Post-Grant Review

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CAFC Standard of Review Options Critical in Appeals From USPTO

The new patent challenge mechanisms of the America Invents Act (AIA) will greatly increase the number of CAFC appeal from the USPTO, as much as several hundred cases per year. This is because the patents subject to the new post grant proceedings (IPR, CBM, PGR) are almost always high-value assets involved in co-pending litigation, and these proceedings will conclude faster than any previous mechanism for challenging a U.S patent. At the time of this writing there are roughly 400 IPR and CBM proceedings pending, all of which will be ripe for appeal to the CAFC in 2014 absent settlement (rate of settlement is roughly 10% at present).

When evaluating the PTAB’s decisions on appeal, the CAFC employs either a de novo standard of review for questions of law or, the more deferential substantial evidence standard of review for questions of fact. Not surprisingly, appeals that employ the de novo standard provide a more significant opportunity for reversal. For this reason, it is important to understand the Court’s practice in applying one standard over the other.
Continue Reading Hundreds of PTAB Appeals Headed to CAFC in 2014

Supreme Court Review in CLS Bank to Create Perfect Storm for CBM Filings

Patent Holders in the business method patent space received a sobering dose of reality a few weeks back when the USPTO Patent Trial & Appeal Board (PTAB) cancelled the claims of the very first Covered Business Method (CBM) patent challenge. The petition (here) challenged U.S. Patent  6,553,350 of Versata Development Group. In May of 2011, Versata secured a $391 million dollar verdict in the Eastern District of Texas against CBM challenger SAP. Aside from the speed at which the USPTO acted on the petition, perhaps the most noteworthy aspect of the decision was the basis for the cancellation.

The PTAB expedited the typical 12 month CBM duration to 9 months since the only challenge to patentability was based on 35 U.S.C. § 101 (i.e., whether or not the claims were directed to subject matter that was eligible for patenting in the first instance). The PTAB found that the claims were not patentable under 101, and cancelled the challenged claims as being directed to an abstract idea. (Written Decision here)

The PTAB’s decision is this case was an eye opener to many business method patent litigants that had become accustomed to the “too slow to matter” world of USPTO patent reexamination. The SAP CBM decision made clear that the new post grant patent proceedings of the America Invents Act (AIA) can truly serve as a faster and cost effective alternative to patent litigation.

With the CAFC’s decision in CLS Bank v. Alice Corp (considering computer implemented business method claims) seemingly destined for Supreme Court Review, the PTAB may very quickly become the 101 court of choice going forward.
Continue Reading CLS Bank to Drive PTAB Business Method Patent Challenges?

Not All of the New Patent Reform Ideas are Good Ones

A few weeks back House Judiciary Committee Chair Bob Goodlatte (R-VA), released a “discussion draft” of further patent reform ideas. The Draft is a collection of adjustments to the U.S. patent system designed to encourage a dialogue on these important reform issues. In particular the abusive litigation tactics of so called “patent trolls” are the driving force behind the legislative effort. For this reason, the bulk of the proposals of the Goodlatte Draft are squarely aimed at preventing the abusive behaviors and practices of patent trolls. Yet, there is one proposal of the Draft that stands out as a glaring exception. This troll-friendly provision, if enacted into law, would virtually ensure the continued success of the patent troll business model.
Continue Reading Congress Considers Helping Patent Trolls?

Motion Practice Requirements Emphasized by Board

The rules of the new patentability trials of the America Invents Act (AIA) are designed to ensure timely resolution within the statutorily mandated 12 month time frame. In particular, the Patent Trial & Appeal Board (PTAB) fashioned their new rules to prevent the notorious delays and complications of the previous inter partes patent reexamination system. One way in which the new AIA post grant proceedings are vastly different from the previous inter partes patent reexamination model is the manner in which claim amendments may be proposed.

In the previous inter partes reexamination system, any number of amended claims could be added or submitted prior to the close of prosecution before the examiner. There was no numerical limit on the number of claims that could be submitted. In fact, it was not uncommon practice for patentees to submit hundreds of new claims. By doing so, patentees made it more difficult for the third party to respond to all issues within their 30 day period, and within page limits. Likewise, the addition of such extensive amendments made examiner/APJ processing all the more tedious and time consuming.

In the new AIA proceedings, Inter Partes Review (IPR) and Post Grant Review, the PTAB provides for a reasonable number of substitute claims. 37 C.F.R. § 42.121/221. The “reasonable” aspect has been explained as a one-to-one correspondence in the typical case. In addition, claim amendments must be presented by motion, in a particular manner. Not surprisingly, patentees are demonstrating that old habits die hard.
Continue Reading PTAB Amendment Procedures Trip Up Patentees

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.
Continue Reading Protective Orders & New AIA Post Grant Patent Realities

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.
Continue Reading Should you Request a Rehearing of Your PTAB Trial Order?

PTAB

Failure to Consider AIA Patentability Challenges May Be Costly Mistake for Law Firms

The face of patent litigation in the U.S. was forever changed on September 16, 2012. This was the date the post grant patentability trials of the America Invent’s Act first became available to patent challengers. The emergence of the new low cost alternatives to patent litigation creates opportunities for patent challengers to pursue a lower cost resolution to patent disputes on far more favorable terms relative to the district court.

If not adequately considered as an alternative to patent litigation, ignorance of the new AIA proceedings may create malpractice opportunities for unsuccessful litigants against their former law firms.
Continue Reading Is it Malpractice to File a Declaratory Judgment of Invalidity After the AIA?