Post-Grant Review

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Fee Setting Authority to be Exercised for FY 2017 (Oct. 2016)

In advance of the November 19, 2015 Patent Public Advisory Committee (PPAC) meeting, the USPTO has distributed its first fee change plan.  As a reminder, the agency was given fee setting authority under the America Invents Act, this is the first time that authority is being exercised.  The PPAC will provide input on the proposed fees (both patent and trademark) at its upcoming meeting.  Thereafter, the USPTO will issue a Federal Register Notice in January of 2016, with plans on a final notice of rulemaking, and implementation for fiscal year 2017 (October 1, 2016). 

Notable Patent Trial & Appeal Board (PTAB) fee increases include:

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Continue Reading USPTO Proposes Hike in PTAB Fees for 2016

Secondary Indicia of Greater Value in Bio/Pharma

The submission of objective evidence of non-obviousness is rarely effective in the predictable arts (i.e., mechanical/electrical).  This is because such evidence must have a “nexus” to the claimed invention.  And, as the most common secondary indicia is “commercial success,” rarely do broadly drafted patent claim elements so cleanly coincide with sales results.  Long-felt but unsolved need is a further secondary consideration that is less prevalent in the predictable arts as it is in more traditional, laboratory driven industries.  Nexus is a significant hurdle in the predictable arts.

On the other hand, patent claims in the unpredictable arts, such as new drug formulations can have an especially compelling nexus to market appeal and unfilled need.  Where a drug is an improvement over existing formulations, or an altogether new treatment, commercial success and long, unmet need are easily tied to the specific formulations of the claims.  For this reason, secondary indicia of non-obviousness is a far more compelling rebuttal to a patentability challenge of the USPTO’s Patent Trial & Appeal Board (PTAB).

Given the modest, but growing rate of PTAB challenges in the unpredictable arts, petitioners should be wary of challenging especially popular drug formulations.
Continue Reading Secondary Considerations More Effective in Unpredictable Arts

Kyle Bass & Friends Swing and Miss in First Two Attempts at IPR

Today, the Patent Trial & Appeal Board (PTAB) denied institution of IPR 2015-00720 and IPR2015-00817 (here and here). These IPR petitions, targeting U.S. Patents 8,663,685 and 8,007,826 of Accorda Therapeutics, were advanced by the so-called “Coalition For Affordable Drugs.”  The Coalition, more widely recognized as a creation of hedge fund manager Kyle Bass, has filed 20+ petitions in the past few months against various drug patents. 

These PTAB denials are likely the first in a long series of disappointments for the Coalition.
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Continue Reading First Two Hedge Fund IPRs Fail

PTAB + Octane Fitness = Problem

Back in 2014, I explained that the recent shift in exceptional case analysis under Octane Fitness, LLC v. ICON Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Mgmt. Sys., would provide opportunity for successful Patent Trial & Appeal Board (PTAB) petitioners. This is because accused infringers are universally embracing PTAB proceedings as an alternative to high cost litigation, and, are increasingly seeking fees after Octane.

Last week, the Southern District of California awarded fees of roughly $400k to a successful USPTO patent challenger in Deep Sky Software, Inc. v. Southwest Airlines Co., 3-10-cv-01234 (CASD).

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Continue Reading Plaintiffs Beware: PTAB Fee Awards Might Be Headed Your Way

Customers of a Defendant Supplier Do Not Have CBM Standing

The Patent Trial & Appeal Board (PTAB) denied institution of a CBM review of Phoenix Licensing, LLC’s (“Phoenix”) 8,352,317 patent in CBM2015-00068, determining that the only remaining Petitioner, Acxiom Corp. (“Acxiom”), lacked standing under § 18(a)(1)(B) of the AIA. (here)

By way of background, the Petition was originally filed by four entities, but the proceeding was terminated with respect to AT&T Mobility LLC, AT&T Services, Inc., and Ford Motor Company (“Ford”), leaving only Acxiom. Under § 18(a)(1)(B), a person may not file a CBM unless the person or the person’s real party in interest or privy has been sued for infringement of the patent or otherwise charged with infringement of the patent. As such, CBM petitions are required to establish that the petitioner meets the standing requirements with sufficient proof. In this case, the Petition merely stated that Acxiom is one of the “real parties-in-interest to and/or privies of one or more parties who have been sued…” without providing any additional explanation or evidence.
Continue Reading CBM Standing Flows Up the Supply Chain, Not Down

Improved Speed For Overlooked Post-Grant Patent Options

Once upon a time, patent reexamination was the only mechanism to challenge a U.S. patent at the USPTO.  First introduced as an ex parte proceeding in the 1980s, patent reexamination was expanded to include an inter partes option in 1999.  Thereafter, patent reexamination became a popular adjunct to patent litigation. Yet, increased popularity of patent reexamination led to significant delays and increased pendency. The expanding timelines, among other shortcomings, prevented inter partes patent reexamination from serving as a true alternative to patent litigation. Not until the patentability trial mechanisms of the America Invents Act (AIA) did Congress finally succeed in providing a true alternative to patent litigation at the USPTO. 

Once the AIA patentability trials were introduced, inter partes patent reexamination was discontinued.  Still ex parte patent reexamination remains an option.  Not surprisingly, reexamination decreased in popularity post-AIA.  The reasons for the decrease in popularity is straightforward.  First, an inter partes AIA challenge option will almost always be preferred over an ex parte option for high-value disputes (where available).  Second, a large number of ex parte reexaminations were pursued, pre-AIA, out of necessity.  That is, older patents were not date-eligible for inter partes reexamination.  Of course, all issued patents are date-eligible for AIA review.  For at least these reasons, the current filing rate of  ex parte reexamination is roughly 50% of the 2008 filing numbers.

The falling numbers for ex parte reexaminations, coupled with the elimination of inter partes patent reexamination has, in limited respects, made ex parte reexamination a more attractive option as compared to 2008.

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Continue Reading Patent Reexamination Speed Presents New Opportunity

Hedge Fund IPR Scheme Unraveling

Last week, the USPTO’s Patent Trial & Appeal Board (PTAB) authorized a Motion for Sanctions in four IPR proceedings filed by the now infamous Kyle Bass & friends. The motion for sanctions will be based on an alleged abuse of process by Bass & Co. for pursuing four IPR proceedings relating to Celgene patents 6,315,720 and 6,045,501. 37 C.F.R. § 42.12(a)(6) The sanction sought is termination of the proceedings. 42.12(b)(8). (motion here)

The motion authorization, while clearly not an ultimate decision as to the propriety of sanctions is a clear harbinger of things to come. First, as busy as the Board is, any request for additional work is strongly indicative of far more than a passing interest in the topic. Second, the authorization in these cases comes by way of expanded panel. Finally, such motions are exceedingly rare (like less than 1% of cases, rare).  If shares in Hayman Capital were publically traded— like its IPR targets— shares would be significantly down trending on this news. The game is over.

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Continue Reading PTAB Considers Unplugging Hedge Fund Filings