AIA Post Grant Trial Mechanisms: Game Changers
Currently, Patentees anticipating a motion to stay a parallel litigation pending patent reexamination will often pursue a preliminary injunction (PI) to bolster their argument that a stay would be prejudicial as between competitors. That is to say, the relatively long, multi-year pendency rates of patent reexamination coupled with a perceived deterioration in market share (not compensable by money damages), was often times enough potential prejudice to influence a judge to deny a stay of the proceeding. …or at least delay any decision to stay until after a decision on the merits of the request for injunctive relief.
Later, when addressing the merits of the PI request, courts would weigh the reexamination evidence against the “likelihood of success on the merits” factor of the well known PI analysis. In some instances, courts would look dis-favorably upon the mere grant of a patent reexamination request. This is because, historically, the grant rate for patent reexamination requests hovered around 93% under the SNQ standard. Likewise, courts would disregard interim rejections of the patent reexamination proceeding as subject to years of further prosecution/appeals.
Yet, these criticisms may no longer apply after September 2012, the effective date of the new contested proceedings of the America Invents Act (AIA).
Starting on September 16 2012, the pendency of the new contested patentability challenges (Inter Partes Review (IPR), Post Grant Review (PGR), Transitional Program for Covered Business Method Patents (TPCBM) will be 12-18 months by statute; a far cry from the 5-7 years for inter partes patent reexamination. At the same time, the standards for initiating the new proceedings have been raised relative to the old SNQ standard to reduce the overall grant rate.
The threshold necessary for initiating an IPR is prescribed by statute as a reasonable likelihood that a petitioner will prevail (RLP) with respect to at least one challenged claim. This standard was also applied to requests for inter partes patent reexamination last September. An almost identical standard is employed by courts when assessing the merits of a request for preliminary injunction, namely, a Patentee must demonstrate four factors, one of which is a “reasonable likelihood of success on the merits.” See Procter & Gamble Co. v. Kraft Foods Global Inc., 549 F.3d 842 (Fed. Cir. 2008). (Of course, courts must also weigh the evidence against a clear and convincing standard and presumption of validity not applicable to post grant proceedings of the USPTO)
On the other hand, the threshold necessary to trigger a PG), or TPCBMP, is prescribed by statute as more likely than not that a challenged claim is unpatentable. The USPTO has made clear that the PGR/TPCBMP standard is higher than the RLP standard applied in IPR.
As the new post grant proceedings of the AIA will be completed in 12-18 months, and assess higher threshold standards at the outset, it may be that not only are cases far more likley to be stayed based on the improved speed, but pending motions for injunctive relief may also be summarily dismissed upon grant of a petition by the USPTO. Simply stated, at the very least a “reasonable likelihood” standard will have already been found to exist by technically educated judges of the Patent Trial & Appeal Board (PTAB)….and the USPTO result will issue in less time than the average court can even get to a Markman Order.
Stay granted, injunction denied…..coming soon