Inter Partes Review

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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.  …
Continue Reading Voluntary Discovery Option in PTAB Post Grant Proceedings Proves Unpopular

USPTO Exercises Fee Setting Authority to Decrease Patent Reexamination and Post Grant  Trial Fees

Based upon the fee setting authority provided in Section 10 of the America Invents Act (AIA), the USPTO has now issued final rules to reduce fees for patent reexamination and post grant proceedings of the Patent Trial & Appeal Board (PTAB). The new fees are discounted from existing rates, and take effect on March 19, 2013. (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. The trial portion of the fees corresponds to the cost of conducting the trial.

A more detailed explanation of the fee changes is provided below.
Continue Reading Post Grant Patent Challenge Fees Set to Drop on March 19th

The EDTex Conundrum Presented by Inter Partes Review

The Eastern District of Texas is a favorite forum of patent trolls in substantial part because its judges have demonstrated a substantial disinclination to stay litigation pending reexamination. Many presume that this historical bias will translate into a similar disinclination to stay litigation pending pending inter partes review. However, refusing to stay a case pending inter partes review will give rise to various case management conundrums.

The practical reality is that the petitioner (usually the defendant in the lawsuit) will be estopped from pursuing at trial any validity defense which reasonably could have been raised in the inter partes review. The time to trial in the Eastern District of Texas is around 25 months, which is about seven months after an inter partes review filed contemporaneously with the complaint should result in a final written decision. (assuming the maximum six month “front end” and assuming further that the PTAB does not extend the one year period in which the trial is to be completed by statute). Under the new inter partes review model, estoppel attaches at the time of the written decision. In most cases this would be amount to a 5-6 years acceleration of estoppel as compared to the old, inter partes reexamination system. Unless the parties settle the inter partes review (in which case they will likely also settle the lawsuit) the defendant will be estopped from pursuing any defenses at trial which could have been raised in the inter partes review proceeding.

That in turn creates a conundrum:  …
Continue Reading Patent Troll Advantage to End in Texas?

inter partes reviewBusiness executives routinely wrestle with whether to defend a patent infringement suit in court, settle the dispute for less than the cost/risk of defending it (especially in the case of patent “troll” suits), or seek the help of the USPTO to address the problem patent via a post grant patent proceeding. Patent litigation is a well-worn path and the variables and risks associated with it are relatively well understood. The same can, to an extent, be said of patent reexamination at the USPTO. But now that inter partes reexamination has been replaced with inter partes review (IPR), an entirely new mechanism of the America Invents act, CEOs and CFOs around the world are asking how this new option alters the existing landscape.

The primary business distinctions between IPR and court proceedings are cost, predictability, effectiveness, and speed. With respect to cost, according to statistics published by AIPLA and others defending a patent lawsuit through trial costs well in into the millions of dollars for cases involving substantial financial exposure. IPR, in the vast majority of cases, will cost in the hundreds of thousands of dollars. As a business rule of thumb,
Continue Reading CEO’s Guide to Avoiding Patent Litigation Costs

Rippling Effect of PTAB Proceedings to Upset Patent Litigation Business Model?

Opponents of the U.S. patent system are quick to deride the America Invents Act (AIA) as a failure when it comes to the so called “patent troll” or “non-practicing entity” (NPE) problem. Indeed, a steady stream of news articles from otherwise reliable sources such as the Wall Street Journal only serve to sensationalize and reinforce this misperception. Most such articles will focus on what has happened prior to September 16, 2012 (i.e., failure of the joinder rules) as opposed to what is now happening as a result of the AIA.

On September 16th, 2012 the new post grant patent proceedings of the America Invents Act (AIA) became available to patent challengers for the first time. These proceedings have only been available for a few months, but allow challenges to suspect patents of any vintage in a far more speedier, cost effective, and challenger friendly manner relative to that of the federal district courts. The idea behind these proceedings is that for the very first time, there will be a true, accelerated alternative to patent litigation. Not surprisingly, there has been a robust demand for these proceedings with over 100 petitions filed in the first few months—many of which target NPE portfolios. The new post grant proceedings of the USPTO’s Patent Trial & Appeal Board (PTAB) will conclude in a fast enough time (12-18 months) to transform the existing litigation landscape in a manner that will significantly undermine the NPE patent litigation business model.

The impact of these new, AIA post grant proceedings are only now beginning to be felt in the district courts.
Continue Reading AIA Post Grant Proceedings Begin to Impact NPE Assertions

Concurrent Post Grant Proceedings with the Same Real Party in Interest

One of the more intriguing aspects of the new patentability trials of the America Invents Act (AIA) is their potential interplay with legacy post grant proceedings such as patent reissue, ex parte and inter partes patent reexamination. In formulating the rules to implement the new AIA proceedings, namely, Inter Partes Review (IPR), Post Grant Review (PGR) and the Covered Business Method (CBM) review, the USPTO did not specifically define how conflicting proceedings would be processed. For example, the first half of 35 U.S.C. § 325(d) explains that the Board may provide for the “stay, transfer, consolidation, or termination” of either of the conflicting proceedings. Exactly how those determinations would be made was explained as a “case-by-case basis.”

The first PTAB proceeding to examine such issues is IPR 2013-00033. In this proceeding, CBS Interactive petitioned for IPR of patent 7,155,241, assigned to Helferich Patent Licensing. The petition challenged several of the patent’s dependent claims. Concurrently, an inter partes patent reexamination (95/001,864) is also pending, challenging all the of independent claims in the patent. The IPR and reexamination did not challenge any of the same claims, but the same real party in interest asserted some of the same grounds of unpatentability with respect to the same prior art.  In examining the potential conflict between the proceedings, the PTAB opted to stay the reexamination proceeding pending termination/completion of the Review, explaining:…

Continue Reading Patent Trial & Appeal Board Shuts Down Patent Reexamination

Repeal of 325(f) May Have Unintended Consequences

As discussed earlier this week the House is currently considering H.R. 6621, which proposes some technical corrections to the America Invents Act. One of the stated goals of the technical bill is to eliminate the 9 month dead zone that now applies to newly issued, first to invent patents relative to the availability of Inter Partes Review (IPR). This technical change is proposed in Section 1(d)(1) of the bill.

As a reminder, patents issuing today are not eligible for IPR until 9 months has elapsed from the time of issuance. This is because the first 9 month window after patent issuance is reserved for Post Grant Review (PGR) challenges; yet PGR is not a possibility for such first-to-invent patents. (first-inventor-to-file applications, which are eligible for PGR, will not even be accepted by the PTO until March 16, 2013)

The bill also proposes, in Section 1(d)(2) to address another perceived dead zone that is particular to reissued patents. But, correction of this perceived dead zone, in the manner proposed, may have unintended consequences.…

Continue Reading Congress Proposes Second Post Grant Window for Patent Reissue?

Straight Forward Changes Expected to Pass Quickly

AIA technical amendmentAs discussed last month, Congress will be considering a technical amendment to the AIA before Christmas. Congressman Lamar Smith (R-Tx) proposed this bill (H.R. 6621 here) to the House last Friday, passage of which seems very likely in the near term.

The proposed technical changes relating to post grant patent practice are as follows:…

Continue Reading Draft Bill Proposes Fixes To America Invents Act

PTAB Issues Decision Denying Appearance of Non-registered Practitioner

Non-registered practitioners may, in limited circumstances, be permitted to appear before the Patent Trial & Appeal Board on a pro hac vice basis. 37 C.F.R § 42.10(c). Last week, I pointed out the expanded panel order of the PTAB in IPR2013-00010 (order here), which outlined the…