Simplification of PTAB Trial Grounds May Not Help CAFC
Under the old inter partes patent reexamination model, patentees were often faced with 10+ grounds of rejection. The numerosity and overlap in these rejections rendered USPTO processing quite tedious and resource intensive. For at least this reason these proceedings would take upward of five years to make their way through the USPTO.
With the inefficiencies of inter partes patent reexamination still fresh on the minds of the Patent Trial & Appeal Board (PTAB), it is not surprising that the Board has attempted to simplify such issues for Inter Partes Review (IPR) and Covered Business Method (CBM) patent challenges (and presumably PGR). In the PTAB Trial Orders to date, grounds of unpatentability that are deemed “redundant” are filtered out at the close of the preliminary proceeding and trial is ordered going forward on the strongest grounds (as determined by the panel of PTAB judges). However, in view of the recent CAFC decision in Rexnord Industries LLC. v. Kappos (CAFC 2013), this redundancy determination may only serve as a temporary reprieve for patentees. Read the rest of this entry »
Early Determination Calibrates Plaintiff Expectations
Inter Partes Review (IPR) and Covered Business Method (CBM) proceedings of the Patent Trial & Appeal Board (PTAB) begin with a Trial Order that includes substantial guidance on matters of claim construction. Typically, key terms at issue in the proceeding are expressly construed by the panel of administrative patent judges (APJs). While such constructions are not binding per se on a parallel litigation proceeding, in some circumstances such findings can be nevertheless devastating to a litigation campaign, and, disruptive at a far earlier date than a typical Markman Order.
For example, in many cases involving non-practicing entities (NPE), an overly broad claim construction is advanced for the purpose of capturing the products/processes of an entire industry. At the PTAB, the broadest reasonable interpretation is applied. Naturally, if the PTAB does not agree with the NPEs claim interpretation some 5-6 months after petition filing, such is strong evidence that the plaintiff’s case will not go according to plan. In fact, the CAFC has found interpretations of the USPTO in this context to be persuasive evidence. See St. Clair Intellectual Property Consultants, Inc. v. Canon Inc., (Fed. Cir. 2011, non-precedential)
In other contexts, where the claim interpretation analysis is more akin to a district court analysis, such as in an expired patent or means-plus-function claim, the PTAB Trial Order can arguably supplant a Markman analysis. Read the rest of this entry »
CBM Statute Inadvertently Excludes Best Source of CBM Prior Art
In fashioning the Covered Business Method (CBM) statutes of the America Invents Act (AIA), Congress was sensitive to the resources of the USPTO. That is, Congress realized that certain types of ”secret prior art” would be very discovery intensive to analyze within the mandated 12 month time frame that the USPTO must conclude a CBM proceeding. An example of such art would be secret public use of a claimed method that predated a patent filing, such as described in Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co. 153 F. 2d 516 (CA2 1946). To avoid this type of discovery intensive prior art being applied in CBM proceeding, Congress excluded it under the definition of prior art provided in Section 18(C) of the AIA.
The problem with Section 18 (C) is that its definition of prior art inadvertently excluded 102(e). Read the rest of this entry »
Avoid These Litigation Inspired Drafting Errors
One of the biggest misconceptions about the new patentability challenges of the America Invents Act (AIA) is the notion that these administrative trial proceedings are somehow analogous to district court litigation — nothing could be further from the truth. Rather, the new AIA proceedings simply skip over the previous patent reexamination examiner phase and go straight to the Patent Trial & Appeal Board (PTAB) phase, with a very limited opportunity for expert depositions along the way.
While it is certainly true that Inter Partes Review (IPR), Post Grant Review (PGR) and the Covered Business Method (CBM) proceedings are “trials,” these PTAB trials are governed by their own unique procedures, and are almost exclusively conducted on paper. As is made clear from the 12 months of proceedings to date, discovery practice is quite limited for these trials since they are based on documentary evidence only (i.e., patents and printed publications).
Looking at the top 5 IPR petition drafting mistakes, it is not surprising that most stem from the failure to recognize the key differences between PTAB and district court proceedings.
Read the rest of this entry »
The First Year of PTAB Patentability Challenges
Today marks the one year anniversary of the new patent challenge mechanisms of the America Invents Act (AIA). Over the past few months there have been many noteworthy rulings in the 550+ Inter Partes Review (IPR) proceedings and 50+ Covered Business Method (CBM) proceedings. This week, I will look at the rulings that helped shape post grant practice before the PTAB over the first year. Today we start at the beginning with formal petition practice. Later this week, I will look at other phases of the proceeding, up to the time of oral argument such as effective petition practices, motion practice, joinder practice, and requests for additional discovery. While these rules and best practices are certain to evolve further, the PTAB’s decisions over the past year provide invaluable guidance far beyond that provided in the statute, legislative history, rules and notices.
The first step in any IPR, CBM or PGR proceeding is the preparation and filing of the petition. Read the rest of this entry »
Key CBM Revision Unpopular with Bar Assoc’s
One of the more intriguing mechanisms of the America Invents Act (AIA) is the Transitional Program for Covered Business Method (CBM) Patents. To date, these speciailized post grant patent challenges have been pursued in relatively limited numbers as compared to the more generic Inter Partes Review (IPR) proceedings. The reason for the disparity between CBM and IPR filing rates is quite simple — IPR is available for any technology not just “business method patents.” Yet, the CBM proceding is far superior to IPR in many strategic respects.
Recognizing the potential of CBM filings to have a greater impact on the patent litigation landscape, Congress is actively considering alterations to the existing statutory framework that would encourage greater use of this powerful AIA mechanism. Read the rest of this entry »
PTAB Braces For Increased AIA Hearings & Reexamination Surge
As we head to the end of the summer months, many of the first patentability trials of the AIA are maturing for decision. Going forward, the USPTO’s Patent Trial & Appeal Board (PTAB) will face a growing number of these oral hearings, also the surge of inter partes patent reexamination filings made last September will also be headed to the Board for decision. At last week’s Patent Public Advicory Committee (PPAC) meeting, the PTAB reported on the progress of their workload, and their plans for staffing up in anticipation of the coming reexamination surge. Read the rest of this entry »
Congress Tinkers with Further Patent Reforms
It seems Congress has chosen to ignore the significant impact the America Invents Act (AIA) has had on pure patent enforcement entities. There is simply no other rationale to explain why a new patent reform bill is contemplated by Congress near every week. While there will always be fringe organizations clamoring to simply outlaw patent suits altogether, or make them impossibly difficult, Congress needs to balance the interests of legitimate innovators with the fanatical anti-patent lobby (i.e., those bellyaching the most have yet to file a single, patent reexamination, IPR or CBM).
In order to properly balance the needs of technology companies and the targets of abusive litigation practices, Congress might want to take a look at the significant impact of the AIA has had on the dreaded “patent troll.” The Patent Trial & Appeal Board (PTAB) proceedings of the AIA have not even been available for a full year. Given a bit more time, these post grant options will significantly degrade the non-practicing entity (NPE) contingency model.
To date, there have been over 400 post grant proceedings inititated with the Patent Trial & Appeal Board (PTAB). A significant number of these procedings have been initated against non-practicing entities.
For more discussion on the current options and an update and forecast on pending legislative inititaives, check out Wednesday’s webinar on July 31st: Battling Patent Trolls: Leveraging New Executive Orders, AIA and Other Tools.
AIA Alternatives to Patent Litigation Prove Wildly Popular
It’s hard to believe that it has only been 10 months since September 16, 2012. On that date, the new patent challenge proceedings of the America Invents Act (AIA) first became available. Since that day 400+ petions for trial (IPR and CBM) have been filed with the USPTO Patent Trial & Appeal Board (PTAB) as an alternative to more costly district court litigation. As the current filing rate is expected to continue, if not accelerate, roughly 500 requests will be pursued within the first year (USPTO fiscal year 2013). With 80-90% of these filings proceeding through to a written decision (i.e., complete trial), the PTAB will be conducting as many as 400 trials per year. This is roughly 4 times that of the most popular patent jusisdiction in the U.S., the now infamous Eastern District of Texas (EDTX).
Indeed, when accounting for the fact that many district court filings are split amongst multiple defendants (as a result of the AIA joinder provision), the PTAB has been the busiest patent court in the U.S. for some time.
With the time to trial in the EDTX now approaching 3 years, and the time to decision in the PTAB roughly 17 months from petition filing, it seems that an antidote to the abusive patent litigation already exists. Still Congress is clamoring to pass additional patent reforms, while at the same time sequestering USPTO funding. Seems to me the most effective patent reform legislation would be to provide full funding to the solution already in place, and working.
USPTO Faces Public Policy Dilemma
The Patent Trial & Appeal Board (PTAB) has the power to terminate an Inter Partes Review (IPR), Post Grant Review (PGR), or Transitional Proceeding for Covered Business Method Patents (CBM) upon request of the parties. This discretionary power to terminate a patentability challenge by agreement (37 C.F.R. § 42.74) is a new concept for the USPTO. Historically reexamination proceedings could not be terminated by agreement. In reexaminations (inter partes) where the contesting parties settled their dispute, the challenging party would simply drop out of the inter partes reexamination, but the Office would continue with the reexamination in the interests of public policy. (cf. terminating an inter partes patent reexamination by operation of estoppel).
The PTAB greatly benefits from the ability to terminate post grant patent proceedings. This is because Board resources can be moved away from post grant proceedings that are no longer commercially relevant (at least as to the present parties) to those newly initiated, and there are plenty of them. Likewise, the ability to settle seems to encourage resolution of disputes as roughly 30 IPRs and CBMs have settled to date. But, some would argue that the public is left holding the bag for suspect patents that escape cancellation by operation of a private settlement.
While it is true that another challenger could come along and pick up where the last left off, such would be at a significant cost— AND the public would essentially be paying the USPTO twice for the same proceeding. Yet, there is a far better solution to this problem already on the books, one that would still allow the Board to free up judicial bandwidth. Read the rest of this entry »