Commentary on Notice of Proposed Rules to Implement Post Grant Patent Proceedings Due on Monday
The deadlines for submitting comments to the USPTO on the Group 2 rule making proposals (i.e., post grant patent proceedings) are next Monday and Tuesday, April 9-10th. (depending upon the publication date)
While the USPTO should be applauded for their monumental, and comprehensive proposals (most of which are quite good and well thought out), some issues are still to be refined. The most problematic issues presented by the proposed rules, at least in my opinion, are as follows:
1. Page Limits (and here)
2. Fee Structure
3. Patentee Estoppel
4. Supplemental Information
Practitioners Preoccupied with Discovery Opportunities
Generally speaking, “discovery” is a litigation process by which information or facts pertinent to a case can be systematically obtained from an opponent or third party prior to trial. Of course, discovery is not permitted in patent reexamination proceedings because patent reexamination does not qualify as a “contested proceeding” in accordance with 35 U.S.C. §§ 23-24.
The lack of discovery in patent reexamination was often cited by Patentees as an example of the inequities of patent reexamination. For example, Patentees are unable to confirm the given identity of a real-party-in-interest identified in a request for inter partes patent reexamination, which could aid certain unscrupulous filers to dodge potential estoppel effects. Likewise, if the Patentee may be unable to obtain and present certain secondary indicia of non-obviousness (i.e., copying, commercial success of an infringing product, etc) as the third party requester may be the best source of such information.
With the passage of the America Invents Act (AIA) comes new, contested proceedings to challenge patent validity at the USPTO. These proceedings, Post Grant Review (PGR) and Inter Partes Review (IPR) will be available as of September 16, 2012. The proceedings will be conducted by the new Patent Trial & Appeal Board (PTAB) and will include “limited discovery.”
In their proposed rules to implement these new, contested proceedings, the USPTO has fleshed out the meaning of “limited discovery.” Read the rest of this entry »
Added Rebuttal Opportunity of Limited Value to Patentees
When faced with a third party request for either ex parte patent (EXP) reexamination or inter partes patent (IPX) reexamination, a Patentee must sit helplessly by and await the determination of the USPTO to grant or deny the request. That is to say, the Patentee may not file any argumentation prior to the determination of the USPTO to institute a reexamination proceeding. For this reason, as well as the relatively low Substantial New Question (SNQ) threshold set for patent reexaminations (although no longer applicable to IPX), the grant rates for both EXP and IPX have hovered around 93%.
In order to address the absence of input from Patentees, and perhaps to a lesser extent the high grant rate, the new post grant proceedings of the America Invents Act (AIA) require higher thresholds (reasonable likelihood standard for Inter Partes Review (IPR) and more likely that not standard for Post Grant Review (PGR)). In addition, prior to ordering a trial in either of the new proceedings, Patentees will now have the option of submitting a preliminary response.
Yet, while on paper the filing of a preliminary response may seem to foster a more balanced system, in practice, such filings may be very rare. Read the rest of this entry »
Speedy, One Sided Estoppel to Force Judicial Deference
The estoppel provisions of Post Grant Review (PGR) and Inter Partes Review (IPR) are markedly different than those in existence today for Inter Partes Reexamination (IPX). Most importantly, PGR/IPR estoppel attaches upon a written determination of the PTAB, and a final, non-appealable decision of a court will not force the USPTO to vacate a parallel IPR/PGR proceeding. These estoppel features are expected to be a significant driver going forward in motions to stay parallel infringement actions.
Currently, IPX requires all appeals to be exhausted before estoppel can attach. In practice, this means that there is (roughly speaking) a 6 year journey through the Central Reexamination Unit (CRU), Board of Patent Appeals & Interferences (BPAI) and Court of Appeals for the Federal Circuit (CAFC). Starting September 16 2012, IPX will be replaced with IPR. Estoppel in an IPR proceeding will be effective within 12-18 months from the initiation of the proceeding. This is because IPR/PGR proceedings must be concluded in this time frame by statutory mandate.
The speed of IPR/PGR proceedings relative to court proceedings will certainly undermine plaintiff oppositions to a motion to stay. Often times, the strongest plaintiff argument in opposing a stay is that the significant USPTO delay will be prejudicial to the plaintiff. However, perhaps more compelling will be the shifting of the prejudice argument to the side of the defendant. Read the rest of this entry »
After Final Pilot Program Designed to Cut Down on RCE Filing Rates
A bit of “pre-grant” news today…. the USPTO has launched a new, internal pilot program entitled “After Final Consideration Pilot” (AFCP). The memo announcing the program to the Examining Corps outlines the purpose as: To advance the goal of compact prosecution, the following guidance is provided to highlight situations when entry of an Amendment After Final Rejection under 37 CFR 1.116(b) may lead to earlier allowance of the application without undue burden on the examiner or applicant. . . . In limited situations further amendments or arguments may be considered.”
In a nutshell the program allots additional time to examiners to consider applicant submissions after final rejection, explaining:
A full and complete review of a response includes any additional search required to determine whether or not proposed amendments distinguish over the prior art. Examiners should review responses under 37 CFR 1.116(b) and use their professional judgment to decide whether the nature and extent of the amendments or arguments presented in the response can be fully considered within the limited amount of time authorized by the After Final Consideration Pilot.
If the examiner determines that the response can be fully considered, including any additional search required, within 3 hours for plant and utility applications or 1 hour for design applications, that amount of non-production time is available whether or not the consideration of the amendment results in allowance of the application . .
(emphasis added)
The memo is found (here).
A full and complete review of a response includes any additional search required to determine whether or not proposed amendments distinguish over the prior art. Examiners should review responses under 37 CFR 1.116(b) and use their professional judgment to decide whether the nature and extent of the amendments or arguments presented in the response can be fully considered within the limited amount of time
authorized by the After Final Consideration Pilot.
Court Cites Change in Inter Partes Reexamination Standard as Justifying Stay
When faced with the assertion of a patent of questionable validity prospective defendants increasingly resort to patent reexamination. Once a suit is filed, the opportunity to obtain a stay of an ongoing district court infringement action pending a parallel patent reexamination is a major benefit of the USPTO proceeding.
For this reason, patent reexamination parallel to a district court is often initiated in an attempt to stay the more cost prohibitive court proceeding. In deciding whether or not to stay the court proceeding the courts look to many factors. (See factor based analysis here). When considering whether to stay the proceeding in view of an ongoing inter partes patent reexamination (IPX), courts often identify the estoppel provisions of IPX as supporting an argument that issues will be simplified for trial by awaiting the USPTO decision.
In an interesting twist on the special consideration given to IPX filings, a California district court considered the impact on the recent America Invents Act (AIA) change to the standard for initiating IPX. Read the rest of this entry »
Severe Page Limit Restrictions Likely to Force Parallel Filings
The page limit restrictions proposed by the USPTO for the new post grant proceedings of the America Invents Act (AIA) are quite severe. The currently proposed rules set a maximum 50 page limit for requests to initiate Inter Partes Review (IPR), and 70 pages for Post Grant Review (PGR). The page limits may be waived upon successful petition for additional pages, however, the Office has explained that such cases would be “exceptional.”
As if the page limits were not enough, the proposal also requires double spacing and a 14 point font (§42.24). These guidelines, taken together with the need to explain lengthy patent claims (up to 20 claims per request) and compare complex figures of the prior art, combine to present significant disincentives to the public. Simply stated, the “use it or lose it” nature of the statutory estoppel provisions of IPR and PGR are inconsistent with such restrictions. For example, to present more than a single proposed rejection in an IPR request directed to 10 claims or more would almost certainly exceed the 50 page limit.
As pointed out last week, the mean page count for an inter partes patent reexamination (IPX) is several hundred pages. IPR was formulated by Congress to replace IPX. As such, the Office’s administrative restrictions may very well frustrate the intent of Congress that these new post grant proceedings serve as a meaningful alternative to patent litigation (in which expert reports on validity and related pleadings may span thousands of pages).
An additional side effect of the proposed limits may be that filers present their proposed rejections across several requests filed in parallel. Read the rest of this entry »
Candidates Question the Good Faith Basis for Suit
Back in February, I noted the “interesting” decision of plaintiff EveryMD to file suit against the Republican presidential candidates. The suit, captioned EveryMD v. Rick Santorum, Mitt Romney, and Newt Gingrich(C.D.CA) explains that U.S. Patent 7,644,122 is infringed by Facebook, and as business customers of Facebook receiving messages, that there is some type of liability on the part of the candidates. (complaint here).
POLITICO now reports that the candidates have fired back, questioning the legitimacy of the suit. The letter (found here) points out that EveryMD had first sued Facebook only to have the case dismissed (patent now subject to reexamination at the USPTO). The letter reasons that the most recent suit is an attempt to circumvent the previous failure, explaining:
[W]e do not believe there is a good faith basis for the filing of EveryMD’s action at this time. Indeed, it appears that this case seeks to circumvent the intent and effect of the Court’s earlier dismissal of virtually identical claims in a related prior action. Under the circumstances, we request that you immediately dismiss the pending complaint, failing which we expressly reserve any and all of our rights and remedies, including any right to seek recovery of all fees and costs incurred in responding to EveryMD’s complaint.
POLITICO also notes that the Patent Holder has seemingly given President Obama a fully paid up license….just because.
CAFC Determines That Claims Must be Textually Amended to Invoke Intervening Rights Statute
During a post grant proceeding, an amendment of an originally issued claim could create an intervening rights defense for potential infringers. That is to say if the amended or new claim introduced by the post grant proceeding is not substantially identical in scope relative to a previously issued claim, potential infringers of the amended/new claims may be provided with an absolute and/or equitable intervening rights defense (35 U.S.C. § 252).
Back in September, in Marine Polymer Technologies, Inc. v. Hemcon, Inc., the CAFC considered whether or not a claim needed to be explicitly (textually) amended to invoke the statute, or whether or not changes to claim scope based on prosecution history could have the same amendatory effect. The September panel ruled that an “amendment in effect” (i.e., disclaimer of claim scope) is equally effective in creating an intervening rights defense as an explicit amendment.
The panel decision was subsequently vacated in favor of an en banc review. In yesterday’s en banc decision, (here) the Court held (by a split-majority) that 35 U.S.C. §252 could not be invoked absent a textual change to the subject claim, explaining:
Read the rest of this entry »
Amended/New Claims Barred by Res Judicata
Previously, the substantially identical standard enunciated by 35 U.S.C. § 252 was analyzed in Aspex Eyewear, Inc., et al., v Marchon Eyewear Inc., et. al., (SDFLA). In the lower court ruling, the court found that claims changed/added in patent reexamination were in fact substantially identical to the previously issued claims. This was because, the claim changes made during patent reexamination added claim features the district court previously ruled to be embraced by the originally issued claim scope.
The lower court explained (decision here) that Aspex was barred from re-litigating these new claims against the previous defendants, reasoning:
The [previous action] was fully adjudicated on the merits. The dismissal release . . . made clear that the settlement dismissed with prejudice as to any causes of action “any claim which could have been had by and between the Parties arising from or connected with [the earlier dispute]. Plaintiffs argue that it alleged legally separate causes of action in their complaint because claim 23 and claim 35 [reexamination changes] did not exist at the time the [previous actions] were being litigated. The reexamination of the ‘545 Patent does not entitle Plaintiffs to circumvent claim preclusion because the amended claims relate back to the original ‘545 Patent reissue date. (emphasis added)
In affirming the lower court, the CAFC reasoned (decision here): Read the rest of this entry »
English
