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Patentees: Be Careful What You Wish For…You Just Might Get It

Since the passage of the America Invents Act (AIA), the debate has raged as to whether or not the Patent Trial & Appeal Board (PTAB) should apply the broadest reasonable claim interpretation (BRI) for AIA trial proceedings. Some patentees and bar associations have been shortsightedly advancing the notion that BRI should not be employed in the patent challenge proceedings of the AIA (Inter Partes Review (IPR) and Post Grant Review (PGR)). Instead, they urge that BRI claim construction be replaced with the claim construction practices of the district court (i.e., Philips v. AWH). This is because, they argue, the new AIA proceedings are more “adjudicative in nature” as compared to past patent reexamination practices…and amendment isn’t really possible.

Yet, if Philips were adopted by the PTAB, patentees would see little in terms of benefit. In fact, such a change would likely make matters far worse for patentees. …
Continue Reading A Philips Construction at the PTAB Will Halt Patent Litigation

Misguided STRONG Act Would Undo Years of AIA Progress

Well, if you expected the Goodlatte Bill to sail through the House for swift passage through the Senate, forget about it. Hill chatter has indicated that the significant House support of the Bill has diminished since the last vote in 2013 (and rightfully so given the events of the past year). Perhaps of greater threat to the patent reform effort , however, is yesterday’s introduction of the “STRONG Act” on the Senate side (here), which makes clear that further patent reform is far from guaranteed for 2015. 

The STRONG Act, or “Support Technology and Research for Our Nation’s Growth Patents Act of 2015” removes the controversial fee shifting provision of the Goodlatte Bill (a key point of contention in past battles). More importantly, the Senate Bill adds a multitude of proposed changes to AIA trial proceedings that will have patent abusers dancing in the streets —the Bill is more aptly titled the “Support Trolls & Reverse Our Nation’s Progress under the AIA Act of 2015.” 

While this legislative grenade may not have much chance ever seeing the light of day, it is surprising that such misguided proposals would be seriously offered in the first instance.
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Continue Reading Senate Democrats Propose Bill to Gut AIA Trials

Agency Discretion Dictated by Petitioner Joinder Rationale

As discussed previously, in Target Corp. v. Destination Maternity Corp (IPR2014-00508) a divided PTAB panel permitted issue joinder. While the dissent argued that acceptance of issue joinder might permit a proverbial “second bite at the apple,” the majority countered that such gamesmanshp could be thwarted by judicious use of agency discretion.

As I have pointed out, petitioner’s sometimes exclude claims from an IPR petition that are not asserted against them in an ongoing litigation. For example, a complaint is filed alleging infringement of claims 1-10, but not claims 11-15. After the 12 month IPR window has passed, and the IPR for claims 1-10 is timely filed, the patentee may then amend their complaint to add claims 11-15. In this way. when the motion to stay pending IPR is argued, the patentee emphasizes that claims 11-15 are not part of the IPR. That is, there is no reason to “stay” as trial will be necessary for claims 11-15 regardless of the IPR outcome. In such a case, issue joinder would seem warranted— as opposed to a case in which the petitioner fails as to claims 11-15, but files a second petition as a “do-over.”

It seems the PTAB agrees, as demonstrated recently in Amneal Pharmaceuticals LLC. v. Endo Pharmaceuticals Inc. (IPR2014-01365, Paper 13, February 4, 2015).

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Continue Reading PTAB Balances Gamesmanship Interests for Issue Joinder

CAFC Decides First IPR Trial Appeal

Today, in In Re Cuozzo Speed Technologies, LLC, the Court of Appeals for the Federal Circuit (CAFC) decided that the broadest reasonable interpretation (BRI) construct was appropriate for interpreting patent claims in AIA trial proceedings. (here)

As previously discussed, oral argument in Cuozzo was held back on November 3, 2014. The notable issues in dispute included: (1) whether the Patent Trial & Appeal Board (PTAB) was free to depart from the district court style claim construction standard enunciated in Phillips v. AWH (CAFC 2005) in favor of BRI as applied by the USPTO in all agency proceedings; and (2) whether trial institution decisions become appeallable once a final written decision is issued. (Note: Interlocutory appeal of such decisions had already been foreclosed by the CAFC).

In a 2-1 decision, the majority held that Congress passed legislation fully aware of BRI practices at the PTAB, especially as it related to patent reexamination. And, in any event, the USPTO was given rule making authority by statute for implementing specifics of AIA trial proceedings. Further, the majority found the ability to amend, long the justification for applying BRI, is available during AIA trials.

On the question of institution decision review, the Court found that a complete bar to appeal was intended by the language of  35 U.S.C. § 314(d), which states institution decision are final and non-appealable.

Judge Newman authored the dissent as to both issues.

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Continue Reading CAFC Endorses Use of BRI in AIA Trial Proceedings

PTAB Bi-monthly Webinar Series Starts Today

As a reminder, the PTAB’s “Boardside Chat” Webinar series kicks off today with an overview of PTAB statistics and key decisions.

The Instructions for today’s webinar are provided below.

Webcast Instructions for Tuesday, February 3:

Event address for attendees: https://uspto-events2.webex.com/uspto-events2/onstage/g.php?MTID=e26061533ffc851f338af0ad718660c3f
Event number: 313 818 218
Event password: 123456
Dial In: 1-571-270-7000

Proponents of Further Reform Beginning to Scramble 

This time last year, further patent reform efforts had steamrolled their way through the House. While the House passed the Goodlatte Bill with surprising urgency, efforts on the Senate side became hopelessly deadlocked last spring on a variety of contentious issues. Since that time, a significant amount of change has come to the world of patent law thanks to a number of significant Supreme Court rulings. At the same time, the administrative patentability trials of the 2011 America Invents Act (AIA) continue to wreak havoc on the business model of patent assertion entities. 

So, it is no surprise that further patent reform has lost some of its 2013 mojo on Capitol Hill.
Continue Reading Further Patent Reform…..Don’t Believe the Hype

PTAB Claim Constructions Often Limited to Intrinsic Record

Yesterday, in Teva Pharmaceuticals USA, Inc., et al v. Sandoz, Inc. et al., (here) the U.S. Supreme Court reversed decades of CAFC precedent permitting de novo review of district court patent claim constructions. More specifically, the high court explained that when reviewing a district court’s resolution of subsidiary factual matters made in the course of its construction of a patent claim, the CAFC must apply a “clear error,” not a de novo, standard of review. This decision will also impact the CAFC’s previous practice of applying de novo review of Patent Trial & Appeal Board (PTAB) claim construction decisions….or will it?
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Continue Reading Teva v. Sandoz & The PTAB

Spooking Financial Markets Via IPR

Over a year ago, I explained how “PTAB Trolls” were attempting to manipulate the new administrative trial system of the Patent Trial & Appeal Board (PTAB). PTAB Trolls attempt to extract settlements from patentees involved in high value litigation disputes. A PTAB troll operates as follows: (1) Identify a patentee that has been awarded a large damage verdict (not yet satisfied); (2) collect the prior art used in the litigation; (3) apply the same art in an Inter Partes Review (IPR) (with lower burdens of proof); (4) hope to leverage those burdens, and speed of the PTAB into forcing a settlement from the patentee. 

Other versions of this practice include PTAB Trolls that will take a “short” position in a penny stock having a market value closely tied to a patent litigation verdict. In such cases the mere filing of an IPR can spook investors, impacting trading volumes enough to cause a temporary, but significant, price drop (i.e., quick profit for a short seller). To date, these efforts have mostly failed, but not all. (See Patience Haggin’s informative article on PTAB Trolls here)

Next up, well financed hedge funds taking on key drug patents of the pharmaceutical industry?

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Continue Reading The PTAB as a Hedge Fund Tool?

PTAB Designates Decision as Informative on 315(b) Question 

Petitioners seeking Inter Partes Review (IPR) must be mindful of the statutory bar of 35 U.S.C. § 315(b). This provision precludes IPR on any patent once 12 months have elapsed after service of a complaint alleging infringement of that patent. The rationale for the statutory bar of 315(b) is straightforward. That is, IPR was designed to be a true alternative to patent litigation, not an adjunct process that was typical of the inter partes patent reexamination proceeding it replaced. By mandating that an IPR filing be brought earlier in the litigation timeline, Congress hoped to avoid duplicative proceedings, avoid patentee harassment, and enhance the ability of the Patent Trial & Appeal Board (PTAB) to provide a timely resolution to such business disputes.

Last summer, the PTAB considered 315(b) in relation to an amended complaint. That is, in cases where a party is added by amended complaint, when does the service become effective for purposes of 315(b), when the added party receives a copy of the proposed complaint, or when the proposed complaint is entered by the court? (via motion for leave to file) This question was answered in TRW Automotive US LLC v. Magna Electronics, Inc., IPR2014-00293 (Paper 18) (June 27, 2014) (here)…
Continue Reading Proposed Amended Complaint Not Served Under IPR Statute 315(b)