Robust Filings Reported for Some AIA Proceedings
Late last week, the USPTO issued a Final Rule to implement the Technical Amendment to the America Invents Act (AIA). The Notice essentially revises 37 C.F.R. § 42.102 to eliminate the “dead zone” for certain first inventor to file patents. You can find the straight forward rule notice (here) The rule became effective yesterday, March 25th.
In other news, the Patent Public Advisory Committee (PPAC) convened on March 15th at the USPTO Alexandria campus. During the meeting, the USPTO reported on the progress of AIA filings to date. There continues to be robust demand for Inter Partes Review (IPR), but others of the new AIA mechanisms have not proven nearly as popular as originally thought. Read the rest of this entry »
Raising of Evidentiary Informalities Prior to Trial Institution
During PTAB patentability proceedings, the Federal Rules of Evidence are applied. And, while the USPTO’s definition of a “proceeding’ includes the preliminary proceeding (i.e., petition filing, preliminary response) it is important to keep in mind that the the trial Order is not the final word of the PTAB on patentability; it is simply a preliminary gauge of the merits prior to trial. The “trial” itself does not actually begin until after institution. As such motions by the Patentee that are directed to perceived evidentiary defects of the petition are deemed premature prior to trial institution.
This issue is often raised in the context of printed publications accompanying a petition to the PTAB for a patentability trial. While patents are considered self authenticating by the USPTO, publications can be considered inadmissable if not authenticated (and perhaps hearsay as to undated submssions) by the petitioner. But, the PTAB has set the time to challenge such evidence post-institution via a motion to exclude.
Read the rest of this entry »
Fee Setting Authority Decreases Post Grant Costs
Based upon the fee setting authority provided in Section 10 of the America Invents Act (AIA), the USPTO post grant filing fees will be downwardly adjusted for both patent reexamination and the patentability trial proceedings of the Patent Trial & Appeal Board (PTAB). The new fees are discounted from the rates that became effective last September 16th, and take effect tomorrow, March 19th. (final rules here)
The fees for PTAB proceedings will be broken up into petition and trial phases. The apportionment enables the office to more precisely calibrate costs so that refunds may be provided, where appropriate. The petition portion of the fees correspond to the cost of considering the petition filing only. The trial portion of the fees corresponds to the cost of conducting the trial. The fees for patent reexamiantion will decrease for all filers, but will drop by 60-80% for those requesters qualifying as small and micro entities.
A more detailed explanation of the fee changes is provided below. Read the rest of this entry »
160+ Petitions on File in First 6 Months
Yesterday, at the Practicing Law Institute’s USPTO Post Grant Trials- 2013, the USPTO provided an update on the demand for the post grant patentability trials introduced by the America Invents Act this past September. (AIA). As shown in the slide below, the demand has been quite substantial, especially on the electrical/software side. This is not surprising considering the typical patent troll case is also in these same arts.
The remaining stops for the PLI program include:
The programs coincide with the release of the new treatise entitled Post Grant Proceedings Before the Patent Trial & Appeal Board.
11th Amendment Immunity from DJ Action Does Not Extend to USPTO
State university technology transfer programs enjoy immunity from declaratory judgment (DJ) actions of patent invalidity/non-infringement. This is because state entities qualify for 11th amendment immunity from suits in federal district courts. So, absent the rare waiver of 11th amendment immunity, licensing targets of state university technology transfer programs have no recourse to proactively challenge the subject patents in the federal district courts.
The immunity benefit enjoyed by such state-run technology transfer licensing programs was most recently made clear in Cyanotech Corp. v. Valensa Intl. & The Univ. of Ill. (D.Haw) (here) In Cyanotech, the DJ action against the Univ. of Illinois was dismissed based on 11th amendment grounds.
Yet, a DJ action in the district courts is not the only avenue to challenge the validity of an issued patent in a forum more favorable to potential licensees. As demonstrated by early filings at the USPTO’s Patent Trial & Appeal Board (PTAB) universities are increasingly the target of Inter Partes Review (IPR) Filings. Read the rest of this entry »
101 Issue Fast Tracked to April Oral Argument at PTAB
The very first petition for a Covered Business Method Patent Challenge (CBM) was filed on September 16th by SAP (CBM2012-00001). The petition (here) challenged U.S. Patent 6,553,350 of Versata Development Group. In May of 2011, Versata secured a $391 million dollar verdict in the Eastern District of Texas against SAP. The verdict is currently on appeal to the CAFC.
Back in January, the PTAB held that SAP’s CBM petition had demonstrated that it was more likely than not that the claims of the ‘350 patent were unpatentable under 35 U.S.C. §§ 101 and 102 (Trial Order here). The PTAB also set the original trial schedule, mandating that the oral hearing be conducted by October 1, 2013. (scheduling Order)
Last week, the PTAB agreed to expedite the trial schedule and move the oral hearing to April 17, 2013. (decision here) The six month acceleration in the proceeding was provided in exchange for SAP dropping the 102 defenses, and agreeing to move forward only on their 101 challenge to the Versata patent. Each side will be given 60 minutes for oral argument.
One of the more intriguing provisions of the new post grant patent proceedings of the America Invents Act (AIA) is the ability to settle these patentability disputes by agreement. Unlike existing patent reexamination practices, the USPTO will terminate an Inter Partes Review (IPR), Post Grant Review (PGR), or Transitional Proceeding for Covered Business Method Patents (CBM) upon joint request of the parties. (cf. terminating an inter partes patent reexamination by operation of estoppel).
At the time of writing, several such disputes have formally settled, some after trial institution (here), and some a mere weeks after petition filing (here). As of yet, I am unaware of a challenger that has simply walked away from the PTAB proceeding in the interests of maintaining the absolute confidentiality of their settlement agreement.
The USPTO greatly benefits from the ability to terminate post grant patent proceedings. This is because agency resources can be moved away from proceedings that are no longer commercially relevant (as to the present parties) to those newly initiated. In this way, the USPTO would operate in much the same way as a court, no longer being responsible for continuing the patentability proceeding on behalf of the public (as is the case in patent reexamination)
The practice of fixing a claim construction for key terms in the Order instituting the patentability trial is also a key driver for dispute settlements much the same way as a Markman Order. As such, it is not surprising that the PTAB has made claim construction a focus of early Orders.
Troll Assertions to be Stayed Instantly Upon Filing of CBM
The new post grant patentability trials of the America Invents Act (AIA) are designed to serve as alternatives to costly patent litigation. One of the new post grant options is the very specialized, Transitional Program for Covered Business Method Patents, or “CBM” proceeding. This proceeding, like Inter Partes Review (IPR), is conducted before the administrative patent judges of the USPTO’s Patent Trial & Appeal Board.
The CBM option is noteworthy in several respects, but perhaps of greatest interest to patent challengers is the degree to which courts must defer to the USPTO. That is to say, when faced with the decision to stay or proceed to trial on a qualifying business method/e-commerce patent, the court is left with little choice but to halt proceedings.
As recently demonstrated by the district court in Markets-Alert Pty Ltd. v. Bloomberg Finance LP, et. al (DED), a stay is even warranted for CBM petitions still awaiting initial disposition by the PTAB. (here) Read the rest of this entry »
First IPRs Advancing at Light Speed
The PTAB has now issued several decisions instituting trials. The initial decisions suggest that post-grant practitioners may in many instances receive a final written decision in about a year from petition filing (rather than about 18 months as initially projected) and that the PTAB decisions instituting trials will provide useful findings regarding claim construction roughly 4-5 months from the time of petition filing.
For instance, the PTAB granted the IPR petition filed by Garmin in early January and has the oral hearing set for August 16th. That should yield a final written decision in 12-13 months from the filing date of the petition. In that case the patent owner waived its right to file a preliminary response but waited almost the full three months before it did so. If the patent owner had promptly filed a waiver of the preliminary response that would have sped up the entire process by about three months.
This suggests that the PTAB intends to remain true to its stated intention of moving these patentability trials along at a brisk pace (even faster than that required by the controlling statute, 12-18 months from institution). The PTAB is well aware that Read the rest of this entry »
Mandatory Disclosure Option Disregarded
Now that over one hundred inter partes reviews (IPRs) and covered business method proceedings (CBMs) have been filed, the parties to those proceedings are actively considering their rights and duties with respect to the limited discovery available at the Patent Trial & Appeal Board (PTAB). PTAB Trial Practice and Procedure Rule 51 provides for two options for “mandatory initial disclosures.” The options are akin to initial disclosures provided by the Federal Rules of Civil Procedure.
As a reminder, the major bar associations lobbied for the USPTO to include the option in the final rules.
Perhaps, not surprisingly, parties are not agreeing to voluntarily participate in discovery for trials that are yet to be instituted. Likewise, as discovery is “limited” if and when a trial begins, there is little motivation to volunteer information that an adversary may not be entitled to in the first instance. To date, the mandatory initial disclosure option has been largely ignored in IPR filings, but may be worth a closer look for those involved in a CBM.
Rule 51(a) provides the option, and generally tracks Rule 26(a)(1) of the Federal Rules of Civil Procedure. Read the rest of this entry »