Tomorrow, the final rules to implement the new post grant trial proceedings of the PTAB will publish. A copy of each of the rule packages is linked below, commentary on the changes to follow tomorrow. In addition to the PTAB rule packages, a package will issue
As noted last Friday, the final rule packages to implement the new patent validity trials of the Patent Trial & Appeal Board (PTAB) are expected to issue this week. (if publication agencies cooperate). While the USPTO has been tight lipped as to the modifications made to the originally proposed rules, some
As the era of Inter Partes Patent Reexamination (IPX) draws to a close, recent third party requesters are finding the the new standard for initiating IPX to be quite problematic. The higher standard, has led to a greater percentage of partial and full IPX denials.
A random review of 80 requests filed under the new Reasonable Likelihood of Prevailing (RLP) standard reveals over 25 requests that were either partially (or even fully denied by examiners). Compared to the prior grant rate of close to 95%, it would seem the new “higher standard” is having Congress’ desired effect.
Continue Reading Higher Patent Reexamination Threshold Suffers from SNQ Hangover
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 (TPCBMP) upon joint request of the parties. (cf. terminating an inter partes patent reexamination by operation of estoppel).
Certainly, the USPTO would greatly benefit from the ability to terminate post grant patent proceedings. This is because agency resources could 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.
But, will contesting parties embrace the new provision as written?
Non-practicing entities or “patent trolls” are generally those plaintiffs that seek to enforce patent rights against an industry in which they themselves do not compete. Stated another way, an NPE’s only business is patent litigation.
Often times the patents an NPE is enforcing were purchased from a traditional technology company for the sole purpose of exacting royalties from the relevant industry. In the hands of an NPE, which has no technological industry subject to a patent counter suit by their industry targets, the NPE patents become especially powerful weapons of economic coercion.
Over the last decade, law firms have recognized the efficacy of NPE litigation campaigns and have signed on in great numbers to get a piece of the action. Typically, an NPE will team up with a law firm that will conduct the campaign on their behalf in exchange for a contingent fee arrangement. (i.e., percentage of the collected settlements)
NPEs team up with law firms, at little to no cost, to launch patent assertion campaigns against entire industries. This profiteerring business model has lead to a significant proliferation of patent infringement suits in the last decade. As litigating a patent infringement suit can take years, and cost millions of dollars, a counter-suit for settlement leverage is not possible. Coupled with the fact that some plaintiff friendly jurisdictions like the Eastern District of Texas (EDTX) routinely return damage verdicts in the tens (if not hundreds) of millions of dollars, most defendants will settle relatively quickly for significant sums of money. For this reason, contingency relationships for even a single, seemingly weak patent are almost always worthwhile for law firms. Whether or not the patent is invalidated years down the road by one of a multitude of defendants does not detract from the easy, short term profits.
But the NPE landscape will forever change on September 16, 2012
Continue Reading USPTO to Break Patent Troll Business Model in September?
Much attention has been given to the contested proceedings of the newly formed Patent Trial & Appeal Board (PTAB) since enactment of the America Invents Act (AIA) last fall. Starting in September of 2012, these new patentability trials (Post Grant Review (PGR), Transitional Program for Covered Business Method Patents (TPCBMP) and Inter Partes Review (IPR)) will become available, and must conclude by statute within 12-18 months of initiation. The pendency of the new trial proceedings is a significant improvement relative to existing patent reexamination and is expected to be a significant driver behind filings concurrent with litigation.
As a result of the new options for contested proceedings, the law eliminates inter partes patent reexamination. So, going forward, the Central Reexamination Unit (CRU) will lose a significant, resource intensive stream of work. While it is true that the CRU will remain responsible for legacy inter partes reexamination filings, the 100+ examiners will necessarily have extra time on their hands post-AIA.
Absent a replacement stream of work, the remaining stream, ex parte patent reexamination filings, may benefit from the newly available bandwidth.
Continue Reading Enhanced Patent Reexamination Speed Coming Soon?
For those that may have missed the Patently-O post on the topic last week, Mr. Joe Matal, Judiciary Committee Counsel to Senator Jon Kyl, recently published a comprehensive guide to the legislative history of the AIA in the Federal Circuit Bar Journal. Since the AIA was the result of years
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.
Continue Reading Preliminary Injunctions an Even Tougher Sell Post AIA?
The new post grant patent trials of the America Invents Act (AIA) are designed to provide a true alternative to patent litigation. That is to say, current patent reexamination proceedings are typically pending 4-5 years through appeal, if not longer. As a result, patent reexamination is primarily utilized as an additional litigation tool rather than the alternative to patent litigation intended by Congress. Conversely, the new AIA trial proceedings are designed to conclude, by statute, within 12-18 months of initiation.
Whether, choosing Post Grant Review (PGR), Transitional Program for Covered Business Method Patents (TPCBMP), or Inter Partes Review (IPR), the new proceedings will conclude relatively promptly, and estoppel will attach upon a written determination of the Patent Trial and Appeal Board (PTAB). Based on the increased speed, and estoppel result, it is expected that the new proceedings will provide a compelling basis to stay parallel infringement actions.
However, the International Trade Commission (ITC) also has a statutory mandate for expeditiously processing their docket (typically within 15 months). For this reason, the ITC is currently an “anti-stay” forum. Given the likelihood of future parallel tracks of the USPTO and ITC, will the ITC change their “anti-stay” practice to account for the post-AIA world?
Continue Reading New Post Grant Patent Trials To Derail Parallel ITC Actions?
During last week’s hearing before the House Judiciary Committee on the implementation status of the America Invents Act (AIA), most of the invited speakers offered particular comments/suggestions on the USPTO’s implementation efforts. Many of these comments were simply re-presentations of written comments submitted this past Spring.
Others focused on possible technical amendments to the AIA. Interestingly, former Committee Chairman James Sensenbrenner (an opponent of the original legislation) accused Committee members of devising such amendments in secret. However, this accusation was quickly dismissed by other members of the Committee who took the position that no such technical amendment exists…..yet anyway. Of course, possible technical fixes have been rumored for quite some time. (webcast here)
When it comes to post grant proceedings, there are quite a few “fixes” that are needed if the legislation is to achieve the goals of the legislature.