounds

An Overview of the Patent

Petition

Must includes a statement of claim construction

Source: IPR 2012-00027

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Petition

Must includes a statement of claim construction


Petition

Good Claim Charts are important

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Petition

Good Claim Charts are important


Petition

A summary of the grounds is very useful

SOURCE: IPR 2012-00005

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Petition


SOURCE: IPR 2012-00041

Petition



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Petition


Petition

An overview of the challenged patent can be helpful.

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Petition

A picture is worth a thousand words


Petition

A picture is worth a thousand words


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Petition

Identify the Level of Ordinary Skill in the Art (where relevant)


Petition

Consider a Statement of Material Fact


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Stays Pending IPR

District Courts stay litigation for reexamination 58.8% of the time.

District Courts have stayed litigation for IPRs 100% of the time (3/3)

IPR must be brought during the first year of litigation.

IPR must be completed within one year of initiation.

Actions Due on Receipt of Petition

Patent owner must file a Power of Attorney a day prior to filing Mandatory Notices.

Patent owner must file Mandatory Notices within 21 days of service of the Petition

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Patent Owner Preliminary Response

Patent Owner Preliminary Response Potential patent owner preliminary responses include:

(1) The petitioner is statutorily barred from pursuing a review.

(2) The references asserted to establish that the claims are unpatentable are not in fact prior art.

(3) The prior art lacks a material limitation in all of the independent claims.

(4) The prior art teaches or suggests away from a combination that the petitioner is advocating.

(5) The petitioner’s claim interpretation for the challenged claims is unreasonable.

(6) How the claims are directed to a patent-eligible invention.

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The Preliminary response should focus on why the proceeding should not be initiated, not why the patent is valid

The Patent Owner generally cannot present testimony in the Preliminary Response

A patent owner may file a statutory disclaimer of one or more challenged claims to streamline the proceedings.


Where a patent owner seeks to expedite the proceeding, the patent owner may file an election to waive the patent owner preliminary response.

No adverse inference will be taken by such an election.

If the parties are going to agree to Mandatory Disclosures, this agreement must be filed at the same time as the Patent Owner’s Preliminary Response.

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Decision on Petition


Decision on Petition is final and unappealable, although Petitioner can request reconsideration

A Scheduling Order will be provided concurrent with the decision to institute the proceeding, setting due dates for taking action.

The Patentee has ten days to object to Petitioner’s Exhibits.

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Mandatory Initial Disclosure (if agreed by the parties) should be filed as Exhibits.

The parties may automatically take discovery of information in any agreed Mandatory Initial Disclosures.

Decision on Petition The Board will initiate a conference call within about one month

from the date of institution of the trial to discuss the Scheduling Order and any motions that the parties anticipate filing during the trial.

Parties should identify any Motions they intend to bring two days before the conference call.

Parties should be prepared to discuss:

Protective Order

Motions

Need for discovery and/or compelled testimony

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Patent Owner Response /Motion to Amend

Patent Owner Response /Motion to AmendThe patent owner has the opportunity to respond to

the Petition once a trial has been instituted.

The patent owner must object to any facts set forth in the Petition, or they are deemed admitted.

The patent owner may file a first motion to amend the claims without the need to obtain prior Board authorization, although the patent owner still must confer with the Board before filing the motion.

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Patent Owner Response /Motion to AmendThe motion to amend can be conditional –made conditional on the original claim being found to be unpatentable.

The affect of amendments on the estoppel against the Petitioner is unclear.

Petition Reply /Opposition to Motion to Amend

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Petition Reply /Opposition to Motion to AmendThe Petitioner has 5 days to object to the patent owners evidence.

The petitioner can reply to the Patentee’s Opposition, and to the Motion to Amend Claims.

Patent Owner Reply to Opposition

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Oral Hearing

Oral Hearing Each party to a proceeding will be afforded an opportunity to

present their case before at least three members of the Board.

Generally, a petitioner to a hearing will go first followed by the patent owner or respondent after which a rebuttal may be given by the petitioner.

The order may be reversed, e.g., where the only dispute is whether the patent owner’s proposed substitute claims overcome the grounds for unpatentability set forth in the petition.

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Final Written Decision

Final Written Decision

The estoppel effect takes effect upon the final written decision (before any appeal to the CAFC is completed)

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