Protective Orders & New AIA Post Grant Patent Realities
Courts Grapple With Post Grant Patent Practice
A standard component of any patent litigation is a protective order. Such orders will invariably include a “prosecution bar. ” The prosecution bar operates to ensure that individuals accessing confidential data of an opponent are precluded from prosecuting patent applications in the area of the litigated technology (usually for a fixed duration of time). Absent this bar, patent applications/claims could be fashioned by competitive decision makers involved in the litigation based on the confidential information of their rival.
With concurrent PTAB proceedings now commonplace with most patent litigation, the question becomes:
Should a prosecution bar extend to PTAB post grant patent proceedings?
The answer to the above question varies across district courts, and, of course, is highly dependent upon the agreed upon language of the Order. The problem becomes, in many cases, when outdated boilerplate that does not directly reference new proceedings of the PTAB appears in the Order. In some districts the bar is found to extend to PTAB proceedings to the extent amendments are contemplated. Other courts take the stricter view that manipulation of the intrinsic record of a patent is an unfair advantage. These courts appreciate the value in allowing patentees to use confidential information of an accused infringer as a navigation aid to be used throughout a USPTO post grant patent proceeding. (especially where IPR, PGR and CBM are explicitly contemplated by the Order)
Courts have recently emphasized the new “ajudicative” nature of the post grant challenges of the America Invents Act to distinguish them from previous patent reexamination proceedings; especially where old boilerplate language is at issue in the Order. While it is true that the new PTAB proceedings do not have an examination phase, the intrinsic record is still susceptible to the very same alterations as made during any application/patent prosecution. That is to say, amendments and prosecution history estoppel are added to the intrinsic record just as they were before. The only difference is that patent examiners are no longer involved— a largely irrelevant detail.
Indeed, history has demonstrated that the stricter view of the courts is the most prudent.
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White House Jumps on Growing Patent Reform Bandwagon
White House Suggests Already Existing Initiatives to Congress & USPTO
Yesterday, a White House press release (here) provided 7 “legislative priorities” and 5 executive actions to Congress, the USPTO and other government agencies for the purpose of improving patent quality (i.e., to primarily stomp out patent trolls). While heralded in many tech news
Congress Considers Reformulation of Business Method Patent Definition
Congress to Choose Between Competing Definitions
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 AIA mechanism.
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Patent Reform Palooza Hits Congress Summer 2013
Competing Bills Target Patent Troll Business Model
Congress has gotten the patent troll memo in a big way. The political stage is being set for a summer of legislative festivities. Like any good summer festival, Congress is separately establishing main and side stage legislative spectacles. The side stage spectacles, the more alternative acts, such as the Shield Act; Patent Abuse Reduction Act of 2013; and the Patent Quality Improvement Act will occupy many until the main stage effort takes shape. Last Friday the main stage act was announced.
House Judiciary Committee Chair Bob Goodlatte (R-VA), a key participant in the legislative effort behind the America Invents Act (AIA) released a draft bill that seeks to sweep in many of the concepts of the competing bills, while introducing fixes to the AIA. (here). The bill puts a new spin on the competing legislative proposals that address discovery controls, loser pay mechanisms, and the revision to notice pleading (brief overview here). Certainly these “troll” specific proposals will get the bulk of the attention from Congress and the public. As to the proposed “improvements and technical fixes” to the AIA, the draft post grant proposals are a mixed bag.
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Congress Proposes to Rewrite FRCP for All Patent Cases
Congress Proposes Yet Another Anti Patent Troll Bill
Fresh on the heels of the Patent Quality Improvement Act (S.866) comes the Patent Abuse Reduction Act of 2013 (here) introduced yesterday by Senator John Cornyn (R-Tx). The newest Senate bill, like the one from earlier this month, also is designed to target patent trolls. While the earlier bill sought a way to short circuit high cost litigation through a more cost effective USPTO post grant review procedure, the newest bill seeks to create a loser pays system and completely revamps patent litigation pleading and discovery practices.
On the pleading side, the Bill proposes that simplistic Form 18 of the Federal Rules of Civil procedure (FRCP) be abandoned in favor of very detailed allegations that identify specific claims, infringing products/methods by name and model #, detailed claim mappings to each product, and a host of other information. The Bill also proposes a “pay to play” discovery system in which certain types of discovery are financed by the requesting party, and a loser pays outcome in certain situations.
The Bill is essentially a wish list of every company that has ever been sued by a troll, but does it throw out the baby with the bath water?
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After Final Rejection Pilot Program Revamped by USPTO
After Final USPTO Initiative Retooled
Some pre- grant news of note this week. Last Friday the USPTO announced the After Final Consideration Pilot Program 2.0 (Federal Register Notice here). The revised pilot program modifies the initial concept by introducing a patent examiner feedback component.
Recall that the USPTO launched version 1.0 as the “After Final Consideration Pilot” (AFCP) to foster compact prosecution and to slow the growing RCE backlog. The pilot program allotted additional productivity time to patent examiners in exchange for their consideration of after final amendments that might result in allowance of the application. Prior to the pilot program even amendments requiring nominal further consideration were routinely denied under 37 C.F.R. § 1.116.
Under the terms of the first version of the pilot, examiners decided whether the after final amendment could be fully considered, including any additional search required, within the three hour time limit provided for by the program. (i.e., fully considered and allowed). There was no need to file any special request in the previous version of the program.
Recognizing that some examiners were treating such submissions inconsistently, and that unsuccessful amendments proceeded along the normal course without any additional added value (e.g., acknowledgment/feedback from the examiner), the USPTO has provided for examiner further communication in version 2.0.
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Should you Request a Rehearing of Your PTAB Trial Order?
Requests for Rehearing May Backfire on Patentees
As detailed earlier this week, a patentee’s decision to file a preliminary response in an IPR/CBM preliminary proceeding is not as straightforward as one would expect. Where such a preliminary response is imprudently pursued by a patentee this misstep can be further compounded by other optional filings post-Trial Order.
Subsequent to the filing of a preliminary response by a patentee the Patent Trial & Appeal Board (PTAB) will issue its decision. If unsatisfied with the Trial Order either party may file a Request for Rehearing as a matter of right within 14 days.
As is the case with the optional patentee preliminary response, just because you can request rehearing doesn’t mean you should.
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Common Patentee Missteps in Inter Partes Review
Preliminary Responses: Just Because You Can Doesn’t Mean You Should
The new post grant patentability challenges of the America Invents Act (AIA) have been warmly embraced by the public as a cost effective patent dispute resolution tool. Patent challengers have quickly leveraged these new proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) to circumvent the high cost of patent litigation and to accelerate opportunities for settlement. Patentees, on the other hand, have been largely caught unaware of the significant threat presented by these new road blocks to patent monetization.
While many of the new PTAB proceedings are only now getting underway a significant number of preliminary proceedings have been concluded. It is during these preliminary proceedings, and shortly thereafter, that many patentees have been committing significant strategic errors.
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Post Markman IPR Filing Displeases Court
Tactical Advantage Found in IPR Timing
The primary business distinctions between the USPTO Patent Trial & Appeal Board (PTAB) proceedings and traditional court based patent invalidity proceedings are the vast improvements in cost, predictability, effectiveness, and speed of PTAB proceedings— to date, the speed has been changing the perspective of the judiciary on staying litigation pending USPTO proceedings. However, while the PTAB proceedings are far faster than the previous inter partes USPTO option (i.e., inter partes patent reexamination) that doesn’t mean that courts will look past a perceived tactical delay in pursuing IPR.